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Rosales v. Heath

United States District Court, D. Nebraska

June 9, 2017

EUGENE ROSALES, on behalf of himself and all others similarly situated, ; Plaintiff,
v.
JOHN C. HEATH, Attorney at Law; Defendant.

          MEMORANDUM AND ORDER

          Cheryl R. Zwart United States Magistrate Judge.

         This matter is before the court on Defendant's motion to stay. (Filing No. 14). For the following reasons, the motion will be granted and the case will be stayed.

         BACKGROUND

         a. Plaintiff's Claims

         On March 20, 2017, Plaintiff Eugene Rosales filed a complaint against Defendant John C. Heath Attorney at Law, PLLC dba Lexington Law Firm (“Lexington Law”) alleging Lexington Law had repeatedly sent his cellular phone automated text messages without his consent in violation of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, et seq. (Filing No. 1). Rosales alleges that Defendant sent text messages using an automatic telephone dialing system (“ATDS”). Specifically he claims “Defendant acquired Plaintiff's number, stored it in a database connected to its telephonic or computer system, and then used its system to send text messages to Plaintiff's cell phone automatically and without human intervention.” (Filing No. 1 ¶ 38 at CM/ECF p. 7).

         On May 8, 2017, Lexington Law moved to stay this case until the U.S. Court of Appeals for the D.C. Circuit ruled in ACA International v. Federal Communications Commission, Case No. 15-1211 (filed July 10, 2015). Lexington Law states that the decision in ACA International will determine the definition of a an ATDS for the purposes of the FCRA. Lexington Law contends this issue is fundamental to Plaintiff's claims and may affect their viability.

         b. The 2015 FCC Order and ACA International v. FCC

         In 2015, the FCC issued an order outlining its interpretation of numerous provisions of the TCPA including the definition of an ATDS.[1] See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Declaratory Ruling and Order, 39 FCC Rcd. 7961 (2015). The FCC Order expanded the definition of an ATDS to include any equipment that could potentially be modified to generate random or sequential numbers.

         Nine parties filed petitions challenging the FCC Order in various U.S. courts of appeals. The petitions were consolidated before the Court of Appeals for the D.C. Circuit. One issue that will be determined in ACA International is “[w]hether the [FCC] interpreted ATDS in a way that unlawfully turns on the equipment's potential rather than present abilities . . . .” See Joint Brief for Petitioners at 4, ACA International v. FCC, No. 15-1211 (D.C. Cir. Nov. 25, 2015). Briefing concluded on February 24, 2016 and the Court of Appeals heard oral arguments on October 19, 2016.

         Based on the oral arguments, Lexington Law contends that the D.C. Circuit will likely reject the expanded definition of an ATDS. Specifically, Lexington Law surmises the court will reject the potential capacity component of the FCC's ATDS definition. Lexington Law argues the ACA International decision will affect, if not invalidate, Plaintiff's claims and have an impact on the discovery allowed in this case.

         ANALYSIS

         "[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. N. Am. Co., 299 U.S. 248 (1936). A federal district court "has broad discretion to stay proceedings as an incident to its power to control its own docket." Clinton v. Jones, 520 U.S. 681, 706 (1997).

         In evaluating a stay, a court should consider several relevant factors including "maintaining control of its docket, conserving judicial resources, and the important interest of providing for the just determination of cases pending before the court." Daywitt v. Minnesota, 2016 U.S. Dist. LEXIS 68512, 2016 WL 3004626, *5 (D. Minn. May 24, 2016). A stay may be warranted where the matter implicates "rights which are inextricably tied to [a] pending . . . claim in [another court]." See Kemp v. Tyson Seafood Grp., Inc., 19 F.Supp.2d 961, 965 (D. Minn. 1998). "Traditionally, an applicant for a stay has the burden of showing specific hardship or inequity if he or she is required to go forward." Jones v. Clinton, 72 F.3d 1354, 1364 (8th Cir. 1996).

         Lexington Law argues that the ACA International decision has the potential to “drastically” affect the nature of this action. Specifically, defendant argues that discovery in this case could be ...


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