Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-md-02286/USCOURTS-casd-3_11-md-02286-23/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

IN RE: MIDLAND CREDIT 

MANAGEMENT, INC., TELEPHONE 

CONSUMER PROTECTION ACT 

LITIGATION 

 Case No. 11-md-2286-MMA (MDD) 

ORDER DENYING DEFENDANTS’ 

MOTION TO STAY 

[Doc. No. 761] 

 Defendants Midland Funding LLC, Midland Credit Management, Inc., and Encore 

Capital Group, Inc. (collectively, “Defendants”) move to stay all proceedings in this 

Multi-District Litigation (“MDL”). See Doc. No. 761.1

 Lead Plaintiff filed a response2

                                               

1

 All citations refer to the pagination assigned by the CM/ECF system. All docket references refer to 

the docket of this action unless otherwise noted. 

2

 Lead Plaintiff’s response brief is not an opposition to the motion. Rather, 

Lead Plaintiff does not oppose a brief stay until June 30, 2020 or the date the Supreme 

Court releases the decision in AAPC, as an administrative matter, even though it is 

exceedingly unlikely that the Supreme Court will strike down the entire “restriction on 

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to Defendants’ motion. See Doc. No. 763. Member Plaintiffs Nicholas Martin 

(“Martin”) and Jeremy R. Johnson (“Johnson”) filed a joint response in opposition. Doc. 

No. 765. Defendants replied. See Doc. No. 767. For the reasons set forth below, the 

Court DENIES Defendants’ motion to stay. 

I. BACKGROUND

Originating in 2011, the MDL comprises a lead class action member case and 

several dozen individual member cases alleging that the Defendants violated the 

Telephone Consumer Protection Act (“TCPA”). See Doc. No. 1 at 1. Specifically, 

Member Plaintiffs aver that Defendants placed debt collection calls to Member Plaintiffs 

cell phones using an automated system, but without the debtors’ consent. See id.; Doc. 

No. 571 at 1. On December 16, 2019, the Magistrate Judge issued an order rescheduling 

discovery and pretrial motion deadlines. Doc. No. 726. The Magistrate Judge’s order 

required any motion for class certification and any motion for summary judgment to be 

“filed no later than June 12, 2020.” Id. at 7. 

 Defendants move to stay this action pending resolution of Barr v. Am. Ass’n of 

Political Consultants, Sup. Ct. Dkt. No. 19-631, currently before the United States 

Supreme Court. On January 10, 2020, the Supreme Court granted certiorari in that 

matter. See id. Defendants filed this motion on February 21 and based their motion on 

the briefing generated in the petition for writ of certiorari in Ass’n of Political 

Consultants. See Doc. No. 761. On February 24 the petitioners filed their merits brief. 

Am. Ass’n of Political Consultants, Sup. Ct. Dkt. No. 19-631. The respondents have not 

yet filed their merits brief. Id. The case is set for argument on April 22, 2020. Id. 

Accordingly, a decision is expected by the end of the Supreme Court’s current term. 

                                               

automated and prerecorded voice calls” (the “automated call restriction”) contained in the 

TCPA. 

Doc. No. 763 at 1. Despite Lead Plaintiff’s non-opposition to the motion, the Court has an 

affirmative obligation to determine the propriety of the instant motion. 

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The Supreme Court’s docket provides the following question presented: 

The Telephone Consumer Protection Act of 1991 (TCPA), Pub. L. No. 102-

243, 105 Stat. 2394, generally prohibits the use of any “automatic telephone 

dialing system or an artificial or prerecorded voice” to “make any call” to 

“any telephone number assigned to a * * * cellular telephone service.” 47 

U.S.C. 227(b)(1)(A)(iii) (Supp. V 2017). The TCPA excepts from that 

automated-call restriction any “call made for emergency purposes or made 

with the prior express consent of the called party.” Ibid. In 2015, Congress 

amended the TCPA to create an additional exception for calls “made solely 

to collect a debt owed to or guaranteed by the United States.” Ibid. 

