Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-01882/USCOURTS-casd-3_16-cv-01882-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 47:0227(b)(3) Telephone Consumer Protection Act of 1991

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

SARAH MENDEZ, On Behalf Of Herself 

And All Others Similarly Situated, 

Plaintiff,

v. 

OPTIO SOLUTIONS, LLC, dba 

QUALIA COLLECTION SERVICES, 

Defendant.

 Case No.: 3:16-cv-01882 AJB (KSC) 

ORDER DENYING DEFENDANT’S 

MOTION TO STAY CASE 

 Presently before the Court is Defendant Optio Solutions, LLC’s, doing business as 

Qualia Collection Services, (“Defendant”) motion to stay the case pending the United 

States Court of Appeals for the District Court of Columbia Circuit’s decision in ACA 

International v. Federal Communications Commission, No. 15-1211, which is currently 

reviewing the Federal Communication Commission’s July 10, 2015, declaratory ruling and 

order (the “2015 FCC Order”). (Doc. No. 21.) Defendant contends that the disputed issue 

for review in ACA International, whether the FCC correctly interpreted the definition of 

an “automated telephone dialing system,” (“ATDS”), bears directly on the viability of 

Plaintiff Sarah Mendez’s (“Plaintiff”) claims under the Telephone Consumer Protection 

Act, 47 U.S.C. § 227 (“TCPA”). (Id.) Upon consideration of the parties’ moving papers, 

the Court finds this motion suitable for determination on the papers without oral argument 

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pursuant to Local Rule 7.1.d.1. Accordingly, the motion hearing presently set for March 

30, 2017, is VACATED. Finding the relevant considerations, including the interests of 

justice, do not support a stay of this matter, Defendant’s motion to stay is DENIED. 

BACKGROUND

 On July 25, 2016, Plaintiff filed a class action complaint alleging negligent and 

willful violations of the TCPA. (Doc. No. 1.) The complaint alleges that as early as October 

2015 and without Plaintiff’s prior consent, Defendant called Plaintiff on her cellular phone 

approximately 120 times, attempting to collect a debt. (Id. ¶¶ 17, 18.) Plaintiff claims that 

Defendant placed the unsolicited phone calls with the use of an ATDS and an artificial or 

prerecorded voice system, which had the capacity to produce or store numbers randomly 

or sequentially, and to dial such numbers. (Id. ¶ 20.) Plaintiff further alleges that Defendant 

left generic, pre-recorded voice messages on Plaintiff’s voicemail, which began midmessage. (Id. ¶ 22.) According to Plaintiff, she never consented to receiving the unsolicited 

phone calls and/or revoked any alleged prior express consent. (Id. ¶ 25.) Plaintiff seeks to 

represent a nationwide class of similarly situated persons who have received unsolicited 

calls from Defendant via either an ATDS or an artificial or prerecorded voice system. (Id.

¶ 29.) 

 On September 2, 2016, Defendant filed a motion to dismiss for failure to state a 

claim, (Doc. No. 10), which the Court granted with leave to amend on the basis that 

Plaintiff’s failure to include a redacted version of her cell phone number did not provide 

Defendant fair notice of her claims. (Doc. No. 17 at 6.) On December 1, 2016, Plaintiff 

filed her first amended complaint, (Doc. No. 18), and on December 15, 2016, Defendant 

answered, (Doc. No. 20). On December 16, 2016, Defendant moved to stay the matter 

pending a decision in ACA International. (Doc. No. 21.) Plaintiff opposes a stay. (Doc. No. 

23.) 

LEGAL STANDARD

A court’s power to stay proceedings is incidental to the inherent power to control the 

disposition of its cases in the interests of efficiency and fairness to the court, counsel, and 

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litigants. Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936); Single Chip Sys. Corp. v. 

Intermec IP Corp., 495 F. Supp. 2d 1052, 1057 (S.D. Cal. 2007). A stay may be granted 

pending the outcome of other legal proceedings related to the case in the interests of judicial 

economy. Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863–64 (9th Cir. 1979). 

Discretion to stay a case is appropriately exercised when the resolution of another matter 

will have a direct impact on the issues before the court, thereby substantially simplifying 

the issues presented. See Mediterranean Enters. v. Ssangyong Corp., 708 F.2d 1458 (9th 

Cir. 1983); San Diego Padres Baseball P’ship v. U.S., Case No. 99CV0828, 2001 WL 

710601, at * 1 (S.D. Cal. May 10, 2001). 

In determining whether a stay is appropriate, a district court “must weigh competing 

interests and maintain an even balance.” Landis, 299 U.S. at 254–55. These competing 

interests include the possible damage resulting from granting a stay, the hardship or 

inequity a party may suffer if required to go forward, and the simplifying or complicating 

of issues, proof, and questions of law that could result from a stay. CMAX, Inc. v. Hall, 300 

F.2d 265, 268 (9th Cir. 1962) (citing Landis, 299 U.S. at 254–55). “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) (quotation 

omitted). “A stay should not be granted unless it appears likely the other proceedings will 

be conducted within a reasonable time in relation to the urgency of the claims presented to 

the court.” Levya, 593 F.2d at 864. 

