Massaro v. Beyond Meat, Inc.

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8 UNITED STATES DISTRICT COURT

9 SOUTHERN DISTRICT OF CALIFORNIA

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11 NAZRIN MASSARO, on behalf of Case No.: 3:20-cv-00510-AJB-MSB

herself and all others similarly situated,

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Plaintiff, ORDER:

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v.

(1) DENYING PETA’S MOTION TO

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BEYOND MEAT, INC., and PEOPLE STAY, (Doc. No. 24);

15 FOR THE ETHICAL TREATMENT OF

ANIMALS, INC., (2) DENYING PETA’S MOTION TO

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Defendants. DISMISS OR STRIKE, (Doc. No. 29);

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(3) DENYING PETA’S MOTION TO

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DISMISS FOR LACK OF

19 JURISDICTION, OR

ALTERNATIVELY, FOR FAILURE

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TO STATE A CLAIM, (Doc. No. 30);

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(4) DENYING AS MOOT BEYOND

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MEAT’S MOTION TO DISMISS OR

23 STAY, (Doc. No. 33);

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(5) GRANTING PETA’S MOTION TO

25 STAY, (Doc. No. 46); AND

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(6) DENYING PETA’S MOTION TO

27 DISMISS FOR LACK OF

JURISDICTION, (Doc. No. 65)

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1 Before the Court are several motions: (1) Defendant People for the Ethical Treatment

2 of Animals, Inc.’s (“PETA”) motion to stay pending the FCC’s definition of an ATDS,

3 (Doc. No. 24); (2) PETA’s motion to dismiss or strike Plaintiff Nazrin Massaro’s

4 (“Plaintiff”) nationwide class claims, (Doc. No. 29); (3) PETA’s motion to dismiss

5 Plaintiff’s First Amended Complaint (“FAC”) for lack of subject matter jurisdiction under

6 Article III of the U.S. Constitution, or alternatively, for failure to state a claim, (Doc. No.

7 30); (4) dismissed Defendant Beyond Meat, Inc.’s motion to dismiss, or in the alternative,

8 stay proceedings, (Doc. No. 33); (5) PETA’s motion to stay pending the Supreme Court’s

9 decision in Facebook, Inc. v. Duguid, (Doc. No. 46); and (6) PETA’s motion to dismiss for

10 lack of subject matter jurisdiction pursuant to the Supreme Court’s decision in Barr v.

11 AAPC, (Doc. No. 65). Plaintiff opposed each motion. (Doc. Nos. 28, 41, 42, 50, 71.) The

12 United States of America intervened in this action to defend the constitutionality of the

13 TCPA against assertions that the “robocall restriction” provision, 47 U.S.C.

14 § 227(b)(1)(A)(iii), violates the First Amendment, on its face and as applied. (Doc. No.

15 90–91.)

16 Pursuant to Civil Local Rule 7.1.d.1, the Court finds the instant matter suitable for

17 determination on the papers and without oral argument. As such, the Court VACATES the

18 March 25, 2021 hearing on PETA’s motion to dismiss for lack of subject matter

19 jurisdiction. For the reasons set forth in detail below, the Court GRANTS PETA’s motion

20 to stay this litigation pending the United States Supreme Court’s decision in Facebook,

21 Inc. v. Duguid. All other motions based on other grounds are DENIED.

22 I. BACKGROUND

23 This is a putative class action under the Telephone Consumer Protection Act, 47

24 U.S.C. § 227 et seq., (“TCPA”). Beyond Meat1 is a publicly traded company that develops

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1 Beyond Meat, Inc. was originally named as a defendant in this action. However, on June 8, 2020, Plaintiff

27 voluntarily dismissed Beyond Meat from the lawsuit. (Doc. No. 40.) Before this dismissal, Beyond Meat

had filed a motion to dismiss, or in the alternative, stay proceedings. (Doc. No. 33.) Because Beyond Meat

28 has already been dismissed from this action, this motion is DENIED AS MOOT.

1 || and sells alternative animal food products made from protein isolate, rice and bean proteins,

2 other various plant extracts. (First Amended Complaint (“FAC”) § 2.) Plaintiff alleges

3 Beyond Meat entered into a corporate partnership agreement and/or arrangement pursuant

4 which Defendant PETA, a non-profit animal rights organization, agreed to promote and

5 || provide marketing benefits to Beyond Meat in exchange for monetary contributions from

6 || Beyond Meat. (Ud. J 36.)

7 On or about January 17, 2020, pursuant to an alleged partnership with Beyond Meat,

8 ||PETA sent the following marketing text messages to Plaintiff's cellular telephone number

9 || ending in 9991 (“9991 Number’):

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11 1B) AG =12) 20 alee aeeN ele)

F:) - || aM nlom □□□ ne(-1m (ole: 1 ele aoeg

12 WES CRSemCkelie laelels

B [otor=) get) (-101¢-] 0) Ome SoM Ne

iret

Dy AG semi creel el

15 r=) □ Olam Malm =felce(-1 mi (eler-1t avg

(Ulett m=i-B-10lc-m come) ce(-]mla-]

16 Voler=] 101-18) Oe ite)

ice)tan EAN

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18 Plaintiffs core allegation is that PETA sent her a text message via an ATDS without

19 || sufficient prior express written consent in violation of the TCPA. Plaintiff maintains at no

20 || point in time did Plaintiff provide Beyond Meat or PETA with express written consent to

21 contacted with automated advertising text messages. Plaintiff maintains she only

22 ||provided express consent to PETA for the purposes of receiving informational non-

23 advertising text messages. (/d. | 53-54.) Furthermore, Plaintiff contends, “[t]he generic

24 nature of the subject text messages demonstrates that Defendant PETA utilized an ATDS

25 ||in transmitting the messages.” (/d. 4] 56.) Plaintiff seeks to represent a nationwide class of

26 |/all individuals who received a similar message and seeks statutory penalties of $500 per

27 || message received by each putative class member of her alleged nationwide class. (/d. 4] 90.)

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1 II. DISCUSSION

2 Defendant PETA filed numerous motions in this action. The Court will first address

3 PETA’s motions involving this Court’s jurisdiction to hear the case. Concluding that this

4 Court has jurisdiction, the Court will turn to whether the nationwide class claims may be

5 properly dismissed at this stage. Lastly, the Court will determine whether a stay is

6 warranted.

7 A. PETA’s Motion to Dismiss for Lack of Standing (Doc. No. 30)

8 First, PETA moves under Federal Rule of Civil Procedure2 12(b)(1) to dismiss the

9 matter for lack of Article III standing. (Doc. No. 30-1 at 13.) For two reasons, PETA argues

10 Plaintiff cannot show an actual injury-in-fact sufficient to confer Article III standing. First,

11 “the single text message was not sent for a marketing purpose and did not invade Plaintiff’s

12 privacy sufficient to cause actual injury.” (Id. at 7.) Second, because Plaintiff consented to

13 the text message, it was not unsolicited and could not have invaded her privacy, at least not

14 sufficient for Article III standing. (Id.) The Court addresses both arguments below, and

15 concludes that Plaintiff has standing to bring this claim.

16 Standing under Article III pertains to the Court’s subject matter jurisdiction and

17 therefore is “properly raised in a motion to dismiss under Federal Rule of Civil Procedure

18 12(b)(1).” White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). The standing to sue doctrine

19 is derived from Article III of the Constitution’s limitation of the judicial power of federal

20 courts to “actual cases or controversies.” Spokeo v. Robins, 136 S.Ct. 1540, 1547 (2016)

21 (citing Raines v. Byrd, 521 U.S. 811, 818 (1997)). “The doctrine limits the category of

22 litigants empowered to maintain a lawsuit in federal court to seek redress for a legal

23 wrong.” Id. Rule 12(b)(1) challenges to this Court’s jurisdiction may be facial or factual.

24 See White, 227 F.3d at 1242. “In a facial attack, the challenger asserts that the allegations

25 contained in a complaint are insufficient on their face to invoke federal jurisdiction. By

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28 2 Unless otherwise noted herein, all references to “Rule” is to the Federal Rules of Civil Procedure.

1 contrast, in a factual attack, the challenger disputes the truth of the allegations that, by

2 themselves, would otherwise invoke federal jurisdiction.” Safe Air for Everyone v. Meyer,

3 373 F.3d 1035, 1039 (9th Cir. 2004). Here, PETA argues that under either attack, Plaintiff

4 lacks Article III standing to bring her claim. (Doc. No. 30-1 at 12.)

