Jesse Meyer v. Portfolio Recovery Associates

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JESSE MEYER, an individual, on his 

own behalf and on behalf of all

others similarly situated,

Plaintiff-Appellee, No. 11-56600

v.

PORTFOLIO RECOVERY ASSOCIATES,

LLC, a Delaware limited liability  D.C. No.

3:11-cv-01008-

company, AJB-RBB

Defendant-Appellant, OPINION

and

DOES, 1-100, inclusive,

Defendant.



Appeal from the United States District Court

for the Southern District of California

Anthony J. Battaglia, District Judge, Presiding

Argued and Submitted

May 10, 2012—Pasadena, California

Filed October 12, 2012

Before: Dorothy W. Nelson, Raymond C. Fisher, and

Morgan Christen, Circuit Judges.

Opinion by Judge Christen

12251

12254 MEYER v. PORTFOLIO RECOVERY

COUNSEL

Christopher W. Madel (argued) and Jennifer M. Robins, Rob-

ins, Kaplan, Miller & Ciresi LLP, Minneapolis, Minnesota;

Edward D. Lodgen and Julia V. Lee, Robins, Kaplan, Miller

& Ciresi LLP, Los Angeles, California, for the defendant-

appellant.

Ethan Preston (argued), Preston Law Offices, Phoenix, Ari-

zona; David C. Parisi and Suzanne Havens Beckman, Parisi

& Havens LLP, Sherman Oaks, California, for the plaintiff-

appellee.

MEYER v. PORTFOLIO RECOVERY 12255

OPINION

CHRISTEN, Circuit Judge:

Portfolio Recovery Associates, LLC (PRA) appeals the

September 14, 2011 district court order granting Jesse

Meyer’s motion for a preliminary injunction and provisional

class certification. Meyer’s complaint alleged that PRA’s debt

collection efforts violated the Telephone Consumer Protection

Act (TCPA), 47 U.S.C. § 227. The district court’s preliminary

injunction restrained PRA from using its Avaya Proactive

Contact Dialer to place calls to cellular telephone numbers

with California area codes that PRA obtained via skip-tracing.1

We have jurisdiction over this appeal pursuant to 28 U.S.C.

§ 1292(a)(1). See also Paige v. State of Cal., 102 F.3d 1035,

1039 (9th Cir. 1996). Having reviewed the record, we affirm.

We resolve several issues on appeal: (1) whether the dis-

trict court had jurisdiction and authority to issue its September

14, 2011 order; (2) whether the district court abused its dis-

cretion by certifying a provisional class for purposes of the

preliminary injunction; and (3) whether the district court

abused its discretion in granting the preliminary injunction.

We review de novo whether a district court has authority to

issue a preliminary injunction or class certification order; we

review the exercise of that authority for abuse of discretion.

Hunt v. Imperial Merch. Servs., Inc., 560 F.3d 1137, 1140

(9th Cir. 2009). See also Alliance for the Wild Rockies v. Cot-

trell, 632 F.3d 1127, 1131 (9th Cir. 2011); A&M Records, Inc.

v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001)

(amended). “An abuse of discretion will be found if the dis-

trict court based its decision ‘on an erroneous legal standard

1

Skip-tracing is the process of developing new telephone, address, job

or asset information on a customer, or verifying the accuracy of such

information.

12256 MEYER v. PORTFOLIO RECOVERY

or clearly erroneous finding of fact.’ ” Cottrell, 632 F.3d at

1131 (internal citation omitted). We look to “whether the dis-

trict court reaches a result that is illogical, implausible, or

without support in inferences that may be drawn from facts in

the record.” United States v. Hinkson, 585 F.3d 1247, 1262

n.21 (9th Cir. 2009) (en banc). Conclusions of law are

reviewed de novo and findings of fact for clear error. Cottrell,

632 F.3d at 1131.

1. Jurisdiction/Authority

This appeal arises from Meyer’s motion for a preliminary

injunction preventing PRA, a debt collection service, from

contacting debtors via their cellular telephone numbers in vio-

lation of the TCPA. Meyer also moved for provisional certifi-

cation of a class of debtors who were contacted by PRA on

their cellular telephones. At the conclusion of the hearing on

Meyer’s motion, Judge Anthony J. Battaglia orally indicated

that it would be denied. A minute order entered June 23, 2011

also indicated that the motion would be denied, but the minute

order stated that the court would prepare a written order.

