Sistrunk v. Titlemax, Inc.

• Decision Date: 17 August 2017
• Docket Number: 5:14-CV-628-RP
• Parties: DEXTER SISTRUNK, individually and on behalf of a class of similarly situated individuals, Plaintiff, v. TITLEMAX, INC., et al., Defendants.
• Court: U.S. District Court — Western District of Texas

DEXTER SISTRUNK,individually and on behalf of a class of similarly situated individuals, Plaintiff, v. TITLEMAX, INC., et al., Defendants.

5:14-CV-628-RP

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

August 17, 2017

ORDER

Before the Court in the above-styled cause are Defendants' objections to the Magistrate Judge's Report and Recommendation ("R&R"), filed May 30, 2017, recommending that Plaintiff's motion for summary judgment be granted in part. (Mot. Summ. J., Dkt. 254; R&R, Dkt. 288; Objections, Dkt. 294). Having undertaken a de novo review of the objected-to portions of the R&R, see 28 U.S.C. § 636(b)(1)(C), the Court issues the following order.

BACKGROUND

The Court incorporates by reference the factual and procedural background laid out in the Magistrate Judge's R&R. (See R&R, Dkt. 288).

SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure only "if the movant shows there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A dispute is genuine only if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). "A fact issue is 'material' if its resolution could affect the outcome of the action." Poole v. City of Shreveport, 691 F.3d 624, 627 (5th Cir. 2012).

The party moving for summary judgment bears the initial burden of "informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "[T]he moving party may [also] meet its burden by simply pointing to an absence of evidence to support the nonmoving party's case." Boudreaux v. Swift Transp. Co., 402 F.3d 536, 544 (5th Cir. 2005). The burden then shifts to the nonmoving party to establish the existence of a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986); Wise v. E.I. Dupont de Nemours & Co., 58 F.3d 193, 195 (5th Cir. 1995). After the non-movant has been given the opportunity to raise a genuine factual issue, if no reasonable juror could find for the non-movant, summary judgment will be granted. Miss. River Basin Alliance v. Westphal, 230 F.3d 170, 175 (5th Cir. 2000). The court will view the summary judgment evidence in the light most favorable to the non-movant. Rosado v. Deters, 5 F.3d 119, 123 (5th Cir. 1993).

DISCUSSION

Defendants first object to the Magistrate Judge's conclusion that a plaintiff need not show actual damages in order to recover the liquidated damages under the Driver Privacy Protection Act. 18 U.S.C. §§ 2721 et seq. They argue, on the contrary, that the absence of proof that Plaintiff or any other class member has suffered actual damages precludes monetary relief. Defendants next take issue with other portions of the R&R, most notably the Magistrate Judge's conclusion that Defendants are vicariously liable for the violations of their employees. The Court will consider each of Defendants' arguments in turn.

1. Actual and Liquidated Damages

The Magistrate Judge disposed of the issue of actual damages briefly in his R&R, referring to his prior ruling, adopted by this Court, that liquidated damages are available under the statute without proof of actual damages. (Dkt. 213). Defendants argue that the ruling is erroneous because, in their view, a plaintiff must demonstrate actual damages in order to recover liquidated damagesunder the statute.¹ Because Plaintiff has disclaimed reliance on actual damages, Defendants contend, his request for monetary relief should be denied.

Defendants correctly point out that courts have split on the question whether a plaintiff must demonstrate actual damages in order to recover liquidated damages under the DPPA. District courts have variously held that actual damages are an independent prerequisite to monetary recovery or an unnecessary showing. Compare Potocnik v. Carlson, No. 13-CV-2093 (PJS/HB), 2016 WL 3919950, at *10-11 (D. Minn. July 15, 2016) (requiring actual damages), with Pichler v. UNITE, 228 F.R.D. 230, 247 (E.D. Pa. 2005) (requiring no actual damages). The circuit courts that have addressed this precise question have unanimously concluded that a court may award statutory damages without a showing of actual damages. Pichler v. UNITE, 542 F.3d 380 (3d Cir. 2008); Kehoe v. Fid. Fed. Bank & Trust, 421 F.3d 1209 (11th Cir. 2005). The Seventh Circuit, on the other hand, has issued an opinion construing identical text in a different statute as requiring proof of actual damages before an award of liquidated damages is appropriate. See Sterk v. Redbox Automated Retail, LLC, 672 F.3d 535 (7th Cir. 2012). The court's opinion in Sterk distinguished Pichler and Kehoe on the basis that the relevant statutes were aimed at different types of harms,² but it is not unfair to say that the court appeared to be skeptical about whether Pichler and Kehoe were correctly decided. Id. at 539.

