Gallion v. Charter Commc'ns Inc.

• Decision Date: 26 February 2018
• Docket Number: Case No. 5:17–cv–01361–CAS(KKx)
• Citation: 287 F.Supp.3d 920
• Court: U.S. District Court — Central District of California
• Parties: Steven GALLION v. CHARTER COMMUNICATIONS INC. et al.

287 F.Supp.3d 920

Steven GALLION

v.CHARTER COMMUNICATIONS INC. et al.

Case No. 5:17–cv–01361–CAS(KKx)

United States District Court, C.D. California.

Signed February 26, 2018

Adrian Robert Bacon, Todd M. Friedman, Meghan Elisabeth George, Thomas Edward Wheeler, Law Offices of Todd M Friedman PC, Woodland Hills, CA, for Plaintiff.

Helen B. Kim, Geoffrey L. Warner, Thompson Coburn LLP, Los Angeles, CA, Andrew D. Prins, Pro Hac Vice, Matthew A. Brill, Pro Hac Vice, Nicholas L. Schlossman, Pro Hac Vice, Latham and Watkins LLP, Washington, DC, Rowena G. Santos Strategic Legal Practices APC, Los Angeles, CA, for Defendants.

Proceedings: (IN CHAMBERS)—DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS (Dkt. 18, filed September 26, 2017)

DEFENDANT'S MOTION TO STAY CASE (Dkt. 25, filed October 13, 2017)

Present: The Honorable CHRISTINA A. SNYDER

I. INTRODUCTION

On July 6, 2017, plaintiff Steve Gallion filed this putative class action against defendants Charter Communications, Inc., Spectrum Management Holding Company, LLC, and Does 1–10 alleging violations of the Telephone and Consumer Protection Act ("TCPA"), 47 U.S.C. § 227. Dkt. 1 ("Compl."). Plaintiff alleges that defendants placed a call to his cellular phone without his "prior express consent" to sell or solicit their services using an "automatic telephone dialing system" and an "artificial or prerecorded voice" in violation of 47 U.S.C. § 227(b)(l)(A)(iii). Plaintiff asserts claims for negligent and willful or knowing violations of the TCPA and seeks statutory damages on behalf of himself a nationwide class of similarly situated consumers.

On September 26, 2017, defendants filed the instant motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), raising a facial First Amendment challenge to the TCPA. Dkt. 18 ("MJP"). On January 9, 2018, the United States of America (the "government") intervened for the limited purpose of defending the TCPA's constitutionality. Dkt. 38 ("Gov't Mot."). On January 12, 2018, plaintiff filed an opposition. Dkt. 39 ("MJP Opp'n"). On January 22, 2018, defendants filed a consolidated reply. Dkt. 42 ("MJP Reply").

On October 13, 2017, defendants filed a motion to stay the proceedings in this case pending the later of (1) decision of the Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") in ACA Int'l v. Fed. Commc'ns Comm'n, No. 15–211 (D.C. Cir.) ("ACA International"), or (2) the decision of this Court on the motion for judgment on the pleadings. Dkt. 25 ("Stay Mot."). On October 23, 2017, plaintiff filed an opposition, dkt. 29 ("Stay Opp'n"); and defendants filed a reply on October 30, 2017, dkt. 32 ("Stay Reply"). On February 5, 2018, the Court held a hearing on the motions. Having carefully considered the parties' arguments, the Court finds and concludes as follows.

II. BACKGROUND

The Telephone Consumer Protection Act of 1991, Pub. L. No. 102–243, 105 Stat. 2394–2402 (1991), was enacted by Congress "to protect the privacy interests of residential telephone subscribers." S. Rep. No. 102–178, at 1 (1991). Section 227(b)(1)(A)(iii) of the TCPA provides, in relevant part:

It shall be unlawful for any person ... to make any 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 ... unless such call is made solely to collect a debt owed to or guaranteed by the United States.

47 U.S.C. § 227(b)(l)(A)(iii). Congress added the final clause of this provision, the government-debt exception, as part of the Bipartisan Budget Act of 2015, Pub. L. No. 114–74, 129 Stat. 584, 588 (2015). The TCPA also authorizes the FCC to promulgate rules exempting calls where doing so would "not adversely affect the privacy rights" that the law seeks to protect. See 47 U.S.C. § 227(b)(2)(B)(ii), (b)(2)(C). Consumers who receive calls prohibited by section 227(b)(l)(A)(iii) may recover the greater of their actual monetary loss or $500 per violation and treble damages where a violation is willful or knowing. Id. § 227(b)(3).

