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Abdallah v. FedEx Corporate Services, Inc.

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

September 18, 2019

NAJEH ABDALLAH, individually and on behalf of classes of similarly situated individuals, Plaintiff,
FEDEX CORPORATE SERVICES, INC., a Delaware corporation, HARTE HANKS, INC., a Delaware corporation, C3/CUSTOMERCONTACTCHANNELS, INC., a Florida corporation, Defendants.



         If something is preventing a package shipped internationally from being delivered, defendant FedEx Corporate Services, Inc. (“FedEx”), or, as in this case, a contractor providing call center services, makes a “trace call” to the shipper.[1] Resp. to JSMF ¶ 12. As a result of a "glitch" in a FedEx database, agents of defendants Harte Hanks, Inc. (“Harte Hanks”) and C3/Customercontactchannels, Inc. (“C3”), placed over 200 trace calls to plaintiff Najeh Abdallah's ("Abdallah") cell number between August 2015 and June 2016. See Resp. to JSMF ¶ 19; Resp. to SAF ¶¶ 2–6. Abdallah filed a two-count class action complaint against C3, FedEx, and Harte Hanks under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227.

         The court has before it defendants' motion for summary judgment on both counts. Abdallah responded to the motion for summary judgment in part that he no longer wished to pursue Count I. He has filed a separate motion, which defendants oppose, seeking leave to amend his complaint to drop Count I.

         I. Background

         A. Facts

         Most of the facts surrounding the making of the trace calls at issue here are undisputed. Abdallah registered his cell number with the national do-not-call database in 2006. Resp. to SAF ¶ 1. FedEx contracts with C3 and Harte Hanks to place trace calls to FedEx customers (among other services). Resp. to JSMF ¶ 12. C3 and Harte Hanks' trace agents use a software system called “One Source” operated by FedEx. Resp. to JSMF ¶ 16. FedEx customers provide the phone numbers in the “One Source” database when they use the company’s services. Id. at ¶ 18. The trace call process begins when a C3 or Harte Hanks supervisor assigns a trace agent a package's tracking number. Id. at ¶ 16. The agent enters the tracking number into “One Source, ” and the system gives the agent a phone number to call. Id.

         The trace agents who called Abdallah were trying to reach other FedEx customers. Resp. to JSMF ¶¶ 12, 15. An error in the “One Source” system (the exact origin of which is unclear) caused Abdallah’s cell number to be “auto-populated into a phone number field for other FedEx customers whose packages were delayed in customs.” Resp. to JSMF ¶ 19; see also Resp. to SAF ¶¶ 2–5 (undisputed that plaintiff received hundreds of trace calls).

         B. Procedural History

         Defendants answered the first amended complaint in June 2016. ECF No. 17; see also 1st Am. Ans to 1st Am. Compl., ECF No. 21. The court adopted the parties’ proposed discovery schedule on August 10, 2016. ECF No. 22. The schedule required pleadings to be amended by December 1, 2016, and required discovery to be completed by May 4, 2017. Id. The court set additional deadlines and referred the case to the assigned magistrate judge for discovery supervision. Id.

         One day before the deadline to amend pleadings, Abdallah sought leave to amend his complaint, which the court granted seven days later, ECF No. 31. The Second Amended Complaint ("SAC"), ECF No. 32, added C3 and Harte Hanks as defendants based on discovery showing that their representatives placed the calls at issue. See Mem. Supp. Mot. Leave File 2d Am. Compl. 1, 6, ECF No. 28. Like the prior complaints, the SAC's two counts allege distinct TCPA violations. Abdallah asserts in Count I that defendants called his cell phone without his prior express consent using an automated telephone dialing system (“auto dialer” or “ATDS”). See 47 U.S.C. §227(b)(1)(A)(iii); SAC ¶¶ 38–39. In Count II, Abdallah alleges that his cell phone number was on the national do not call registry, and defendants therefore violated 47 U.S.C. § 227(c)(5) by calling him to “solicit[ ] the purchase of various package disposition services from FedEx.” SAC ¶ 43; see also SAC ¶¶ 42–46.

         Almost two months after the SAC was filed, defendants moved to stay the case. ECF No. 45 (Jan. 26, 2017); see also Minute Entry, ECF No. 41 (Jan. 12, 2017) (setting briefing schedule on anticipated motion to stay). They argued that the case should be paused until the D.C. Circuit Court of Appeals ruled in ACA International v. FCC., No. 15-1211, because they anticipated a ruling on the meaning of the word “capacity” in the TCPA’s definition of an auto dialer. The TCPA defines the term “automated telephone dialing system” to mean “equipment which 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); see also Blow v. Bijora, Inc., 855 F.3d 793, 801 (7th Cir. 2017) (discussing FCC’s history of interpreting this definition). In ACA International, several companies and trade associations challenged a 2015 FCC ruling "concluding that equipment’s 'capacity' to dial random or sequential numbers is not limited to its 'present ability.'" Blow, 855 F.3d at 801 (quoting In re Rules & Regs Implementing the TCPA, 30 FCC Rcd. 7961, 7972 (2015)).

