Case 3:13-cv-01845-JLS-BLM Document 139 Filed 05/03/16 Page 1 of 8
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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SHYRIAA HENDERSON, individually
and on behalf of all others similarly
situated,
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Case No.: 13-CV-1845
ORDER DENYING MOTION TO
STAY ACTION
Plaintiff,
v.
(ECF No. 126)
UNITED STUDENT AID FUNDS, INC.,
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Defendants.
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Presently before the Court is defendant United Student Aid Funds, Inc.’s
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(Defendant) Motion to Stay Action Pending Ruling from the United States Supreme Court.
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(ECF No. 126.)
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Opposition to (ECF No. 132) and Defendant’s Reply in Support of (ECF No. 133)
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Defendant’s Motion to Stay. Having considered the parties’ arguments and the law, the
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Court DENIES Defendant’s Motion to Stay.
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Also before the Court is plaintiff Shyriaa Henderson’s (Plaintiff)
BACKGROUND
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Plaintiff first filed her class action complaint on August 8, 2013, alleging that
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Defendant had violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. §§ 227
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et seq., by negligently and/or willfully contacting Plaintiff’s cellphone without prior
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express consent, (Compl. ¶ 1, ECF No. 1). Plaintiff further alleged that she was part of a
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putative class that had been harmed by Defendant’s unsolicited phone calls, which caused
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“Plaintiff and the Class members to incur certain cellular telephone charges or reduce[d]
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cellular telephone time for which Plaintiff and the Class members previously paid, and
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invad[ed] the privacy of said Plaintiff and the Class members.” (Id. at ¶ 23.) Plaintiff
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asserted two causes of action and sought statutory damages and injunctive relief for both:
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(1) negligent violations of the TCPA against Plaintiff and the Class, and (2) knowing and/or
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willful violations of the TCPA against Plaintiff and the Class. (Id. at ¶¶ 32–41.) Defendant
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answered the first complaint on October 18, 2013, by denying both causes of action.
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(Answer ¶¶ 32–41, ECF No. 10.)
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Plaintiff later filed an amended complaint (FAC) on October 2, 2014, adding three
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new defendants to the lawsuit. (ECF No. 47.) Defendant answered on October 16, 2014.
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(Answer to FAC, ECF No. 49.) Each of the three new defendants subsequently filed
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motions to dismiss, (ECF Nos. 55, 56, and 60), and the Court granted all three of these
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motions on April 8, 2015, (ECF No. 81). There have been multiple continuances and time
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extensions granted since the complaint was first filed, (see ECF Nos. 6, 9, 26, 28, 67, 113,
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124, and 131), which has pushed the close of discovery to October 24, 2016, (Am.
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Scheduling Order 3, ECF No. 131). Defendants filed this Motion on January 19, 2016.
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(Mot. to Stay, ECF No. 126.) Defendant argues that all further proceedings should be
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stayed “pending the ruling from the United States Supreme Court in the matter entitled
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Robins v. Spokeo, Inc., 742 F.3d 409 (9th Cir. 2014) cert. granted, 135 S. Ct. 1892 (2015).”
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(Mot. to Stay, ECF No. 126-1, at 2.)1
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LEGAL STANDARD
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“[T]he power to stay proceedings is incidental to the power inherent in every court
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to control the disposition of the causes on its docket with economy of time and effort for
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Pinpoint citations to docketed materials refer to the CM/ECF page number electronically stamped at the
top of each page.
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itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). This
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power to stay proceedings includes the discretion to grant stays “pending resolution of
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independent proceedings which bear upon the case.” Leyva v. Certified Grocers of Cal.,
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Ltd., 595 F.2d 857, 863 (9th Cir. 1979). Moreover, “[t]his rule applies whether the separate
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proceedings are judicial, administrative, or arbitral in character, and does not require that
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the issues in such proceedings are necessarily controlling of the action before the court.”
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Id. at 863–64 (citations omitted).