5 To establish standing, a plaintiff must show she “(1) suffered an injury in fact, (2)

6 that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to

7 be redressed by a favorable judicial decision.” Spokeo, 136 S. Ct. at 1547. These elements

8 are referred to as injury-in-fact, causation, and redressability. See Planned Parenthood of

9 Greater Washington & N. Idaho v. U.S. Dep’t of Health & Human Servs., 946 F.3d 1100,

10 1108 (9th Cir. 2020). All three are necessary. See id. PETA challenges the injury-in-fact

11 requirement. (Doc. No. 30-1 at 15.) “To establish injury in fact, a plaintiff must show that

12 he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and

13 particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Spokeo, 136S.

14 Ct. at 1538.

15 1. PETA’s Argument That A Single Text Message Was Sent for A

16 Non-Marketing Purpose

17 a) Whether a Single Text Message May Constitute an Injury-

18 in-Fact

19 Addressing PETA’s first point, PETA argues Plaintiff’s receipt of a single non-

20 telemarketing text message does not constitute an injury-in-fact sufficient to confer Article

21 III standing. (Doc. No. 30-1 at 15.) In support of PETA’s position that a single text may

22 not constitute an injury, PETA cites to the Eleventh Circuit’s decision in Salcedo v. Hanna,

23 wherein the court held that a text message is akin to “having a flyer briefly waived in one’s

24 face . . . [a]nnoying, perhaps, but not a basis for invoking the jurisdiction of the federal

25 courts.” 936 F.3d 1162, 1172 (11th Cir. 2019). In opposition, Plaintiff argues PETA

26 violated Plaintiff’s substantive rights under the TCPA and Plaintiff is not required to show

27 any additional harm. (Doc. No. 42 at 13.) Plaintiff asserts she previously provided her

28 telephone number to PETA only “for purposes of receiving informational non-advertising

1 text messages,” and “did not provide her telephone number to Defendant for purposes of

2 receiving any advertisements or telemarketing.” (Id.)

3 Notwithstanding PETA’s citation to Eleventh Circuit authority in Salcedo, PETA

4 also admits that the leading authority in the Ninth Circuit is Van Patten v. Vertical Fitness

5 Grp., 847 F.3d 1037 (9th Cir. 2017). Notably, Salcedo distinguishes Van Patten by noting

6 that “our sister circuit has reached the opposite conclusion in this context.” 936 F.3d at

7 1170 (citing Van Patten, 847 F.3d at 1043). In Van Patten, the Ninth Circuit held that

8 telephone calls or text messages from a telemarketer is sufficient to satisfy Article III’s

9 injury-in-fact requirement. In the case, the plaintiff provided his cellphone number to a

10 gym in the process of signing up for a gym membership. See 847 F.3d 1037, 1040 (9th Cir.

11 2017). After the plaintiff cancelled his membership, the gym texted the plaintiff to offer

12 him a special deal to rejoin the gym. Id. at 1041. The Ninth Circuit panel held that Congress

13 established the TCPA to protect the plaintiff’s substantive right to privacy, namely the right

14 to be free from unsolicited telemarketing phone calls or text messages that “invade the

15 privacy and disturb the solitude of their recipients.” Id. at 1043. Therefore, “a violation of

16 the TCPA is a concrete, de facto injury.” Id. Significantly, the court stated “a” violation of

17 the TCPA is sufficient. Moreover, the court noted “a plaintiff alleging a violation under the

18 TCPA ‘need not allege any additional harm beyond the one Congress identified,’” which

19 is that she received an unsolicited text message or telephone call from a telemarketer. Id.

20 (quoting Spokeo II, 136 S. Ct. at 1549).

21 As a preliminary note, there is a dispute between the parties as to whether one or two

22 text messages were sent to Plaintiff. (Compare Doc. No. 30-1 at 16 (“Here, Plaintiff

23 received one text message from PETA on January 17, 2020. . . .” with Doc. No. 42 at 10

24 (“Defendant sent the following two text messages to Plaintiff’s cellular telephone. . . .”).)

25 While technically two separate text messages were sent, the two text messages appear to

26 be identical, and sent simultaneously. But regardless of whether PETA’s text message to

27 Plaintiff qualified as a single text message or two separate text messages, the Ninth

28 Circuit’s decision in Van Patten forecloses PETA’s argument that a single text message

1 may not constitute a TCPA violation. Accordingly, the TCPA claim will not be dismissed

2 on this basis alone. See Aleisa v. Square, Inc., No. 20-CV-00806-EMC, 2020 WL 5993226,

3 at *4 (N.D. Cal. Oct. 9, 2020) (rejecting argument that a single text message may not rise

4 to the level of a TCPA violation).

5 b) Whether a Non-Telemarketing Text Message May

6 Constitute an Injury-in-Fact

7 In a related argument, PETA maintains there is no standing because the single text

8 message was not sent for a telemarketing benefit. (Doc. No. 30-1 at 17.) It is PETA’s

9 position that it sent one text message only to further its non-profit, charitable mission—

10 “Animals are not ours to . . . eat . . .”—by encouraging a vegan diet. (Id.) PETA argues it

11 did not send the text message on behalf of, or at the direction of Beyond Meat, and it did

12 not send this text message for any economic benefit. (Id.)

13 At this point of the litigation, a “[j]urisdictional finding of genuinely disputed facts

14 is inappropriate when the jurisdictional issue and substantive issues are so intertwined that

15 the question of jurisdiction is dependent on the resolution of factual issues going to the

16 merits of an action.” Sun Valley Gas., Inc. v. Ernst Enters., 711 F.2d 138, 140 (9th Cir.

17 1983)). Such is the case here. While Plaintiff argues the subject text messages were sent

18 on behalf of Beyond Meat pursuant to a marketing arrangement, (FAC ¶ 43), PETA asserts

19 it never entered into a corporate partnership agreement with Beyond Meat to send the text

20 message, (Declaration of Jeffrey S. Kerr (“Kerr Decl.”) ¶ 10). The three elements of a

21 TCPA claim are: (1) the defendant called a cellular telephone number; (2) using an

22 automatic telephone dialing system; (3) without the recipient’s prior express consent.”

23 Meyer v. Portfolio Recovery Assocs., LLC, 707 F.3d 1036, 1043 (9th Cir. 2012). Text

24 messages are considered “calls” under the TCPA. See Satterfield v. Simon & Schuster, Inc.,

25 569 F.3d 946, 954 (9th Cir. 2009). As to the third element, consent is an affirmative defense

26 on which the defendant bears the burden of proof. See Van Patten, 847 F.3d at 1044. The

27 type of consent required depends on the content of the message. If the text message

28 “includes or introduces an advertisement or constitutes telemarketing,” the sender is

1 required to obtain “prior express written consent” of the recipient. See 47 C.F.R. at

2 §§ 64.1200(a)(1) and (2).

3 Whether the text message was sent for a commercial purpose or not is thus squarely

4 intertwined with whether there was a TCPA violation in the first instance. See Sattefirld v.

5 Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009). At this time, the Court cannot resolve

6 PETA’s attack on the Court’s jurisdiction without also deciding the merits of Plaintiff’s

7 TCPA claim. See Berman v. Freedom Fin. Network, LLC, 400 F. Supp. 3d 964, 978 (N.D.

8 Cal. 2019) (explaining that the court previously denied a Rule 12(b)(1) motion to dismiss

9 because “there are factual issues in dispute that cannot be determined based upon the record

10 here”). This is a key factual dispute going to the merits and not appropriate for resolution

11 as a standing question. See Aleisa, 2020 WL 5993226, at *5 (denying Rule 12(b)(1) motion

12 to dismiss in TCPA matter based on entanglement of jurisdictional dispute and merits).

13 2. PETA’s Argument That Plaintiff Consented to the Text Message

14 As the second grounds for this motion, PETA argues Plaintiff cannot prove actual

15 injury-in-fact based on the receipt of a text message that she consented to receive. (Doc.

