Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-00041/USCOURTS-casd-3_13-cv-00041-1/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

RAFAEL DAVID SHERMAN,

individually and on behalf of all others

similarly situated,

Plaintiff,

v.

YAHOO! INC., a Delaware

corporation,

Defendant.

 

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Case No. 3:13-cv-41-GPC-WVG

ORDER:

1) DENYING MOTION FOR

PARTIAL RECONSIDERATION

OF ORDER DENYING

DEFENDANT’S MOTION FOR

SUMMARY JUDGMENT

[Dkt. No. 33.]

2) DENYING MOTION IN THE

ALTERNATIVE FOR

INTERLOCUTORY APPEAL

Presently before the Court is a Motion for Reconsideration filed by Defendant

Yahoo! Inc. (“Defendant” or “Yahoo!”). (Dkt. No. 33.) The Parties have fully briefed

the motion. (Dkt. Nos. 37, 38, 39, 40, 43.) The Court held a hearing on the matter on

June 13, 2014. Joshua Swigart, Esq. appeared on behalf of Plaintiff Rafael David

Sherman, and Ian Ballon, Esq. appeared on behalf of Defendant Yahoo!. For the

following reasons, the Court DENIES the motion. 

BACKGROUND

This case concerns a text notification message that was sent to a cellular phone

number as part of Yahoo!’s Instant Messenger service. Plaintiff Rafael David Sherman

(“Plaintiff”) brings this action individually and on behalf of those similarly situated,

claiming Defendant violated the Telephone Consumer Protection Act (“TCPA”), 47

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U.S.C. § 227(b)(1)(A) by “illegally contact[ing] Plaintiff and the Class members via

their cellular telephones by using unsolicited SPAM text messages.” (Dkt. No. 1,

Compl. ¶ 26.)

On February 3, 2014, thisCourt issued an Order denying Defendant’s motion for

summary judgment. (Dkt. No. 30.) Specifically, the Court held that: (1) a single,

confirmatory text message may be actionable under the TCPA; (2) issues of fact

precluded summary judgment on the issue of whether Yahoo!’s PC to SMS Service

constitutes an Automatic Telephone Dialer System (“ATDS”) within the meaning of

the TCPA; and (3) that “Good Samaritan Immunity” did not render Yahoo! immune

from liability in this case. (Id.) 

On March 24, 2014, Defendant filed a motion for reconsideration of the Court’s

February 3, 2014 Order. (Dkt. No. 33.) Defendant contends the Court erred by relying

on FCC commentary to construe what constitutes an ATDS under the TCPA and that

new evidence warrants summary judgment on Plaintiffs’ claim that Yahoo!’s PC to

SMS Service equipment is an ATDS. (Dkt. No. 33.) In the alternative, Defendantseeks

certification of the Court’s Order denying summary judgment for appeal due to

conflicting constructions of the phrase ATDS among district courts in the Ninth

Circuit. (Id.)

LEGAL STANDARD

District courts have the discretion to reconsider interlocutory rulings until a final

judgment is entered. Fed. R. Civ. P. 54(b); United States v. Martin, 226 F.3d 1042,

1048-49 (9th Cir. 2000). While the Federal Rules of Civil Procedure do not set forth

a standard for reconsidering interlocutory rulings, the “law of the case” doctrine and

public policy dictate that the efficient operation of the judicial system requires the

avoidance of re-arguing questions that have already been decided. See Pyramid Lake

Paiute Tribe of Indians v. Hodel, 882 F.2d 364, 369 n.5 (9th Cir. 1989). 

As such, most courts adhere to a fairly narrow standard by which to reconsider

their interlocutory rulings. This standard requires that the party show: (1) an

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intervening change in the law; (2) additional evidence that was not previously

available; or (3) that the prior decision was based on clear error or would work

manifest injustice. Id.; Marlyn Natraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571

F.3d 873, 880 (9th Cir. 2009); Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263

(9th Cir. 1993).

Reconsideration is an “extraordinary remedy, to be used sparingly in the interests

of finality and conservation of judicial resources.” Kona Enters., Inc. v. Estate of

Bishop, 229 F.3d 877, 890 (9th Cir. 2000). “‘A motion for reconsideration is not an

opportunity to renew arguments considered and rejected by the court, nor is it an

opportunity for a party to re-argue a motion because it is dissatisfied with the original

outcome.’” FTC v. Neovi, Inc., 2009 WL 56130 at *2 (S.D. Cal. Jan. 7, 2009) (quoting

Devinsky v. Kingsford, 2008 WL 2704338 at *2 (S.D.N.Y. July 10, 2008)).

