TRINDADE v. Reach Media Group LLC, No. 5:2012cv04759 - Document 85 (N.D. Cal. 2014)

Court Description: ORDER GRANTING TRINDADES MOTION FOR DEFAULT JUDGMENT by Judge Paul S. Grewal granting 80 Motion for Default Judgment (psglc3S, COURT STAFF) (Filed on 7/18/2014)

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TRINDADE v. Reach Media Group LLC Doc. 85 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 United States District Court For the Northern District of California 8 SAN JOSE DIVISION 11 DAVID TRINDADE 12 Plaintiff, 13 14 v. REACH MEDIA GROUP, LLC, 15 Defendant. 16 ) ) ) ) ) ) ) ) ) ) Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT (Re: Docket No. 80) Before the court is Plaintiff David Trindade’s motion for default judgment. 1 Defendant 17 18 Reach Media Group, LLC has not filed any opposition. Having reviewed the motion and the 19 record, the court GRANTS Trindade’s motion for default judgment. 2 20 I. BACKGROUND 21 22 On September 12, 2012, Trindade filed this suit as a putative class action, alleging that RMG made, or had made on its behalf, unsolicited text message calls to Trindade and the other 23 24 25 1 26 2 27 28 See Docket No. 80. Because the court has obtained consent of all parties to the case, this court possesses jurisdiction to make a case-dispositive ruling on Trindade’s motion for default judgment. See 28 U.S.C. § 636(c). Third-party defendant Eagle Web Assets, Inc. has not been served and thus is not a party to the case. 1 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT Dockets.Justia.com 1 members of the putative class. 3 The alleged text message calls stated that lenders were offering 2 cash loans and directed recipients to information collection and payday loan offer websites. 4 3 Trindade alleged that RMG’s actions violated the Telephone Consumer Protection Act and sought 4 injunctive relief, statutory damages, costs and attorney’s fees. 5 5 6 7 8 9 On November 1, 2012, RMG filed its answer. 6 RMG admitted that, as part of its business as a “publisher network,” it generated leads “by contracting with third-party publishers to advertise payday loan offers to consumers through text messages.” 7 RMG also admitted that it owned two of the websites alleged in the complaint. 8 RMG denied, however, that it generated leads “by making United States District Court For the Northern District of California 10 text message calls or having them made on its behalf to drive consumers to information collection 11 websites and payday loan offers” or that it made, or had made on its behalf, the alleged text 12 message calls. 9 13 On November 15, 2012, RMG filed a cross-complaint against third-party Defendants 14 Ryan Lenahan, Kyle Danna and Eagle Web Assets Inc. alleging that the third-party Defendants 15 16 contracted with RMG as third-party publishers and subsequently edited the content of text message 17 advertisements designed by RMG in violation of their contracts. 10 RMG alleged that the 18 third-party Defendants therefore were required to indemnify RMG against any claims arising from 19 20 3 See Docket No. 1 at ¶ 15. 4 See id at ¶ 17, 19, 20 and 21. 5 See 47 U.S.C. § 227; see also Docket No. 1 at ¶ 2 and 5. 6 See Docket No. 17. 7 Id. at ¶ 1. 8 See id. at ¶ 19. 9 Id. at ¶ 1. 21 22 23 24 25 26 27 10 28 See Docket No. 22 at ¶ 4, 5 and 6. 2 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT 1 breach of their contracts. 11 RMG’s concurrent responses to Trindade’s interrogatories were 2 consistent with these allegations. 12 All of RMG’s claims against the third-party defendants, 3 however, were eventually dropped. The court dismissed all of the claims against Danna with leave 4 to amend for lack of personal jurisdiction. 13 The court also dismissed the breach of contract, 5 breach of warranty, tortious interference with contractual relations and tortious interference with 6 prospective economic advantage claims against Lenahan with leave to amend. 14 RMG then filed 7 8 9 notice of its intent not to file an amended third-party complaint and not to serve Eagle Web Assets Inc., 15 as well as a stipulation to the dismissal of all of its claims against Lenahan. 16 On November 8, 2013, the court granted RMG’s counsel leave to withdraw as counsel of United States District Court For the Northern District of California 10 11 record. 17 In the interim, RMG has not actively litigated this case – for example, RMG has not 12 responded to Trindade’s discovery requests or filed anything on the docket. 18 On 13 January 27, 2014, the Clerk entered default pursuant to Fed. R. Civ. P. 55(a) against RMG. 19 14 Trindade now seeks entry of default judgment only as to his individual claim. 20 15 16 17 11 18 See id. at ¶ 8. 12 19 20 See Docket No. 80-1, Ex. 1-A at 13 (“Third-Party Defendants in this action may have made calls which included the text message language identified in Paragraph 20 of the Class Action Complaint.”). 13 See Docket No. 64 at 35. 14 See id. 15 See Docket No. 68. 16 See Docket No. 69. 17 See Docket No. 71. 18 See Docket No. 80-1 at ¶ 6. 19 See Docket No. 78. 20 See Docket No. 80 at 2. 21 22 23 24 25 26 27 28 3 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT II. LEGAL STANDARDS 1 2 After entry of default, district courts are authorized to enter default judgment, so long as the 3 judgment does not “differ in kind from, or exceed in amount, what is demanded in the pleadings.” 21 4 Entry of default judgment is discretionary. 22 To determine whether default judgment is warranted, 5 6 the court balances the Eitel factors: “(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in 7 8 9 United States District Court For the Northern District of California 10 the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.” 23 III. DISCUSSION 11 12 A. 13 The Eitel Factors 1. 