District Court (Cal.) Lifts “Primary Jurisdiction” Stay in TCPA Case After FCC Says They’ll Get Around to It When They Get Around to It

In Jordan v. Nationstar Mortgage LLC, 2014 WL 5359000 (N.D.Cal. 2014), Judge Orrick lifted a previous stay of a TCPA case under the Primary Jurisdiction Doctrine.

On September 4, 2014, I issued an order postponing the decision on Nationstar’s motion and staying the case until October 15, 2014. Dkt. No. 48. I did so to allow time for the FCC to respond to Judge Alsup’s request for a status update on the pending petitions, which he issued in another TCPA case, Heinrichs v. Wells Fargo Bank N.A., No. 13–05434–WHA (N.D.Cal. Nov. 22, 2013). The FCC did respond, but gave no indication that it would resolve the matters raised by the petitions in the near term, if ever. See Heinrichs, No. 13–05434–WHA, Dkt. No. 58.   Having considered the FCC’s response to Judge Alsup and the relevant filings by the parties in this case, like Judge Alsup I LIFT THE STAY. Application of the primary jurisdiction doctrine is not warranted here. Courts in this circuit have ruled on the meanings of the three terms at issue here consistently and without the need to defer to the technical expertise of the FCC. As reflected in the FCC’s response to Judge Alsup, the evidence that the FCC will rule “imminently” on the pending petitions is equivocal at best. It is not clear that rulings on the petitions would be determinative to this case because the questions presented in the petitions appear different from the issues presented here. The obligation of the court to provide a just, speedy and inexpensive determination of this case further weighs against the possible benefits of awaiting an FCC decision on the petitions. See Fed.R.Civ.P. 1. Nationstar’s motion for stay is DENIED.

Judge Orrick lifted the stay, saying the FCC was unlikely to get around to deciding the issue of “capacity” as part of the ATDS definition any time soon.