The above opinions largely center on the Supreme Court's decision in Doe v. Chao, and "the sum of several legal principles" in contract and tort law. See Kehoe, 421 F.3d at 1212. Defendants base their arguments on these same sources and the Court now turns to consider them.

A. Doe v. Chao

Defendants assert that the Supreme Court's opinion in Doe v. Chao, 540 U.S. 614 (2004), compels a finding that the availability of liquidated damages is contingent upon a showing of actual damages. This Court disagrees.

Doe concerned the remedial provisions of the Privacy Act of 1974, 5 U.S.C. § 552a. The question to be decided in that case was, as here, whether the statute permitted a plaintiff to recover statutory damages without proof of actual damages. Relying heavily on the statute's text, the Court concluded that it did not. The relevant provision, which differs substantially from the one at issue here, provided that an aggrieved plaintiff could recover "actual damages sustained by the individual . . . but in no case shall a person entitled to recovery receive less than the sum of $1,000." 5 U.S.C. § 553a(4)(A). Considering the language "person entitled to recovery," which it described as a "critical limiting phrase," id. at 627, the Court found that "the simplest reading of that phrase looks back to the immediately preceding provision for recovering actual damages." It followed that a "person entitled to recovery," and thus entitled to statutory damages, was an individual who had sustained actual damages. Id. at 622-23.

Beyond this textual analysis, the Court supported its holding by reference to "the traditional understanding that tort recovery requires not only wrongful act plus causation reaching to the plaintiff, but proof of some harm for which damages can reasonably be assessed." Id. at 621. However, the Court acknowledged a potential counterargument that claimants at common law have been able to recover presumed damages without proof of any particular harm. Id. (citing 3 Restatement (First) of Torts § 621, Comment a (1938) ("General damages are a form ofcompensatory damages. They are imposed for the purpose of compensating the plaintiff for the harm which the defamatory publication is proved, or, in the absence of proof, is assumed to have caused to his reputation. It is not necessary for the plaintiff to prove any specific harm to his reputation or any other loss caused thereby.")). It dismissed this argument not by holding that general damages are per se unavailable for statutory causes of action sounding in tort, but rather by noting that such damages appeared to have been considered by Congress and ultimately rejected, thus weighing against finding that the statute nonetheless authorized them. See id. at 622 ("Congress left the question of general damages, that is, for another day.").

The Court's decision was thus primarily based upon textual analysis informed by legislative history, rather than upon general principles of tort law. As such, it is advisable to exercise caution in extending the reach of Doe to statutes, like the present one, with substantially different text and their own legislative histories. Indeed, the Court found a provision of the Tax Reform Act "too far different from the language of the Privacy Act to serve as any sound basis for analogy" because it "does not include the critical limiting phrase 'entitled to recovery.'" Id. at 626.³ And the DPPA provision this Court must construe differs to an even greater extent from the text of the Privacy Act. Even when presented with statutes containing the "critical limiting phrase" along with clear legislative intent to provide what it described as "true liquidated damages remedies," the Court distinguished these statutes on the basis that they, like the one at issue here, were passed "well after the Privacy Act." See id. at 626-27 ("Those of us who look to legislative history have been wary about expecting to find reliable interpretive help outside the record of the statute being construed, and we have said repeatedly that subsequent legislative history will rarely override a reasonableinterpretation of a statute that can be gleaned from its language and legislative history prior to its enactment.") (internal quotations omitted).

Doe thus clearly explains why it does not control the outcome of this case. The text of the later-enacted DPPA's remedial provision differs greatly from that of the Privacy Act, and it does not contain the limiting language the Court deemed "critical." See id. at 626. This Court thus cannot agree with Defendants that Doe compels a finding that a showing of actual damages is necessary in order to recover liquidated damages under the DPPA.

This view of the limited reach of Doe is shared by most other courts that have considered its impact on...