16 No. 30-1 at 17.) PETA points out that Plaintiff admits she “previously provided express

17 consent” to PETA to receive text messages. (FAC ¶ 54.) In rebuttal, Plaintiff states that

18 while she provided express consent, she did not provide express written consent to be

19 contacted with advertising and telemarketing. (Doc. No. 42 at 17.) It is inappropriate to

20 address this argument in the context of a motion to dismiss for lack of standing. Indeed,

21 “the question of the recipient’s consent bears not on the plaintiff’s standing, but on the

22 separate inquiry into whether the defendant is able to establish an affirmative defense of

23 consent.” Daniel v. Lennar Corp., No. 819CV00452JLSDFM, 2019 WL 8194735, at *3

24 (C.D. Cal. Oct. 16, 2019). Accordingly, this contention is more properly addressed as a

25 question going to the merits of Plaintiff’s claim.

26 * * *

27 In summation, Plaintiff has sufficiently alleged standing by the assertion that she

28 received a telemarketing text message without her express written consent, in violation of

1 the TCPA. PETA’s motion to dismiss based on this ground is DENIED.

2 B. PETA’s Motion to Dismiss for Failure to State a Claim (Doc. No. 30)

3 PETA next argues that should the Court decline to dismiss this action for lack of

4 subject matter jurisdiction, the Court should nevertheless dismiss the FAC for failing to

5 state a claim under Rule 12(b)(6). In particular, PETA argues that under the FCC’s

6 exemption for non-profits, PETA cannot be held liable for the subject text message because

7 (1) PETA is a non-profit organization, and (2) Plaintiff provided “prior express consent”

8 to be texted. (Doc. No. 30-1 at 21–22.) PETA claims that because it is a non-profit, it did

9 not need prior express written consent, even if the text message was considered advertising

10 or telemarketing. (Id.) In opposition, Plaintiff argues that PETA should not be permitted to

11 avail itself of the exemption even when engaging in commercial activities. (Doc. No. 42 at

12 22.) As set forth below, Plaintiff’s position is persuasive.

13 The TCPA makes it “unlawful for any person within the United States . . . to make

14 any call (other than a call . . . made with the prior express consent of the called party) . . .

15 using any automatic telephone dialing system or an artificial or prerecorded voice . . . to

16 any telephone number assigned to a . . . cellular telephone service[.]” 47 U.S.C.

17 § 227(b)(1)(A)(iii). Generally, for non-marketing messages, only prior express consent is

18 required. See In the Matter of Rules & Regulations Implementing the Tel. Customer Prot.

19 Act of 1991, 30 FCC Rcd. 7961, 8029 ¶ 141 & n.481 (July 10, 2015) (“[P]ersons who

20 knowingly release their phone numbers have in effect given their invitation or permission

21 to be called at the number which they have given.”).

22 Under its Telemarketing Rule, the FCC has imposed a more stringent “prior express

23 written consent” requirement for calls or texts that constitute marketing. See 47 C.F.R.

24 § 64.1200(a)(2); see also Van Patten, 847 F.3d at 1044. For such “written consent,” the

25 FCC requires a clear and conspicuous signed, written agreement to receive automated calls

26 and a disclosure that such consent is not a condition of any good or service. See 47 C.F.R.

27 § 64.1200(a)(2). The FCC, however, has exempted non-profits from the prior express

28 written consent requirement applicable to marketing messages. Indeed, the FCC

1 regulations provide:

2 “No person or entity may: . . . Initiate, or cause to be initiated, any telephone

call that includes or introduces an advertisement or constitutes telemarketing,

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using an automatic telephone dialing system or an artificial or prerecorded

4 voice . . . [to a cell phone] . . . other than a call made with the prior express

written consent of the called party or the prior express consent of the called

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party when the call is made by or on behalf of a tax-exempt nonprofit

6 organization . . . .”

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47 C.F.R. § 64.1200(a)(2) (emphasis added). The FCC recognized that many non-profit

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organizations send messages that are not commercial in nature and are therefore not

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“advertisements.” Under the TCPA, telemarketing calls from non-profit organizations are

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by definition, non-commercial. See In the Matter of Rules & Regulations Implementing

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the Tel. Consumer Prot. Act of 1991, 7 FCC Rcd. 8752, 8773–74 (1992) (“[W]e conclude

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that tax-exempt nonprofit organizations should be exempt from the prohibition on

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prerecorded message calls to residences as non-commercial calls.”).

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Here, PETA appears to argue there is a blanket exemption for non-profit

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organizations, (Doc. No. 30-1 at 19–22), while Plaintiff contends PETA’s text messaging

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campaign amounts to a commercial advertising endeavor masquerading as charitable

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communication, (Doc. No. 42 at 23). The issue therefore turns on whether PETA is

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shielded from liability regardless of the content of the allegedly offending text message.

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On the one hand, PETA’s text message notifying recipients of the availability of a meat

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alternative product at a certain restaurant is certainly related to PETA’s mission of

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encouraging a vegan diet. But equally compelling is the argument that the text message

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was sent to encourage the purchase of a for-profit corporation’s product.

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The Court is not aware of any court in the Ninth Circuit expressly addressing this

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issue. However, persuasive federal case law, the FCC regulations, and the legislative

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history help guide this Court to its conclusion that the non-profit exemption does not apply

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to these facts at this stage. First, other federal courts have touched on this subject in a way

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helpful to this Court’s analysis. In the motion for summary judgment context in Aranda v.

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1 Caribbean Cruise Line, Inc., 179 F. Supp. 3d 817 (N.D. Ill. 2016), the court grappled with

2 a non-profit exemption under Section 64.1200(a)(2). While the non-profit exemption was

3 different, the reasoning applies similarly. The court noted that if a tax-exempt non-profit

4 entity was acting on its own behalf, the exemption would absolve the non-profit of liability

5 for the calls. See 179 F. Supp. 3d 817, 828. But the court further noted that it was not clear

6 at that stage of the litigation that the non-profit made the calls on its own behalf or “rather

7 did so as an agent” of other defendants. Id. If the nonprofit was acting as a “conduit for

8 [the other for-profit defendants] to solicit business and generate profit, then the calls can

9 hardly be said to have been made ‘by or on behalf of a tax-exempt nonprofit organization.’”

10 Id. Thus, the court held that “[b]ecause a reasonable jury could find that [the nonprofit]

11 was acting on its own and without the authorization of [the other for-profit defendants], the

12 Court cannot say at this juncture whether the exemptions contained in sections

13 64.1200(a)(3)(ii) and 64.1200(a)(3)(iv) might shield defendants from liability.” Id.

14 Second, the FCC regulations demonstrate that this question is not as clear cut as

15 argued by PETA. By the plain terms of the FCC regulations, non-profits are shielded from

16 liability under the non-profit exemption as a categorical matter if the nonprofit is promoting

17 its own products or services. See In Re Rules & Regulations Implementing the Tel.

18 Consumer Prot. Act of 1991, 18 FCC Rcd. 14014, 14089 (2003). As stated in the

19 regulations, “[c]onsistent with section 227, a tax-exempt nonprofit organization that

20 conducts its own fundraising campaign or hires a professional fundraiser to do it, will not

21 be subject to the restrictions on telephone solicitations.” Id. While the regulations make

22 clear that a blanket exemption exists if a non-profit is promoting its own organization, there

23 is not the same clarity when the subject call/text involves a for-profit entity. For example,

24 in its 2003 Report and Order, the FCC confronted complaints that the “[nonprofit

25 exemption] frequently has been used to veil what is in reality a commercial venture.” FCC

26 2003 Report & Order, 18 FCC Rcd. 14014, 14088 ¶ 127. In light of this concern, the FCC

27 issued a clarification of the non-profit exemption: “[i]f . . . a for-profit organization is

28 delivering its own commercial message as part of a telemarketing campaign (i.e.,

1 encouraging the purchase or rental of, or investment in, property, goods, or services), even

2 if accompanied by a donation to a charitable organization or referral to a tax-exempt

3 nonprofit organization, that call is not by or on behalf of a tax-exempt nonprofit

4 organization.” Id. at 14089 ¶ 128. Thus, the FCC regulations shed light on the concern for

5 the use of the non-profit exemption to conceal for what is in fact a commercial scheme.

6 Third, the legislative history confirms that Congress’ decision to exclude non-profit

7 organizations from the definition of “telemarketing” in the TCPA was related to Congress’

8 belief that calls from non-profits tend to be less intrusive. In the House Report No. 102–

9 317, the House Committee on Energy and Commerce stated, “the record suggests that most

10 unwanted telephone solicitations are commercial in nature. . . . [T]he Committee also

11 reached the conclusion, based on the evidence, that . . . calls [from tax-exempt nonprofit

12 organizations] are less intrusive to consumers because they are more expected.

