Izor v. Abacus Data Systems Inc. ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 PAUL IZOR, Case No. 19-cv-01057-HSG 8 Plaintiff, ORDER DENYING DEFENDANT'S MOTION TO STAY 9 v. Re: Dkt. No. 50 10 ABACUS DATA SYSTEMS, INC, 11 Defendant. 12 Defendant moves the Court to stay this case under its inherent authority “until the Supreme 13 Court decides the constitutionality of the TCPA in Barr v. American Association of Political 14 Consultants Inc., 19-631.” Dkt. No. 50. For the reasons noted below, the Court DENIES 15 Defendant’s motion to stay.1 16 I. DISCUSSION 17 A district court’s “power to stay proceedings is incidental to the power inherent in every 18 court to control the disposition of the causes on its docket with economy of time and effort for 19 itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). To 20 determine whether a Landis stay is warranted, courts consider: (1) “the possible damage which 21 may result from the granting of a stay,” (2) “the hardship or inequity which a party may suffer in 22 being required to go forward,” and (3) “the orderly course of justice measured in terms of the 23 simplifying or complicating of issues, proof, and questions of law which could be expected to 24 result from a stay.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) (citing Landis, 299 25 26 1 Defendant also filed two requests for judicial notice of documents filed in Barr and other cases. See Dkt. Nos. 52, 61. Because the Court can consider these documents in deciding the motion, the 27 Court GRANTS the two requests. See Papai v. Harbor Tug & Barge Co., 67 F.3d 203, 207 n.5 1 U.S. at 254–55). “[I]f there is even a fair possibility that the stay for which [the requesting party] 2 prays will work damage to [someone] else,” then the party seeking a stay “must make out a clear 3 case of hardship or inequity in being required to go forward.” Landis, 299 U.S. at 255. A district 4 court’s decision to grant or deny a Landis stay is a matter of discretion. Dependable Highway 5 Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). 6 Under Landis, the Court declines to exercise its discretion to stay the case pending the 7 Supreme Court’s decision in Barr. The Court agrees that a stay will likely result in little damage 8 to Plaintiff. Although oral argument in Barr has been postponed in response to public health 9 guidance regarding COVID-19, the stay would not be indefinite or present the possibility of 10 continuing wrongful conduct, as the messaging campaign at issue in this case only took place from 11 December 2018 to February 2019. See Dkt. No. 50-1 at ¶3. The Court similarly finds little 12 hardship or inequity will result if the case moves forward. While Defendant argues that it “will 13 suffer harm in the form of potentially unnecessary fees and costs spent litigating a class action that 14 may be mooted shortly,” Dkt. No. 51 at 12, “being required to defend a suit, without more, does 15 not constitute a ‘clear case of hardship or inequity’ within the meaning of Landis.’” Lockyer v. 16 Mirant Corp., 393 F.3d 1098, 1112 (9th Cir. 2005). Moreover, Defendant fails to acknowledge 17 that a second cause of action alleged by Plaintiffs under section 227(c)(5) will be completely 18 unaffected by the outcome in Barr. See Dkt. No. 1. The discovery deadline in this case was 19 previously set for March 27, 2020, and the parties have represented that depositions remain. See 20 Dkt. No. 50-1 at ¶¶3–5. The depositions are relevant to both causes of action and thus will need to 21 be taken regardless. The circumstances may change after all discovery is complete since the two 22 causes of action allege two different classes, but the Court sees little to no harm in the case 23 proceeding to the class certification stage. See Dkt. No. 44. 24 Finally, the Court turns to the factor of judicial economy, which is the most significant 25 based on the scenario presented in this motion. Defendant argues that that a stay will conserve 26 judicial resources since Barr could invalidate section 227(b)(1)(A)(iii) (Plaintiff’s first cause of 27 action) in its entirety. Barr certified two issues to the Supreme Court: “whether the government- 1 “whether the proper remedy [is] to sever the offending exception from the TCPA, leaving the 2 remainder of the TCPA intact.” Mot. at 1. Section 227(b)(1)(A)(iii) states: 3 It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United 4 States-- (A) to make any call (other than a call made for emergency purposes 5 or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or 6 prerecorded voice-- (iii) to any telephone number assigned to a paging service, cellular 7 telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party 8 is charged for the call, unless such call is made solely to collect a debt owed to or guaranteed by the United States. 