Komaiko v. Baker Techs., Inc.
Decision Date | 11 August 2020 |
Docket Number | Case No. 19-cv-03795-DMR |
Parties | RICHARD KOMAIKO, et al., Plaintiffs, v. BAKER TECHNOLOGIES, INC., et al., Defendants. |
Court | U.S. District Court — Northern District of California |
Plaintiffs Richard Komaiko and Marcie Cooperman are named representatives in this putative class action against Defendant Baker Technologies, Inc. ("Baker").1 [Docket No. 29 ("FAC").] Plaintiffs assert claims for violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. ("TCPA") and California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq. ("UCL"). Baker moves to stay the case pending the U.S. Supreme Court's rulings in Barr v. American Ass'n of Political Consultants, Sup. Ct. Docket No. 19-631 ("Political Consultants") and Facebook, Inc. v. Duguid, Sup. Ct. Docket No. 19-511 ("Duguid"). [Docket Nos. 56 ("Mot."), 70 ("Reply").] Plaintiffs oppose. [Docket No. 67 ("Opp.").] This matter is suitable for determination without oral argument pursuant to Civil Local Rule 7-1(b).
For the reasons stated below, the motion to stay is denied without prejudice.
The factual allegations in this case are laid out in detail in the court's order on Defendant's motion to dismiss. [Docket No. 52.] In brief, Baker provides a customer relationship marketing ("CRM") platform for over 900 cannabis dispensaries throughout Canada and the United States. Baker offers software that allows client dispensaries to collect customer contact information and tosend customers text messages through an automatic telephone dialing system ("ATDS"). Between February 2015 and December 2016, the named Plaintiffs visited four of Baker's client dispensaries. After their visits, they began receiving marketing text messages from the dispensaries. Plaintiffs allege that they received the telemarketing texts without providing their prior express written consent in violation of the federal TCPA and California's UCL.
On April 20, 2020, the court granted in part Baker and TILT's motion to dismiss and dismissed the claims against TILT for lack of personal jurisdiction. See Docket No. 52. Fact discovery in this case closes on May 21, 2021 and expert discovery closes August 20, 2021. The last day for hearing Plaintiffs' motion for class certification is February 25, 2021 and the last day for hearing dispositive and Daubert motions is October 28, 2021. Trial is scheduled to begin on February 7, 2022. Baker's motion requests a stay of this case until the end of the Supreme Court's next term in mid-2021.
District courts have broad discretion in deciding whether to stay a case. See Landis v. N. Am. Co., 299 U.S. 248, 254 (1936) (). The moving party has the burden to show that a stay is appropriate. Clinton v. Jones, 520 U.S. 681, 708 (1997). In determining whether to enter a stay, the court must consider the competing interests at stake, including (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." CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) (citing Landis, 299 U.S. at 254-55) ("Landis factors").
A stay may be granted "pending resolution of independent proceedings which bear upon the case . . . and does not require that the issues in such proceedings are necessarily controlling of the action before the court." Leyva v. Certified Grocers of California, Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979). However, "[a] stay should not be granted unless it appears likely the other proceedingswill be concluded within a reasonable time in relation to the urgency of the claims presented to the court." Id. at 864.
The TCPA defines an 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." 47 U.S.C. § 227(a)(1). The TCPA makes it unlawful for any person to make a call using an ATDS except for emergency purposes or if the recipient has provided prior express consent. 47 U.S.C. § 227(b)(1)(A)(iii); see 47 C.F.R. § 64.1200(a)(1). The Ninth Circuit has held that "a text message is a 'call' within the meaning of the TCPA." Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 952 (9th Cir. 2009).