Meyer filed a notice of appeal from the June 23, 2011 minute

order, but on September 14, 2011, Judge Battaglia entered a

written order granting a preliminary injunction and provision-

ally certifying the class. Judge Battaglia signed another order

dated September 13, 2011 transferring this matter to another

district court judge who was presiding over an earlier-filed

and related case. The transfer order was entered into the

docket on September 19, 2011.

PRA argues on appeal that the June 23, 2011 notice of

appeal divested the district court of jurisdiction to enter its

September 14, 2011 order. We disagree. The district court’s

June 23, 2011 minute order was not a final appealable order.

Ruby v. Sec’y of the U.S. Navy, 365 F.2d 385, 389 (9th Cir.

1966). It did not clearly evidence the judge’s intention that it

would be the court’s final act on the matter, Brown v. Wilshire

Credit Corp. (In re Brown), 484 F.3d 1116, 1120 (9th Cir.

MEYER v. PORTFOLIO RECOVERY 12257

2007); in fact, it expressly stated that a written order would

follow. Accordingly, the June 23, 2011 notice of appeal was

premature and had no operative effect. Jurisdiction remained

in the district court as of September 14, 2011.

PRA also argues that Judge Battaglia lacked authority to

preside over this case after September 13, 2011, the date he

signed the transfer order. This argument is unavailing because

the transfer order was not effective until it was entered into

the docket on September 19, 2011 and the order granting the

preliminary injunction and provisional class certification was

entered on September 14, 2011. The transfer order did not

impair Judge Battaglia’s authority to enter the September 14,

2011 order granting a preliminary injunction and provisional

class certification.

2. Provisional class certification

[1] PRA argues the district court erred because the require-

ments of Federal Rule of Civil Procedure (FRCP) 23(a) were

not met in this case. We conclude the district court acted

within its discretion when it ruled that Meyer met the com-

monality, typicality, and adequacy requirements of FRCP

23(a) and did not abuse its discretion by granting provisional

class certification.

[2] Meyer has the burden of meeting the threshold require-

ments of FRCP 23(a). Wal-Mart Stores, Inc. v. Dukes, 131 S.

Ct. 2541, 2551 (2011). The commonality and typicality

requirements of FRCP 23(a) “tend to merge,” but they “[b]oth

serve as guideposts for determining whether under the partic-

ular circumstances maintenance of a class action is economi-

cal and whether the named plaintiff’s claim and the class

claims are so interrelated that the interests of the class mem-

bers will be fairly and adequately protected in their absence.”

Id. at 2551 n.5 (quotations and citation omitted). “All ques-

tions of fact and law need not be common to satisfy the [com-

monality requirement]. The existence of shared legal issues

12258 MEYER v. PORTFOLIO RECOVERY

with divergent factual predicates is sufficient, as is a common

core of salient facts coupled with disparate legal remedies

within the class.” Hanlon v. Chrysler Corp., 150 F.3d 1011,

1019 (9th Cir. 1998) (amended). The common contention

“must be of such a nature that it is capable of classwide reso-

lution — which means that determination of its truth or falsity

will resolve an issue that is central to the validity of each one

of the claims in one stroke.” Dukes, 131 S. Ct. at 2551.

“[R]epresentative claims are ‘typical’ if they are reasonably

co-extensive with those of absent class members; they need

not be substantially identical.” Hanlon, 150 F.3d at 1020.

The district court limited the provisional class in this case

to all persons using a cellular telephone number that “(1) PRA

did not obtain either from a creditor or from the Injunctive

Class member; and (2) has a California area-code; or (3)

where PRA’s records identify the Injunctive Class member as

residing in California.”

