Nicholson v. REI Energy, LLC
Nicholson v. REI Energy, LLC
Opinion of the Court
Plaintiff Todd Nicholson brings this putative class action against Defendant REI Energy, LLC, alleging violations of the Telephone Consumer Protection Act ("TCPA"),
BACKGROUND
I. Factual Background
Defendant is a Texas corporation that "specializes in the acquisition, development, *1202and management of conventional and unconventional oil and gas properties." Compl. ¶¶ 2, 11, ECF 1. Particularly relevant to the present motion, Plaintiff alleges that Defendant utilized a system that qualifies as an ATDS in contacting potential investors about oil or gas property investment opportunities.
Plaintiff, a resident of Portland, Oregon, first received a call from Defendant on his cellular phone on December 21, 2017. Compl. ¶¶ 1, 21. Despite having informed Defendant he was not interested and wanted the calls to stop, Plaintiff alleges that he received a second call on December 22, 2017.
II. Legal Developments
Plaintiff's claims arise under
[U]nlawful for any person within the United States ... to make a call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice to any telephone number assigned to a ... cellular telephone service ... or any service for which the called party is charged for the call, unless such call is made solely to collect a debt owed to or guaranteed by the United States.
This section defines ATDS as "equipment which has the capacity-(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers."
Between 2003 and 2015, the FCC issued several declaratory rulings and orders on what equipment qualifies as an ATDS under the TCPA. See Marks v. Crunch San Diego, LLC ,
*1203ACA Int'l v. Fed. Commc'ns Comm'n ,
In September of 2018, the Ninth Circuit issued its opinion in Marks v. Crunch San Diego, LLC. There, the Ninth Circuit considered "anew ... the definition of ATDS under the TCPA."
Meanwhile, a joint petition for declaratory ruling was filed with the FCC seeking guidance on the definition of ATDS.
*1204The FCC subsequently issued two public notices requesting comments on issues related to the definition of ATDS under the TCPA. Def. Mot. Exs. B, C, ECF 35-2, 35-3. In the First Notice, the FCC sought comment on "how to determine 'capacity' in light of [ ACA International ]" and "the functions a device must be able to perform to qualify as an automatic telephone dialing system." Def. Mot. Ex. B at 2. The Second Notice, issued on October 3, 2018, sought "further comment on what constitutes an 'automatic telephone dialing system.' " Def. Mot. Ex. C. at 1. The FCC specifically cited the conflict between the Ninth Circuit's expansive decision in Marks and the narrower ACA International decision. Id. at 2. The comment and reply periods extended through the end of June for the first notice and the end of October for the second. Def. Mot. Exs. B, C. To date, the FCC has not made a decision.
III. Procedural Background
Plaintiff filed his Complaint on January 31, 2018. Compl. On April 13, 2018, Defendant filed a Motion to Bifurcate Discovery to pursue limited discovery on the equipment used by Defendant to make the calls at issue in this case prior to pursing class certification. Def. Mot. Bifurcate Disc., ECF 23. Defendant asserted that the narrow issue of whether the equipment constituted an ATDS could be dispositive of Plaintiff's claim. Id. The Court granted Defendant's Motion, setting a limited discovery deadline for September 7, 2018. The Court also suspended all other deadlines, including class certification, pending the completion of discovery and set the deadline for filing a dispositive motion on the ATDS issue for 21 days after the close of discovery. Order, ECF 32, 34. Instead of filing a dispositive motion, however, Defendant filed the present Motion for Stay two months after the close of limited discovery. Def. Mot., ECF 35.
DISCUSSION
Defendant moves to stay this action pending an order by the FCC regarding what constitutes an ATDS in violation of the TCPA. The basis for Defendant's motion is ACA International v. FCC , which set aside the FCC's interpretation of the term "capacity" in the definition of ATDS. Since the ACA International decision, the FCC has issued two public notices requesting comments on the definition of ATDS. Pursuant to either the primary jurisdiction doctrine or the Court's inherent authority, Defendant argues that this case should be stayed pending new guidelines from the FCC.
*1205Plaintiff has directed the Court to three other district court opinions in this circuit addressing this issue. In all three cases, the court declined to stay TCPA proceedings under either the primary jurisdiction doctrine or the court's inherent authority.