Baker's motion initially requested a stay of this case until the Supreme Court issued a decision in Political Consultants and Duguid. On July 6, 2020, the Court ruled on Political Consultants. One issue before the Court was whether the government-debt exception to the TCPA's automated-call restriction violated the First Amendment, and if so, whether the appropriate remedy would be to invalidate the call restriction entirely. If the Court had struck down the call restriction, Plaintiffs' claims in this case would have been mooted. Instead, however, the Court severed the government-debt exception from the remainder of the statute, leaving the call restriction otherwise intact. Because the government-debt exception is not at issue in this case, the decision in Political Consultants does not impact Plaintiffs' claims. Accordingly, the only remaining issue in this motion is whether the case should be stayed pending the Court's ruling in Duguid, an appeal from the Ninth Circuit's decision in Duguid v. Facebook, Inc., 926 F.3d 1146 (9th Cir. 2019).
At issue in Duguid is the definition of ATDS in the TCPA, and specifically whether that definition "encompasses any device that can 'store' and 'automatically dial' telephone numbers, even if the device does not 'us[e] a random or sequential number generator.'"2 Sup. Ct. Docket No. 19-511, Petition for a Writ of Certiorari, at ii (Oct. 17, 2019). The Third, Seventh, and Eleventh and have read the TCPA to apply only to devices with the capacity to "generat[e] random or sequentialtelephone numbers and dial[] those numbers." Dominguez on Behalf of Himself v. Yahoo, Inc., 894 F.3d 116, 121 (3d Cir. 2018); see also Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 461 (7th Cir. 2020) ( ); Glasser v. Hilton Grand Vacations Co., LLC, 948 F.3d 1301, 1306-10 (11th Cir. 2020) ( ). By contrast, the Ninth and Second Circuits have held that "the statutory definition of ATDS is not limited to devices with the capacity to call numbers produced by a 'random or sequential number generator, but also includes devices with the capacity to dial stored numbers automatically." Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1052 (9th Cir. 2018); see also Duran v. La Boom Disco, Inc., 955 F.3d 279, 287 (2d Cir. 2020) ().
According to Baker, the issue before the Supreme Court in Duguid is dispositive in this case. It points out that Plaintiffs' allegations only accuse its software of sending texts from lists of customer data, not randomly generating numbers. While these allegations are currently sufficient to impose TCPA liability in the Ninth Circuit, Baker asserts that a reversal by the Supreme Court would eliminate Plaintiffs' case. However, Baker is notably evasive on a key fact: whether its software has the capacity to generate random numbers and call them, regardless of whether it used that capacity in sending the texts at issue. The Ninth Circuit has definitively held that a system "need not actually store, produce, or call randomly or sequentially generated telephone numbers, it need only have the capacity to do it." Satterfield, 569 F.3d at 951; see also King v. Time Warner Cable Inc., 894 F.3d 473, 480 (2d Cir. 2018) (). This is a separate question than the one before the Supreme Court in Duguid. Even if the Ninth Circuit is incorrect that a device that can store and automatically dial numbers is an ATDS, such a conclusion would not necessarily invalidate its interpretation of the term "capacity." In other words, under Ninth Circuit precedent that is not before the Supreme Court in Duguid, Baker's technology could still be considered an ATDS under Ninth Circuit law if it has thecapacity to store or produce numbers "using a random or sequential number generator," regardless of whether it was being used for that purpose when it sent texts to the dispensaries' customers. Notably, the Eleventh Circuit, which split from the Ninth Circuit on the random generation issue, still recognized that the TCPA "applies to devices that have the 'capacity' to identify randomly generated numbers; it does not require that capacity to be used in every covered call." Glasser, 948 F.3d at 1312.
In sum, it is not clear that a reversal in Duguid would be dispositive in this case. This consideration is highly relevant to whether a stay is warranted. Courts generally have held that stays of the length Baker requests are reasonable where a Supreme Court decision expected in the following term could moot some or all issues in a case. See, e.g., McElrath v. Uber Techs., Inc., Case No. 16-cv-07241-JSC, 2017 WL 1175591, at *6 (N.D. Cal. Mar. 30, 2017) (...
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