[3] PRA argues that individualized issues of consent

should have precluded a finding of typicality or commonality

because some debtors might have agreed to be contacted at

any telephone number, even telephone numbers obtained after

the original transaction. But the Federal Communications

Commission (FCC) issued a declaratory ruling clarifying the

requirement for consent in the context of the TCPA that

defeats PRA’s argument. See In the Matter of Rules & Regu-

lations Implementing the Tel. Consumer Prot. Act of 1991,

Request of ACA Int’l for Clarification and Declaratory Rul-

ing, 23 FCC Rcd. 559, 565 (Jan. 4, 2008). Pursuant to the

FCC ruling, prior express consent is deemed granted only if

the wireless telephone number was provided by the consumer

to the creditor, and only if it was provided at the time of the

transaction that resulted in the debt at issue. Id. at 564-65.

Thus, consumers who provided their cellular telephone num-

bers to creditors after the time of the original transaction are

not deemed to have consented to be contacted at those num-

bers for purposes of the TCPA.

MEYER v. PORTFOLIO RECOVERY 12259

[4] PRA also argues that the class is overbroad because it

may include debtors who provided express consent to be con-

tacted on their cellular telephones but whose telephone num-

bers were obtained via skip-tracing. But PRA does not point

to a single instance where a cellular telephone number that

had been given by the debtor to the original creditor was also

found by PRA via skip-tracing, and the evidence before the

district court suggested that cellular telephone numbers PRA

found via skip-tracing were unlikely to have been given to

PRA by the debtors. Specifically, PRA’s securities filing

shows that PRA’s practice was to first attempt to contact debt-

ors via the information received from creditors and only resort

to skip-tracing if the debtors could not be reached using such

information. Given this record, it was reasonable for the dis-

trict court to find that cellular telephone numbers obtained via

skip-tracing had not been given to the creditors in the course

of the underlying consumer transactions.

[5] PRA also argues that Meyer failed to satisfy the

requirements of FRCP 23(a) because Meyer was not an ade-

quate class representative due to convictions for offenses

involving dishonesty and because he has used multiple names

in the past. PRA argues that the district court did not analyze

Meyer’s personal credibility and integrity. We conclude the

district court acted within its discretion when it provisionally

decided Meyer was an adequate class representative. The dis-

trict court did consider PRA’s argument that Meyer’s criminal

record included convictions for deceptive conduct, but it also

considered that Meyer’s convictions were from 1998 and

2001, more than 10 years ago,2 and that Meyer had since

taken positive steps in his life, including his graduation from

the University of California. On this record we cannot say the

district court abused its discretion by accepting Meyer as a

provisional class representative.

2

See Fed. R. Evid. 609(b).

12260 MEYER v. PORTFOLIO RECOVERY

PRA also argues that the district court lacked authority to

certify a provisional class pursuant to FRCP 23(b)(2) because

that rule only provides for final, not preliminary, injunctive

relief.

[6] FRCP 23(b) states, “A class action may be maintained

if Rule 23(a) is satisfied and if . . . the party opposing the

class has acted or refused to act on grounds that apply gener-

ally to the class, so that final injunctive relief or correspond-

ing declaratory relief is appropriate respecting the class as a

whole.” The plain language of FRCP 23(b)(2) does not

restrict class certification to instances when final injunctive

relief issues; it only requires that final injunctive relief be

appropriate. PRA did not show the district court incorrectly

interpreted or applied FRCP 23(b)(2).

3. Preliminary injunction

[7] Generally, a party seeking a preliminary injunction

must demonstrate: (1) a likelihood of success on the merits;

(2) that he is likely to suffer irreparable harm in the absence

of preliminary relief; (3) that the balance of equities tips in his

favor; and (4) that an injunction is in the public interest. Win-

ter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).