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The inherent power of district courts to grant stays “calls for the exercise of sound
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discretion,” by which a court must weigh the competing interests of the parties that would
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be affected by a grant or denial of a stay. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir.
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1962). The Ninth Circuit has identified three competing interests that warrant the closest
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examination in this analysis: (1) the hardship or inequity upon the non-moving party that
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would result from granting the stay, (2) the hardship or inequity upon the moving party in
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being required to go forward after denial of the stay, and (3) the orderly course of justice
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measured in terms of the simplifying or complicating of issues, proof, and questions of law
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that could be expected to result from a stay. Id.; see also Lockyer v. Mirant Corp., 398
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F.3d 1098, 1110 (9th Cir. 2005). Finally, “[t]he party requesting a stay bears the burden
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of showing that the circumstances justify an exercise of that discretion.” Nken v. Holder,
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556 U.S. 418, 433–34 (2009) (citing Clinton v. Jones, 520 U.S. 681, 708 (1997); Landis v.
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N. Am. Co., 299 U.S. 248, 255 (1936)).
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ANALYSIS
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The Balance of Hardship or Inequity between Plaintiff and Defendant
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First, the Court must balance the “possible damage [to Plaintiff] which may result
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from the granting of a stay,” with “the hardship or inequity which [Defendant] may suffer
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in being required to go forward.” CMAX, 300 F.2d at 268. If there is “even a fair possibility
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that the stay for which [Defendant] prays will work damage to some one else,” then
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Defendant must show “a clear case of hardship or inequity in being required to go forward.”
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Landis, 299 U.S. at 255. Here, Defendant suggests it is not subject to the higher “clear
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case” threshold by arguing that Plaintiff “would not suffer any damage or prejudice by a
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stay [because] [t]he duration of the stay would be brief.” (Mot to Stay. Mem., ECF No.
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126-1, at 6 (“[T]he Supreme Court is expected to release its decision in [Spokeo] by June
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2016.”) (citing Ramirez v. Trans Union, LLC, No. 12-cv-632, 2015 WL 6159942, at *2
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(N.D. Cal. June 22, 2015)).) Therefore, concludes Defendant, a stay “would not create any
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prejudice to [Plaintiff] whatsoever.” (Id.) On the other hand, Defendant argues, it will
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“face the prospect of significant hardship or inequity based on unnecessary proceedings
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and expense” if the stay is not granted. (Id.) According to Defendant, both the parties and
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the Court “will be burdened with discovery and significant motion practice” absent a stay.
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(Id.)
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Plaintiff counters that she would be disadvantaged by the delay in conducting
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discovery “while witnesses’ memories fade and documents inevitably become misplaced”
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if the stay is granted. (Opp’n 15, ECF No. 132.) Plaintiff claims these risks are heightened
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because important documents such as call logs and dialer information are under the control
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of third parties that are not obligated to preserve such evidence. (Id. (citing LG Elecs., Inc.
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v. Eastman Kodak Co., No. 09-cv-344, 2009 WL 1468703, at *2 (S.D. Cal. May 26,
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2009)).) Plaintiff also disputes Defendant’s assertions of hardship and inequity, citing
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Lockyer for the proposition that “being required to defend suit, without more, does not
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constitute a clear case of hardship or inequity within the meaning of Landis.” 398 F.3d at
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1112. If the stay is denied, Plaintiff further argues, Defendant’s time and resources will
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not be needlessly wasted because “even in the unlikely event that Spokeo establishes that
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Plaintiff cannot proceed in federal court, she will pursue her claims in state court where the
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Parties would litigate class certification under substantially similar standards and using the
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same discovery.” (Opp’n at 14.)
