Bliss v. CoreCivic, Inc.

580 F.Supp.3d 924

Kathleen BLISS, on behalf of herself, the Proposed Nationwide Rule 23 Class, and the Proposed Nevada Subclass, Plaintiff

v.CORECIVIC, INC., Defendant

Case No. 2:18-cv-01280-JAD-EJY

United States District Court, D. Nevada.

Signed January 14, 2022

Charles A. Delbridge, Pro Hac Vice, Matthew Hale Morgan, Pro Hac Vice, Rebekah L. Bailey, Anna Purna Prakash, Pro Hac Vice, Melanie A. Johnson, Pro Hac Vice, Nichols Kaster, PLLP, Minneapolis, MN, Paul S. Padda, Paul Padda Law, PLLC, Joshua Y. Ang, Resnick & Louis, P.C., Las Vegas, NV, Joseph Kenneth Eischens, Pro Hac Vice, Law Office of Joseph K. Eischens, Parkville, MO, Lance David Sandage, Pro Hac Vice, Sandage Law LLC, Kansas City, MO, Michael Hodgson, Pro Hac Vice, The Hodgson Law Firm, LLC, Lees Summit, MO, for Plaintiff.

Ashlee Hesman, Jacob B. Lee, Rachel Love, Pro Hac Vice, Daniel Struck, Pro Hac Vice, Struck Love Bojanowski & Acedo, PLC, Chandler, AZ, Gina Winspear, Dennett Winspear, Las Vegas, NV, for Defendant.

Order Denying Motion to Dismiss Second Amended Complaint

[ECF No. 129]

Jennifer A. Dorsey, United States District Judge On her own behalf and on behalf of a proposed nationwide class and a proposed Nevada subclass, criminal-defense attorney Kathleen Bliss sues CoreCivic, Inc., alleging that the company—which owns and operates Nevada Southern Detention Center (NSDC)—recorded privileged calls between her and her incarcerated clients in violation of the Federal and Nevada Wiretap Acts.¹ In 2019, finding Bliss's claims barred by both acts’ two-year statutes of limitations, which I found were triggered when she discovered the recording scheme, I granted summary judgment for CoreCivic.² Bliss appealed, and the Ninth Circuit affirmed in part and reversed in part, holding that each recorded call triggered the statute of limitations anew, so any alleged wiretap-act violations prior to June 27, 2016, were time-barred but subsequent ones aren't necessarily so.³ Following remand, Bliss amended her complaint for a second time.⁴ CoreCivic moves to dismiss that second-amended complaint, arguing that Bliss fails to state a claim and should not be able to recover punitive damages, and that this court lacks personal jurisdiction over claims by the putative nationwide-class members.⁵ Because I find Bliss's claims for relief and punitive damages plausible and that this court has jurisdiction over the putative nationwide-class claims, I deny the motion in full.⁶

Discussion

I. This court has jurisdiction over Bliss's nationwide-class claims.

Citing to the Supreme Court's decision in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County , CoreCivic argues that this court lacks specific personal jurisdiction over it for purposes of the putative nationwide-class-members’ claims.⁷ In Bristol-Myers , a number of plaintiffs—a vast majority of whom were not California residents—brought a state-law mass-tort action against an out-of-state drug manufacturer in California state court.⁸ The state court denied the drug manufacturer's motion to quash service of summons, which asserted the lack of personal jurisdiction on the nonresidents’ claims, and the Supreme Court reversed.⁹ The Court reasoned that federalism concerns counseled against state courts exercising personal jurisdiction over nonresident defendants for nonresident plaintiffs’ out-of-state-injury claims in a mass-tort action.¹⁰ It expressly left "open" whether the same restrictions apply to federal courts.¹¹ And in her dissent, Justice Sonia Sotomayor recognized that "[t]he Court today does not confront the question whether its opinion here would also apply to a class action in which a plaintiff injured in the forum [s]tate seeks to represent a nationwide class of plaintiffs, not all of whom were injured there."¹²