I. Primary Jurisdiction Doctrine
"Primary jurisdiction is a prudential doctrine that permits courts to determine 'that an otherwise cognizable claim implicates technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch.' " Astiana v. Hain Celestial Grp., Inc. ,
The Ninth Circuit has instructed courts to look to four factors in evaluating primary jurisdiction: " '(1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration.' " Clark ,
Defendant argues that all four factors are applicable here. First, Defendant contends that prior to ruling on summary *1206judgment, "the Court will ... need clear guidance regarding what capabilities and characteristics are required for equipment to meet the statutory definition of ATDS," a definition which is currently in flux and being actively considered by the FCC. Def. Mot. 12-13. Second, Defendant notes that the FCC has jurisdiction to decide whether certain technology constitutes an ATDS, and "is poised to decide that very issue soon." Id. at 14. Third, "[t]he core issue that will require resolution in this case ... falls squarely within the TCPA's complex and complicated regulatory scheme." Id. at 15. Finally, Defendant argues that deference to the FCC on this issue is warranted because it would promote uniformity and is within its particular area of expertise. Id. at 15-17.
The Court disagrees. Though "Congress has delegated the FCC with the authority to make rules and regulations to implement the TCPA," Satterfield v. Simon & Schuster, Inc. ,
In addition, despite Defendant's assertions to the contrary, it is unclear when the FCC will issue its ruling. As recognized by other district courts in this circuit, a stay based on the FCC's ruling would be indefinite, particularly as that ruling could be subject to further challenge. Pieterson ,
II. Inherent Authority
The power to stay 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." Landis v. N. Am. Co. ,
the possible damage which may result from the granting of a stay, the hardship or inequity which a party may suffer in *1207being required to go forward, and the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay.
Lockyer v. Mirant Corp. ,
Defendant argues that the Court should exercise its inherent authority to stay this case. Def. Mot. 17. Defendant argues that Plaintiff will not be prejudiced by a stay because the FCC is expected to issue an order soon, Plaintiff is not claiming a continued threat of calls from Defendant, and monetary damages in this case are minimal. Id. at 18. And Defendant alleges that the burden it would suffer in moving forward with this case is significant because it would require Defendant to pursue dispositive motion practice absent clarification from the FCC. Id. at 18-19. Finally, Defendant suggests that a stay would permit the Court to save judicial resources. Id. at 19. It asserts that any rulings regarding ATDS would "likely have to be revisited after the FCC issues its order." Id.
As described above, there is no indication as to when the FCC might issue a decision on the definition of ATDS, and the Ninth Circuit has provided this Court with binding precedent on this issue. Accordingly, there is no question of law which might soon be answered if the Court were to grant the stay, and any prejudice to Defendant in litigating this case further is outweighed by the prejudice resulting to Plaintiff if he is required to wait indefinitely for a decision from the FCC. Lockyer ,
CONCLUSION
Defendant's Motion to Stay [35] is DENIED. The parties shall contact the courtroom deputy to schedule a status conference. The parties shall also file a joint status report and case schedule by noon two days prior to the conference.
IT IS SO ORDERED.
There has been some dispute as to whether the DC Circuit invalidated the FCC's prior orders. However, the Ninth Circuit concluded in Marks v. Crunch San Diego that "[b]ecause the D.C. Circuit exercised its authority to set aside the FCC's interpretations of the definition of an ATDS in the 2015 order and any prior FCC rules that were reinstated by the 2015 order, ... the FCC's prior orders on that issue are no longer binding on [the court]." Marks v. Crunch San Diego, LLC ,
Defendant asks the Court to take judicial notice of the joint petition filed with the FCC after ACA International and both FCC public notices requesting comments on issues related to the definition of ATDS discussed below. Def. Mot. Stay, Exs. A-C. Plaintiff does not oppose this request. Because these documents are "made 'publicly available by government entities' " and their authenticity is not disputed, the Court takes judicial notice of these documents. Gusman v. Comcast Corp. , No. 13CV1049-GPC (DHB),
In support of its motion, Defendant also cites: (1) the split between the Third Circuit and the Ninth Circuit; and (2) PDR Network, LLC v. Carlton & Harris Chiropractic, Inc. , 17-1705, currently pending before the Supreme Court. First, the Ninth Circuit addressed the Third Circuit's decision in Dominguez ex. rel. Himself v. Yahoo, Inc. ,
Defendant also cites two cases in a footnote in its Reply where district courts-prior to the Ninth Circuit's decision in Marks -stayed similar proceedings. See Thomas v. Smith-Palluck Assocs. Corp. , 2:17-cv-02001-MMD-CWH,
However, the Court may reconsider whether to stay these proceedings if future developments before the FCC, Ninth Circuit, or Supreme Court justify a stay.
Reference
- Full Case Name
- Todd NICHOLSON, individually and on behalf of all others similarly situated v. REI ENERGY, LLC, a limited liability company
- Cited By
- 5 cases
- Status
- Published