         The magistrate judge granted the motion to stay on March 20, 2017. Order, ECF No. 60 (Gilbert, J.). He concluded that “[t]he D.C. Circuit’s ruling in ACA International, though not binding, will provide this Court with valuable input on the merits of Plaintiff’s ATDS claim and the permissible scope of discovery on that claim in this case.” Id. at 2; see also Blow, 855 F.3d at 802–03 (noting that courts across the nation stayed TCPA cases pending ACA International). The parties agreed that the do-not-call claim in Count II would likely be unaffected by any ruling in ACA International. Id.

         ACA International was decided on March 16, 2018. ACA International v. F.C.C., 885 F.3d 687 (D.C. Cir. 2018). The D.C. Circuit rejected the FCC’s interpretation of the word “capacity” in the TCPA’s definition of an auto dialer. Id. at 695–700. The ACA International court reasoned that the FCC’s interpretation of the word “capacity” would make virtually every smart phone an auto dialer because “essentially any smartphone, with the addition of software, can gain the statutorily enumerated features of an autodialer and thus function as an ATDS.” Id. at 696. The court found it “untenable to construe the term 'capacity' in the statutory definition of an ATDS in a manner that brings within the definition's fold the most ubiquitous type of phone equipment known, used countless times each day for routine communications by the vast majority of people in the country.” Id. at 698.

         After the D.C. Circuit decided ACA International, the magistrate judge directed the parties to submit a proposed case management plan and entered a revised case management order on April 20, 2018, ECF No. 75. The order permitted approximately six months of fact and expert discovery relevant to: “(a) the type of equipment used to place the trace calls at issue, and (b) the nature of the trace calls made by Defendants.” Id. at 1.

         The parties completed limited discovery. Minute Entry, ECF No. 88 (Nov. 27, 2018). Defendants then filed their pending motion for summary judgment, and Abdallah responded by seeking leave to drop Count I, the auto dialer count, from his complaint.

         II. The “Auto Dialer” Claim

         Abdallah first sought leave to drop the auto dialer claim in Count I after defendants moved for summary judgment on it.[2] He invoked Federal Rule of Civil Procedure 15(a)(2), which tells courts to “freely give leave [to amend a pleading] when justice so requires.” The rule takes a liberal approach to allowing amendments. Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago & Nw. Ind., 786 F.3d 510, 520 (7th Cir. 2015).

         Because the December 1, 2017, deadline to amend pleadings has not been extended, Abdallah must demonstrate good cause to enlarge that deadline under the more demanding standard of Rule 16(b)(4). Arrigo v. Link, 836 F.3d 787, 797 (7th Cir. 2016); Bell v. Taylor, 827 F.3d 699, 706 (7th Cir. 2016); Alioto v. Town of Lisbon, 651 F.3d 715, 719 (7th Cir. 2011). While delay alone is rarely a sufficient reason to deny leave to amend under Rule 15(a)(2), Arrigo, 836 F.3d at 797 (citing Dubicz v. Commonwealth Edison Co., 377 F.3d 787, 793 (7th Cir. 2004) (other citation omitted)), “the primary consideration for district courts [under Rule 16(b)(4)] is the diligence of the party seeking amendment.” Alioto, 651 F.3d at 720 (citing Trustmark Ins. Co. v. Gen. & Cologne Life Re of Am., 424 F.3d 542, 553 (7th Cir. 2005)).

         At the outset, the court finds it hard to understand what the parties perceive to be the difference between amending the complaint to drop Count I and proceeding to summary judgment. Defendants insist that Abdallah should not “be shielded” from the consequences of his decision to pursue Count I in the face of purportedly contrary discovery. Resp. Mot. Leave to File 3d Am. Compl. 3, ECF No. 113. But if Count I is dropped from the complaint, any judgment will still almost certainly bar Abdallah from bringing a second suit against defendants asserting a claim similar to Count I. Under the doctrine of res judicata, a judgment on the merits bars relitigation by the same parties of “not only those issues actually decided in the prior suit, but all other issues which could have been brought” here. Matrix IV, Inc. v. Am. Nat'l Bank & Tr. Co. of Chicago, 649 F.3d 539, 547 (7th Cir. 2011) (quoting Aaron v. Mahl, 550 F.3d 659, 664 (7th Cir. 2008)).

         But suppose leave to amend is denied. Based on the cases Abdallah cites in his reply brief, see ECF No. 117 at 3–4, he appears to concede that Count I should be dismissed either as moot or as abandoned. See Beer v. Kellogg Sales Co., 2006 WL 1722335, at *1 n.1 (N.D. Iowa June 22, 2006) (dismissing claim at summary judgment because plaintiff conceded that it should be dismissed); Mendrala v. Crown Mortg. Co., 1990 WL 129602, at *4 (N.D. Ill. Aug. 28, 1990) (denying motion for summary judgment as moot because the plaintiff voluntarily dismissed a count of the complaint). Indeed, Abdallah’s failure to develop any argument against dismissing Count I in his summary judgment response is reason enough to grant the ...

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