Reynolds v. Geico Corporation
OPINION AND ORDER: The Court GRANTS defendant's Motion to Stay. This action is stayed pending the D.C. Circuit panel's decision in ACA International. Accordingly, the Court does not presently reach defendant's Motion to Dismiss . The Court instructs the parties to notify the Court when the D.C. Circuit's opinion is issued and to file supplemental briefing regarding the impact of the opinion on this case within 15 days of that notice. Signed on 3/1/17 by Magistrate Judge Patricia Sullivan. (dsg)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PAM REYNOLDS, individually and
on behalf of all others similarly situated,
Case No. 2:16-cv-01940-SU
SULLIVAN, United States Magistrate Judge:
Plaintiff Pam Reynolds brings this putative class action against defendant Geico
Corporation for violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C.
§ 227 et seq. Plaintiff alleges that defendant sent her, and others in two putative classes,
unsolicited text messages using an automatic telephone dialing system, without obtaining
consent, and despite requests to cease. Defendant has moved to stay the proceedings, or in the
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alternative, to dismiss plaintiff’s complaint. (Docket No. 19). Defendant’s Motion to Stay is
based on the matter of ACA International v. FCC, No 15-1211 (D.C. Cir. 2015), currently
pending before the Court of Appeals for the D.C. Circuit, which may decide the validity of a
declaratory ruling by the Federal Communications Commission (“FCC”) and if so, defendant
argues, could directly bear on the viability of plaintiff’s claims in this action. Defendant’s
alternative Motion to Dismiss argues that plaintiff does not plausibly state a claim for relief
under the TCPA. Plaintiff opposes defendant’s Motion. (Docket No. 21). Although defendant
has requested oral argument on its Motion, the Court has determined that the Motion is suitable
for resolution without oral argument. On review of the parties’ arguments and submissions, the
Court GRANTS defendant’s Motion to Stay, and accordingly, does not reach the merits of
defendant’s Motion to Dismiss.
Plaintiff owns a cellular telephone. Compl. (Docket No. 1) ¶ 27. Beginning in May
2016, plaintiff began receiving unsolicited text messages on her cellular telephone from “short
code” 434-26,1 “a number associated with” defendant. Id. ¶ 28. Plaintiff received one text
message from defendant, from short code 434-26, on May 27, 2016, that read, “GEICO Policy:
Your payment of $127.79 for policy ending in 6756 will be withdrawn from bank acct ending in
5155 on 06/01. Reply STOP to end texts.” Id. ¶ 29 & Ex. A (screenshots of text messages).
Plaintiff received another text message from defendant, from short code 434-26, on June 25,
https://dispatch.geico.com/ecams/expressRenewal.xhtml for policy ending in 6756. Reply STOP
A “short code” is a special telephone number, shorter than a standard telephone number, used
to send Short Message Service (“SMS”) messages, i.e., text messages. See Harnish v. Frankly
Co., No. 5:14-CV-02321-EJD, 2015 WL 1064442, at *1-3 (N.D. Cal. Mar. 11, 2015); Derby v.
AOL, Inc., No. 15-CV-00452-RMW, 2015 WL 3477658, at *1 (N.D. Cal. June 1, 2015).
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to end texts.” Id. ¶ 30 & Ex. A (Docket No. 1-1). Plaintiff received another similar text message
on June 26, 2016. Id. ¶ 31. On June 26, 2016, plaintiff emailed defendant’s customer support
requesting that the unsolicited text messages cease; that same day, defendant replied and said it
would remove plaintiff’s phone number from its marketing lists, allowing six to eight weeks to
process the removal request. Id. ¶ 32 & Ex. B (Docket No. 1-2). Plaintiff sent this email instead
of replying to the text message with “STOP,” as the message had suggested, to request that
messages cease. Plaintiff received further text messages in July and August 2016, including after
the eight weeks defendant said it would need to stop sending such messages. Id. ¶¶ 33-35.