Respondents wish to use an automatic telephone dialing system or an 

artificial or prerecorded voice to make calls to the cell phones of potential or 

registered voters to solicit political donations and to advise on political and 

governmental issues. First Am. Compl. ¶¶ 8-10, 12. The court of appeals 

held that the government-debt exception to the TCPA’s automated-call 

restriction violates the First Amendment. The court further held that the 

proper remedy was to sever the government-debt exception, leaving the 

basic automated-call restriction in place. The question presented is as 

follows: 

Whether the government-debt exception to the TCPA’s automated-call 

restriction violates the First Amendment, and whether the proper remedy for 

any constitutional violation is to sever the exception from the remainder of 

the statute. 

Id. 

II. LEGAL STANDARD

“A district court has discretionary power to stay proceedings in its own court . . . .” 

Lockyer v. Mirant Corp., 398 F.3d 1098, 1109 (9th Cir. 2005) (citing Landis v. N. Am. 

Co., 299 U.S. 248, 254 (1936)). “The power to stay a case 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.’” Halliwell v. A-T 

Sols., No. 13-CV-2014-H (KSC), 2014 WL 4472724, at *7 (S.D. Cal. Sept. 10, 2014) 

(quoting Landis, 299 U.S. at 254). A district court may stay a case “pending resolution of 

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independent proceedings which bear upon the case,” even if those proceedings are not 

“necessarily controlling of the action before the court.” Leyva v. Certified Grocers of 

Cal., Ltd., 593 F.2d 857, 863–64 (9th Cir. 1979) (citations omitted). However, “[o]nly in 

rare circumstances will a litigant in one cause be compelled to stand aside while a litigant 

in another settles the rule of law that will define the rights of both.” Landis, 299 U.S. at 

255. 

In determining whether to grant a stay, courts in the Ninth Circuit weigh the 

“competing interests which will be affected by the granting or refusal to grant a stay,” 

including 

[1] the possible damage which may result from the granting of a stay, [2] the 

hardship or inequity which a party may suffer in being required to go 

forward, and [3] the orderly course of justice measured in terms of the 

simplifying or complicating of issues, proof, and questions of law which 

could be expected to result from a stay. 

See Lockyer, 398 F.3d at 1110 (quoting CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 

1962)). “‘If there is even a fair possibility that the stay will work damage to someone 

else,’ the stay may be inappropriate absent a showing by the moving party of ‘hardship or 

inequity.’” Dependable Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 

1066 (9th Cir. 2007) (quoting Landis, 299 U.S. at 255). The burden is on the movant to 

show that a stay is appropriate. Clinton v. Jones, 520 U.S. 681, 708 (1997) (quoting 

Landis, 299 U.S. at 255). 

III. DISCUSSION

A. Whether the Pending Supreme Court’s Decision in Ass’n of Political Consultants

Will Dispose of Member Plaintiffs’ TCPA Claims 

 Before the Court can address the competing interests to determine whether a stay is 

appropriate, the Court must answer a threshold question: whether the Supreme Court’s 

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decision in Ass’n of Political Consultants will have an impact on the merits of Member 

Plaintiffs’ claims. 

 Defendants argue that “[i]f the Supreme Court invalidates the automated[-]call 

restriction, the ruling will dispose of all of the plaintiffs’ TCPA claims in this MDL in 

one fell swoop.” Doc. No. 761 at 4. Defendants note that the MDL’s TCPA claims all 

allege “violations of the automated[-]call restriction.” Id. at 7. Defendants assert that the 

Court would only need to remand the member cases involving non-TCPA claims back to 

their original courts. Id. Defendants emphasize that the issue of 

whether the automated[-]call restriction must be invalidated is squarely 

before the Supreme Court. Both AAPC and the Government agreed in their 

petitions that if the Court were to review the question of whether the 

automated[-]call restriction is unconstitutional, it should also review whether 

the appropriate remedy is to sever the government[-]debt exemption or 

invalidate the entire automated[-]call restriction. 