DISCUSSION

 The crux of Defendant’s motion is based upon two key inquiries: (1) whether the 

FCC was authorized to interpret or modify the ATDS definition set forth by Congress, and 

if so, (2) whether the FCC correctly interpreted that definition. (Doc. No. 21 at 2-3.) 

Specifically, Defendant believes that resolution of ACA International will greatly impact 

the merits of Plaintiff’s ATDS claim because the 2015 FCC Order expanded its prior ATDS 

definition by concluding that every predictive dialer is an ATDS, and that the term 

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“capacity” was not limited to the “present capacity” of the telephone equipment at issue. 

(Id. at 1.) Defendant contends a stay is warranted to conserve judicial resources and to 

avoid the hardship of conducting expensive and time-consuming discovery and motion 

practice. (Id. at 5.) 

Alternatively, Plaintiff argues that a stay is inappropriate because the outcome of the 

ACA International has no bearing on Plaintiff’s ATDS claim. (Doc. No. 23.) First, Plaintiff 

contends the 2015 FCC Order merely reiterated and reaffirmed the FCC’s previous 

determinations regarding automatic dialing equipment. Thus, the Court is bound to uphold 

the FCC’s prior regulatory determinations, which are consistent with the ATDS definition 

set forth in the 2015 FCC Order, stating that dialing equipment need not generate random 

or sequential numbers to constitute an ATDS. (Id. at 2-4.) Second, because Plaintiff alleges 

Defendant violated the TCPA through both the use of an ATDS and an artificial or 

prerecorded voice, Plaintiff’s TCPA claim will stand despite the ATDS allegations. (Id. at 

5.) Lastly, Defendant failed to establish genuine hardship because fact discovery is still 

necessary and postponing such process will be prejudicial to Plaintiff where “delay could 

result in loss of testimonial and documentary evidence.” (Id. at 9-10.) 

The TCPA defines an ATDS as “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). In July 2015, the FCC clarified that 

the “TCPA’s use of ‘capacity’ does not exempt equipment that lacks the ‘present ability’ 

to dial randomly or sequentially,” and that ‘the capacity of an autodialer . . . also includes 

its potential functionalities.” See In the Matter of Rules & Regulations Implementing the 

Telephone Consumer Protection Act of 1991, 30 F.C.C. Rcd. 7961, 7974 (July 10, 2015). 

ACA International represents a consolidation of various petitions that request the D.C. 

Circuit to vacate the 2015 FCC Order regarding the definition of ATDS. Defendant seeks 

a stay pending the resolution of ACA International. Through resolution of the pending 

appeal, the D.C. Circuit will address, among other things, what type of equipment 

constitutes an ATDS. 

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Upon review of the parties’ arguments in support and in opposition of a stay, as well 

as the reasoning of other courts to address the present issue, the Court finds a stay is 

inappropriate. Defendant has not shown this is one of the “rare circumstances” in which a 

stay pending the resolution of an appeal in another case is appropriate. See Landis, 299 

U.S. at 255; Lathrop v. Uber Tech., Inc., No. 14-CV-5678-JST, 2016 WL 97511 at *5 

(N.D. Cal. Jan. 8, 2016). First, while Defendant correctly asserts that briefing and oral 

arguments in the appeal are now complete, “it is far from guaranteed that a final result in 

ACA International is imminently forthcoming.” Glick v. Performant Fin. Corp., No. 16-

CV-5461-JST, 2017 WL 786293, at *2 (N.D. Cal. Feb. 27, 2017) (emphasis added). In 

fact, courts in this Circuit have recently rejected this argument on the basis that whatever 

the outcome, appeal is likely and will further delay proceedings until a final determination 

is made by the U.S. Supreme Court. See id.; Cabiness v. Educ. Fin. Solutions, LLC, No. 

16-CV-1109-JST, 2017 WL 167678, at *3 (N.D. Cal. Jan 17, 2017); Lathrop, 2016 WL 

97511, at *4 (“[T]he D.C. Circuit is unlikely to be the final step in the litigation over the 

FCC’s 2015 Omnibus Order. Whichever party is unsuccessful in that court is almost certain 

to appeal to the Supreme Court. Thus, even the most optimistic estimate of the time 

required for a decision from the D.C. Circuit significantly understates both the delay a stay 

might engender and the concomitant prejudice to Plaintiff.”). Thus, as presently 

considered, a stay pending ACA International would be of indefinite duration, which 

weighs against issuance of a stay. 