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The Court has determined that neither of the first two CMAX factors weighs strongly
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for or against staying this action. The Court is not persuaded that substantial damage would
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befall Plaintiff if the stay were granted, because the stay would likely be in place for fewer
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than three months. Plaintiff’s contention that “memories fade and documents inevitably
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become misplaced” is therefore unconvincing. (Opp’n at 15.) However, the Court is also
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not persuaded that Defendant would suffer any meaningful hardship or inequity if the stay
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were denied and it was “required to go forward.” CMAX, 300 F.2d at 268. Currently, two
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deadlines fall within the timeframe during which a granted stay would last: (1) a motion
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for class certification and expert designations were previously due by April 29, 2016,
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although the deadline to file a motion for class certification has been extended to May 4,
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2016, and (2) any supplement to the expert designations is due by May 27, 2016. (Am.
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Scheduling Order 2, ECF No. 131.)2 Given this schedule, Plaintiff’s forthcoming motion
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for class certification is the most significant potential burden for the Court and the parties,
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although the parties will continue to advance this litigation toward trial as long as it is
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active. (Mot. to Stay Mem. at 6.) The Court is mindful that a motion for class certification
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is a significant undertaking, both for the party preparing the motion and the party
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responding to it. The Court also agrees with Defendant that Lockyer is distinguishable
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from this case because Plaintiff is primarily seeking damages for past harm rather than
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ongoing or future harm.3 (Reply at 3.) Nevertheless, the Court does not believe Defendant
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will be prejudiced by denial of the stay.
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As Plaintiff argues, and the Court agrees, any time expended by Defendant in
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preparing a response to class certification and designating experts will not be wasted. See
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Janik v. Rudy, Exelrod & Zieff, 119 Cal. App. 4th 930, 943 (Cal. Ct. App. 2004) (noting
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that “California state courts look for guidance” to Federal Rule of Civil Procedure 23 when
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ruling on class certification (citing Home Sav. & Loan Ass’n v. Super. Ct., 42 Cal. App. 3d
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1006, 1012 (Cal. Ct. App. 1974))). Assuming the outcome in Spokeo favors Defendant
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and this case must be dismissed for lack of subject-matter jurisdiction, most or all of the
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work could easily be applied in state court proceedings, which do not require Article III
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Expert disclosures required under FRCP 26(a)(2) are not due until July 29, 2016, and discovery remains
open until October 24, 2016. (Am. Scheduling Order 2–3, ECF No. 131.)
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Defendant aptly points out that the Lockyer court was heavily concerned with ongoing and future harm
when it stated that defending suit alone would not amount to hardship or inequity. 398 F.3d at 1112.
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standing. See Grosset v. Wenaas, 42 Cal. 4th 1100, 1117 (2008) (“[A]rticle III of the
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federal Constitution does not apply in state courts.”).
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Consequently, the Court will not rely on either of the first two CMAX factors in
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making the ultimate decision whether to grant or deny Defendant’s request for a stay.
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II.
The “Orderly Course of Justice”
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Next, the Court must consider “the orderly course of justice measured in terms of
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the simplifying or complicating of issues, proof, and questions of law which could be
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expected to result from a stay.” CMAX, 300 F.2d at 268. In Spokeo, the Supreme Court
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will address “[w]hether Congress may confer Article III standing upon a plaintiff who
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suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of
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a federal court, by authorizing a private right of action based on a bare violation of a federal
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statute.”4 (Opp’n at 8.)
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Defendant contends that Spokeo “could well be dispositive of [Plaintiff]’s TCPA
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claims,” (Mot. to Stay Mem. at 7), because Plaintiff “could be deprived of standing by the
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Supreme Court’s decision and this case would have to be dismissed,” (Reply at 5 (quoting
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Stone v. Sterling Infosystems, Inc., No. 15-cv-711, 2015 WL 4602968, at *2 (E.D. Cal. July
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29, 2015))). Defendant’s argument hinges on the assertion that Plaintiff “has not suffered
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any actual harm to this point,” (Mot. to Stay Mem. at 6), because “the FAC contains no
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claim for actual damages, nor is there any assertion in the FAC that she was quantifiably
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harmed in any way by the alleged phone calls,” (Reply at 6 (citing FAC ¶¶ 45, 50, 52, 55,
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ECF No. 47)). According to Defendant, Plaintiff “seeks only statutory damages . . . .
