Castillo v. Caesars Entm't Corp.

JUAN CASTILLO, as an individual and onbehalf of all others similarly situated, Plaintiff, v. CAESARS ENTERTAINMENT CORPORATION, et al., Defendants.

Case No.: 2:18-cv-02297-GMN-NJK

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

September 30, 2019

ORDER

Pending before the Court is the Motion on for Judgment on the Pleadings, (ECF No. 47), filed by Defendants Caesars Entertainment Corporation ("CEC") and Desert Palace, LLC ("Caesars Palace") (collectively "Defendants"). Plaintiff Juan Castillo ("Plaintiff") filed a Response, (ECF No. 72), and Defendants filed a Reply, (ECF No. 74).

Also pending before the Court is Defendants' Motion to Stay Case, (ECF No. 48). Plaintiff filed a Response, (ECF No. 73), and Defendants filed a Reply, (ECF No. 75).

I. BACKGROUND

This case arises out of Defendants' alleged violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 ("TCPA") by way of its "Ivy virtual concierge." (Compl. ¶¶ 10, 31-36, Ex. A to Notice of Removal, ECF No. 1-1). Plaintiff alleges that in April 2018, Plaintiff stayed in Defendants' hotel, Caesars Palace, in Las Vegas, Nevada. (Compl. ¶ 16). Once at the front desk, while checking in, he orally provided his cell phone number to the receptionist. (Id.). About thirty minutes later, he received a text message from Defendants' Ivy virtual concierge service telling him, inter alia, to "[t]ext me for hotel information, towels, housekeeping requests and more." (Id.). Additionally, Plaintiff claims that at no time prior to receiving Defendants' text message did Plaintiff expressly authorize Defendants to send him text messages using an automatic telephone dialing system for telemarketing or advertising purposes. (Id. ¶ 19).

On August 2, 2018, Plaintiff brought this class-action in the Superior Court of the State of California, Marin County alleging one claim against Defendants for violation of the TCPA. (Compl. ¶¶ 31-36). Subsequently, Defendants removed to the U.S. District Court, Northern District of California, invoking federal question subject matter jurisdiction. (Notice of Removal, ECF No. 1). The case was subsequently transferred to the District of Nevada in December 2018. (J. Chen Order, ECF No. 33); (Min. Order, ECF No. 36). On December 21, 2018, Defendants filed the instant Motion for Judgment on the Pleadings and Motion to Stay Case. This Order now follows.

II. LEGAL STANDARD

"After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). Motions for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) are "functionally identical" to motions to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989).

In reviewing a motion for judgment on the pleadings pursuant to Rule 12(c), a court "must accept all factual allegations in the complaint as true and construe them in the light most favorable to the non-moving party." Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009).

"[J]udgment on the pleadings is proper 'when, taking all the allegations in the non-moving party's pleadings as true, the moving party is entitled to judgment as a matter of law.'" Ventress v. Japan Airlines, 486 F.3d 1111, 1114 (9th Cir. 2007) (citation omitted). The allegations of the nonmoving party must be accepted as true while any allegations made by themoving party that have been denied or contradicted are assumed to be false. MacDonald v. Grace Church Seattle, 457 F.3d 1079, 1081 (9th Cir. 2006).

III. DISCUSSION

A. Motion for Stay

Defendants provide two grounds for stay: (1) the Ninth Circuit will soon rule on Defendants' constitutional affirmative defense; and (2) the FCC's interpretation of the term "ATDS" in a pending proceeding will determine whether Plaintiff can state a claim. (Mot. Stay 3:5-6, ECF No. 48). With regard to the latter, Defendants invoke the primary jurisdiction doctrine as well as the Court's inherent authority in support of its Motion to Stay.

1. Constitutional defense

Defendants argue that the TCPA is a content-based regulation of speech triggering strict scrutiny and that the TCPA fails strict scrutiny. (Mot. J. at 6-14). Defendants further state that the Ninth Circuit will be issuing a ruling on this issue and therefore, the Court should stay this matter until that decision is announced. The Court finds that this argument is moot as the Ninth Circuit made its ruling on this issue in July 2019. Gallion v. United States, 772 F. App'x 604, 605 (9th Cir. 2019) (affirming the district court's ruling that the TCPA is constitutional). Insofar as Defendants' Motion for Stay relies on this argument, the Court denies this Motion.