Plaintiff brings this action on behalf of two putative classes. The first, the “Autodialed
No Consent Class,” consists of those whose cellular telephones defendant sent text messages to
without prior express consent. Compl. (Docket No. 1) ¶ 40. The second, the “Autodialed Stop
Call Class,” consists of those whose cellular telephones defendant sent text messages to after
those recipients informed defendant that they no longer wanted to receive text messages. Id.
Plaintiff brings two causes of action. First, on behalf of herself and the Autodialed No
Consent Class, plaintiff alleges that defendant violated the TCPA, 47 U.S.C. § 227(b)(1)(A)(iii),
by sending unsolicited text messages to cellular telephone numbers using an automatic dialer
(i.e., “equipment that . . . had the capacity to store or produce telephone numbers to be called,
using a random or sequential number generator, and/or receive and store lists of phone numbers,
and to dial such numbers, en masse, without human intervention”) without the recipients’ prior
Compl. (Docket No. 1) ¶¶ 47-53.
Second, on behalf of herself and the
Autodialed Stop Call Class, plaintiff alleges that defendant violated the same TCPA section by
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sending unsolicited text messages to cellular telephones using an automatic dialer after the
recipients requested to no longer receive such messages. Id. ¶¶ 54-60.
Plaintiff seeks monetary, declaratory, and injunctive relief for herself and the class
members. Compl. (Docket No. 1), at 17-18.
The Court has jurisdiction over this matter under 28 U.S.C. § 1331.
The district court has the inherent power to stay its proceedings. Landis v. N. Am. Co.,
299 U.S. 248, 254-55 (1936) (“[T]he power to stay proceedings is incidental to the power
inherent in every court to control the disposition of the causes on its docket with economy of
time and effort for itself, for counsel, and for litigants. How this can best be done calls for the
exercise of judgment, which must weigh competing interests and maintain an even balance.”).
A trial court may, with propriety, find it is efficient for its own docket and the
fairest course for the parties to enter a stay of an action before it, pending
resolution of independent proceedings which bear upon the case. This rule
applies whether the separate proceedings are judicial, administrative, or arbitral in
character, and does not require that the issues in such proceedings are necessarily
controlling of the action before the court.
Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979). “The proponent
of a stay bears the burden of establishing its need.” Clinton v. Jones, 520 U.S. 681, 708 (1997).
In considering a motion to stay, a court must consider three factors: (1) potential prejudice to the
non-moving party, (2) hardship and inequity to the moving party if the action is not stayed, and
(3) the judicial resources that would be saved. See CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th
Cir. 1962); Oregon, ex rel. Kroger v. Johnson & Johnson, No. 11-cv-86-AC, 2011 WL 1347069,
at *2 (D. Or. Apr. 8, 2011). “If there is even a fair possibility that the stay will work damage to
some one else, the stay may be inappropriate absent a showing by the moving party of hardship
or inequity.” Dependable Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066
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(9th Cir. 2007) (quotation omitted). “A stay should not be granted unless it appears likely the
other proceedings will be concluded within a reasonable time in relation to the urgency of the
claims presented to the court.” Levya, 593 F.2d at 864. However, “being required to defend a
suit, without more, does not constitute a clear case of hardship or inequity.” Lockyer v. Mirant
Corp., 398 F.3d 1098, 1112 (9th Cir. 2005) (quotation omitted). A delay in recovering monetary
damages is not sufficient harm to warrant denying a stay. See CMAX, 300 F.2d at 268-69.
Defendant seeks to stay this case pending the D.C. Circuit’s decision in ACA
International v. FCC, No. 15-1211, a consolidated action considering challenges to the FCC’s
Declaratory Ruling and Order In the Matter of Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991, 30 FCC Rcd. 7961, 7999-8012 (2015) (the “2015
FCC Order”). Defendant argues that ACA International may invalidate the 2015 FCC Order,
which Order allegedly directly bears on several issues in this action. Plaintiff opposes a stay on
the grounds that a stay would prejudice her, and could be lengthy.