13 Consequently, the two main sources of consumer problems—high volume of solicitations

14 and unexpected solicitations—are not present in solicitations by nonprofit organizations.”

15 H.R. Rep. No. 102-317 at 16. Thus, an interpretation of the non-profit exemption in a way

16 that would tend to frustrate Congress’ intent would be improper.

17 Based on the foregoing authority, the Court finds the non-profit exemption

18 inapplicable to PETA at the motion to dismiss stage. Construing the facts alleged in the

19 Complaint as true, and viewing them in a light most favorable to Plaintiff, it appears the

20 subject text messages was made with dual commercial and non-commercial purpose.

21 Plaintiff’s allegations provide that PETA, as a nonprofit, was acting as a conduit for

22 Beyond Meat in advertising the availability of the alternative meat product at a certain

23 restaurant. (FAC ¶ 55.) Specifically, the FAC offers that “[a] key component of Defendant

24 PETA’s revenue are its corporate partnerships, including its “PETA Business Friends”

25 program. (Id. ¶ 33.) Plaintiff explains PETA and Beyond Meat “entered into a corporate

26 partnership agreement and/or arrangement pursuant to which Defendant PETA agreed to

27 promote and provide marketing benefits to Defendant Beyond Meat in exchange for

28 monetary contributions from Defendant Beyond Meat.” (Id. ¶ 36.) In further support of this

1 contention, Plaintiff outlines that the PETA’s and Beyond Meat relationship dates as far

2 back as December 2013, when PETA began to promote Defendant Beyond Meat’s

3 products. (Id. ¶ 37.) Although PETA denies the allegations that it received compensation

4 from Beyond Meat, (Doc. No. 30-1 at 11), the Court is obligated to take Plaintiff’s word at

5 face value at this stage. Thus, if PETA was indeed acting as a “conduit for [Beyond Meat]

6 to solicit business and generate profit, then the calls can hardly be said to have been made

7 ‘by or on behalf of a tax-exempt nonprofit organization.’” Aranda, 179 F. Supp. 3d 817.

8 This conclusion also comports with the FCC’s concern that the non-profit exemption

9 may serve as an end-run around the prior express written consent requirement, particularly

10 in cases where the subject texts or calls contain a commercial message. Here, a reading of

11 the FAC reveals a plausible claim that PETA was simultaneously promoting its

12 organizational mission, along with a for-profit corporation’s product. Furthermore,

13 adopting PETA’s view of a blanket exemption for non-profits would not be consistent with

14 the spirit of the TCPA in maintaining privacy, and safeguarding citizens against a high

15 volume of unexpected calls.

16 Accordingly, while it is possible that further litigation will reveal that the subject

17 text message was not sent with a commercial purpose, for now, PETA’s Rule 12(b)(6)

18 motion to dismiss based on the non-profit exemption is DENIED.

19 C. PETA’s Motion to Dismiss for Lack of Jurisdiction Based On

20 Constitutionality (Doc. No. 65)

21 Next, PETA moves to dismiss the action for lack of jurisdiction based on two

22 grounds. First, PETA argues the United States Supreme Court recently held in AAPC v.

23 FCC that a relevant provision of the TCPA was unconstitutional during the time Plaintiff

24 received the at-issue text messages, (Doc. No. 65-1 at 5). Second, PETA challenges the

25 application of the TCPA as an unconstitutional restriction on free speech. (Doc. No. 65-1

26 at 18.) In response, Plaintiff characterizes PETA’s argument as an attempt to “ride a

27 discrete constitutional flaw in [the TCPA] to take down the whole, otherwise constitutional

28 statute.” (Doc. No. 71 at 7.) The United States of America also intervened to defend the

1 constitutionality of the TCPA. (Doc. No. 91.)

2 1. Whether This Court Lacks Jurisdiction Based on Barr v. AAPC

3 First, PETA argues the Supreme Court’s decision in Barr v. AAPC (“AAPC”)

4 deprives this Court of jurisdiction because the decision found the TCPA unconstitutional

5 between 2015 (when the TCPA was amended to add an unconstitutional provision) to 2020

6 (the year the AAPC opinion was issued). (Doc. No. 65-1 at 5.) Because the text message at

7 issue was sent during this time in question, PETA essentially contends it cannot be held

8 liable for any TCPA violation. (Id. at 13.) Plaintiff disagrees, asserting that only one

9 provision, not at issue in this case, offended the Constitution and this provision was severed

10 from the rest of the TCPA. (Doc. No. 71.) The Court agrees with Plaintiff’s position.

11 As background, Congress first enacted the TCPA in 1991 in response to the rise of

12 intrusive robocalls. In 2015, the TCPA was amended to create a “government-debt”

13 exception to allow calls made to collect a debt owed to or guaranteed by the United States

14 government. See Bipartisan Budget Act of 2015, Pub. L. No. 114-74, § 301(a)(1)(A), 129

15 Stat. 584, 588 (amending 47 U.S.C. § 227(b)(1)(A)(iii)). This government-debt exception

16 was challenged in 2016 as a violation of the First Amendment. See AAPC v. Sessions, 323

17 F. Supp. 3d 737 (E.D.N.C. 2018). Plaintiffs in the district court argued that the government-

18 debt exception was an unconstitutional content-based restriction on speech because the

19 government-debt exception favors commercial speech over political speech. Id. at 741. The

20 matter eventually reached the United States Supreme Court, which granted certiorari to

21 determine: (1) whether the government-debt exception violates the First Amendment, and

22 (2) whether the proper remedy for any constitutional violation was to sever the exception

23 from the remainder of the statute. See Barr v. AAPC, 140 S.Ct. 812 (2020). In a plurality

24 opinion in AAPC, the Supreme Court held that “the 2015 government-debt exception

25 created an unconstitutional exception to the 1991 robocall restriction.” AAPC, 140 S. Ct.

26 at 2348. The Court concluded the government-debt exception was content-based,

27 subjecting it to strict scrutiny, which the government could not satisfy. Id. at 2346–47. To

28 cure the unconstitutional exception, seven members of the Court invalidated the

1 government-debt exception and severed it from the rest of the statute. Id. at 2343, 2356.

2 Specifically, in Parts I and II of the opinion, Justice Kavanaugh, joined by Chief

3 Justice Roberts and Justice Alito, determined that the government-debt exception was

4 unconstitutional because it favored debt-collection speech over political or other speech in

5 violation of the First Amendment. See id. at 2342–48. In Part III, these same three Justices

6 concluded that the 2015 amendment should be severed from the rest of the TCPA. Id. at

7 2348–56. In a concurrence, Justice Sotomayor concluded she would have based Parts I and

8 II on a different ground (applying intermediate as opposed to strict scrutiny to the speech)

9 but concurred in the conclusion and in Part III with respect to severability. Id. at 2356–57.

10 Dissenting in part, Justices Breyer, Ginsburg, and Kagan disagreed that the government-

11 debt exception violated the First Amendment, but concurred with Part III in finding the

12 exception severable. Id. at 2357–63. Justices Gorsuch and Thomas agreed with Parts I and

13 II that the amendment was unconstitutional but dissented on the issue of severability. Id. at

14 2363–67. In summation, “[s]ix Members of the Court . . . conclude[d] that Congress ha[d]

15 impermissibly favored debt-collection speech over political and other speech in violation

16 of the First Amendment” and “[s]even Members of the Court conclude[d] that the entire

17 1991 robocall restriction should not be invalidated, but rather that the 2015 government-

18 debt exception must be invalidated and severed from the remainder of the statute.” Id. at

19 2343.

20 Of first note, this case is not about the government-debt exception. Rather, the

21 robocall restriction provision is at issue because Plaintiff alleges PETA sent a text message

22 to her cell phone via an ATDS without her prior express written consent. Even though the

23 government-debt exception is not at issue in the present litigation, PETA argues that based

24 on Barr v. AAPC, there cannot be any TCPA liability of any kind between 2015 (when the

25 statute was amended to add the government-debt exception) to 2020 (when the Supreme

26 Court struck down the government-debt exception). The Court disagrees. The AAPC

27 opinion plainly contradicts PETA’s assertion that the entire TCPA statute was struck down

28 as unconstitutional. In a footnote to Part III, Justice Kavanaugh addressed precisely

1 whether the decision affected the remaining portions of the TCPA. Directly answering this

2 question, Justice Kavanaugh wrote: “Although our decision means the end of the

3 government-debt exception. . . . [O]ur decision today does not negate the liability of parties

4 who made robocalls covered by the robocall restriction.” AAPC, 140 S. Ct. at 2355 n.12

5 (emphasis added).

