Aleisa v. Square, Inc.

493 F.Supp.3d 806

Mishari ALEISA, et al., Plaintiffs,

v.SQUARE, INC., a Delaware Corporation, Defendant.

Case No. 20-cv-00806-EMC

United States District Court, N.D. California.

Signed October 9, 2020

Seyed Abbas Kazerounian, Kazerouni Law Group, APC, Costa Mesa, CA, Jason A. Ibey, Kazerouni Law Group, APC, St. George, UT, Yana Hart, Kazerouni Law Group, APC, San Diego, CA, for Plaintiffs.

Shannon Z. Petersen, Lisa S. Yun, Sieun Jennifer Lee, Sheppard Mullin Richter & Hampton LLP, San Diego, CA, Tiffany Cheung, Cheyenne J. Overall, Michael Burshteyn, Morrison & Foerster LLP, San Francisco, CA, Nancy R. Thomas, Morrison & Foerster LLP, Los Angeles, CA, for Defendant.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS AND GRANTING DEFENDANT'S MOTION TO STAY

Docket Nos. 33, 42

EDWARD M. CHEN, United States District Judge

Plaintiffs Mishari Aleisa and Nicole Belluomini filed a putative class action against Defendant Square, Inc. ("Square") asserting claims for violation of the Telephone Consumer Protection Act ("TCPA" or the "Act"), 47 U.S.C. §§ 201 – 231. See Docket No. 1 ("Compl."). Plaintiffs allege that Square texted them without their authorization in violation of the Act. See id.

Pending before the Court are Square's (1) amended motion to dismiss Belluomini's claims for lack of Article III standing under Federal Rule of Civil Procedure 12(b)(1) ;¹ and (2) motion to stay pending the Supreme Court's decision in Facebook, Inc. v. Duguid (Duguid II ), No. 19-511, 2019 WL 5390116 (U.S. filed Oct. 17, 2019). See Docket Nos. 33 (amending Docket No. 23), 42. For the reasons discussed below, Square's motion to dismiss is DENIED and its motion to stay is GRANTED .²

I. BACKGROUND

A. Factual Background

The complaint alleges as follows. Belluomini is the regular and sole user of the cellphone number ending in 4446. Compl. ¶ 80. On May 12, 2017, Belluomini visited Taste Kitchen & Table ("Taste") in Fairfax, California. Id. ¶ 81. After placing her order, Taste processed Belluomini's credit card payment through Square's point-of-sale (POS) system. Id. ¶ 82. Belluomini alleges that she did not enter her cellphone number to receive a copy of her digital receipt or to earn loyalty rewards at Taste. Id. ¶ 83. Almost immediately after her transaction, however, Belluomini received the following automated text message from Square:

Id. ¶ 84–85. The link within the text message redirects to Square's website for Taste's loyalty program. Id. ¶ 86. According to Belluomini, Square's text messages caused her actual harm, including "an invasion of privacy," a "private nuisance," diminished battery life, and lost time. Id. ¶ 92.

Aleisa is the regular and sole user of the cellphone number ending in 5566. Compl. ¶ 57. On July 28, 2018, Aleisa visited Samovar Teashouse Café ("Samovar") in San Francisco, California. Id. ¶ 58. After placing his order, Samovar processed Aleisa's credit card payment through Square's POS system. Id. ¶ 59. The POS system invited Aleisa to join Samovar's loyalty program by providing his cellphone number, and he did. Id. ¶ 60. Almost immediately after the transaction, Aleisa received a text message stating that he earned a "loyalty star" from Samovar because of his purchase, which he could accumulate toward free products. Id. ¶ 61. According to Aleisa, he also received three other text messages following purchases at other food and beverage retailers without his authorization. Id. ¶¶ 65, 69, 71–73.

Importantly, both Plaintiffs allege that "Square sent loyalty texts to Plaintiff's cellphone number (and those of the putative class members) by using an ATDS as defined by 47 U.S.C. § 227(a)(1)." Id. ¶¶ 76, 89, 97, 98, 114, 117, 126(b), 133, 144,

B. Procedural History

On February 3, 2020, Plaintiffs filed a complaint against Defendant alleging non-willful (Count 1) and willful (Count 2) violations of the TCPA, which prohibits making "any call (other than a call made ... with the prior express consent of the called party) using any automatic telephone dialing system [ATDS] or any 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)(1)(A)(iii).