The 2015 FCC Order and ACA International
The FCC issued the 2015 FCC Order on July 10, 2015. In part, that Order held that the
term “called party” under 47 U.S.C. § 227(b)(1)(A) should be defined as the consumer actually
assigned the telephone number dialed in the call, and rejected the proposed definition of “called
party” as “intended recipient” or “intended called party.” 30 FCC Rcd. 7961, 8000-03 (emphasis
added). Thus, a call to a reassigned phone number may violate the TCPA when only the
previous subscriber—not the current subscriber or holder of the telephone number—provided the
express consent to be called. Id. at 8000-01. This potential liability is subject to a narrow, onecall safe harbor. Id. The Order also held that individuals should have the right to revoke consent
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to be called by “any reasonable method.” Id. at 7996. The Order further opined on the definition
of an automatic telephone dialing system (“ATDS”), specifically, what satisfied the statutory
definition of ATDS as “equipment which has the capacity to (A) store or produce telephone
numbers to be called, using a random or sequential number generators; and (B) to dial such
numbers,” 47 U.S.C. § 227(a)(1) (emphasis added): the FCC stated that “capacity” “is not
limited to [the equipment’s] current configuration but also includes its potential functionalities,”
that is, “capacity” is not limited to “present ability,” 30 FCC Rcd. 7961, 7974.
Nine companies filed petitions with the D.C. Circuit seeking review of the 2015 FCC
Order. See Fontes v. Time Warner Cable Inc., No. CV14-2060-CAS(CWx), 2015 WL 9272790,
at *3 (C.D. Cal. Dec. 17, 2015). Those petitions were consolidated into a single case, ACA
International. Id. “All of the petitions request that the D.C. Circuit vacate the FCC’s ruling with
regard to the potential liability for calls to reassigned cell phone numbers and the definition of an
‘automatic telephone dialing system.’”
The D.C. Circuit held oral argument in ACA
International on October 19, 2016.
Under the Hobbs Act, 28 U.S.C. § 2342(a), the federal courts of appeals have exclusive
jurisdiction to review FCC final orders; the district courts lack such jurisdiction. When multiple
petitions for review of an FCC order are consolidated and assigned to a single circuit court, that
court is “the sole forum for addressing the validity of the FCC’s rules.” MCI Telecomms. Corp.
v. U.S. W. Commc’ns, 204 F.3d 1262, 1267 (9th Cir. 2000) (quotation omitted).
Instructive Case Law Regarding a Stay Pending ACA International
Multiple district courts, including district courts within in this Circuit, have considered
whether to stay TCPA actions pending the outcome of ACA International, with the majority
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deciding to issue a stay. Although the parties cite and discuss numerous such cases, the Court
here will focus on the most applicable and persuasive, from within this Circuit.
In Fontes v. Time Warner Cable Inc., the court stayed a TCPA action concerning prerecorded phone calls allegedly made from an ATDS, in part to reassigned phone numbers. 2015
WL 9272790, at *1. The court found a “legitimate possibility that the [D.C. Circuit] Court of
Appeals may overturn” the 2015 FCC Order, and because the issues before the D.C. Circuit in
ACA International “could potentially be dispositive of the outcome in” that case, “the Court
[found] that it is prudent to await further guidance from the D.C. Circuit.” Id. at *4. Those
issues included the definition of “called party,” liability for reassigned phone numbers, and the
definition of an ATDS. Id. A stay could save “substantial efforts by the parties” and avoid “the
risk of wasting the resources of the Court.” Id. at *5. The court in Small v. GE Capital, Inc.
engaged in much the same reasoning and also decided to stay, while also holding that the
plaintiff had not shown he would be prejudiced by a stay. No. EDCV 15-2479 JGB (DTBx),
2016 WL 4502460, at *2-3 (C.D. Cal. June 9, 2016). Errington v. Time Warner Cable Inc.
reached the same conclusion, noting that without a stay “Defendant may suffer hardship in
conducting discovery and trial preparation in light of the uncertain” definition of ATDS, and that
“a stay may simplify the issues in this case and conserve judicial resources.” No. 2:15-CV02196 RSWL (DTB), 2016 WL 2930696, at *4 (C.D. Cal. May 18, 2016).2
Other cases granting stays pending ACA International include Frable v. Synchrony Bank, No.