2. FCC's interpretation of ATDS

Primary Jurisdiction

Primary jurisdiction is "a prudential doctrine under which courts may, under appropriate circumstances, determine that the initial decision-making responsibility should be performed by the relevant agency rather than the courts." Syntek Semiconductor Co. v. Microchip Tech. Inc., 307 F.3d 775, 780 (9th Cir. 2002). In evaluating primary jurisdiction, Ninth Circuit courts consider "(1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute thatsubjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration." Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 760 (9th Cir. 2015) (quoting Syntek, 307 F.3d at 781).

The primary jurisdiction doctrine does not apply here. "The doctrine is reserved for a 'limited set of circumstances' that 'requires resolution of an issue of first impression, or of a particularly complicated issue that Congress has committed to a regulatory agency.'" Astiana, 783 F.3d at 760 (citation omitted). Given the Marks Court's construction of the TCPA, the statutory definition of an ATDS is neither an issue of first impression, nor one that judges are incompetent to decide. Applying this rationale, Ninth Circuit courts have consistently rejected requests to stay actions pending further FCC rulemaking. See, e.g., Nicholson, v. REI Energy, LLC, No. 3:18-cv-00203-HZ, 370 F. Supp. 3d 1199, 1206, 2019 WL 993624, at *5 (D. Or. Feb. 28, 2019) (holding that in light of Marks, "this case presents neither an issue of first impression nor a question better suited to the expertise of the [FCC]."); Knapper v. Cox Commc'ns, Inc., No. 17-cv-00913-PHX-SPL, 2019 WL 250430, at *2 (D. Ariz. Jan. 17, 2019); ("Marks represents binding law in this Circuit. Consequently, there is no matter of first impression or of such complexity inhibiting this Court from proceeding."); Larson v. Harman Mgmt. Corp., No. 1:16-cv-00219-DAD-SKO, 2018 WL 6459964, at *4 (E.D. Cal. Dec. 10, 2018) ("The Ninth Circuit's willingness to decide the meaning of an ATDS in Marks also indicates that defining that term as used in the applicable statute is within the conventional experience of judges."); Pieterson v. Wells Fargo Bank, N.A., No. 17-cv-02306-EDL, 2018 WL 3241069, at *3 (N.D. Cal. July 2, 2018) ("[T]he primary jurisdiction doctrine does not comfortably fit the circumstances of this case because the issues before the FCC are not ones of first impression and controlling or persuasive law already exists.").

Considerations of judicial efficiency also counsel against a stay. "The 'deciding factor' in determining whether the primary jurisdiction doctrine should apply is 'efficiency.'" Reid v.Johnson & Johnson, 780 F.3d 952, 967 (9th Cir. 2015) (quoting Rhoades v. Avon Prods., Inc., 504 F.3d 1151, 1165 (9th Cir. 2007)). Aside for Defendants' speculation, there is no indication that a new FCC order is imminent or any assurance such an order will conclusively resolve the ATDS issue. As another court explained, "this cycle of staying a case while an FCC order is pending only to have the FCC order challenged in court has played out before, demonstrating the real possibility of indefinite delay." See Pieterson, 2018 WL 3241069, at *5; see also Larson, 2018 WL 6459964, at *4 ("[A]ny action from the FCC will be subject to further challenge, which is exactly what happened with the 2015 Declaratory Ruling."); Goldschmidt v. Rack Room Shoes, No. 18-21220, 2019 WL 166629, at *1 (S.D. Fla. Jan. 4, 2019) ("[D]espite Defendant's assertion that the ruling is expected by late 2018 or early 2019, there is no real indication that the FCC will in fact issue a ruling by a certain date.").

In sum, the Court is unconvinced that judges are incompetent to construe the TCPA to define the contours of an ATDS. Moreover, even if Defendants' speculation is correct and the FCC "will soon rule" on this definitional question, the Court is skeptical that such an order would bring finality to the issue of what constitutes an ATDS. Accordingly, the Court declines to stay this matter under the primary jurisdiction doctrine.

Inherent Authority to Stay

"A district court has discretionary power to stay proceedings in its own court under [Landis ]." Lockyer v. Mirant Corp., 398 F.3d 1098, 1109 (9th Cir. 2005) (citing Landis v. North American Co., 299 U.S. 248, 254 (1936)). When deciding whether to issue a stay, the court must weigh competing interests including: (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). The proponent of a stay bears theburden of establishing its need. Clinton v. Jones, 520 U.S. 681, 708 (1997) (citing Landis, 299 U.S. at 255).

As an initial matter, Landis stays "should not be granted unless it appears likely the other...