Antitrust Law Daily Wrap Up, PRIVACY—N.D. Cal.: Motion to stay TCPA class action against health club partially granted, (Mar 3, 2016)

By Michael Menzhuber, J.D., LL.M.

A motion to stay an individual’s putative class action, that alleged a violation of the Telephone Consumer Protection Act (TCPA) by a health club, was granted by the federal district court in San Jose. The court stayed the matter pending decisions by the U.S. Supreme Court in two related cases but denied the stay pending an appeal of an FCC Declaratory Ruling by the D.C. Circuit (O’Hanlon v. 24 Hour Fitness USA, Inc., March 2, 2016, Freeman, B.).

Michele O’Hanlon filed a putative class complaint alleging that 24 Hour Fitness USA, Inc. violated the TCPA by making numerous unsolicited calls to her cellular telephone number through an automatic telephone dialing system (ATDS). She also alleged that the defendant continued to call her, even after she informed the defendant that she was not the individual the defendant sought. Her complaint sought statutory damages, including treble damages, but did not allege any actual injury.

The defendant moved to stay the matter pending: (1) the Supreme Court’s decisions in Tyson Foods, Inc. v. Bouaphakeo, 135 S. Ct. 2806 (2015) and Spokeo,Inc. v. Robins, 135 S. Ct. 1892 (2015); and (2) the D.C. Circuit’s resolution of appeals filed from a July 10, 2015 FCC Declaratory Ruling.

In Tyson Foods, the Supreme Court granted a petition of writ of certiorari to consider whether a class action may be certified or maintained where: (1) liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample; and (2) the class contains hundreds of members who were not injured and have no legal right to damages. In Spokeo, the Supreme Court granted a petition of writ of certiorari to consider whether Article III standing can be conferred on a plaintiff who suffers no concrete harm. The FCC Declaratory Ruling appeal concerned, among other things, the definition of an ATDS and who may be considered a “called party”.

The court determined that the factors weighed in favor of staying the action pending the Supreme Court’s decisions in Tyson Foods and Spokeo because: (1) the potential prejudice to O’Hanlon and the putative class, if the action was stayed, would be minimal because the case was in its early stages, the Supreme Court decisions would likely be issued within a few months, and O’Hanlon only sought statutory damages; (2) the potential prejudice to the defendant, if the stay was not granted, would be significant because the defendant would be forced to litigate an action that could be potentially rendered moot by the Supreme Court’s decisions; and (3) continuing the matter would be an inefficient use of the court’s resources because, depending upon the Supreme Court’s decision, it might not have subject matter jurisdiction.

However, the factors weighed against staying the action pending a decision from the D.C. Circuit concerning the FCC Declaratory ruling. The court found that the potential prejudice to O’Hanlon, if the stay was granted, would be significant because awaiting a ruling by the D.C. Circuit would likely involve a substantial delay and suspend the action for an indefinite period of time. There would be little prejudice to the defendant, if the stay was not granted, because the D.C. Circuit’s decision would not be binding on the court and there was persuasive authority on the issue from other circuit courts. Finally, the compelling interests of the expedient resolution of disputes and providing certainty to the parties outweighed any potential benefits in deferring to the D.C. Circuit.

The case is No: 15-cv-01821-BLF.

Attorneys: Aaron David Radbil (Greenwald Davidson Radbil PLLC) for Michele O'Hanlon. Dayle Marie Van Hoose (Sessions, Fishman, Nathan & Israel, LLC) for 24 Hour Fitness USA, Inc.

Companies: 24 Hour Fitness USA, Inc.

Cases: Privacy CaliforniaNews