Considering Ninth Circuit case law on the meaning of “capacity,” the content of the pending petitions, and the facts of this case, I find that application of the primary jurisdiction doctrine is not warranted here. The interpretation of “capacity” is within the Ninth Circuit’s experience, does not involve technical expertise, and does not impose a substantial danger of inconsistent rulings. Moreover, it is not obvious that the petitions pending before the FCC, assuming even that the FCC eventually rules on them, will be determinative of the outcome of this case.    Nationstar asserts that the dialing system it used to call the plaintiffs does not qualify as an ATDS because it: (i) does not have the current capacity to store or produce telephone numbers to be called using a random or sequential number generator; and (ii) requires human intervention to initiate calls. See Supp. Lemon Decl. ¶ 2. The TCPA defines an ATDS as “equipment that has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator.” 47 U.S.C. § 227(a)(1). The Ninth Circuit has held that “the statutory text is clear and unambiguous,” Satterfield, 569 F.3d at 951, and courts in this Circuit have interpreted the term capacity consistently with the FCC’s definition. See, e.g., id.; Meyer, 707 F.3d at 1043; Pimental, 2012 WL 1458179 at *3. Nationstar urges me to follow Judge Hamilton’s decision in Mendoza, but that case did not cite the Ninth Circuit’s decisions in Satterfield or Meyers. See 2014 WL 722031, at *1–2. Furthermore, Nationstar has not given any examples within the Ninth Circuit where courts have defined the term “capacity” inconsistently; Nationstar only contends that inconsistent rulings are a possibility. Mot. at 10–11.  Additionally, the pending petitions may not be determinative on the issue of “capacity” in this case. An FCC decision on whether an ATDS may include equipment with the “potential capacity” to store or produce numbers is irrelevant to the facts here because the declarations submitted with Nationstar’s motion do not state that its equipment has the “potential capacity” to perform such functions. See Lemon Decl., Supp. Lemon Decl. Nationstar only asserts that its equipment lacks the current capacity to perform the functions of an ATDS as defined in the TCPA. Id. If Nationstar’s assertions are true, then its equipment likely does not qualify as an ATDS, and a decision on the petitions currently pending before the FCC is not necessary to the outcome of this litigation. Also, under Ninth Circuit precedent, the distinction between “current capacity” and “potential capacity” is a distinction without a difference. As stated in Pimental, the “focus must be on the equipment’s capacity to store, produce, or call randomly or sequentially generated telephone numbers, not whether the equipment actually did these things.” 2012 WL 1458179, at *3 (citing Satterfield, 569 F.3d at 951) (emphasis added).  Likewise, the FCC and the Ninth Circuit have already stated that an ATDS operates without human intervention, and therefore any ruling by the FCC on that issue will not change the outcome of this case. See In re the Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 FCC Rcd. 14014, 14017 (2003) (ATDS “covers any equipment that has the specified capacity to generate numbers and dial them without human intervention, regardless of whether the numbers called are randomly or sequentially generated or come from calling lists.”) (emphasis added); Meyer, 707 F.3d at 1043 (“The basic function of such equipment, however, has not changed – the capacity to dial numbers without human intervention.”). The two petitions currently pending before the FCC ask that the words “without human intervention” be added to the definition of ATDS. See In re Professional Association for Customer Engagement’s Petition for Expedited Declaratory Ruling, CG Docket No. 02–278 (filed October 18, 2013) (asking the FCC to “modify the definition of ATDS in 47 CFR 64.1200(f)(2) by adding the phrase ‘without human intervention’ to the end of the definition.”); Petition for Expedited Declaratory Ruling and Clarification of TextMe, Inc., CG Docket No. 02–278 (filed Mar. 18, 2014) (asking the FCC to “clarify that the term ‘capacity’ as used in the statutory definition of an ATDS under § 227(a)(I) of the TCPA encompasses only equipment that, at the time of use, could in fact perform the functions described in the TCPA without human intervention”). These petitions merely ask the FCC to confirm a matter that has already been decided by both the FCC and the Ninth Circuit.   Lastly, the evidence that an FCC ruling on the capacity issue is “imminent” remains uncertain. The first piece of evidence is a September 10, 2013, letter from the FCC stating that the Communication Innovators petition, which was filed June 7, 2012, “is under consideration by the Commission” and the FCC expects to resolve the issues “soon.” Gindi Decl., Ex. D. On July 14, 2014, however, the Communication Innovators petition was withdrawn. See Dkt. No. 40, Ex. 1.   The second piece of evidence is a March 25, 2014, statement by FCC Commissioner Michael O’Reilly expressing concern over “a growing backlog of petitions pending at the FCC,” and noting, “the FCC needs to address this inventory of petitions as soon as possible.” Gindi Decl., Ex. K. It states that through the pending petitions,  the FCC has the opportunity to answer important questions … including what it means to initiate a call, whether there is liability for calls made to reassigned phone numbers, whether consent can be obtained through intermediaries, whether consent can be inferred through consumer behavior or social norms, whether devices including smartphones could be considered automatic telephone dialing systems, or what type of faxes are actually unsolicited.  *10 Id. Some of the issues Nationstar raises are listed here. But the letter demonstrates that they are only a subset of the large number of TCPA-related issues currently under consideration by the FCC. There is no guarantee that the FCC will rule on these issues imminently, let alone that a ruling will determine the outcome of this case. Compare Clark v. Time Warner Cable, 523 F.3d 1110, 1115 (9th Cir.2008) (finding primary jurisdiction applied where claim raised issue of first impression, and “the FCC’s Notice of Proposed Rulemaking demonstrates that the agency is actively considering” the particular issue).  A third piece of evidence is Chairman Wheeler’s August 28, 2014 statement to Congress that the FCC plans to resolve “more than one-third” of the pending petitions regarding the TCPA “within the next several months.” Dkt. No. 50 at 2. But, again, there is no guarantee that the FCC will be able to follow through on this plan, or that the petitions relevant to this case are among those the agency plans to resolve. Under these circumstances, a stay is not warranted.

  Judge Orrick applied the same analysis to the questions of “called party” under the TCPA and whether the TCPA applies to debt collection calls.