DISCUSSION

I. Reconsideration

Defendant brings the present motion seeking reconsideration solely as to the

Court’s conclusion that issues of fact preclude summary judgment on Plaintiff’s claim

that Yahoo!’s PC to SMS service equipment constituted an automatic telephone

dialing system within the meaning of the Telephone Consumer Protection Act

(“TCPA”), 47 U.S.C. § 227. (Dkt. No. 33.) Under the TCPA, an “automatic telephone

dialing system” (“ATDS”) is defined 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). 

Defendant argues reconsideration is warranted on two grounds:(1) that the Court

erred in relying on Federal Communications Commission (“FCC”) commentary

regarding “predictive dialers” to construe the statutory term “ATDS”; and (2) that the

Court erred in relying on Yahoo!’s testimony regarding its ability to write or install

new software to dial telephone numbers to deny summary judgment. (Dkt. No. 33-1.)

Having reviewed the Parties’ arguments and the applicable legal authority, the Court

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finds no basis for granting the “extraordinary remedy” of reconsideration.

A. FCC Commentary on Predictive Dialers

Defendant first argues the Court erred in construing the term ATDS according

to FCC guidance on predictive dialers because the Ninth Circuit has held in Satterfield

v. Simon & Schuster, Inc., 569 F.3d 946, 951 (9th Cir. 2009), that the statutory

definition of ATDS is “clear and unambiguous,” and therefore deference to the FCC

guidance under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467

U.S. 837 (1984), would be inappropriate. (Dkt. No. 33-1 at 4.) Defendant argues the

Court’s citation to FCC rulings beyond the plain meaning ofthe TCPA thus constituted

clear error. (Id.) 

The Court disagrees. This Court’s construction of ATDS is premised on the

statutory text of the TCPA as interpreted by the Satterfield court. (See Dkt. No. 30 at

11-12) (citing Satterfield for the proposition that the focus of the ATDS inquiry is on

whether the equipment has the capacity to store and dial phone numbers). In

Satterfield, the Ninth Circuit reversed the district court’s grant of summary judgment

in favor of defendant Simon and Schuster, Inc., finding that the district court “focused

its analysis on the wrong issue in its determination of what constitutes an ATDS.” 569

F.3d at 951. The Ninth Circuit found that, when courts evaluate whether equipment is

an ATDS under the TCPA, “the statute’s clear language mandates that the focus must

be on whether the equipment has the capacity ‘to store or produce telephone numbers

to be called, using a random or sequential number generator.’ ” Id. (emphasis in

original). Although the court concluded that the statutory text “is clear and

unambiguous,” the court did so in the context of finding that the statute clearly and

unambiguously focuses on the equipment’s requisite “capacity” rather than present

functionality. Id. Ultimately, it is unnecessary to rely on the FCC guidance on

predictive dialers to reach the result arrived at in this case. 

Furthermore, to the extent that the Defendant complains of the Court’s citation

to the FCC commentary, the Ninth Circuit has itself cited the same FCC regulations

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regarding predictive dialers in defining an ATDS. Meyer v. Portfolio Recovery

Assocs., LLC, 707 F.3d 1036, 1043 (9th Cir. 2012) (citing In the Matter of Rules &

Regs Implementing the Tel. Consumer Prot. Act of 1991, 18 FCC Rcd. 14014, 14091-

93 (July 3, 2003)).

In the alternative, Defendant argues the Court erred in relying on the FCC’s

definition of “ATDS” to include “predictive dialers” because of evidence since

obtained in another case. (Dkt. No. 33-1 at 6.) Specifically, Defendant argues

Plaintiff’s expert testified in Benzion v. Vivint, Inc., No. 12-cv-61826WJZ (S.D. Fla.),

that “there’s no such thing as predictive dialing in text.” (Id.) As such, Defendant

argues the Court erred in relying on the FCC’s guidance related to predictive dialers.

(Id. at 6-7.) 

This argument also failsto show clear error in the Court’s prior Order. Although

the Court cited FCC rules and regulations related to predictive dialers in its Order

denying summary judgment, the Court did not rest its conclusion regarding the Parties’

“ATDS” showing on a finding that Defendant’s equipment was or was not a predictive

dialer. (See Dkt. No. 30 at 12.) The Court cited to the FCC’s rulings regarding

predictive dialersto support the proposition that equipment may fall under the statutory

definition of “ATDS” without the present functionality of randomly or sequentially

generating numbersto be called. (Id. at 9.) The focus of the Court’s analysis was on the

Parities’ respective evidence asto whether Yahoo!’s server and systemhad the capacity

to store or produce telephone numbers to be called, using a random or sequential

number generator. (Dkt. No. 30 at 10-12) (citing Satterfield, 569 F.3d at 951) (“[T]he

statute’s clear language mandates that the focus must be on whether the equipment has

the capacity ‘to store or produce telephone numbers to be called, using a random or

sequential number generator.’”). Having reviewed the Parties’ respective evidence

regarding the statutorily mandated “capacity,” the Court found that genuine issues of

material fact precluded summary judgment. (Dkt. No. 30 at 12.) Defendant’s newly

proffered evidence that Plaintiffs’ expert has testified in another case that there is “no

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such thing as predictive dialing in text” is therefore inapposite and fails to show clear

error in the Court’s previous Order. 

