Rosenberg v. Loandepot.Com. LLC

435 F.Supp.3d 308

Douglas E. ROSENBERG, Plaintiff,

v.LOANDEPOT.COM LLC and Ascendant Marketing Group LLC, Defendants.

Civil Action No. 19-10661-NMG

United States District Court, D. Massachusetts.

Signed January 24, 2020

Anthony I. Paronich, Paronich Law, P.C., Hingham, MA, Avi R. Kaufman, Pro Hac Vice, Kaufman P.A., Miami, FL, Alex M. Washkowitz, CW Law Group, P.C., Framingham, MA, for Plaintiff.

Kelly M. Kirby, Paul R. Mastrocola, Burns & Levinson, Boston, MA, Beth-Ann Krimsky, Jamey R. Campellone, Pro Hac Vice, Greenspoon Marder, Fort Lauderdale, FL, Donald R. Frederico, Melanie A. Conroy, Pierce Atwood LLP, Boston, MA, for Defendants.

MEMORANDUM & ORDER

Nathaniel M. Gorton, United States District Judge

This is a putative class action which purports to arise from a violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227. Plaintiff Douglas Rosenberg ("plaintiff" or "Rosenberg") alleges that LoanDepot.com, LLC ("Loan Depot") and Ascendant Marketing, LLC ("Ascendant Marketing" or "Ascendant") (collectively "defendants") made repeated automated telemarketing calls to his cell phone in violation of the TCPA.

Pending before the Court are five motions: (1) Loan Depot's motion to stay, (2) Loan Depot's motion to strike the class allegations, (3) the motion of Loan Depot and Ascendant to dismiss on grounds that the TCPA is unconstitutional and inseverable and that Rosenberg has failed to state a claim, and (4) two motions, one by each defendant, to dismiss non-Massachusetts putative class members for lack of personal jurisdiction under Rule 12(b)(2).

For the following reasons, the Court will deny all pending motions.

I. Background

A. Factual Background

Plaintiff Rosenberg is a Massachusetts resident who owns a cell phone with a "508" area code. He alleges that his cell phone is his only telephone, he uses it for residential purposes and he registered the number on the National Do-Not-Call Registry and the Massachusetts Do-Not-Call List in 2003.

Defendant Loan Depot is a California limited liability company and a non-bank consumer lender. Ascendant Marketing is a Texas limited liability company and provides marketing services. Loan Depot allegedly contracted with Ascendant Marketing to generate business through telemarketing services.

In 2018, Rosenberg alleges that he received a number of phone calls, both from Loan Depot and from Ascendant Marketing advertising Loan Depot's services. Plaintiff alleges that at least two of those calls were made from non-working or "spoofed" numbers, which he contends is indicative of the fact that the calls were made from an Automatic Telephone Dialing System ("ATDS") in violation of the TCPA. He seeks to certify nationwide classes of (1) consumers who were called by defendants via an automated dialing system in violation of the TCPA's automated calling provision ("the ATDS class") and (2) persons who were called by the defendants more than once in a 12-month period in violation of the TCPA's Do-Not-Call provision ("the DNC class").

B. Procedural History

In April, 2019, Rosenberg filed a complaint against Loan Depot and a John Doe Corporation as the representative of a proposed nationwide class. Loan Depot responded with two motions to dismiss, a motion to strike the class and a motion to stay the case. In June, 2019, Rosenberg filed an amended complaint which added Ascendant Marketing as a defendant and set forth allegations supporting the ATDS class and DNC class.

In response to the amended complaint, the parties stipulated that the initial motions to dismiss and to strike the class were moot. Loan Depot subsequently filed renewed motions seeking the same relief. Both defendants also filed motions to dismiss the non-Massachusetts putative class members.

C. The TCPA

In 1991, Congress enacted the TCPA as a response to the proliferation of intrusive calls from telemarketers. The law sought to safeguard the public's interest in personal privacy and, to that end, prohibits multiple abuses of telephone technology. Applicable to this litigation are the ATDS and Do Not Call provisions of the TCPA.

As summarized by the District of Columbia Circuit Court of Appeals ("D.C. Circuit"), "the TCPA generally makes it unlawful to call a cell phone using an ATDS." ACA International v. FCC, 885 F.3d 687, 693 (D.C. Cir. 2018). More specifically, the law provides in relevant part that it is unlawful:

to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system ... to any telephone number assigned to a ... cellular telephone service... unless such call is made solely to collect a debt owed or guaranteed by the United States.