Second, it is unclear what impact the D.C. Circuit’s decision would have on the 

issues raised in this matter and Defendant similarly fails to articulate the same. Though 

ACA International has the potential to clarify what constitutes an ATDS, and regardless of 

the authoritative weight of such a clarification, Defendant will still be required to produce 

discovery to settle the factual disputes regarding its autodialing technology. See, e.g., Glick, 

2017 WL 786293 at *2; Lathrop, 2016 WL 97511, at *4 (“Even if the D.C. Circuit were to 

modify or vacate the 2015 FCC Order, factual disputes such as whether an ATDS was used 

and whether [ ] recipients provided their consent, will remain here.”); Richardson v. Verde 

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Energy USA, Inc., No. CV 15-6325, 2016 WL 4478839, at *3 (E.D. Pa. Aug. 25, 2016) 

(“This action is not automatically over even if the ACA [International] outcome is 

favorable to the defendant. The impact the ACA decision might have on this case is limited 

only to the scope of the definition of an automatic telephone dialing system.”); Sliwa v. 

Bright House Networks, LLC, No. 16-CV-235-FTM-29 MRM, 2016 WL 3901378, at *4-

5 (M.D. Fla. July 19, 2016) (“But, even if the D.C. Circuit’s decision is favorable for [the 

defendant] and the conclusions reached therein are binding on this Court, Plaintiff’s TCPA 

claim will proceed.”); see also Reichman v. Poshmark, Inc., No. 16-CV-2359-DMS, 2017 

WL 436505, at *5 (S.D. Cal. Jan. 3, 2017) (“It would be unreasonable to require Plaintiff, 

without the benefit of discovery, to describe the technical details of Defendant’s alleged 

ATDS. Therefore, whether Defendant actually used an ATDS, i.e., equipment with the 

capacity to dial numbers without human intervention, is an issue that should be decided 

after discovery has been conducted.”). Moreover, the Court finds Defendant’s argument 

to this point unpersuasive because Plaintiff’s TCPA claims are not limited to Defendant’s 

use of an ATDS, but also concern Defendant’s use of an artificial or prerecorded voice 

system. See Vaccaro v. CVS Pharmacy, Inc., No. 13-CV-174-IEG RBB, 2013 WL 

3776927, at *1 n.2 (S.D. Cal. July 16, 2013); Silwa, 2016 WL 3901378, at *4 (“[T]he 

appeal will not affect Plaintiff’s contention that Bright House called him using a 

prerecorded or automated voice, which is an independent basis for stating a claim under 

the TCPA.”). Thus, it is unclear whether the resolution of ACA International will have a 

direct impact on the issues before the Court, or substantially simplify the issues presented. 

See Leyva, 593 F.2d at 863-64. Even if the outcome was relevant to these proceedings and 

favorable to the Defendant, other issues would remain ripe for consideration, discovery, 

and resolution. 

Lastly, Defendant does not demonstrate a hardship in moving forward with 

inevitable discovery and motion practice. See Edwards v. Oportun, Inc., 193 F. Supp. 3d 

1096, 1100-1102 (N.D. Cal. 2016); Konopca v. Comcast Corp., No. CV156044, 2016 WL 

1645157, at *4 (D.M.J. Apr. 26, 2016) (denying stay pending the ACA International 

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decision where “the only purported ‘hardship’ identified by Defendant is the possibility 

that the parties may engage to some extent in unnecessary discovery and/or motion 

practice”); Nussbaum v. Diversified Consultants, Inc., No. CIV. 15-600, 2015 WL 

5707147, at *2 (D.N.J. Sept. 28, 2015) (denying stay pending ACA International where the 

only hardship identified in the absence of a stay was unnecessary discovery and motion 

practice”); Jones v. AD Astra Recovery Servs., Inc., No. 16-1013-JTM-GEB, 2016 WL 

3145072, at *6 (D. Kan. June 6, 2016) (denying stay pending ACA International and 

finding the “potential that Defendant could engage in greater discovery, if the case is not 

stayed, does not constitute a ‘rare circumstance’ which justifies an indefinite stay.”). 

However, the potential of prejudice to Plaintiff in delaying discovery is likely and severe. 

Glick, 2017 WL 786293 at *2; Cabiness, 2017 WL 167678, at *3 (“[P]assage of time will 

make it more difficult to reach the class members and will increase the likelihood that 

relevant evidence will dissipate.”). Although other district courts to consider this issue have 

found a stay pending resolution of ACA International appropriate, as the Supreme Court 

has noted, “[o]nly in rare circumstances will a litigant in one c[a]se 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. 

For the reasons set forth above, because Defendant has failed to carry its burden of 

demonstrating a stay is warranted and there is more than a fair possibility Plaintiff will 

suffer prejudice from effecting a stay, the equities considered do not support staying this 

matter. Accordingly, Defendant’s motion to stay is DENIED. 

CONCLUSION

 As set forth above, Defendant’s motion to stay is DENIED. 

IT IS SO ORDERED. 

Dated: March 8, 2017 

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