16-cv-0559 (DWF/HB), 2016 WL 6123248 (D. Minn. Oct. 17, 2016); Shahin v. Synchrony
Financial, No. 8:15-cv-2941-T-35EAJ, 2016 WL 4502461 (M.D. Fla. Apr. 12, 2016); Rose v.
Wells Fargo Advisors, LLC, No. 1:16-CV-562-CAP, 2016 WL 3369283 (N.D. Ga. June 14,
2016); Robinson v. Nationstar Mortgage, LLC, No. 2:16-cv-83, 2016 WL 6275192 (S.D. Ga.
Oct. 25, 2016); Coatney v. Synchrony Bank, No. 6:16-cv-389-Orl-22TBS, 2016 WL 4506315
(M.D. Fla. Aug. 2, 2016); Ricks v. Allied Interstate, LLC, No. 3:16-cv-00205-HES-PDB, 2016
WL 4505173 (M.D. Fla. July 11, 2016); and Abplanalp v. United Collections Bureau, Inc., No.
3:15-CV-203-RJC-DCK, 2016 WL 81498 (W.D.N.C. Jan. 7, 2016).
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By contrast, the court in Lathrop v. Uber Technologies, Inc., denied a motion for stay.
No. 14-cv-05678-JST, 2016 WL 97511 (N.D. Cal. Jan. 8, 2016). When Lathrop was decided,
the D.C. Circuit had not yet held oral argument, which fact the court found weighed against a
stay. Id. at *4. The court found that, given likely appeals from the ACA International decision,
litigation could continue and lengthen a stay significantly. Id. The court noted that the case
before it would require discovery regardless of ACA International’s outcome, even if that appeal
did have the potential to narrow discovery, and that the hardship to defendant of conducting
discovery was not sufficient to merit a stay. Id.3
Application of the relevant factors strongly counsels in favor of staying this action
pending a decision in ACA International.
1. Potential Prejudice to the Non-Moving Party: The potential prejudice to plaintiff of a
stay is minimal. Any delay in plaintiff’s recovering monetary damages does not merit a stay, see
CMAX, 300 F.2d at 268-69, and although plaintiff has requested injunctive relief as well, the last
text message plaintiff received was in August 2016, Compl. (Docket No. 1) ¶ 35, and nothing
suggests that plaintiff is in jeopardy of receiving additional text messages. Moreover, the Court
finds that the harm to plaintiff of receiving unsolicited text messages, which historically
averaged approximately two per month, see id. ¶¶ 28-35, is minimal. Further, “[t]his case is in
the early stages of litigation and in all likelihood, the stay will not be lengthy,” Shahin, 2016 WL
Cases denying a stay include Konopca v. Center for Excellence in Higher Education, Inc., No.
15-5340 (FLW)(DEA), 2016 WL 4644461 (D.N.J. Sept. 6, 2016). Plaintiff also cites Espejo v.
Santander Consumer USA, Inc. in opposition to defendant’s request to stay, but Espejo presented
a different procedural posture (the opinion plaintiff cites concerns a motion for class
certification), and in fact the Espejo court said that it would partially stay the case: “the Court
will defer a trial on [plaintiff’s remaining individual] claims until the D.C. Circuit issues its
decision in ACA Int’l, and will revisit any issues affected by that decision as needed,” so Espejo
in fact supports defendant’s, not plaintiff’s, position. Nos. 11 C 8987 & 12 C 9431, 2016 WL
6037625, at *6 (N.D. Ill. Oct. 14, 2016).
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4502461 at *2; see also Rose, 2016 WL 3369283 at *2 (finding the same); Robinson, 2016 WL
6275192, at *2 (same); Coatney, 2016 WL 4506315, at *2 (same), especially as the D.C. Circuit
has already heard oral argument in ACA International. The Court finds plaintiff’s concerns
regarding subsequent appeals from the D.C. Circuit’s decision unpersuasive, as the Court would
not be staying this action until the termination of the entire ACA International litigation, but only
until the D.C. Circuit panel issues its decision. Although plaintiff suggests that a stay would
jeopardize the availability of witnesses, accuracy of testimony, and preservation of evidence, see
Pl.’s Resp. (Docket No. 21), at 8-9, plaintiff has not provided any specific argument or evidence
concerning why this would be so, and indeed the Court finds that the facts likely at issue
(whether defendant sent plaintiff the alleged text messages, and whether plaintiff consented to
receive them) are not likely susceptible to any loss of evidence during the short time this action
would be stayed.