[8] PRA first argues the district court erred by finding that

Meyer demonstrated a likelihood of success on the merits. We

disagree. The three elements of a TCPA claim are: (1) the

defendant called a cellular telephone number; (2) using an

automatic telephone dialing system; (3) without the recipi-

ent’s prior express consent. 47 U.S.C. § 227(b)(1). The term

“automatic telephone dialing system” means “equipment that

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). PRA

argues that its dialers do not have the present capacity to store

or produce numbers using a random or sequential number

generator. As we explained in Satterfield v. Simon &

MEYER v. PORTFOLIO RECOVERY 12261

Schuster, Inc., the clear language of the TCPA “mandates that

the focus must be on whether the equipment has the capacity

‘to store or produce telephone numbers to be called, using a

random or sequential number generator.’ ” 569 F.3d 946, 951

(9th Cir. 2009). PRA’s securities filing shows that PRA uses

predictive dialers. PRA does not dispute that its predictive

dialers have the capacity described in the TCPA. This is suffi-

cient to determine that PRA used an automatic telephone dial-

ing system. See id. (“[A] system need not actually store,

produce, or call randomly or sequentially generated telephone

numbers, it need only have the capacity to do it.”).

[9] The FCC further defined “automatic telephone dialing

system” to include predictive dialers. See In the Matter of

Rules and Regulations Implementing the Tel. Consumer Prot.

Act of 1991, 18 FCC Rcd. 14014, 14091-93 (July 3, 2003).

“[A] predictive dialer is equipment that dials numbers and,

when certain computer software is attached, also assists tele-

marketers in predicting when a sales agent will be available

to take calls. The hardware, when paired with certain soft-

ware, has the capacity to store or produce numbers and dial

those numbers at random, in sequential order, or from a data-

base of numbers.” Id. at 14091. “As one commenter points

out, the evolution of the teleservices industry has progressed

to the point where using lists of numbers is far more cost

effective. The basic function of such equipment, however, has

not changed — the capacity to dial numbers without human

intervention.” Id. at 14092. PRA’s predictive dialers fall

squarely within the FCC’s definition of “automatic telephone

dialing system.”

PRA argues that the FCC did not have the authority to

define predictive dialers as “automatic telephone dialing sys-

tems” and that the regulation reflecting this definition is there-

fore invalid. But PRA did not raise this argument in the

district court and it did not argue any exception to the rule that

arguments not raised before the district court are waived. Bac-

12262 MEYER v. PORTFOLIO RECOVERY

cei v. United States, 632 F.3d 1140, 1149 (9th Cir. 2011). We

therefore deem this argument waived.

PRA failed to argue in the district court that Meyer’s

motion should have been denied for failure to demonstrate

that the injury in this case was caused by something against

which the TCPA was designed to protect, that is, use of an

automatic telephone dialing system to contact consumers via

their cellular telephones without their consent. This argument

is also deemed waived. Id. Moreover, even if the argument

had not been waived, as discussed below, the TCPA was

designed to protect against the types of calls at issue in this

case. See Satterfield, 569 F.3d at 954.

PRA argues that the district court erred by using the wrong

legal standard when it decided Meyer did not need to show

irreparable harm in order to obtain a preliminary injunction.

The district court’s order was premised on Ninth Circuit case

law approving injunctions without a showing of irreparable

harm when they are sought to prevent violations of federal

statutes that specifically provide for injunctive relief. See,

e.g., United States v. Estate Pres. Servs., 202 F.3d 1093, 1098

(9th Cir. 2000); United States v. Odessa Union Warehouse

Co-op, 833 F.2d 172, 175 (9th Cir. 1987); Navel Orange

Admin. Comm. v. Exeter Orange Co., Inc., 722 F.2d 449, 453

(9th Cir. 1983).