6 PETA responds that Justice Kavanaugh’s footnote is merely dicta, carrying no

7 precedential force. (Doc. No. 72 at 9.) The Court disagrees. “When a fragmented Court

8 decides a case and no single rationale explaining the result enjoys the assent of five Justices,

9 ‘the holding of the Court may be viewed as that position taken by those Members who

10 concurred in the judgments on the narrowest grounds.’” Marks v. United States, 430 U.S.

11 188, 193 (1977) (quoting Gregg v. Georgia, 428 U.S. 153, 169 n.15 (1976)). Here, it simply

12 cannot be ignored that a total of seven Justices agreed that the government-debt exception

13 should be severed from the rest of the TCPA, leaving all other provisions intact. Critically,

14 three of these seven Justices—Justices Breyer, Ginsburg, and Kagan—even concluded that

15 the government-debt exception should not be deemed unconstitutional in the first place.

16 Because these three Justices would not even conclude that the exception is unconstitutional,

17 it would logically follow that they would uphold the rest of TCPA. Thus, this Court must

18 heed the conclusion of the seven Justices in agreement that the government-debt exception

19 should be severed, leaving the remaining portions of the TCPA, including the robocall

20 restriction undisturbed.

21 Even if the Court concluded that Justice Kavanaugh’s footnote is dicta, this Court is

22 nevertheless persuaded by this unambiguous announcement that the AAPC decision is not

23 meant to disturb the entirety of the TPCA. Recognizing the preeminence of this nation’s

24 highest court, this Court cannot ignore such a clear statement, whether it be considered

25 dicta or a holding. See, e.g., United States v. Montero-Camargo, 208 F.3d 1122, 1133 n.17

26 (9th Cir. 2000) (“Supreme Court dicta have a weight that is greater than ordinary judicial

27 dicta as prophecy of what the court might hold; accordingly we do not blandly shrug them

28 off because they were not a holding.”).

1 Lastly, PETA has cited to a few cases coming to a conclusion contrary to the Court’s

2 today. See Creasy v. Charter Commc’ns, Inc., No. 20-CV-1199, ––– F. Supp. 3d ––––,

3 2020 WL 5761117 (E.D. La. Sept. 28, 2020); Lindenbaum v. Realgy, LLC, No. 1:19 CV

4 2862, ––– F. Supp. 3d ––––, 2020 WL 6361915 (N.D. Ohio Oct. 29, 2020). But the Court

5 declines to adopt the reasoning in these out-of-circuit cases. Instead, the Court joins several

6 other district courts within the Ninth Circuit—including Judge Bashant of this district—in

7 holding that AAPC did not divest federal courts of jurisdiction over TCPA claims

8 concerning robocalls made between 2015 and the date of AAPC’s issuance. See, e.g.,

9 McCurley v. Royal Sea Cruises, Inc., No. 17-CV-00986-BAS-AGS, 2021 WL 288164, at

10 *3 (S.D. Cal. Jan. 28, 2021) (“[T]he TCPA still applies to this conduct even though it

11 occurred between 2015 and 2020.”); Johansen v. LoanDepot.com LLC, et al., No. 20-CV-

12 00919-DOC-JDE, 2021 WL 669329, at *3 (C.D. Cal. Jan. 31, 2021) (“As explained below,

13 the Court finds that AAPC does not bar the claims here. The Court in AAPC did not

14 conclude that the entire TCPA was unconstitutional.”); Stoutt v. Travis Credit Union, No.

15 20-CV-01280-WBS-AC, 2021 WL 99636, at *5 (E.D. Cal. Jan. 12, 2021) (“[D]efendant’s

16 view of severability has no foundation in law. Because the Supreme Court has invalidated

17 and severed the government-debt exception from the remainder of § 227(b)(1)(A)(iii), the

18 exception did not affect the remainder of the statute and the statute remains enforceable, at

19 least against non-government debt collectors, as to calls made between November 2015

20 and July 6, 2020.”); Trujillo v. Free Energy Sav. Co., LLC, No. 19-CV-02072-MCS-SP,

21 2020 WL 8184336, at *5 (C.D. Cal. Dec. 21, 2020) (same); Shen v. Tricolor California

22 Auto Grp., LLC, No. 20-CV-7419-PA-AGRX, 2020 WL 7705888, at *5 (C.D. Cal. Dec.

23 17, 2020) (same).

24 2. PETA’s Challenge to the Application of the TCPA as

25 Unconstitutional

26 Secondly, PETA challenges the application of the TCPA as an unconstitutional

27 restriction on free speech. (Doc. No. 65-1 at 18.) PETA argues the constitutional problem

28 is “that the FCC has interpreted the meaning of ‘prior express consent’ different depending

1 on the content of the call or text message.” (Id. at 19.) The Court is without jurisdiction to

2 entertain this argument. Indeed, the Hobbs Act provides the court of appeals with

3 “exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine

4 the validity of . . . all final orders of the Federal Communications Commission.” 28 U.S.C.

5 § 2342. A regulation is considered a final FCC order. See US W. Commc’ns, Inc. v.

6 Jennings, 304 F.3d 950, 958 n.2 (9th Cir. 2002) (“The Hobbs Act, 28 U.S.C. § 2342,

7 requires that all challenges to the validity of final orders of the FCC be brought by original

8 petition in a court of appeals . . . the district court thus lacked jurisdiction to pass on the

9 validity of the FCC regulations”). A party may invoke this jurisdiction “only by filing a

10 petition for review of the FCC’s final order in a court of appeals naming the United States

11 as a party.” US W. Commc’ns v. MFS Intelenet, Inc., 193 F.3d 1112, 1120 (9th Cir. 1999).

12 As a result, the validity of the FCC’s interpretation of “prior express consent” in its

13 regulations may not be challenged in this Court, and must be presumed valid at this time.

14 See Jennings, 304 F.3d at 958 n.2.

15 * * *

16 In conclusion, PETA’s motion to dismiss based on either the Supreme Court’s

17 decision in AAPC or its challenge to the application of the TCPA as unconstitutional is

18 DENIED.

19 D. PETA’s Motion to Dismiss or Strike Plaintiff’s Nationwide Class Claims

20 for Lack of Personal Jurisdiction (Doc. No. 29)

21 In its next motion, PETA argues this Court should dismiss or strike Plaintiff’s

22 nationwide class claims for lack of personal jurisdiction. PETA’s argument is two-fold.

23 First, a nationwide class action against PETA is improper because this Court does not have

24 general jurisdiction over PETA. (Doc. No. 29-1 at 13.) Second, PETA argues based on

25 Bristol-Myers, this Court lacks specific jurisdiction over the non-California class claims.

26 (Id. at 7.) At most, PETA posits, specific jurisdiction may only be conferred over Plaintiff’s

27 individual claims, and the claims of putative class members who received text messages in

28 California. In opposition, Plaintiff argues that Bristol-Myers is inapposite, as demonstrated

1 by the decisions of numerous federal courts. (Doc. No. 41 8–10.) The Court agrees with

2 Plaintiff.

3 To exercise personal jurisdiction over an out-of-state defendant, the defendant must

4 have “certain minimum contacts with [the State] such that the maintenance of the suit does

5 not offend traditional notions of fair play and substantial justice.” Goodyear Dunlop Tires

6 Operations, S.A. v. Brown, 564 U.S. 915, 923 (2011) (quoting Int’l Shoe Co. v. Washington,

7 326 U.S. 310, 316 (1945) (internal quotations omitted)). This minimum contacts

8 jurisdiction may be either “general or all-purpose jurisdiction,” or “specific or case-linked

9 jurisdiction.” Id. at 919 (citing Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S.

10 408, 414 (1984)). “The paradigmatic locations where general jurisdiction is appropriate

11 over a corporation are its place of incorporation and its principal place of business.” Ranza

12 v. Nike, Inc., 793 F.3d 1059, 1069 (9th Cir. 2015) (citing Daimler AG v. Bauman, 571 U.S.