47 U.S.C. § 227(b)(1)(A)(iii).

As is evident from the statutory language, the TCPA contains three exceptions to the prohibition on telephone calls made using an ATDS: calls (1) for "emergency purposes," (2) with the "prior express consent of the called party" and (3) "made solely to collect a debt owed to or guaranteed by the United States" (hereinafter, "the debt-collection exemption"). The debt-collection exemption was added by Congress in 2015 as part of a budget bill and is subject to the defendants constitutional challenge as well as extensive constitutional litigation in other courts.

The TCPA goes on to define an ATDS as

equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.

47 U.S.C. § 227(a)(1).

Also relevant to the current litigation, the TCPA and its implementing regulations prohibit telephone solicitations to "[a] residential telephone subscriber who has registered his or her telephone number on the national do-not call registry ...." 47 C.F.R. § 64.1200(c)(2).

D. The FCC's Regulatory Orders

Given the expansive and technical nature of the TCPA, Congress explicitly vested the FCC with rulemaking authority in order to implement the statute. 47 U.S.C. § 227(b)(2). The FCC has used that authority to issue regulations defining the TCPA's reach including what technology qualifies as an ATDS. Applicable here, The FCC, in response to changing technology, issued a series of rulings between 2003 and 2015, which established that "predictive dialers" (a type of automated dialing systems) and other similar advanced technology fit the definition of an ATDS. See Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1045 (9th Cir. 2018).

In 2015, the FCC issued a ruling reaffirming its position that predictive dialers constituted an ATDS. However, the 2015 ruling included a new, more expansive definition of an ATDS. The FCC concluded that an ATDS' "capacity" included not just a device's present capabilities but also its potential functionalities. See In Re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961, 7974 (2015) (" 2015 Order"); Richardson v. Verde Energy USA, Inc., 354 F. Supp. 3d 639, 644 (2018).

E. ACA International and its aftermath

Unsurprisingly, the 2015 Order spurred immediate litigation as various regulated entities challenged the FCC's decision. Those legal challenges resulted in a DC circuit decision in which the court set aside parts of the 2015 Order, including the definition of an ATDS, because the FCC "failed to satisfy the requirement of reasoned decision making." ACA Int'l, 885 F.3d 687 at 703.

Courts are now split on the effect of that decision. The disagreement turns on whether ACA Int'l overturned just the 2015 FCC interpretation of what constitutes an ATDS or was an invalidation of all prior FCC interpretations. See Marks, 904 F.3d 1041 at 1049 (holding that the D.C. Circuit "set aside the FCC's interpretations of the definition of an ATDS in the 2015 order... and any prior FCC rules that were reinstated by that order."). But see Gonzalez v. HOSOPO Corporation, 371 F. Supp. 3d 26, 31 (2019) (noting that "other courts have concluded that ACA Int'l only invalidated the FCC's 2015 ruling, and not the earlier FCC rulings") (collecting cases).

At this juncture, the definition of an ATDS is not integral to the motions pending before the Court. As such, the Court need not decide the scope of the ACA Int'l decision.

II. Motion for Stay

In May, 2019, Loan Depot moved to stay this action pending rulings (1) from the FCC redefining an ATDS in light of ACA Int'l and (2) on a constitutional challenge to the TCPA pending in the Ninth Circuit. The Ninth Circuit has since ruled on the TCPA's constitutionality, rendering any argument for a stay on those grounds moot. See Gallion v. United States, 772 F. App'x 604, 605 (9th Cir. 2019) (holding that the "2015 amendment to the TCPA, which excepts calls made solely to collect a debt owed to or guaranteed by the United States, is a content-based speech regulation that fails strict scrutiny, and thus is incompatible with the First Amendment" but that the offending provision was severable from the remainder of the statute).

Defendants submit that given the uncertainty surrounding the scope of the D.C. Circuit's ACA Int'l decision and the definition of an ATDS, a stay is warranted under both the primary jurisdiction doctrine and the court's inherent power to manage its docket.

Plaintiff responds that a stay is unwarranted because (1) he has asserted a claim under the Do-Not-Call provision of the TCPA which, because it is unrelated to a definition of an ATDS, would be unaffected by any FCC ruling and (2) the Court is perfectly capable of defining "ATDS" based on the statutory text, case law and existing FCC orders.

A. Primary Jurisdiction Doctrine

1. Legal Standard

Primary jurisdiction doctrine is a prudential doctrine which seeks to "promote accurate decision making and regulatory consistency in areas of agency expertise." A ss'n of Int'l Auto. Mfrs., Inc. v. Comm'r Mass. Dep't of Envtl. Prot., 196 F.3d 302, 304 (1st Cir. 1999). There is, however, "no fixed formula" for application of the...