Id. at 6. 

As noted above, Lead Plaintiff “does not oppose a brief stay until June 30, 2020 or 

the date the Supreme Court releases the decision in AAPC . . . even though it is 

exceedingly unlikely that the Supreme Court will strike down the entire ‘restriction on 

automated and prerecorded voice calls’ . . . .” Doc. No. 763 at 1. However, Member 

Plaintiffs Martin and Johnson oppose a stay and argue that the invalidation of the 

automated-call exception is unlikely. See Doc. No. 765 at 2. 

The parties appear to conflate the Supreme Court granting certiorari regarding the 

government-debt exception with the overall automated-call restriction. For example, 

Defendants state that “[t]he United States Supreme Court recently granted review in a 

case that presents the question of whether the automated[-]call restriction violates the 

First Amendment and, if so, whether this means that the restriction must be invalidated in 

its entirety.” Doc. No. 761 at 4 (emphasis added). However, the question presented in 

the Petitioner’s merits brief and the Supreme Court’s docket is “[w]hether the 

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government-debt exception to the TCPA’s automated-call restriction violates the First 

Amendment, and whether the proper remedy for any constitutional violation is to sever 

the exception from the remainder of the statute.” Am. Ass’n of Political Consultants, 

Sup. Ct. Dkt. No. 19-631 (emphasis added); accord Brief of Petitioner at (I), Am. Ass’n of 

Political Consultants, Sup. Ct. Dkt. No. 19-631 (Feb. 24, 2020) (emphasis added). 

Defendants’ statement of the issue overlooks the fact that the validity of the governmentdebt exception is the threshold issue that the Supreme Court must address and also find 

unconstitutional before it can assess if the government-debt exception is severable from 

the rest of the TCPA. 

Accordingly, the Supreme Court’s decision might have an impact on the merits of 

Member Plaintiffs’ claims if the Court both passes the threshold issue and then finds the 

government-debt exception is not severable. Regardless, the possibility remains that the 

Supreme Court could invalidate the automated-call restriction. The Court now proceeds 

to weigh the competing interests to determine whether a stay is appropriate. 

B. Whether the Competing Interests Compel a Stay 

 Defendants argue that a stay would benefit both parties because resources would 

be wasted if the motion to stay were denied and the Supreme Court were to invalidate the 

entire automated-call restriction. Doc. No. 761 at 8–9. Defendants point to the proposed 

stay’s short duration. Id. at 8. Arguing that a Supreme Court ruling invalidating the 

automated-call restriction would dispose of all TCPA MDL claims, Defendants note that 

waiting for the Supreme Court would “greatly simplify and streamline the process here” 

as well as “promote judicial economy and conserve the parties’ and the Court’s 

resources.” Id. at 7, 8. They assert that a decision invalidating the automated-call 

restriction would only require this Court to remand the member cases with non-TCPA 

claims back to their original courts. Id. Defendants argue that any discovery pertaining 

to “plaintiff-specific issues should be addressed after remand.” Id. at 8. However, 

Defendants note that “if plaintiff-specific issues are going to be litigated in this MDL,” 

then the discovery work and motion practice “will be unnecessary, and all of the parties’ 

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and Courts’ time and resources will be wasted, if the Supreme Court invalidates the 

automated call restriction.” Id. at 8. 

 Although Lead Plaintiffs do not oppose the motion, Doc. No. 763 at 1, Member 

Plaintiffs Martin and Johnson oppose the motion, Doc. No. 765. Martin and Johnson 

argue that “Defendants fail to identify circumstances warranting such relief” and that they 

will suffer prejudice from the delay. Id. at 2. Specifically, Martin and Johnson assert that 

Defendants overstate the possibility that the Supreme Court will strike down the entire 

automated-call restriction, pointing to both the Ninth and Fourth Circuits that held the 

government-debt exception was severable from the remainder of the TCPA. Id. They 

also point to the repeated delay in this case and the fact that Defendants waited more than 

a month after the Supreme Court granted certiorari to file this motion. See id. at 3. 