13 117, 137 (2014)). Here, there is no dispute that PETA is incorporated in Virginia and has

14 its principal place of business in Virginia. Thus, the Court cannot exercise general personal

15 jurisdiction over PETA, and the only issue is whether the Court can exercise specific

16 personal jurisdiction. The parties additionally do not disagree that the Court has specific

17 jurisdiction over claims arising out of text messages sent to California cellphone numbers.

18 Instead, the parties quarrel over whether there is specific jurisdiction over the non-

19 California putative class members. To mount its jurisdictional attack, PETA primarily

20 relies on the case, Bristol-Myers for the proposition that this Court lacks specific

21 jurisdiction over the non-California class claims. See Bristol-Myers Squibbs Company v.

22 Superior Court of California, 137 S. Ct. 1773 (2017).

23 In Bristol-Myers, a group of plaintiffs brought a state law “mass tort” action in

24 California state court for injuries allegedly caused by Plavix, a drug manufactured and

25 distributed by the defendant company incorporated in Delaware and headquartered in New

26 York. Id. at 1777–78. The 678 plaintiffs included 86 California residents and 592 non-

27 California residents. Id. at 1778. The defendant company asserted lack of personal

28 jurisdiction and moved to quash service of the summons on the non-residents’ claims,

1 which was denied and subsequently litigated through two sets of appeals in the California

2 courts. Id. at 1778. The United States Supreme Court eventually concluded that the

3 California state courts lacked specific personal jurisdiction over the out-of-state defendant

4 for claims brought by the out-of-state plaintiffs because there were insufficient contacts

5 between the defendant’s conduct in connection with those claims and California. Id. at

6 1779–83.

7 Here, the parties argue whether Bristol-Myers requires this Court to dismiss or strike

8 the claims asserted by putative class members who did not receive a text message in

9 California. Fundamental to the parties’ dispute is that Bristol-Myers concerned a mass tort

10 action—not a class action. Furthermore, Justice Sotomayor stated in her dissenting opinion,

11 “[t]he Court today does not confront the question whether its opinion here would also apply

12 to a class action in which a plaintiff injured in the forum State seeks to represent a

13 nationwide class of plaintiffs, not all of whom were injured there.” Id. at 1789 n.4

14 (Sotomayor, J., dissenting).

15 While it appears the Ninth Circuit has not addressed this precise issue, whether

16 Bristol-Myers applies to class actions in federal court has been the subject of debate

17 amongst district courts within this Circuit. Some courts, including this one, have concluded

18 that Bristol-Myers applies to class actions and compels the dismissal of non-resident

19 unnamed plaintiffs whose injuries do not arise out of, or relate to, a defendant’s contacts

20 with the forum. These courts hold that California has little interest in the claims of non-

21 California plaintiffs arising out of contacts made outside California. See, e.g., Carpenter v.

22 PetSmart, Inc., 441 F. Supp. 3d 1028, 1035 (S.D. Cal. 2020) (“That the Supreme Court did

23 not consider whether its holding in Bristol-Myers Squibb would apply to class actions is

24 hardly supportive of a holding that it does not apply to class actions.”); Goldstein v. Gen.

25 Motors LLC, 445 F. Supp. 3d 1000, 1012–13 (S.D. Cal. 2020) (“The federalism concerns

26 that animated the majority’s opinion in Bristol-Myers Squibb are equally relevant here and

27 necessitate dismissal for lack of subject matter jurisdiction.”).

28 But other district courts have concluded that Bristol-Myers does not apply to class

1 actions. These courts, including this Court, distinguish Bristol-Myers as only applicable in

2 the mass tort action context. In so finding, these courts emphasize that in a mass tort action,

3 each plaintiff is a real party in interest, named in the complaint, with individualized claims

4 with distinct damages. By contrast, a nationwide class action is brought by one or more

5 plaintiffs in a representative capacity, on behalf of a group of similarly situated individuals,

6 and the “named plaintiffs” are the only plaintiffs actually named in the complaint. To apply

7 Bristol-Myers to unnamed class members in a nationwide class action, these courts hold,

8 would limit certification to only those states where the defendant is subject to general

9 personal jurisdiction. Moreover, these courts conclude that to qualify for class action

10 treatment under Fed. R. Civ. P. 23, an action must meet additional due process

11 requirements that are not applicable in the Bristol-Myers mass tort context. See, e.g., Sousa

12 v. 7-Eleven, Inc., No. 19-CV-2142 JLS (RBB), 2020 WL 6399595, at *3 (S.D. Cal. Nov.

13 2, 2020); Schertzer v. Bank of Am., N.A., 445 F. Supp. 3d 1058, 1080 (S.D. Cal. 2020);

14 Branca v. Bai Brands, LLC, No. 318CV00757BENKSC, 2019 WL 1082562, at *14 (S.D.

15 Cal. Mar. 7, 2019) (“Thus, the Court declines to extend Bristol-Myers to this case.”); In re

16 Morning Song Bird Food Litig., No. 12-CV-1592-JAH-AGS, 2018 WL 1382746, at *5

17 (S.D. Cal. Mar. 19, 2018).

18 In recognizing this district court divide, the Court joins with the majority of courts

19 in taking the position that Bristol-Myers does not apply to federal class actions. See

20 Carpenter, 441 F. Supp. 3d at 1034. While the Ninth Circuit has not expressly addressed

21 this issue, this conclusion is consistent with at least one other circuit court of appeal which

22 has also declined to apply Bristol-Myers to federal class actions. See Mussat v. IQVIA, Inc.,

23 953 F.3d 441, 448 (7th Cir. 2020) (“[A]bsentees [in a class action] are more like nonparties,

24 and thus there is no need to locate each and every one of them and conduct a separate

25 personal-jurisdiction analysis of their claims.”).

26 Two reasons drive this Court’s conclusion. First, the Supreme Court in Bristol-

27 Myers expressly acknowledged, but left open, the question of whether its holding even

28 extended to federal courts. Id. at 1783–84. The Bristol-Myers Court limited its ruling to the

1 exercise of jurisdiction by a state court, and did not resolve whether “the Fifth Amendment

2 imposes the same restrictions on the exercise of personal jurisdiction by a federal court.”

3 Id. at 1784. In Bristol–Myers, the Supreme Court was exclusively concerned with the

4 unfairness of submitting an out-of-state defendant to the jurisdiction to a foreign sovereign

5 (California) with respect to claims having no connection to California. See Bristol–Myers,

6 137 S.Ct. at 1780. But it is questionable whether cases arising out of federal question

7 jurisdiction—such as this one based on the TCPA—present the same concerns. That is

8 because “all federal courts, regardless of where they sit, represent the same federal

9 sovereign, not the sovereignty of a foreign state government.” Sloan v. Gen. Motors LLC,

10 287 F. Supp. 3d 840, 858–59 (N.D. Cal. 2018), order clarified, No. 16-CV-07244-EMC,

11 2018 WL 1156607 (N.D. Cal. Mar. 5, 2018), and on reconsideration, 438 F. Supp. 3d 1017

12 (N.D. Cal. 2020). Therefore, the due process concerns relating to whether a state court can

13 hail an out-of-state defendant into its court does not exist in a purely federal case.

14 Second, the Court declines to extend Bristol-Myers to the present litigation because

15 this case does not involve a mass tort action with consolidated individual suits. While the

16 claims of the non-resident named plaintiffs were pertinent to the issue of specific

17 jurisdiction in Bristol-Myers, “claims of unnamed class members are irrelevant to the

18 question of specific jurisdiction.” AM Trust v. UBS AG, 78 F. Supp. 3d 977, 986 (N.D. Cal.

19 2015). In a Rule 23 class action, the named plaintiffs represent the interests of absent class

20 members. The unnamed class members are not full parties to the case for many purposes.

21 In fact, the absent class members generally are not taken into account when deciding

22 subject matter jurisdiction or venue. See Devlin v. Scardelletti, 536 U.S. 1, 9–10 (2002)

23 (“Nonnamed class members cannot defeat complete diversity. . . .”). Further, Rule 23’s

24 requirements of numerosity, commonality, typicality, adequacy of representation,

25 predominance, and superiority provide due process protections not available in the Bristol-

26 Myers mass tort context. These requirements ensure that the class claims the defendant is

27 required to defend against will have a degree of uniformity and consistency.

28 Therefore, the Court declines to apply Bristol-Myers in this case. PETA’s motion to

1 dismiss or strike the nationwide class claims is DENIED.