2. Hardship and Inequity to the Moving Party: Conversely, defendant will suffer hardship
if this action is not stayed. Both parties face the possibility of unnecessary discovery and trial
preparation on issues that ACA International may modify or remove from this action. Although
defendant’s being required to defend a suit is not alone sufficient to merit a stay, see Lockyer,
398 F.3d at 1112, the burden of proceeding with this litigation potentially unnecessarily is
nonetheless a factor in favor of granting a stay (in conjunction with the savings to judicial
resources, discussed below) that the Court may consider, even if it is not dispositive, see Small,
2016 WL 4502460, at *3 (“[F]urther litigation absent a ruling may be unnecessary and will
require both parties and the court to spend substantial resources.”); Frable, 2016 WL 6123248, at
*2 (finding the same); Rose, 2016 WL 3369283 at *2 (same).
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3. Judicial Resources That Would Be Saved: Lastly, a stay will greatly conserve judicial
resources. This factor weighs most heavily in favor of a stay. ACA International may be
dispositive of certain issues, or the entire outcome, of this action; it will almost certainly
significantly aid this Court’s decision-making. See Fontes, 2015 WL 9272790, at *4-5; Shahin,
2016 WL 4502461, at *1. ACA International would likely simplify the issues before the Court
and thereby conserve judicial resources. See Errington, 2016 WL 2930696, at *4; Rose, 2016
WL 3369283 at *2. Specifically, the ACA International decision could directly affect the
questions of whether defendant used an ATDS as defined by the TCPA, and whether defendant
would be liable for allegedly sending text messages to a reassigned telephone number. ACA
International will also likely address the issue of how a message recipient may revoke consent to
receive such messages, which under the 2015 FCC Order can occur by “any reasonable method.”
Although it was apparently plaintiff’s predecessor to her phone number that had provided
consent to receive messages, not plaintiff, plaintiff asked defendant to cease sending text
messages not by replying with “STOP,” as messages had instructed, but by sending an email to
customer support. If the D.C. Circuit strikes down the 2015 FCC Order, this will likely affect
how consent to receive messages may be revoked. Indeed, plaintiff cites the 2015 FCC Order at
length in her Complaint, on the issue of who must consent to receive text messages. Compl.
(Docket No. 1) ¶ 13. Thus, “[s]hould the D.C. Circuit reject the FCC’s interpretation of” the
TCPA, and find that, for example, a cause of action for a TCPA violation is more limited than
the present FCC regulations would allow, “federal district courts would be more likely to follow
the D.C. Circuit’s decision than an invalidated FCC order.” Frable, 2016 WL 6123248, at *3.
This is especially so given the consolidation of the actions challenging the 2015 FCC Order
before the D.C. Circuit and that court’s resulting exclusive jurisdiction to hear such challenges.
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The Court finds that these substantial savings in judicial resources greatly outweigh any potential
prejudice to plaintiff in waiting what would likely be only a short while for the D.C. Circuit’s
decision. See Robinson, 2016 WL 6275192, at *2.
Thus, one factor (potential prejudice to plaintiff) weighs against a stay, but only
minimally. The two other factors (hardship to defendant, savings of judicial resources) weigh in
favor of a stay, with the third factor doing so greatly. Accordingly, analysis of the relevant
factors strongly counsels the Court to stay this action pending ACA International.
For the foregoing reasons, the Court GRANTS defendant’s Motion to Stay. This action
is stayed pending the D.C. Circuit panel’s decision in ACA International. Accordingly, the Court
does not presently reach defendant’s Motion to Dismiss.
The Court instructs the parties to notify the Court when the D.C. Circuit’s opinion is
issued and to file supplemental briefing regarding the impact of the opinion on this case within
15 days of that notice.
IT IS SO ORDERED.
day of March, 2017.
/s/ Patricia Sullivan
United States Magistrate Judge
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