 Defendants overlook the impact of a stay on the overall course of the MDL. The 

United States Judicial Panel on Multidistrict Litigation transferred the first member cases 

to this Court in 2011 for coordinated pretrial proceedings. Doc. No. 1. The standing 

class verification and summary judgment deadlines have already been pushed back 

several months. Compare Doc. No. 701 (January 24, 2020 deadline), with Doc. No. 726 

(June 12, 2020 deadline). From the Court’s perspective, staying this MDL would 

continue to consume more of the Court’s resources and delay an already prolonged MDL. 

Further, Defendants delayed bringing this motion more than a month after the Supreme 

Court granted certiorari. 

 Importantly, Defendants have not sufficiently persuaded the Court that resources 

will be wasted on further discovery tasks. Defendants state that “expert discovery will 

take place in March and April” and that some “plaintiffs wish to serve discovery requests 

on common issues, and they have indicated they may seek leave to serve discovery on 

plaintiff-specific issues as well.” Doc. No. 761 at 8. Further, Defendants note that “if 

plaintiff-specific issues are going to be litigated in this MDL, Midland will soon need to 

seek leave to conduct depositions of individual plaintiffs and take other necessary steps to 

preserve and develop its defenses in connection with each case in this MDL.” Id. 

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Defendants’ proffered evidence of wasted resources fails to place the discovery work to 

be completed in the proper context of the discovery that has been ongoing for many 

months. Defendants leave the court without the specifics as to what discovery has been 

completed and what discovery still needs to be done in the few remaining months. 

As noted by Lead Plaintiff and Plaintiffs Martin and Johnson, it appears unlikely 

that the Supreme Court would invalidate the entire automated-call restriction. See Doc. 

No. 763 at 2; Doc. No. 765 at 2. Petitioners argue that the TCPA contains a severability 

provision that “unambiguously specifies the appropriate remedy, making clear 

Congress’s intent that only the invalid exception should be excised and that ‘the 

remainder of the [Act] * * * shall not be affected.’” Brief of Petitioner, supra, at 35 

(quoting 47 U.S.C. § 60). Further emphasizing that the government-debt exception is 

severable, the Petitioner notes that Congress enacted the TCPA in 1991 and the 

provisions—including the automated-call exception—“remained in place for the next 24 

years without any exception for calls made to collect government-backed debts.” Id. 

Thus, based on the focus of the case before the Supreme Court, the Court finds the 

unlikelihood of the entire automated-call restriction being stricken suggests that a stay is 

inappropriate. See Sutor v. Amerigroup, Corp., 1:19-cv-1602 (LMB/JFA), at 2 (Mar. 10, 

2020), ECF No. 20 (denying a stay of a TCPA action not involving the government-debt 

exception, and noting the small likelihood of the Supreme Court invalidating the entire 

provision). But see Wright, et al. v. Exp. Realty, LLC, 6:18-cv-1851-PGB-EJK, at 2 

(M.D. Fla. Feb. 7, 2020), ECF. No. 99 (granting a stay, noting the pending Supreme 

Court decision). 

 Accordingly, based on the unique characteristics of this MDL, the Court finds that 

Defendants have not carried their burden to persuade the Court to grant a stay. If the 

Supreme Court decides Ass’n of Political Consultants after the motion for class 

certification and motion for summary judgment deadline, and to the extent, if any, its 

decision has bearing on this Court’s proceedings, the Court INSTRUCTS the parties to 

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file a joint status report detailing the Supreme Court’s impact on this MDL 

within one week of the Supreme Court’s decision. 

IV. CONCLUSION

 For the foregoing reasons, the Court DENIES Defendants’ motion to stay on the 

proffered grounds. The Court VACATES the hearing date on this motion previously set 

for March 23, 2020. 

 IT IS SO ORDERED. 

DATE: March 18, 2020 _______________________________________ 

 HON. MICHAEL M. ANELLO 

 United States District Judge 

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