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Ankcorn v. Kohl's Corporation

United States District Court, N.D. Illinois, Eastern Division

January 30, 2017

MARK ANKCORN, on behalf of himself and all others similarly situated, Plaintiffs,
v.
KOHL'S CORPORATION, Defendant.

          MEMORANDUM OPINION AND ORDER

          Robert M. Dow, Jr. United States District Judge

         Before the Court is Defendant Kohl's motion to continue the stay and to file instanter supplemental authority [55]. For the reasons stated below, the Court grants Defendant's motion [55] to file instanter supplemental authority and to continue the stay pending a decision by the D.C. Circuit in ACA International v. FCC, No. 15-1211 (D.C. Cir., argued Oct. 19, 2016). The status hearing set for February 21, 2017 is stricken and no appearances are necessary. The parties are directed to promptly advise the Court when the D.C. Circuit issues its ruling in ACA International v. FCC and to file within 14 days of that decision a brief of no more than 10 pages explaining how the ruling affects their respective positions in this case. The Court will set this matter for further status after reviewing the D.C. Circuit's decision and the parties' supplemental briefs.

         I. Background

         On February 11, 2015, Plaintiff Mark Ankcorn filed this putative class action lawsuit against Defendant Kohl's for alleged violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”). [1.] Plaintiff alleges that Defendant has received in excess of one hundred calls from Defendant on his cellular phone, without consenting to receive the alleged calls. Plaintiff further alleges that Defendant has violated the TCPA by engaging in a widespread and systematic practice of placing calls to consumers on their cell phones, using autodialer technology, without prior express consent. The proposed class includes all persons within the U.S. who were called on his or her cell phone by Defendant using an automatic telephone dialing system without prior consent. [See 1, at ¶ 23.]

         Defendant alleges that in April 2014, a Kohl's credit card holder provided the telephone number at issue to Defendant on a Kohl's credit card application and consented to being contacted by telephone regarding account related issues. [61, at 4.] After opening a Kohl's credit card, the cardholder made purchases on her card but never made any credit card payments to Defendant. Defendant argues that any calls that it made to the number provided were permitted pursuant to the cardholder's consent and thus in compliance with the TCPA. Defendant further argues that it did not know, and had no reason to know, that the number provided by the cardholder was reassigned to Plaintiff or incorrectly or falsely provided by the cardholder in the first instance. [Id. at 4-5.]

         On December 30, 2015, Defendant filed a motion to stay this action [38]. On September 21, 2016, the Court granted Defendant's motion to stay the proceedings pending the disposition by the Judicial Panel on Multidistrict Litigation (“JPML”) of Plaintiff's motion to transfer related actions for coordinated pretrial proceedings. [49.] On October 4, 2016, the JPML declined to consolidate these actions. [54.] On October 18, 2016, Defendant filed a motion to continue the stay pending a decision by the D.C. Circuit in ACA International v. FCC, No. 15-1211 (D.C. Cir., argued Oct. 19, 2016), which is currently before the Court [55.] Defendant argues that the pending appeal in the D.C. Circuit will resolve two issues that are relevant to and possibly determinative of the claims and defenses in this case.

         The D.C. Circuit case, ACA International v. FCC, is an appeal from the Federal Communications Commission's July 10, 2015 Omnibus Declaratory Ruling and Order. In this Declaratory Ruling, the FCC addressed, among other things, the TCPA's exemption from liability for calls made “with the prior express consent of the called party.” In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 F.C.C. Rcd. 7961, 7965 (2015). The FCC considered two issues which are relevant to the case at hand. First, the FCC considered whether the statutory term “called party”[1] includes an original subscriber to a cell phone number who provided his or her telephone number to a caller, consented to receive calls, and was the intended recipient of calls, even if the cell phone number had been subsequently reassigned to a new subscriber without the caller's knowledge. Id. at 7999-8006. The FCC concluded that “‘called party' is best understood to mean the subscriber to whom the dialed wireless number is assigned because the subscriber is ‘charged for the call' and * * * is the person whose privacy is interrupted by unwanted calls.” Id. at 8001.