9 47 U.S.C. § 227(b)(1)(A)(iii) (emphasis added). The Fourth Circuit held that the government-debt 10 exception of the TCPA (emphasized above) is unconstitutional under the First Amendment, and 11 severed this provision from the remainder of the statute. Am. Ass’n of Political Consultants, Inc. 12 v. Fed. Commc’ns Comm’n, 923 F.3d 159, 171 (4th Cir. 2019) (“We are also satisfied that a 13 severance of the debt-collection exemption will not undermine the automated call ban. For 14 twenty-four years, from 1991 until 2015, the automated call ban was ‘fully operative.’ As a result, 15 the Plaintiffs simply cannot show that excising the debt-collection exemption will hamper the 16 function of the ban.”) (citations omitted). The Ninth Circuit similarly held in Duguid v. Facebook, 17 Inc. 926 F.3d 1146, 1156 (9th Cir. 2019) (“Though incompatible with the First Amendment, the 18 debt-collection exception is severable from the TCPA.”) 19 Defendant’s argument relies entirely on the second question: it assumes that if the Supreme 20 Court agrees that the government-debt exception is unconstitutional under the First Amendment, it 21 also will find that the provision is not severable from section 227(b)(1)(A)(iii)—but that is the 22 opposite of what both the Fourth and Ninth Circuits held. The government-debt exception is not 23 at issue in this case, nor has Defendant put it in issue. See Dkt. No. 21 (Defendant’s motion to 24 dismiss only concerned Plaintiff’s second cause of action under section 227(c)(5) and did not raise 25 any issues with the constitutionality or interpretation of section 227(b)(1)(A)(iii)). Defendant’s 26 hope that the Supreme Court will find the government-debt exception inseverable and overturn 27 controlling authority in this circuit does not warrant a stay pending a decision in Barr. See 1 Duguid, 926 F.3d at 1156 (“While not dispositive, this unambiguous language endorsing 2 severability relieves us of a counterfactual inquiry as to congressional intent and creates a 3 presumption of severability absent ‘strong evidence that Congress intended otherwise.’”) (quoting 4 Alaska Airlines, Inc. v. Brock, 480 U.S. 678, 686 (1987)). 5 Defendant points to Seefeldt v. Entertainment Consulting International, LLC, No. 4:19- 6 CV-00188, 2020 WL 905844, at *3 (E.D. Mo. Feb. 25, 2020), Wright v. EXP Realty, LLC 18-cv- 7 1851-ORL-40EJK, Dkt. No. 99 (M.D. Fla. Feb. 7, 2020), Jones v. USHealth Group, No. 19-cv- 8 02534, Dkt. No. 53 (D. Kan. March 12, 2020), and Perrong v. Liberty Power Corp., 18-cv-00712 9 (D. Del. Mar. 6, 2020), which all recently granted stays in TCPA putative class actions pending 10 the Supreme Court’s decision in Barr. The Court does not find these cases persuasive given the 11 nature of this case. In Seefeldt, “the definitional problem of what constitutes an autodialer” and 12 “government-debt exception issue [were] certainly front-and-center in [the parties’] arguments,” 13 No. 4:19-CV-00188, 2020 WL 905844, at *3 (E.D. Mo. Feb. 25, 2020), but neither of those issues 14 are raised here. Instead, Defendant solely relies upon petitioner’s request for review of the 15 severability question in Barr. In Wright, Jones, and Perrong, the courts provided very little 16 explanation as to why any proceedings before the resolution of Barr would be a waste of judicial 17 resources. 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 // 26 // 27 // Il. CONCLUSION For the foregoing reasons, and in its discretion, the Court DENIES Defendant’s motion to 2 stay. The Court further sets a telephonic conference for April 28, 2020 at 2:00 p.m. All counsel 3 shall use the following dial-in information to access the call: Dial-In: 888-808-6929 Passcode: 4 6064255. For call clarity, parties shall NOT use speaker phone or earpieces for these calls, and 5 where at all possible, parties shall use landlines. The parties are further advised to ensure that the 6 Court can hear and understand them clearly before speaking at length. The parties are directed to 7 file a joint statement proposing an amended case schedule, given that the stayed deadlines have 8 already passed. The joint statement must be efiled by April 22, 2020. 9 IT IS SO ORDERED. 10 Dated: 4/13/2020 11 aAywods S. GILLIAM, JR. i United States District Judge © 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28