Berrow v. Navient Solutions LLC ( 2020 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Michael Berrow, No. CV-20-01342-PHX-SMB 10 Plaintiff, ORDER 11 v. 12 Navient Solutions LLC, 13 Defendant. 14 15 16 The Court is in receipt of Defendant Navient Solutions LLC’s (“Navient”) Motion 17 to Stay Action (“Motion”). (Doc. 23.) Plaintiff, Michael Berrow, responded, (Doc. 24), and 18 Defendant replied. (Doc. 25.) Defendant’s Motion requested oral argument, but the Court 19 is inclined to rule without oral argument, finding that it is unnecessary. See LRCiv. P. 20 7.2(f). The Court has considered the pleadings and will grant Defendant’s Motion for the 21 reasons below. 22 I. BACKGROUND 23 Plaintiff alleges in his Complaint that he co-signed three student loans for his 24 daughter to attend college. (Doc. 1 ¶ 8.) In 2009, Mr. Berrow’s daughter passed away due 25 to heart failure, leaving him financially responsible for her loans. (Id. at 9.) Although 26 Navient, the holder of the student loans, allegedly originally told Mr. Berrow that he would 27 not be responsible for the debt, they later recanted and requested that Mr. Berrow begin 28 making payments. (Id. ¶¶ 10-11.) Mr. Berrow alleges that he could not afford to make the 1 full payment, so he paid only the interest on the loans for a few years to keep them from 2 going into default. (Id. ¶ 13.) In or around June 2017, the Complaint alleges that Navient 3 began calling Mr. Berrow on his cell phone. (Id. ¶ 16.) On or about July 31, 2017, Mr. 4 Berrow spoke with a Navient representative and revoked consent to be contacted further. 5 (Id. ¶ 19.) Thereafter, Navient allegedly called him an additional 225 times between July 6 31, 2017 and October 1, 2018 using an automatic telephone dialing system (“ATDS”). (Id. 7 ¶¶ 23-24.) Plaintiff alleges that these calls violated the Telephone Consumer Protection Act 8 (“TCPA”), 47 U.S.C. § 227(b)(1)(A)(iii), which states: “It shall be unlawful for any person 9 within the United States…too make any call (other than a call made for emergency 10 purposes made with the prior express consent of the called party) using any automatic 11 telephone dialing system or artificial or prerecorded voice—to any telephone number 12 assigned to a … cellular telephone service … or any service for which the called party is 13 charged for the call.” (Id. ¶ 33.) 14 Defendant filed this Motion asking for a stay in light of the Supreme Court’s grant 15 of the Writ of Certiorari in Facebook, Inc. v. Duguid, Sup. Ct. Dkt. No. 19-511 (“Duguid”), 16 in which the Supreme Court will clarify a circuit split on what is needed for a device to 17 constitute an ATDS under the TCPA. 18 II. LEGAL STANDARD 19 “[T]he power to stay proceedings is incidental to the power inherent in every court 20 to control the disposition of the causes on its docket with economy of time and effort for 21 itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163 22 (1936). Accordingly, “[a] trial court may…enter a stay of an action before it, pending 23 resolution of independent proceedings which bear upon the case.” Leyva v. Certified 24 Grocers of California, Ltd., 593 F.2d 857, 863 (9th Cir. 1979). The decision whether to 25 stay an action is committed to the “sound discretion” of the district court and is based on 26 weighing “the competing interests which will be affected by the granting or refusal to grant 27 a stay…” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). Among these competing 28 interests are (1) “the possible damage which may result from the granting of the stay,” (2) 1 “the hardship or inequity which a party may suffer in being required to go forward,” and 2 (3) “the orderly course of justice measured in terms of the simplifying or complicating of 3 issues, proof, and questions of law which could be expected to result from a stay.” Lockyer 4 v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting CMAX, Inc., 398 F.3d at 5 268).1 “[T]he proponent of a stay bears the burden of establishing its need.” Clinton v. 6 Jones, 520 U.S. 681, 708, 117 S.Ct. 1636 (1997). 7 III. ANALYSIS 8 Defendant argues that the case should be stayed until the United States Supreme 9 Court renders a decision in Duguid. As Judge Lanza recently pointed out, “Since the 10 Supreme Court granted review in [Duguid], courts have split on whether a stay is 11 appropriate in TCPA cases premised on the use of ATDSs.” Canady v. Bridgecrest 12 Acceptance Corp., No. CV-19-04738-PHX-DWL, 2020 U.S. Dist. LEXIS 161629, at *7 13 (D. Ariz. Sep. 3, 2020). On July 9, 2020, the Supreme Court granted the Petition of Writ 14 for Certiorari in Duguid on the second questions presented of the petition, which states, 15 “Whether the definition of ATDS in the TCPA encompasses any device that can ‘store’ 16 and ‘automatically dial’ telephone numbers, even if the device does not ‘us[e] a random or 17 sequential number generator.’” (Doc. 23-1, Ex. B.) The Supreme Court heard oral 18 argument in the case on December 8, 2020. (Doc. 23-1 ¶ 5.) Currently in the Ninth Circuit, 19 random or sequential phone number generation is not required for a system to qualify as 20 an ATDS under the TCPA, but ATDS has instead been construed to encompass “devices 21 with the capacity to dial stored numbers automatically.” See Marks v. Crunch San Diego, 22 LLC, 904 F.3d 1041, 1052 (9th Cir. 2018). However, courts in other circuits disagree, and 23 24 1 Plaintiff argues in his response that the factors in Nken v. Holder, 556 U.S. 418, 433 (2009), not Landis and its progeny, govern this Court’s decision of whether to grant a stay. 25 (Doc. 24 at 4.) However, courts in the Ninth Circuit use the factors in Landis over those in 26 Nken where a party seeks to stay a district court proceeding pending the resolution of another action. See, e.g., Lal v. Capital One Fin. Corp., No. 16-CV-06674-BLF, 2017 U.S. 27 Dist. LEXIS 9121, at *3 (N.D. Cal. Jan. 23, 2017) (using the Landis factors and explaining 28 that the same four factors used in Nken are used where a party seeks to stay enforcement of a judgment or order pending an appeal of the same judgment or order in the same case). 