An "automatic telephone dialing system" ("ATDS") is defined 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." Id. § 227(a)(1). On July 10, 2015, the FCC issued an Omnibus Declaratory Ruling and Order addressing, among other issues, the definition of ATDS. In re Rules & Regs. Implementing the TCPA of 1991, 30 F.C.C.R. 7961, 7974 (July 10, 2015). Finding that Congress intended a broad definition of ATDS, the FCC interpreted the term "capacity" to include equipment that lacks the "present ability" to dial randomly or sequentially. Id. at 2974. In other words, "capacity" was broadly interpreted to include equipment that had potential or future capacity to store, produce, and dial random or sequential numbers. Id. After the FCC issued its ruling, nine companies filed petitions for review, which were consolidated into a single appeal to the D.C. Circuit in ACA International. The petitioners are requesting that the D.C. Circuit vacate the FCC's interpretation of the term "capacity" as used in the definition of an ATDS pursuant to the court's authority under the Hobbs Act, 28 U.S.C. § 2342. Oral argument took place on October 19, 2016, but no decision has been issued.

III. LEGAL STANDARDS

A. Motion for Judgment on the Pleadings

Under Rule 12(c) of the Federal Rules of Civil Procedure, a party may move for judgment on the pleadings at any time after the pleadings are closed, so long as the motion is filed in sufficient time that it will not delay trial. "For the purposes of the motion, the allegations of the non-moving party must be accepted as true, while the allegations of the moving party which have been denied are assumed to be false." Hal Roach Studios, Inc. v. Richard Feiner and Co. Inc., 896 F.2d 1542, 1550 (9th Cir. 1990). "Judgment on the pleadings is proper when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law." Id.

In deciding a motion for judgment on the pleadings, the court generally is limited to the pleadings and may not consider extrinsic evidence. See Fed. R. Civ. P. 12(c) (stating that a Rule 12(c) motion for judgment on the pleadings should be converted into a Rule 56 motion for summary judgment if matters outside the pleadings are considered by the court). A district court may, however, consider documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading." Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Moreover, a district court may consider a document if the complaint "necessarily relie[s]" on it, and the authenticity of the document is not challenged. Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998).

B. Motion to Stay Case

A district court "has broad discretion to stay proceedings as an incident to its power to control its own docket." Clinton v. Jones, 520 U.S. 681, 706–07, 117 S.Ct. 1636, 137 L.Ed.2d 945 (1997) (citing Landis v. North Am. Co., 299 U.S. 248, 57 S.Ct. 163, 81 L.Ed. 153 (1936) ). When considering whether to stay proceedings, courts consider (1) the possible damage which may result from the granting of a stay; (2) the hardship or inequity which a party may suffer in being required to go forward; and (3) 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., 398 F.3d 1098, 1110 (9th Cir. 2005) (citation omitted). However, "if there is even a fair possibility that the stay ... will work damage to someone else, the stay may be inappropriate absent a showing by the moving party of hardship or inequity." Dependable Highway Exp., Inc., v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007) (internal quotation marks and citation omitted). The party seeking a stay bears the burden of establishing its need. Clinton, 520 U.S. at 708, 117 S.Ct. 1636 (citing Landis, 299 U.S. at 255, 57 S.Ct. 163 ).

IV. DISCUSSION

A. Motion for Judgment on the Pleadings

Defendants move for judgment on the pleadings on the ground that section 227(b)(l)(A)(iii) of the TCPA violates the First Amendment because it contains content- and speaker-based restrictions on speech and fails strict scrutiny. Defendants' facial constitutional challenge is based primarily on the 2015 amendment to the TCPA establishing a government-debt exception and the Supreme Court's recent decision in Reed v. Town of Gilbert, ––– U.S. ––––, 135 S.Ct. 2218, 192 L.Ed.2d 236 (2015). Prior to the 2015 amendment and Reed, the Ninth Circuit twice considered and upheld the constitutionality of the TCPA as a valid, content-neutral speech regulation under intermediate scrutiny. See Gomez v. Campbell–Ewald Co., 768 F.3d 871, 876 (9th Cir. 2014), aff'd on other grounds, ––– U.S. ––––, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016) ; Moser v. FCC, 46 F.3d 970 (9th Cir. 1995).

No appellate court has since considered the constitutionality of the TCPA. However, four district courts—including two in the Northern District of California—have addressed the issue and held that section 227(b)(l)(A)(iii) is content based in light of the government-debt exception and Reed but nevertheless upheld the law under strict scrutiny. See Brickman v. Facebook, Inc., 230 F.Supp.3d 1036 (N.D. Cal. 2017) ; Holt v. Facebook, Inc., 240 F.Supp.3d 1021 (N.D. Cal. 2017) ; Mejia v. Time Warner Cable Inc., No. 15-CV-6445 (JPO), 2017 WL 3278926, at *14 (S.D.N.Y. Aug. 1, 2017) ; Greenley v. Laborers' Int'l Union of N. Am., 271 F.Supp.3d 1128 (D. Minn. 2017). Both Brickman and Holt are currently pending...