Since Bristol-Myers , the lower courts have taken divergent approaches to the class-action question the Court left unanswered, creating intra-circuit and even intra-district splits.¹³ The Ninth Circuit has not addressed the issue, so it is one of first impression for this court. A minority of district courts have concluded that Bristol-Myers effectively hamstrings nationwide class actions and compels the dismissal of any nonresidents’ claims whose injuries do not arise out of the defendant's forum-state contacts.¹⁴ But the Seventh Circuit and a majority of district courts—including another judge in this district¹⁵ —have held that Bristol-Myers is cabined to state-law mass-tort actions, which involve only named plaintiffs, each of whom have personalized injuries and separate damage claims.¹⁶ In these courts’ view, unnamed class members are "more like nonparties"¹⁷ and "apply[ing] Bristol-Myers to [their] claims in a nationwide class action ... would limit [class] certification to only those states where the defendant is subject to general personal jurisdiction"¹⁸ and "could lead to duplicative nationwide class actions if the defendants hailed from different states."¹⁹ These courts also reason that unlike the procedural rules applicable in the mass-tort context the Bristol-Myers Court considered, the heightened due-process safeguards in Federal Rule of Civil Procedure (FRCP) 23 are sufficient to protect the interests of class-action defendants.²⁰

I find this majority analysis persuasive and I adopt it. Bristol-Myers involved a state court applying one state's tort laws to hundreds of named out-of-state plaintiffs’ out-of-state injuries. The federalism concerns that animated the Supreme Court in that case are not replicated here because the only named plaintiff is a resident of Nevada who alleges injuries caused by the defendant's actions in Nevada and invokes this federal court's federal-question jurisdiction under the Federal Wiretap Act. And I agree with the majority of district courts that FRCP 23 ’s numerosity, commonality, typicality, adequacy, predomination, and superiority requirements are sufficient to protect class-action defendants’ due-process rights. I also find it an unlikely and impracticable result of Bristol-Myers —which did not decide whether its rule would apply in federal court or in class actions—to require federal courts to conduct specific-jurisdiction analyses for unnamed class members’ claims and dismiss them long before any class has been certified. And it goes against principles of judicial efficiency to dismiss the nationwide class members at this stage, only to cause the filing of duplicate and parallel class actions based on the same facts and questions of federal law in a federal court where CoreCivic is subject to general personal jurisdiction. So I deny CoreCivic's motion to dismiss for want of personal jurisdiction the putative nationwide-class-members’ claims.

II. Bliss has stated plausible claims for violations of the Wiretap Acts.

CoreCivic also moves to dismiss Bliss's complaint for failure state a claim.²¹ Federal pleading standards require plaintiffs to plead enough factual detail to "state a claim to relief that is plausible on its face."²² This "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation"²³ ; plaintiffs must make direct or inferential factual allegations about "all the material elements necessary to sustain recovery under some viable legal theory."²⁴ The court must accept as true all well-pled factual allegations in the complaint, recognizing that legal conclusions are not entitled to the assumption of truth, and resolve all factual disputes in the plaintiff's favor.²⁵ A complaint that fails to meet this standard must be dismissed.²⁶

I find that Bliss has stated colorable claims for violations of the Federal and Nevada Wiretap Acts. The Federal Wiretap Act makes unlawful the (1) intentional (2) interception of a (3) "wire, oral, or electronic communication" (4) unless the circumstances establish an exception.²⁷ The Nevada Wiretap Act, which was amended to "conform" with the federal act,²⁸ similarly prohibits any (1) unconsented (2) intercept or attempt to intercept (3) a wire communication (4) unless the circumstances establish an exception.²⁹ CoreCivic argues that there was no intercept under either Wiretap Act because of the statutory business-use and law-enforcement exceptions, if there was an intercept it was unintentional, and that Bliss either had no reasonable expectation of privacy or consented to the interceptions.³⁰

A. Bliss has plausibly alleged intent.

The intent element in the Federal Wiretap Act is met if the act is "done on purpose," even if that purpose was not nefarious and the actor was unaware that the use was unlawful.³¹ In other words, the actor's motive is irrelevant to a finding of intentionality; the plaintiff need only plead that the act was not a mistake.³² And FRCP 9(b) permits plaintiffs to plead intent and malice generally.³³ Bliss's second-amended complaint repeatedly asserts that CoreCivic "knowingly," "willfully," and "intentional[ly]" intercepted attorney-client communications, and that it did so despite Bliss's objections, numerous other lawsuits based on similar facts, "admit[ing] in other litigation that there is no legitimate reason to record calls between attorneys and their clients," and being "under cease and desist orders in Kansas ..." for the same conduct.³⁴ Bliss's allegations are more than enough to plead intentionality on CoreCivic's part.³⁵

B. Bliss has plausibly alleged an interception.

Under the federal act, an interception is "the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device."³⁶ Statutorily excluded from the definition of "electronic, mechanical, or other device" are those devices that are (i) furnished for and being used for a subscriber's ordinary course of business, (ii) being used by a provider of wire or electronic communication in the ordinary course of business or (iii) by law enforcement in the ordinary course of their duties.³⁷...