The opinion of the court was delivered by: Sue E. Myerscough, U.S. District Judge.
3:12-cv-03221-SEM-BGC # 22 Page 1 of 25
Tuesday, 12 March, 2013 03:56:27 PM
Clerk, U.S. District Court, ILCD
On March 5, 2013, this Court held a status hearing in the two cases captioned above. At this hearing, the Court addressed several matters, including whether the two cases should proceed individually or be consolidated, and whether Plaintiffs in Case No. 09-3073 (Dish I) should be granted leave to amend the Complaint in that case to add the claim brought in Case No. 12-3221 (Dish II).
After considering the arguments at the hearing and the briefing previously provided on several of these issues, the Court DISMISSES Dish II and GRANTS leave to amend in Dish I.
A. The United States and States of California, Illinois, North Carolina, and Ohio File Lawsuit Against Dish--Case NO. 09-3073 (Dish I)
In March 2009, the United States of America and the States of
California, Illinois, North Carolina, and Ohio filed an action against Dish, Case No. 09-3073 (Dish I). In April 2009, Plaintiffs amended their complaint. See d/e 5.
In the Amended Complaint, Plaintiffs allege that Dish violated the Telemarketing Sales Rule (TSR) (16 C.F.R. §§ 310.4, 310.3), the Telephone Consumer Protection Act (TCPA) (47 U.S.C. § 227), and various state statutes. Specifically, Count I alleges Dish engaged in or caused a telemarketer to engage in initiating an outbound telephone call to a telephone number on the National Do Not Call Registry in violation of the TSR. Count II alleges that Dish abandoned or caused telemarketers to abandon outbound telephone calls in violation of the TSR. Count III alleges that Dish provided substantial assistance or support to certain dealers when Dish knew or consciously avoided knowing that the dealers were abandoning outbound telephone calls in violation of the TSR. Counts I through III are brought by the United States and seek injunctive relief and civil penalties.
In Counts IV and V, the State Plaintiffs seeks injunctive relief and damages for violations of the TCPA. Count IV alleges that Dish, either directly or through third parties acting on its behalf, called telephones on the Do Not Call List in violation of the TCPA. Count V alleges that Dish, either directly or through third parties acting on its behalf, used pre-recorded sales pitches in violation of the TCPA.
Finally, in Counts VI, VII, VIII, IX, X, and XI, each state Attorney General seeks relief under each state's respective statute that prohibt these forms of telephone solicitations.
Dish raised several affirmative defenses. See d/e 26. One of those affirmative defenses included the TSR's Safe Harbor provisions. See d/e 26. See 16 C.F.R. § 310.4(b)(4).
In December 2010, Dish filed a Motion to Stay this Action
Pursuant to the Doctrine of Primary Jurisdiction, or in the Alternative to Stay All Counts IV-XI to the Extent They Claim "On Behalf Of" Liability and Refer that Issue to the Federal Communications Commission (FCC). See d/e 67.
In February 2011, the Court allowed the motion in part. The Court stayed all matters related exclusively to the TCPA but allowed the parties to proceed on discovery and other matters related to any nonTCPA claims. See Opinion (d/e 86). The Court also ordered the parties to jointly file an administrative complaint with the FCC seeking the FCC's interpretation of the phrase "on behalf of." See Opinion (d/e 86). In addition, the Court directed the parties to file a status report once the FCC resolves the administrative complaint. Because the parties have not filed a status report, the Court assumes the FCC has not resolved the administrative complaint.
On May 22, 2012, Dish filed a Motion for a Stay of the Case Pending Resolution of Issues Referred to the Federal Communication Commission (d/e 133) and an Amended Motion to Stay (d/e 140). Dish asserted that a complete stay of the action upon the close of fact discovery, pending a determination of the issues referred to the FCC, would serve the interests of judicial economy.
On June 21, 2012, this Court denied the Motion and Amended Motion, finding that a stay of the entire case would not reduce the burden of litigation on the parties and the Court and would not serve the interests of judicial economy. This Court noted that Counts I through III and the State Plaintiffs' statutory claims were not predicated on the TCPA and do not depend on the FCC's ultimate ruling.
On May 18, 2012, Plaintiffs filed their Motion for Leave to File Second Amended Complaint (d/e 135). When Plaintiffs filed that motion, fact discovery was set to close on May 25, 2012. The parties later agreed to extend that deadline to June 22, 2012 for certain limited outstanding discovery. See Consent Motion (d/e 139); Text Order granting Consent Motion May 23, 2012 (also extending additional deadlines).
In the Motion for Leave to File Second Amended Complaint, Plaintiffs sought to conform the pleadings to Plaintiffs' discovery of evidence that Dish made 10.1 million telemarketing calls to consumers on Dish's own internal Do Not Call List. Plaintiffs sought to add one count alleging that Dish violated the entity-specific do-not-call provision of the TSR, 16 C.F.R. § 310.4 (b)(1)(iii)(A). Specifically, Plaintiffs sought to add the following paragraphs of legal background and factual allegations:
17. Since December 31, 1995, sellers and telemarketers have been prohibited from initiating an outbound telephone call to any person who previously has stated that he or she does not wish to receive an outbound telephone call made by or on behalf of the seller whose goods or services are being offered. 16 C.F.R. § 310.4(b)(1)(iii)(A).
34. Defendant DISH Network and some of its authorized dealers maintain or cause to be maintained lists of phone numbers of persons who have stated that they do not wish to receive an outbound telephone call made by or on behalf of DISH Network.
39. Since on or about October 17, 2003, DISH Network has initiated outbound telephone calls to phone numbers of persons who have stated that they do not wish to receive an outbound telephone call made by or on behalf of DISH Network.
Plaintiffs also sought to add a new Count II (and renumber the other counts):
67. In numerous instances, in connection with telemarketing, DISH Network has engaged in or caused other telemarketers to engage in initiating an outbound telephone call to a person who has previously stated that he or she does not wish to receive such a call made by or on behalf of DISH Network, in violation of the TSR, 16 C.F.R. § 310.4(b)(1)(iii)(A).
In June 2012, United States Magistrate Judge Byron G. Cudmore denied the Motion for Leave to File Second Amended Complaint. See Opinion (d/e 155). Judge Cudmore found that Plaintiffs unduly delayed filing the proposed amendment and that the delay prejudiced Dish. Judge Cudmore also noted: "If the FTC elects to authorize a new suit, then both the United ...