1 the Supreme Court is posed to clarify the statute. See, e.g., Glasser v. Hilton Grand 2 Vacations Co., 948 F.3d 1301, 1304-05 (11th Cir. 2020) (requiring devices to use randomly 3 or sequentially generated numbers to be considered an ATDS under the TCPA). As one of 4 the two claims in Plaintiff’s complaint will turn on the Supreme Court’s decision in 5 Duguid, Navient argues that all three factors weigh in favor of granting a stay until the 6 Supreme Court decides Duguid. The Court agrees. 7 Defendant argues that granting the stay will do little, if any damage to Plaintiff. 8 Plaintiff argues that a stay would be highly prejudicial to his case. Plaintiff argues that 9 since he bears the burden of proof for his claims, a stay will prejudice his chances of 10 prosecuting his case because “memories will fade, witnesses will become difficult to 11 locate, and essential records will be lost.” (Doc. 24 at 13.) However, the Court is 12 unpersuaded by this argument. The stay will not be “indefinite in nature,” which is 13 disfavored by the Ninth Circuit. Dependable Highway Exp., Inc. v. Navigators Ins. Co., 14 498 F.3d 1059, 1066-67 (9th Cir. 2007). As oral argument was held at the Supreme Court 15 in Duguid on December 8, 2020, staying the case until a decision is issued from the 16 Supreme Court will not cause prejudice to Plaintiff’s case because he will likely only need 17 to wait, at most, a few months to begin discovery. This short delay is not substantial enough 18 to cause a hardship of Plaintiff’s prosecution of this matter, as his evidence is unlikely to 19 disappear in this short amount of time. This is especially in true in light of the fact that 20 Defendant should have by now issued litigation hold to preserve documents relevant to the 21 litigation. Canady, 2020 U.S. Dist. LEXIS 161629, at *10. What’s more, as Defendant 22 points out, the suit is for an injury that is no longer occurring, and a stay would not cause 23 continuing harm to Plaintiff. (Doc. 23 at 14.) Further, this case is at an early stage, which 24 weighs in favor of granting the stay. See Sensibaugh v. Ef Educ. First, 2020 U.S. Dist. 25 LEXIS 113165, at *4 (C.D. Cal. May 7, 2020) (“A (relatively) young case, at least from 26 the standpoint of litigation efforts, if not time alone, factors staying this action.” (quoting 27 Seefeldt v. Entm’t Consulting Int’l, LLC, N. 4:19-CV-00188, 2020 WL 905844, at *3 (E.D. 28 Mo. Feb. 25, 2020)). Thus, the Court finds that the first factor of the Landis analysis weighs 1 in favor of granting the stay. 2 As to the second factor of the analysis, Defendant argues that it will be a hardship 3 for it to have to litigate its potential TCPA liability from an uncertain position. While 4 uncertainty in the law alone does not merit a stay, the Court finds that the Duguid decision 5 has the potential to narrow and clarify the issues in this case related to Defendant’s TCPA 6 liability. While Plaintiff argues that, no matter what the Supreme Court decides, Defendant 7 will still have to undergo discovery to determine whether their system qualifies as an 8 ATDS, the Court is not persuaded by this point. The Supreme Court’s decision will 9 potentially clarify and narrow discovery questions that need to be answered, likely saving 10 both parties time and resources. Thus, this factor weighs, although minimally, in favor of 11 granting the stay. 12 For the third and final factor in the analysis, the Court must determine whether a 13 stay would promote the “orderly course of justice measured in terms of the simplifying…of 14 issues, proof, and question[s] of law.” Lockyer, 398 F.3d at 1110 (quotations omitted). In 15 other words, the Court must determine if the stay will further judicial economy. The third 16 factor weighs in favor of granting the stay. The Supreme Court decision in Duguid will 17 clarify the law, and therefore, discovery in this case. Further, the decision will avoid 18 exhausting judicial resources to decide things like discovery disputes and motions, which 19 could later prove fruitless. See Canady, 2020 U.S. Dist. LEXIS 161629 at *11 (quoting 20 Seefeldt, 2020 U.S. Dist. LEXIS 152058 at *2.). The Court finds that a stay would further 21 judicial economy in this case. 22 IV. CONCLUSION 23 Weighing the competing interests, the Court concludes that a stay is warranted. For 24 the reasons discussed above, 25 IT IS ORDERED granting the Defendant’s Motion to Stay Action (Doc. 23) until 26 the United States Supreme Court issues an opinion in Facebook Inc. v. Duguid, No. 19- 27 511. 28 IT IS FURTHER ORDERED that the parties shall submit a new proposed scheduling order within 14 days of the date that the Supreme Court issues its opinion in 2|| Facebook Inc. v. Duguid, No. 19-511. 3 Dated this 16th day of December, 2020. 4 5 — . RP 6 SO 7 Gnvted States District ude. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6-