On April 17, 2020, Square filed its motion to dismiss Belluomini's claims for lack of Article III standing under Rule 12(b)(1), see Docket No. 23 ("MTD"), which it amended on July 2, 2020, see Docket No. 33 ("Am. MTD"). Meanwhile, Square also moved to stay this action pending the resolution of an FCC petition that it contends will decide how the agency interprets the term "ATDS." See Docket No. 25 ("First MTS") at 9. On August 7, 2020, Square filed a second motion to stay this action, this time pending the Supreme Court's decision in Facebook, Inc. v. Duguid , No. 19-511, 2019 WL 5390116 (U.S. filed Oct. 17, 2019). See Docket No. 42 ("Second MTS").

II. LEGAL STANDARD

A. Motion to Dismiss Under Rule 12(b)(1)

Under Federal Rule of Civil Procedure 12(b)(1), a party may move to dismiss for lack of subject matter jurisdiction. When subject matter jurisdiction is challenged, "[t]he party seeking to invoke the court's jurisdiction bears the burden of establishing that jurisdiction exists." Scott v. Breeland , 792 F.2d 925, 927 (9th Cir. 1986). A Rule 12(b)(1) motion will be granted if the complaint, considered in its entirety, fails on its face to allege facts sufficient to establish subject matter jurisdiction. See Savage v. Glendale Union High Sch. , 343 F.3d 1036, 1039 (9th Cir. 2003). "[L]ack of Article III standing requires dismissal for lack of subject matter jurisdiction under [ Rule] 12(b)(1)." Maya v. Centex Corp. , 658 F.3d 1060, 1067 (9th Cir. 2011).

The "irreducible constitutional minimum" of standing requires a "plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins ("Spokeo II "), ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). These three elements are referred to as, respectively, injury-in-fact, causation, and redressability. Planned Parenthood of Greater Was. & N. Idaho v. U.S. Dep't of Health & Human Servs. , 946 F.3d 1100, 1108 (9th Cir. 2020). "The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing these elements," which at the pleadings stage means " ‘clearly ... alleg[ing] facts demonstrating’ each element." Spokeo II , 136 S. Ct. at 1547 (quoting Warth v. Seldin , 422 U.S. 490, 518, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ).

B. Motion to Stay

A court's power to stay proceedings is incidental to its inherent power to control the disposition of its cases in the interests of efficiency and fairness to the court, counsel, and litigants. Landis v. N. Am. Co. , 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936). In determining whether to stay proceedings, the district court "must weigh competing interests and maintain an even balance" between the hardships that would be suffered by the parties if a stay were or were not granted, as well as judicial economy. Id. at 254–55, 57 S.Ct. 163. "If there is even a fair possibility" that the stay will harm the non-moving party, the party seeking the stay "must make out a clear case of hardship or inequity in being required to go forward." Id. at 255, 57 S.Ct. 163.

The Ninth Circuit has clarified that these competing interests include:

(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, 57 S.Ct. 163 ). However, "being required to defend a suit, without more, does not constitute a ‘clear case of hardship or inequity’ within the meaning of Landis ." Lockyer v. Mirant Corp. , 398 F.3d 1098, 1112 (9th Cir. 2005).

III. MOTION TO DISMISS

Square contends that Belluomini lacks Article III standing because she has failed to allege injury-in-fact and causation.³ Neither of these arguments has merit.

A. Injury-in-fact

Square's first argument is that the receipt of a single text message, even without consent and in violation of the TCPA, is not enough for Article III standing. Am. MTD at 8. In support of this proposition, Square cites to the Eleventh Circuit's decision in Salcedo v. Hanna , where the court held that a text message is akin to "having a flyer briefly waived in one's face ... [a]nnoying, perhaps, but not a basis for invoking the jurisdiction of the federal courts." 936 F.3d 1162, 1172 (11th Cir. 2019). Whatever the reach of standing under Salcedo , this Court is governed by Ninth Circuit law. Notably, Salcedo does distinguish Van Patten : "We note that out sister circuit has reached the opposite conclusion in this context." 936 F.3d at 1170 (citing Van Patten , 847 F.3d at 1043 )

The Ninth Circuit's decision in Van Patten governs. Van Patten held that a single telephone call or text message from a telemarketer is sufficient to satisfy Article III's injury-in-fact requirement. In Van Patten v. Vertical Fitness Group, LLC , the plaintiff provided his cellphone number to a gym in the process of signing up for a gym membership. 847 F.3d 1037, 1040 (9th Cir. 2017). After the plaintiff cancelled his membership, the gym texted Van Patten to offer him a special deal to rejoin the gym. Id. at 1041. The panel held that Congress established the TCPA to protect the plaintiff's substantive right to privacy, namely the right to be free from unsolicited telemarketing phone calls or text messages that "invade the privacy and disturb the solitude of their recipients." Id. at 1043. Therefore, "a violation of the TCPA...