In eBay, Inc. v. MercExchange, LLC, the Supreme Court

disapproved of the use of “categorical” rules regarding irrepa-

rable harm in patent infringement cases, concluding that such

a rule “cannot be squared with the principles of equity

adopted by Congress.” 547 U.S. 388, 393 (2006). In Flexible

Lifeline Systems, Inc. v. Precision Lift, Inc., our Circuit

applied eBay’s rule to a request for injunctive relief in a copy-

right infringement claim, reversing the Circuit’s “long-

standing precedent finding a plaintiff entitled to a presump-

tion of irreparable harm on a showing of likelihood of success

on the merits in a copyright infringement case.” 654 F.3d 989,

MEYER v. PORTFOLIO RECOVERY 12263

998 (9th Cir. 2011). Our Circuit has not yet determined

whether irreparable harm must be shown in order to obtain

injunctive relief in all types of cases, but at least one decision

post-eBay but pre-Flexible Lifeline reiterated the premise that

“[t]he standard requirements for equitable relief need not be

satisfied when an injunction is sought to prevent the violation

of a federal statute which specifically provides for injunctive

relief.” Antoninetti v. Chipotle Mexican Grill, Inc., 643 F.3d

1165, 1175-76 (9th Cir. 2010).

[10] In order to resolve this case, we need not decide

whether to extend Flexible Lifeline to TCPA claims, because

we conclude that Meyer demonstrated irreparable harm under

the traditional four-part test. We reach this conclusion in the

first instance because Meyer argued before the district court

that he and other class members will suffer irreparable harm

from PRA’s continuing violations of the TCPA, which violate

the class members’ right to privacy, and because the district

court found in its written order that PRA would continue to

violate the TCPA if an injunction was not issued. Cf. Flexible

Lifeline, 654 F.3d at 1000 (declining to affirm the district

court’s grant of a preliminary injunction because the district

court presumed irreparable harm without making factual find-

ings that would support a finding of likelihood of irreparable

harm). We have little difficulty concluding the record sup-

ports the district court’s finding that PRA would have contin-

ued to violate the TCPA if an injunction had not been issued.

Between February 1 and March 31, 2011, PRA called 46,657

cellular telephone numbers with California area codes PRA

obtained via skip-tracing. In response to Meyer’s motion for

a preliminary injunction, PRA did not acknowledge the

wrongful nature of its conduct. Instead, PRA assured the court

it would stop calling Meyer without making any assurance

regarding other members of the provisional class. We agree

with Meyer that PRA’s violation of the TCPA violated his

right to privacy, an interest the TCPA intended to protect. Sat-

terfield, 569 F.3d at 954. Accordingly, Meyer demonstrated

12264 MEYER v. PORTFOLIO RECOVERY

that irreparable harm is likely in the absence of injunctive

relief. Winter, 555 U.S. at 22.

[11] Finally, PRA briefly raises an as-applied due process

challenge to the TCPA. Questions of law, including due pro-

cess claims, are reviewed de novo. Vargas-Hernandez v. Gon-

zales, 497 F.3d 919, 921 (9th Cir. 2007). The basis for PRA’s

due process claim is not entirely clear, so we analyze it as a

substantive and procedural due process challenge. First, to the

extent PRA raises a substantive due process challenge, the

property interest PRA identified is its interest in conducting

a debt collection business — an economic interest. We have

held that “[w]here a fundamental right is not implicated . . .

governmental action need only have a rational basis to be

upheld against a substantive due process attack. If a statute is

not arbitrary, but implements a rational means of achieving a

legitimate governmental end, it satisfies due process.” Kim v.

United States, 121 F.3d 1269, 1273 (9th Cir. 1997) (citation

and internal quotations omitted). Here, Congress had several

goals when it passed the TCPA, including prohibiting the use

of automatic telephone dialing systems to communicate with

others by telephone in a manner that invades privacy. See Sat-

terfield, 569 F.3d at 954. Prohibiting the use of automatic

dialers to call cellular telephones without express prior con-

sent is a rational means of achieving this objective. To the

extent PRA raises a procedural due process challenge, its

argument fails because PRA has not shown that it was denied

notice or an opportunity to be heard.

AFFIRMED.