         Second, the FCC considered whether a safe harbor exists for callers who call a cell phone number when the caller had obtained consent to call from the previous subscriber and did not know the cell phone number had been reassigned. Id. at 8006-10. The FCC concluded that after the first call, any subsequent calls will incur TCPA liability, explaining that “the one-call window provides a reasonable opportunity for the caller to learn of the reassignment, which is in effect a revocation of consent to be called at that number” and that “[o]ne call represents an appropriate balance between a caller's opportunity to learn of the reassignment and the privacy interests of the new subscriber to avoid a potentially large number of calls to which he or she never consented.” Id. at 8009. The FCC Commissioners were divided over these issues, and the Declaratory Ruling drew multiple dissents. Id. at 7962.

         After the FCC released its Declaratory Ruling, nine companies filed petitions in the D.C. Circuit seeking review of the FCC's Declaratory Ruling pursuant to the Administrative Procedures Act, 47 U.S.C. § 402 (“the Hobbs Act”), which sets forth the procedural process for anyone seeking to “enjoin, set aside, annul, or suspend any order of the [FCC].” 47 U.S.C. § 402(a). These petitions were consolidated, and briefing was completed by February 2016. Oral argument took place in the D.C. Circuit on October 19, 2016.

         II. Legal Standard

         “The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Amer. Co., 299 U.S. 248, 254 (1936). In deciding whether to enter such a stay, courts consider the following factors: (1) whether a stay will unduly prejudice or tactically disadvantage the non-moving party, (2) whether a stay will simplify the issues in question and streamline the trial, and (3) whether a stay will reduce the burden of litigation on the parties and on the court. Genzyme Corp. v. Cobrek Pharm., Inc., 2011 WL 686807, at *1 (N.D. Ill. Feb. 17, 2011). The party requesting stay “bears the burden of establishing its need.” Clinton v. Jones, 520 U.S. 681, 708 (1997) (citing Landis, 299 U.S. at 255).

         III. Analysis

         The Court concludes that a stay is warranted. First, a stay will simplify the issues in question and streamline the proceedings in this court and thus reduce the burden of litigation on the parties and on the court because two issues under consideration by the D.C. Circuit- (1) whether the statutory term “called party” under the TCPA includes the “intended recipient” of a telephone call; and (2) whether a safe harbor exemption for unintentionally calling the wrong person is limited only to the first such call or extends to other calls-are relevant to Defendant's potential liability in the case at hand. If the D.C. Circuit holds that the statutory term “called party” means the intended recipient of the call or that the safe harbor provision extends beyond the first call, the court's ruling will affect Defendant's defenses to Plaintiff's claims. Additionally, the D.C. Circuit's ruling may affect the size of the potential class. At the very least, the rulings of the D.C. Circuit may impact the size and scope of the discovery in this case. A stay will also promote judicial efficiency and support a uniform, nationwide interpretation of these TCPA issues.

         Further, a stay will not unduly prejudice Plaintiff or the putative class. This case is in an early stage of litigation, and the delay caused by the stay will likely be insubstantial giving that briefing and oral argument have already been completed in the D.C. Circuit. See Coatney v. Synchrony Bank, 2016 WL 4506315, at *2 (M.D. Fla. Aug. 2, 2016) (granting a stay and explaining that “[i]mportantly, Plaintiff has not shown that he will be prejudiced by a stay at such an early stage in the litigation. It is not likely the stay will be lengthy given that ACA International has been fully-briefed as of February 2016 and the potential prejudice is minimal”). Additionally, Plaintiff does not claim that he continues to receive telephone calls from Defendant, so there is no risk of ongoing harm to Plaintiff. See Matlock v. United Healthcare ...


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