2 E. PETA’s Motion to Stay Pending the FCC’s Definition of an ATDS (Doc.

3 No. 24)

4 PETA has filed two separate motions to stay pending (1) the FCC’s clarification of

5 an ATDS, and (2) the Supreme Court’s decision in Facebook, Inc. v. Duguid. The Court

6 will now address the first ground for a stay. PETA argues the case should be stayed while

7 the FCC considers promulgating regulations further defining an ATDS. (Doc. No. 24.) To

8 prevail under the TCPA, Plaintiff must prove that PETA sent her the text message at issue

9 via an ATDS without sufficient prior express consent. “The three elements of a TCPA

10 claim are: (1) the defendant called a cellular telephone number; (2) using an automatic

11 telephone dialing system [ATDS]; (3) without the recipient’s prior express consent.”

12 Portfolio Recovery Assocs., LLC, 707 F.3d at 1043. Proving that PETA used an ATDS to

13 send the text message is an element of Plaintiff’s claim. The TCPA defines an ATDS as

14 “equipment which has the capacity—(A) to store or produce telephone numbers to be

15 called, using a random or sequential number generator; and (B) to dial such numbers.” 47

16 U.S.C. § 227(a)(1) (emphases added). The TCPA empowers the FCC “to prescribe

17 regulations to implement the requirements of this subsection,” including issuing

18 declaratory rulings defining terms within the TCPA. See 47 U.S.C. § 227(b)(2); 47 C.F.R.

19 § 1.2(a).

20 1. Background

21 As background, in July 2015, the FCC issued a declaratory order defining an ATDS

22 as any “dialing equipment [that] generally has the capacity to store or produce, and dial

23 random or sequential numbers even if it is not presently used for that purpose, including

24 when the caller is calling a set list of consumers.” In the Matter of Rules & Regs.

25 Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961, 7971–72 (July 10,

26 2015). On March 16, 2018, the D.C. Circuit set aside this definition of ATDS as “an

27 unreasonably expansive interpretation of the statute” because it “would appear to subject

28 ordinary calls from any conventional smartphone to the Act’s coverage.” ACA Int’l v. FCC,

1 885 F.3d 687, 692 (D.C. Cir. 2018).

2 Then, on May 14, 2018, the FCC released a Public Notice seeking comments on

3 various issues relating to the TCPA, including: (1) what constitutes an ATDS; (2) how to

4 interpret “capacity” in light of the D.C. Circuit’s ruling; and (3) what functions telephone

5 equipment must be able to perform to qualify as an ATDS—i.e., “If equipment cannot itself

6 dial random or sequential numbers, can that equipment be an automatic telephone dialing

7 system?” May 2018 FCC Public Notice, at 1–3.

8 Following ACA International, the circuit courts have split on the proper definition

9 of an ATDS. While some circuits took a narrow view of an ATDS, the Ninth Circuit in

10 Marks v. Crunch San Diego, LLC defined an ATDS broadly as: “equipment which has the

11 capacity—(1) to store numbers to be called or (2) to produce numbers to be called, using a

12 random or sequential number generator—and to dial such numbers automatically.” 904

13 F.3d 1041, 1053 (9th Cir. 2018). The court concluded that the statutory definition of an

14 ATDS “includes a device that stores telephone numbers to be called, whether or not those

15 numbers have been generated by a random or sequential number generator.” Id. at 1043.

16 On October 3, 2018, in response to the Ninth Circuit’s decision in Marks, the FCC

17 released another Public Notice, seeking additional comments on what constitutes an ATDS.

18 Comments were due on October 17, 2018; reply comments were due on October 24, 2018.

19 PETA argues that after considering these comments, the FCC will likely issue its new rule

20 defining ATDS in 2020.

21 2. Discussion

22 a) Whether A Stay is Proper Under the Primary Jurisdiction

23 Doctrine

24 Citing the primary jurisdiction doctrine, PETA argues a stay is warranted pending

25 the FCC’s clarification of what constitutes a ATDS. “The primary jurisdiction doctrine

26 allows courts to stay proceedings . . . pending the resolution of an issue within the special

27 competence of an administrative agency.” Clark v. Time Warner Cable, 523 F.3d 1110,

28 1114 (9th Cir. 2008). The doctrine “applies in a limited set of circumstances” and “is not

1 designed to secure expert advice from agencies every time a court is presented with an

2 issue conceivably within the agency’s ambit.” See id. (internal quotations and citations

3 omitted). Rather, the doctrine “is properly invoked when a claim is cognizable in federal

4 court but requires resolution of an issue of first impression, or of a particularly complicated

5 issue that Congress has committed to a regulatory agency.” Brown v. MCI WorldCom

6 Network Servs., Inc., 277 F.3d 1166, 1172 (9th Cir. 2002).

7 The Court concludes the primary jurisdiction doctrine does not support a stay. The

8 Ninth Circuit has already provided guidance on the definition of an ATDS with its decision

9 in Marks. Because the Ninth Circuit has already defined an ATDS, the Court need not

10 consider administrative input. Thus, the Court finds the circumstances presents neither “a

11 matter of first impression” nor “a particularly complicated issue that merits waiting for

12 FCC guidance.” See Trim v. Mayvenn, Inc., No. 20-CV-03917-MMC, 2020 WL 6460543,

13 at *6 (N.D. Cal. Nov. 3, 2020) (“[T]he Court declines to stay the instant action pending the

14 FCC’s declaratory ruling.”); Pascal v. Concentra, Inc., No. 19-CV-02559-JCS, 2019 WL

15 5458282, at *2 (N.D. Cal. Oct. 24, 2019) (“[T]he primary jurisdiction doctrine does not

16 justify a stay in this case.”).

17 Moreover, “courts must also consider whether invoking primary jurisdiction would

18 needlessly delay the resolution of claims.” See Astiana v. Hain Celestial Grp., Inc., 783

19 F.3d 753, 760 (9th Cir. 2015) (holding “efficiency is the deciding factor in whether to

20 invoke primary jurisdiction”). Here, with no deadline for the FCC to clarify the definition

21 of an ATDS, “a stay . . . pending an FCC decision could be indefinite.” See Bacon v.

22 Artificial Grass Liquidators Location 1, Inc., No. 18-CV-01220-JLS-ADS, 2019 WL

23 8811867, at *5 (C.D. Cal. May 1, 2019). Indeed, PETA argues that a definition was likely

24 to issue in 2020, but that year has passed, and there is still no guidance from the FCC.

25 b) Whether the Court Will Exercise Its Inherent Powers

26 In the alternative, PETA asks for a stay pursuant to this Court’s inherent powers.

27 (Doc. No. 24-1 at 22.) A court’s power to stay proceedings is incidental to its inherent

28 power to control the disposition of its cases in the interests of efficiency and fairness to the

1 court, counsel, and litigants. See Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). In

2 determining whether to stay proceedings, the district court “must weigh competing

3 interests and maintain an even balance” between the hardships that would be suffered by

4 the parties if a stay were or were not granted, as well as judicial economy. Id. at 254–55.

5 “If there is even a fair possibility” that the stay will harm the non-moving party, the party

6 seeking the stay “must make out a clear case of hardship or inequity in being required to

7 go forward.” Id. at 255. The Ninth Circuit has clarified that these competing interests

8 include: (1) the possible damage which may result from the granting of a stay, (2) the

9 hardship or inequity which a party may suffer in being required to go forward, and (3) the

10 orderly course of justice measured in terms of the simplifying or complicating of issues,

11 proof, and questions of law which could be expected to result from a stay. See CMAX, Inc.

12 v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) (citing Landis, 299 U.S. at 254–55). However,

13 “being required to defend a suit, without more, does not constitute a ‘clear case of hardship

14 or inequity’ within the meaning of Landis.” Lockyer v. Mirant Corp., 398 F.3d 1098, 1112

15 (9th Cir. 2005).

16 The Court declines to exercise its inherent powers in staying this case pending

17 further direction from the FCC. First, there is no imminent deadline as to when or whether

18 the FCC will promulgate such regulations. As noted above, PETA predicted in its briefing

19 that a decision will issue at the end of 2020. However, it is now 2021, and it does not appear

20 the FCC has provided clear guidance on the definition of an ATDS. Therefore, the

21 requested stay could be an indefinite one, leading to a loss of evidence and the miscarriage

22 of justice for not only Plaintiff, but PETA as well. Second, even assuming the FCC did

23 issue a new rule, the rule would be subject to challenge in the judicial system under the

24 Hobbs Act, even further demonstrating the potential for delay as the cases work their way

25 through the courts. For these reasons, the Court concludes that a stay is not warranted. See

26 Hoagland v. Axos Bank, No. 19-CV-00750-BAS-JLB, 2020 WL 583974, at *4 (S.D. Cal.

27 Feb. 6, 2020) (“Ultimately, the fact that there is no clear timeline, and, in fact, there may

28 not be new regulations promulgated by the FCC in the near future, leads the court to

1 conclude that a stay at this stage would be inappropriate.”).

