This article previously appeared on The Consumer Financial Services Blog and is re-published here with permission.

Charles Ochab

Joining several other federal district courts around the country, the U.S. District Court for the Eastern District of New York recently granted a joint motion to stay proceedings in a putative class action lawsuit alleging violation of the federal Telephone Consumer Protection Act (TCPA).

The Court found that appeals currently pending before the Supreme Court of the United States would likely result in controlling determinations as to:  (1) whether a Rule 68 offer of judgment renders a matter moot;  (2) whether a plaintiff has standing to pursue his claims in the absence of actual damages or injury in fact; and  (3) whether a named putative class plaintiff may certify a class of individuals who were not injured.

Moreover, the Court found that a petition pending before the U.S. Court of Appeals for the D.C. Circuit would likely result in more precise definitions of certain terms and provisions of the TCPA.

Accordingly, the Court granted the joint motion to stay the proceedings, finding that a stay pending the outcome of the Supreme Court and the D.C. Circuit litigation was in the interests of justice.

A copy of the opinion in Acton v. Intellectual Capital Management, Inc. is available at:  Link to Opinion.

The plaintiffs, individually and on behalf of a putative class, alleged that the defendants violated the TCPA by sending commercial text messages to the plaintiffs’ and class members’ cell phones without their consent. The plaintiffs filed a motion for class certification simultaneously with the filing of their complaint.

The defendants served the plaintiffs with offers of judgment pursuant to Fed. R. Civ. P. 68.  One of the plaintiffs accepted the defendants’ offer of judgment and the court granted his motion for judgment based on settlement.  The remaining plaintiff did not accept the defendants’ offer of judgment.

The defendants filed a motion to stay proceedings pending the resolution of certain Supreme Court and D.C. Circuit matters.

The defendants argued that the resolution of three cases for which the Supreme Court recently granted certiorari will likely result in precedent-controlling determinations with respect to the following issues in this case: (1) whether the defendants’ Rule 68 offer of judgment renders this matter moot; (2) whether the remaining plaintiff has standing to pursue this matter in the absence of actual damages or injury in fact; and (3) whether the remaining plaintiff may certify a class of individuals who were not injured. See Gomez v. Campbell-Ewald Co., 768 F.3d 871 (9th Cir. 2014), cert. granted, 135 S. Ct. 2311 (May 18, 2015); Robins v. Spokeo, Inc., 742 F.3d 409 (9th Cir. 2014), cert. granted, 135 S.Ct. 1892 (Apr. 27, 2015); Bouaphakeo v. Tyson Foods, Inc., 593 F. App’x 578 (8th Cir. 2014), cert. granted, 135 S. Ct. 2806 (Jun. 8, 2015) (collectively, the “Supreme Court Cases”).

Specifically, the Petition for a Writ of Certiorari filed in the Campbell-Ewald matter presents the following questions: “1. Whether a case becomes moot, and thus beyond the judicial power of Article III, when the plaintiff receives an offer of complete relief on his claim” and “2. Whether the answer to the first question is any different when the plaintiff has asserted a class claim under Federal Rule of Civil Procedure 23, but receives an offer of complete relief before any class is certified.” Petition for Writ of Certiorari, Campbell-Ewald Co., 2015 WL 241891 (No. 14-857).

The Petition for a Writ of Certiorari filed in the Spokeo matter presents the question of “[w]hether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm . . . by authorizing a private right of action based on a bare violation of a federal statute.” Petition for Writ of Certiorari, Spokeo, 2014 WL 1802228 (No. 13-1339).

Finally, the Petition for Writ of Certiorari filed in the Tyson matter presents the question of “[w]hether a class action may be certified or maintained under Rule 23(B)(3) . . . when the class contains hundreds of members who were not injured and have no legal right to any damages.” Petition for Writ of Certiorari, Tyson, 2015 WL 1285369 (No. 14-1146).

Defendants also argued that a petition filed in the U.S. Court of Appeals for the D.C. Circuit challenging the validity of a 2015 TCPA Order issued by the Federal Communications Commission will similarly affect the outcome of this litigation to the extent that the D.C. Circuit clarifies certain definitions within the TCPA. See also ACA Int’l v. FCC, No. 15-1211 (D.C. Cir.).

The Amended Petition for Review filed in ACA alleges, inter alia, that the FCC’s treatment of the term “capacity” in the TCPA’s definition of an “automatic telephone dialing system” is arbitrary, capricious, and an abuse of discretion. Amended Petition for Review at 2-3, ACA v. In’tl v. FCC, No. 15-1211 (D.C. Cir. July 13, 2015). The ACA Amended Petition for Review also requests that the FCC be compelled to either: (a) “establish a viable safe harbor for autodialed `wrong number’ non-telemarketing calls to reassigned wireless numbers” or (b) “define `called party’ as a call’s intended recipient.” Id. at 5.

The defendants requested a stay pending the outcome of the Supreme Court Cases or, alternatively, a stay pending the disposition of the D.C. Circuit.

Subsequent to the filing of the defendants’ motion, the parties’ counsel executed a stipulation agreeing to stay this matter pending the outcome of the Supreme Court Cases and the D.C. Circuit.

The Court began its analysis by saying its inherent power to stay proceedings is incidental to its inherent power to ” ‘control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.’ ” Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 96 (2d Cir. 2012).

As you may recall, in determining whether to enter a stay, the court considers: “(1) the private interests of the plaintiffs in proceeding expeditiously with the civil litigation as balanced against the prejudice to the plaintiffs if delayed; (2) the private interests of and burden on the defendants; (3) the interests of the courts; (4) the interests of persons not parties to the civil litigation; and (5) the public interest.” Trikona Advisors Ltd. v. Kai-Lin Chuang, No. 12-CV-3886, 2013 WL 1182960, at *2-3 (E.D.N.Y. Mar. 20, 2013).

“It is within the district court’s sound discretion to enter a stay pending the disposition of an independent matter whose outcome will likely affect a case on the court’s calendar.” Trikona, 2013 WL 1182960, at *2. See, e.g., Ruggieri v. Boehringer Ingelheim Pharm., Inc., 06-CV-1985, 2012 WL 1521850 (D. Conn. Feb. 24, 2012).

The Court found that a stay pending the outcome of the Supreme Court Cases and the petition before the D.C. Circuit was in the interests of justice. The Court further noted that the parties agreed that a stay is appropriate and it is clear that the outcome of the Supreme Court Cases could potentially conclude this matter and will, at the very least, settle important issues of law relating to the remaining plaintiff’s claims.

The Court’s determination is consistent with other district courts that have deemed it appropriate to stay TCPA lawsuits pending the outcome of Campbell-Ewald and Spokeo. See, e.g., Eric B. Fromer Chiropractic, Inc. v. N.Y. Life Ins. and Annuity Corp., 15-CV-4767, 2015 WL 6579779 (C.D. Cal. Oct. 19, 2015).

Similarly, the Court also found that resolution of the petition before the D.C. Circuit will more precisely define terms set forth in the TCPA. Thus, the factors weigh in favor of a stay of this matter and therefore the Court granted the parties’ request for a stay pending the outcome of the Supreme Court Cases and the D.C. Circuit.