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[which] is precisely the sort of statutory recovery without a concrete harm that is being
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addressed in [Spokeo].” (Reply at 6.)
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The Court agrees with Plaintiff that Spokeo probably will not be dispositive on
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Plaintiff’s claims because “the harm suffered [by Plaintiff is] sufficient to confer Article
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SCOTUSblog, Spokeo, Inc. v. Robins, http://www.scotusblog.com/case-files/cases/spokeo-inc-v-robins/
(last visited Apr. 13, 2016).
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III standing inasmuch as the injury suffered by Plaintiff and the putative class members is
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far more concrete.” (Opp’n at 12.) Plaintiff alleges in the FAC that she and other putative
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class members were harmed by Defendant’s “unsolicited telephone calls, thereby causing
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Plaintiff and the Class members to incur certain telephone charges or reduce[d] cellular
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telephone time for which Plaintiff and the Class members previously paid, and invading
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the privacy of said Plaintiff and the Class members.” (FAC ¶ 33.) Although Plaintiff seeks
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only the minimum statutory damages authorized by the TCPA, (see FAC ¶ 45 & 50), this
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does not determine whether the harm she suffered is concrete enough to satisfy the Article
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III standing requirements. Indeed, the Court concludes that Plaintiff’s injuries, as currently
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pleaded, are sufficiently concrete to confer standing. See Meyer v. Bebe Stores, No. 14-
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cv-267, 2015 WL 431148, at *2 (N.D. Cal. Feb. 2, 2015) (citing Smith v. Microsoft, 11-cv-
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1959, 2012 WL 2975712, at *6 (S.D. Cal. July 20, 2012)) (finding that the plaintiff had
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Article III standing to pursue a TCPA claim because she alleged an invasion of privacy));
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see also Mims v. Arrow Fin. Servs. LLC, 132 S. Ct. 740, 751 (2012) (describing the “federal
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interest in regulating telemarketing to ‘protec[t] the privacy of individuals’ while
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‘permit[ting] legitimate [commercial] practices.’” (citations omitted)).
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Even if the Supreme Court reverses the Ninth Circuit’s judgment in Robins, 742 F.3d
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at 413–14 (“[A]lleged violations of Robins’s statutory rights are sufficient to satisfy the
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injury-in-fact requirement of Article III”), and determines that actual harm beyond a mere
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violation of a statute is necessary to confer Article III standing,5 Plaintiff still has pleaded
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an injury sufficient to confer standing. Therefore, a stay would do little to further “the
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orderly course of justice” because the outcome of Spokeo probably will not bear
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significantly on the “issues, proof, or questions of law” in this case. CMAX, 300 F.2d at
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268; see also Lathrop v. Uber Techs., Inc., No. 14-cv-5678, 2016 WL 97511, at *4 (N.D.
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Cal. Jan. 8, 2016) (denying Defendant’s motion to stay because “[p]laintiffs have
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The Court also hesitates to presume that the outcome of Spokeo will be a reversal.
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articulated concrete harm to them, and are not simply relying on a bare violation of the
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statute.”). Consequently, the third factor weighs in favor of denying the stay.
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IV.
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In sum, the Court finds that Defendant has not met its burden to show that the balance
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of hardships favors a stay. The first and second CMAX factors effectively break even,
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neither favoring nor disfavoring either party. The third factor is therefore determinative in
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the Court’s decision, and the Court does not believe that waiting for the outcome of Spokeo
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“will promote economy of time and effort for itself, for counsel, and for litigants.” See
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CMAX, 300 F.2d at 268. This is not one of the “rare circumstances” in which a stay pending
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the outcome of another case is appropriate, see Landis, 299 U.S. at 255, and the Court
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therefore declines to exercise its discretion to grant a stay.
The Overall Balance Favors Denial of the Stay
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CONCLUSION
For the reasons stated above, the Court DENIES Defendant’s Motion to Stay Action
Pending Ruling from the United States Supreme Court.
IT IS SO ORDERED.
Dated: May 3, 2016
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