2 F. PETA’s Motion to Stay Pending the Supreme Court’s Decision in

3 Facebook, Inc. v. Duguid (Doc. No. 46)

4 Next, PETA requests a stay of this action pending the United States Supreme Court’s

5 decision in Facebook, Inc. v. Duguid. (Doc. No. 46.) As noted above, the Ninth Circuit in

6 Marks provided a broad definition of an ATDS. The Marks case was reaffirmed in Duguid

7 v. Facebook, Inc., 926 F.3d 1146 (9th Cir. 2019). In that case, the defendant argued that it

8 stored numbers only to be called reflexively. The messages were sent when there appeared

9 to be unauthorized activity on an individual’s Facebook account. The Court found no

10 difference between calls made actively and those made reflexively. Id. The TCPA’s

11 “animating purpose” is “protecting privacy by restricting unsolicited, automated telephone

12 calls.” Id. Since the plaintiff alleged receiving calls that were automated, unsolicited, and

13 unwanted, the plaintiff’s allegations were sufficient. As a result, the Ninth Circuit again

14 confirmed the definition set forth in Marks, defining an ATDS as “equipment which has

15 the capacity—(1) to store numbers to be called or (2) to produce numbers to be called,

16 using a random or sequential number generator—and to dial such numbers automatically.”

17 Duguid, 926 F.3d at 1150 (quoting Marks, 904 F.3d at 1053).

18 On July 2, 2020, the Supreme Court granted Facebook’s petition for certiorari in

19 Facebook, Inc. v. Duguid, scheduling oral argument for December 8, 2020. See Facebook,

20 Inc. v. Duguid, 141 S. Ct. 193 (2020). In doing so, the Supreme Court agreed to decide the

21 following question: whether the definition of ATDS in the TCPA encompasses any device

22 that can “store” and “automatically dial” telephone numbers, even if the device does not

23 “us[e] a random or sequential number generator.” Petition for Writ of Certiorari, No. 19-

24 511 (U.S. filed Oct. 17, 2019). The Supreme Court is likely to issue an opinion on this

25 question in the first half of 2021, which should resolve the circuit split and provide a

26 uniform definition of an ATDS.

27 Based on the foregoing, a stay pending an opinion from the Supreme Court is

28 warranted. The first factor the Court considers is “the possible damage which may result

1 from the granting of a stay.” Lockyer, 398 F.3d at 1110 (quoting CMAX, Inc., 300 F.2d at

2 268). Plaintiff argues that she will be prejudiced by a lengthy, indefinite stay. (Doc. No. 50

3 at 13.) Plaintiff’s concern is the risk of evidence being lost or destroyed. (Id. at 14–15.)

4 The Court finds these concerns do not justify the denial of PETA’s motion to stay. First,

5 both parties have an obligation to preserve evidence. See Canady v. Bridgecrest

6 Acceptance Corp., No. CV-19-04738-PHX-DWL, 2020 WL 5249263, at *4 (D. Ariz. Sept.

7 3, 2020) (noting that the obligation to preserve evidence reduces the risk of evidence being

8 destroyed, lost, corrupted, or forgotten). Second, the requested stay is not impermissibly

9 indefinite. Unlike the uncertainty surrounding whether and when the FCC would clarify

10 the definition of an ATDS, PETA requests a stay of these proceedings only until the

11 Supreme Court issues a decision in Facebook, Inc. v. Duguid. Given that oral argument

12 was heard in December 8, 2020, a decision is likely imminent. Canady, 2020 WL 5249263,

13 at *3. Therefore, a stay would only minimally delay discovery. The obligation to preserve

14 evidence, “coupled with the fact that the stay is not for an indefinite amount of time, further

15 underscores that there is little risk of harm in instituting a stay.” Id. at *4.

16 The second factor the Court considers is “the hardship or inequity which a party may

17 suffer in being required to go forward.” Lockyer, 398 F.3d at 1110 (quoting CMAX, Inc.,

18 300 F.2d at 268). PETA argues that if a stay is not granted, it will be forced to expend

19 unnecessary time and resources litigating a matter with no clear idea as to the law that will

20 actually apply at trial. (Doc. No. 46-1 at 17.) The Court agrees. Allowing this case to

21 proceed pending a decision could be wasteful for all parties and result in duplicative

22 proceedings. While “being required to defend a suit, without more, does not constitute a

23 ‘clear case of hardship or inequity,’” Lockyer, 398 F.3d at 1112, the burden of litigating an

24 issue that may be mooted adds to that potential hardship. PETA’s interest in avoiding

25 potentially unnecessary litigation and discovery is consistent with the Court’s interest in

26 preserving judicial resources and efficiency. This factor, therefore, weighs in favor of

27 staying the case.

28 The third factor the Court considers is “the orderly course of justice measured in

1 terms of the simplifying or complicating of issues, proof, and questions of law which could

2 be expected to result from a stay.” Lockyer, 398 F.3d at 1110 (quoting CMAX, Inc., 300

3 F.2d at 268). A stay will simplify the issues in this case. Plaintiff here has made a single

4 TCPA claim, alleging PETA sent her two identical text messages using an ATDS without

5 her prior express written consent. To prevail on her TCPA claim, Plaintiff must prove that

6 PETA used an ATDS to send the text messages at issue. PETA’s liability for Plaintiff’s

7 sole cause of action will therefore turn on the precise issue the Supreme Court will decide,

8 i.e. whether an ATDS requires random or sequential number generation. Although the

9 Ninth Circuit has offered a definition of an ATDS, a stay pending the outcome of a

10 forthcoming decision will promote the orderly course of justice by clarifying the issues

11 involved in this case. See Sealey v. Chase Bank (U.S.A.), N.A., No. 19-CV-07710-JST,

12 2020 WL 5814108, at *2 (N.D. Cal. Sept. 29, 2020) (“[T]he orderly course of justice

13 dictates that [Facebook] should be decided first, as that case addresses the central question

14 at issue here.”). Accordingly, the Court finds that the third factor weighs in favor of

15 granting a stay.

16 Therefore, after weighing the competing interests, the Court concludes that a stay is

17 warranted pending the Supreme Court’s resolution of Facebook, Inc. v. Duguid.

18 Additionally, the Court declines Plaintiff’s request to allow class discovery during the stay.

19 Judicial efficiency is best promoted by the simplification of issues before discovery. The

20 motion is GRANTED.

21 III. CONCLUSION

22 In sum, the Court hereby ORDERS as follows:

23 (1) PETA’s motion to stay pending the FCC’s definition of an ATDS is DENIED,

24 (Doc. No. 24);

25 (2) PETA’s motion to dismiss or strike Plaintiff’s nationwide class claims is

26 DENIED, (Doc. No. 29);

27 (3) PETA’s motion to dismiss for lack of subject matter jurisdiction under Article

28 III, or alternatively, for failure to state a claim is DENIED, (Doc. No. 30);

1 (4) Defendant Beyond Meat, Inc.’s motion to dismiss, or in the alternative, stay

2 proceedings is DENIED AS MOOT, (Doc. No. 33);

3 (5) PETA’s motion to dismiss for lack of subject matter jurisdiction pursuant to the

4 Supreme Court’s decision in Barr vy. AAPC is DENIED, (Doc. No. 65); and

5 (6) PETA’s motion to stay pending the Supreme Court’s decision in Facebook, Inc.

6 v. Duguid is GRANTED, (Doc. No. 46).

7 The Court VACATES the March 25, 2021 hearing on PETA’s motion to dismiss

8 || for lack of subject matter jurisdiction. The parties are ordered to file a notice with this Court

9 when the Supreme Court issues its ruling, or otherwise disposes of Facebook, Inc. v.

10 || Duguid. The notice is to include a request for a Case Management Conference.

11

12 IT IS SO ORDERED.

13 Dated: March 12, 2021 ©

14 Hon. Anthony J.Battaglia

15 United States District Judge

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