B. Present versus Future Capacity

Defendant next argues the Court erred in relying on Yahoo!’s testimony

regarding its ability to write or install new software to dial telephone numbers to deny

summary judgment, because “subsequent case law makes clear that the mere ability to

write or install new software does not, as a matter of law, make Yahoo!’s system an

ATDS under [the TCPA].” (Dkt. No. 33-1 at 7) (citing Gragg v. Orange Cab Co., Inc.,

–F. Supp. 2d –, No. C12-0576RSL, 2014 WL 494862 at *2-3 (W.D. Wash. Feb. 7,

2014)). As an initial matter, the Court notes that Defendant’s new proffered authority,

as district court opinion, does not qualify as an “intervening change in the controlling

law” sufficient to justify reconsideration. See Kona Enters., Inc. v. Estate of Bishop,

229 F.3d 877, 890 (9th Cir. 2000) (citing 398 Orange St. Partners v. Arnold, 179 F.3d

656, 665 (9th Cir. 1999)).

However, having considered the Gragg court’s reasoned disagreement with this

Court’s holding, the Court finds itself nonetheless bound by Ninth Circuit precedent

to the contrary and finds no clear error in its February 3, 2014 Order denying Yahoo!’s

motion for summary judgment. In particular, the Gragg court held that the statutory

definition of ATDS focuses on the “system’s present, not potential, capacity to store,

produce, or call randomly or sequentially generated telephone numbers.” 2014 WL

494862 at *2 (emphasis in original). In further denying the plaintiff’s motion for

reconsideration, the Gragg court specifically rejected this Court’s February 3, 2014

Order, finding that “[t]here is no indication that the Ninth Circuit would deem a system

that has to be reprogrammed or have new software installed in order to perform the

functions of an ATDS to be an ATDS.” Gragg v. Orange Cab Co., Inc., No. C12-

0576RSL, 2014 WL 801305 at *2 (W.D. Wash. Feb. 28, 2014). As Yahoo! has argued,

two other district courts applying Ninth Circuit law have found similarly. See Hunt v.

21st Mortg. Corp., No. 2:12-CV-2697-WMA, 2013WL 5230061 at *4 (N.D. Ala. Sept.

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17, 2013) (holding that to “meet the TCPA definition of an [ATDS], a system must

have a present capacity, at the time the calls were being made, to store or produce and

call numbers from a number generator”); Dominguez v. Yahoo! Inc., –F. Supp. 2d –,

2014 WL 1096051 (E.D. Pa. March 20, 2014). 

This Court respectfully disagrees. In Satterfield v. Simon & Schuster, No. C 06-

2893 CW, 2007 WL 1839807 at *6 (N.D. Cal. June 26, 2007), the district court granted

summary judgment to defendant Simon & Schuster, concluding that the plain language

of the TCPA precluded a finding that Simon & Schuster’s equipment was an ATDS

where the parties did not dispute that the equipment at issue did not “store, produce or

call randomly or sequentially generated telephone numbers.” On appeal, the Ninth

Circuit reversed and remanded the district court’s conclusion, emphasizing that the

focus must be on the equipment’s capacity rather than whether the equipment actually

stored, produced, or called randomly or sequentially generated telephone numbers.

Satterfield v. Simon & Schuster, 569 F.3d 946, 951 (9th Cir. 2009). 

Furthermore, in Meyer v. Portfolio Recover Associates, LLC, 707 F.3d 1036,

1043 (9th Cir. 2012), the Ninth Circuit specifically considered and rejected a

defendant’s argument that its dialers did not fall within the statutory definition of

ATDS because its dialers did not “have the present capacity to store or produce

numbers using a random or sequential number generator.” See Meyer v. Portfolio 1

Recover Associates, LLC, Case No. 11-56600, Dkt. No. 6-1 (appellant’s opening brief)

at 25 (9th Cir. filed Oct. 14, 2011) (arguing that “[t]he question at issue is the present

capacity of [defendant’s] dialers to store and produce numbers using a random and

sequential number generator, not what theoretical, future capacity could be possible if

The Court notes that the defendant in Meyer had argued to the district court that 1

it “would be required to invest significant resources to change the dialers to achieve

[the capacity to store or produce numbers using a random or sequential number

generator].” (Meyer v. PortfolioRecover Associates, LLC, Case No. 11-cv-1008-JAHBGS, Dkt. No. 22 at 18 (S.D. Cal. filed May 31, 2011).) The defendant then presented

the same argument to the Ninth Circuit. (Meyer v. Portfolio Recover Associates, LLC,

Case No. 11-56600, Dkt. No. 6-1 at 25 (9th Cir. filed Oct. 14, 2011) (“[defendant]

would be required to invest significant resources to change its dialers to achieve that

capacity, and it would make no sense for [defendant’s] business to do so.”). 

