District Courts Stay TCPA Cases in Light of Spokeo, Gomez, and D.C. Circuit Appeal

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A number of federal district courts have recently stayed TCPA cases pending the outcome of Supreme Court proceedings in Robins v. Spokeo, Inc. and Campbell-Ewald Co. v. Gomez, and the outcome of petitions seeking review of the FCC’s July 10, 2015 Declaratory Ruling and Order (“FCC Order”) that are currently pending before the United States Court of Appeals for the District of Columbia Circuit. See ACA Int’l, et al. v. F.C.C., No. 15-1211 (D.C. Cir. 2015).

As we have discussed in previous posts, on April 27, 2015 the Supreme Court granted certiorari in Robins v. Spokeo, Inc. to address whether “a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court” can bring a private right of action based solely on a technical violation of a federal statute. 742 F.3d 409 (9th Cir. 2014) cert granted, 135 S. Ct. 1892 (2015). Less than a month later, the Supreme Court granted certiorari in Campbell-Ewald Co. v. Gomez, a TCPA class action, to address whether a case is mooted when a plaintiff is offered complete relief of his claim. 768 F.3d 871 (9th Cir. 2014) cert. granted, 135 S. Ct. 2311 (2015). And in the wake of the FCC Order, a number of companies filed petitions seeking judicial review of various controversial rulings. These include: (1) to qualify as an “automatic telephone dialing system” (“ATDS”) under the TCPA, a system “need only have the ‘capacity’ to dial random and sequential numbers, rather than the ‘present ability’ to do so”; (2) the term “called party” means the “intended recipient of the call,” which implies that calls to reassigned numbers may violate the TCPA where the previous subscriber—not the current subscriber—provided express consent; and (3) callers that unknowingly call reassigned numbers are allowed one call to gain actual knowledge of reassignment, and knowledge of reassignment is deemed constructive after that single call.

A number of district courts have recently stayed TCPA cases pending the resolution of these three controversies.

In Fontes v. Time Warner Cable, Inc., 14-2060 (C.D. Cal. Dec. 17, 2015), the Central District of California granted the defendant’s motion to stay pending a decision from the D.C. Circuit in ACA International. In the case, Defendant Time Warner Cable argues that it did not violate the TCPA because it had inadvertently called the plaintiffs, whose numbers had been reassigned to them without its knowledge. Time Warner Cable also contends that the device used to make the calls was not an ATDS because it did not have the present capacity to generate random or sequential phone numbers. In granting Time Warner’s motion to stay, the district court noted that the FCC “was sharply divided” on these issues, so much so that “at least one commissioner believes that the FCC ruling is ‘flatly inconsistent with the TCPA.’” Accordingly, the court found that “there is a legitimate possibility that the Court of Appeals may overturn that ruling” and therefore the “proper interpretation of the TCPA remains unclear.”

Similarly, in a short opinion, the Central District of California stayed another TCPA class action, Kolloukian v. Uber Technologies, Inc., 15-2856 (C.D. Cal. Dec. 14, 2015), pending the resolution of the ACA International appeal in the D.C. Circuit, noting that the decision will likely “simplify[] the issues in question, streamlin[e] the resolution of substantive issues, and reduc[e] the burden on the parties and the Court.”

In Acton v. Intellectual Capital Management, Inc., 15-4004 (E.D.N.Y. Dec. 28, 2015), a TCPA class action dealing with the alleged sending of commercial text messages to plaintiff’s phones without consent, the Eastern District of New York granted the parties’ joint request for a stay based on Spokeo, Gomez, and the appeal of the FCC Order. In seeking a stay, the defendants asserted that the questions of whether plaintiff’s claims were satisfied by an offer of judgment and whether he lacked standing to pursue the action in the absence of actual damages would be dispositive of the case. Additionally, defendants contended that the appeal of the FCC Order would affect the outcome of the litigation to the extent it clarified certain terms of the TCPA. The plaintiff agreed and stipulated to the stay. In granting the joint request to stay, the court reasoned that a stay was “in the interests of justice” because the outcome of Spokeo and Gomez “could potentially conclude this matter and will, at the very least, settle important issues of law relating to [plaintiff’s] claims.” Along the same lines, the court noted that the resolution of the D.C. Court of Appeals will more precisely define terms set forth in the TCPA,” thereby providing additional support for the issuance of a stay.

Finally, in Luster v. Sterling Jewelers, 15-cv-2854, (N.D. Ga. Dec. 17, 2015), the court granted a stay pending the resolution of Spokeo and Gomez. The court reasoned that Spokeo and Gomez may be dispositive of the action. It noted that, in addition to the fact that the plaintiff would suffer no prejudice, a stay was warranted “(i) to avoid unnecessary expenditures of time and resources, (ii) because a decision on both Supreme Court cases is expected in the next few months, and (iii) because there is a public interest in judicial economy and efficiency.” It also rejected the plaintiff’s argument that doubts about the court’s federal subject matter jurisdiction warranted an immediate remand to state court. In doing so, it opined that “[t]he proper inquiry is whether the Court had jurisdiction at the time of removal. . . . The Court had jurisdiction over this action at the time of removal, and therefore continues to have jurisdiction over this action.”

These stays illustrate the impact that Spokeo and Gomez will have on numerous TCPA class actions and the uncertainty that still surrounds interpretation of the TCPA as a result of the FCC Order and the resulting appeals. It is likely that more stays will be sought and granted in light of the essential aspects of these cases and their far-reaching implications.