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significant time and resources were spent by PRA to modify its dialers”) (emphasis in

original). In rejecting the defendant’s argument, the court reaffirmed its previous

holding in Satterfield that the TCPA focuses on the equipment’s capacity rather than

present use. Meyer, 707 F.3d at 1043. The court further found that because the

defendant used its equipment as a predictive dialer, which the FCC has found has the

requisite “capacity,” the district court did not err in finding the plaintiff had

demonstrated likelihood ofsuccess on the meritssufficient for a preliminary injunction.

Id. (citing In the Matter of Rules & Regs Implementing the Tel. Consumer Prot. Act

of 1991, 18 FCC Rcd. 14014, 14091-93 (July 3, 2003)).

This Court therefore finds the clear mandate from the Ninth Circuit requires a

defendant challenging a plaintiff’s ATDS showing on a motion for summary judgment

to demonstrate that no genuine issues of material fact exist asto whether the equipment

at issue has the requisite current and future capacity to act as an ATDS in order to

warrant summary judgment. 

Accordingly, the Court finds no clear error in its previous conclusion that

genuine issues of materialfact exist asto whether Yahoo!’s equipment has the requisite

“capacity” to be considered an ATDS under the TCPA. Defendant’s motion for

reconsideration, (Dkt. No. 33), must be DENIED.

II. Interlocutory Appeal

District courts may certify an issue for interlocutory appeal upon satisfaction of

certain criteria. 28 U.S.C. § 1292(b). Those criteria are: (1) the order involves a

controlling question of law; (2) there is substantial ground for difference of opinion;

and (3) an immediate appeal from the order may materially advance the ultimate

termination of the litigation. In re Cement Antitrust Litig., 673 F.2d 1020, 1026 (9th

Cir. 1982). Courts apply section 1292(b)’s requirementsstrictly, and grant motionsfor

certification only when exceptional circumstances warrant immediate appeal. Coopers

& Lybrand v. Livesay, 437 U.S. 463, 475 (1978). The party seeking certification to

appeal an interlocutory order has the burden of establishing the existence of such

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exceptional circumstances. Id. “Even then, a court has substantial discretion in deciding

whether to grant a party’s motion for certification.” Zulewski v. HersheyCo., 2013 WL

1334159, at *1 (N.D. Cal. Mar. 29, 2013).

Having considered the foregoing criteria, the Court finds that no exceptional

circumstances warrant interlocutory review. The Court notes that it denied summary

judgment on the issue of whether Yahoo!’s server and system constitutes and ATDS

because it finds that genuine issues of fact preclude summary judgment. (Dkt. No. 30.)

Thus, even if the Ninth Circuit ultimately reviews this Court’s February 3, 2014 Order,

the Ninth Circuit will be more able to do so with a complete factual record. See

McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1259 (11th Cir. 2004) (“§ 1292(b)

appeals were intended, and should be reserved, for situations in which the court of

appeals can rule on a pure, controlling question of law without having to delve beyond

the surface of the record in order to determine the facts.”). 

Furthermore, to the extent that Yahoo! disagrees with the Court’s interpretation

of this circuit’s controlling law, Judge Lasnik in the Western District of Washington

has certified an interlocutory appeal in Gragg v. Orange Cab Co. Inc., No. C12-

057RSL, Dkt. No. 132 (W.D. Wash. Apr. 15, 2014), on the question of the proper

interpretation of “has the capacity” in the context of the TCPA’s definition of ATDS.

(See Dkt. No. 39-1, Chang Decl. Ex. 1.) As such, the Court will deny Defendants’

alternative request to certify the February 3, 2014 Order for interlocutory appeal. 

CONCLUSION AND ORDER

For the foregoing reasons, Yahoo! Inc.’s Motion for Reconsideration, (Dkt. No.

33), is DENIED. Yahoo! Inc.’s request, in the alternative, for interlocutory appeal is

also DENIED.

IT IS SO ORDERED.

DATED: July 3, 2014

HON. GONZALO P. CURIEL

United States District Judge

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