14 Potential Prejudice to Trindade The first Eitel factor considers potential prejudice to Trindade. If the court does not grant 15 Trindade’s motion for default judgment, Trindade has no alternative recourse. 16 2. 17 Trindade’s Claim Is Meritorious Second, the court looks to the merits of Trindade’s complaint. “In considering the 18 19 sufficiency of the complaint and the merits of the plaintiff’s substantive claims, facts alleged in the 20 complaint not relating to damages are deemed to be true upon default.” 24 21 21 22 23 24 25 Fed. R. Civ. P. 54(c); see also Fed. R. Civ. P. 55 (authorizing the court to enter default judgment). 22 See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (“The district court’s decision whether to enter a default judgment is a discretionary one.” (citing Duling v. Markun, 231 F.2d 833 (7th Cir. 1956); Georgia Power Project v. Georgia Power Co., 409 F. Supp. 332, 336-37 (N.D. Ga. 1975); Ciccarello v. Joseph Schlitz Brewing Co., 1 F.R.D. 491, 493-94 (S.D. W.Va. 1940))). 26 23 27 24 28 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Bd. of Trustees of Sheet Metal Workers v. Moak, Case No. 4:11-cv-04620-CW, 2012 WL 5379565, at *2 (N.D. Cal. Oct. 31, 2012) (citing Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977); Fed. R. Civ. P. 8(d)). 4 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT Trindade’s complaint alleges that RMG violated Section 227(b)(1)(A)(iii) of the TCPA. 25 1 2 Section 227(b)(1)(A)(iii) prohibits making a call to a telephone number assigned to a cellular 3 telephone service using an automatic telephone dialing system (“ATDS”), except for emergency 4 purposes or with the prior express consent of the called party. 26 The Ninth Circuit has clarified the 5 statute’s language, holding that “a text message is a ‘call’ within the TCPA” 27 and that an ATDS is 6 7 8 equipment that “has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator.” 28 Trindade asserts his TCPA claim under Section 227(c)(5) of the TCPA, 29 which provides a 9 United States District Court For the Northern District of California 10 private right of action for any “person who has received more than one telephone call within any 11 12-month period by or on behalf of the same entity in violation of the regulations prescribed under 12 this subsection.” Trindade alleges that RMG made, or had made on its behalf, 30 and “presently 13 14 15 25 16 26 17 18 19 See Docket No. 1 at ¶ 2. “It shall be unlawful for any person within the United States . . . to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial pre-recorded voice . . . to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call.” 47 U.S.C. § 227(b)(1)(A)(iii). 27 20 21 Satterfield v. Simon & Schuster, Inc. 569 F.3d 946, 954 (9th Cir. 2009) (affording deference to the FCC’s interpretation of the term ‘call’); see also Kazemi v. Payless Shoesource, Inc., Case No. 3:09-cv-05142-EMC-MHP, 2010 WL 963225, at *2 (N.D. Cal. Mar. 16, 2010). 28 Id. at 951 (emphasis in original). 29 See Docket No. 80 at 8. 22 23 30 24 25 26 27 28 Courts in this district have held that under the TCPA, “a seller may be liable for violations by its representatives under a broad range of agency principles.” Lee v. Stonebridge Life Ins. Co., Case No. 3:11-cv-00043-RS-JSC, 2013 WL 3828814, at *1 (N.D. Cal. Jul. 19, 2013) (quoting FCC ruling); see also Heidorn v. BDD Mktg. & Mgmt. Co., LLC, Case No. 4:13-cv-00229-YGR-JCS, 2013 WL 6571629, at *15 (N.D. Cal. Aug. 19, 2013) (“On May 9, 2013, the Federal Communications Commission issued a Declaratory Ruling that ‘while a seller does not generally initiate’ calls within the meaning of the TCPA, it nonetheless may be held vicariously liable under the federal common law principles of agency for violations of either section 227(b) or section 227(c) that are committed by third-party telemarketers.”). 5 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT 1 continues to make,” text message calls to his cellular telephone without his consent. 31 He claims, 2 for example, that he received one such call on August 13, 2012. 32 Trindade alleges that these text 3 message calls were made using an ATDS, which “had the capacity to store or produce telephone 4 numbers to be called using a random or sequential number generator, and to dial such numbers.” 33 5 Trindade’s complaint thus states a valid claim under the TCPA. 6 3. 7 Trindade’s Complaint is Well-Supported by the Record Third, the court must consider the sufficiency of Trindade’s complaint. Trindade’s 8 9 United States District Court For the Northern District of California 10 allegations are supported by the declaration of Trindade’s attorney Benjamin Richman and 151 pages of supporting exhibits. 34 RMG’s answer, third-party complaint and responses to 11 interrogatories also support Trindade’s allegations. These documents establish that RMG 12 contracted with third-party publishers to advertise via text messages, 35 owned two of the websites 13 alleged in the complaint 36 and was aware that the third-party defendants sent “text messages to 14 cellular phone numbers.” 37 The allegations in the complaint thus are well-supported by the record. 15 16 31 17 32 18 19 20 21 22 Docket No. 1 at ¶ 15. See id. at ¶ 17. Trindade’s complaint alleges the August 13, 2012 call with particularity, providing content and the telephone number from which the call was made. He also alleges that RMG made “and presently continues to make, text message calls to Plaintiff’s and the other Class members’ cell phones.” The exact number of calls that Trindade alleges were made to his cellular telephone is unclear, but it is reasonable to infer that Trindade alleges that he received more than one call within a 12-month period. See In re Consol. Pretrial Proceedings in Air W. Secs. Litig., 436 F. Supp. 1281, 1286 (N.D. Cal. 1977) (citing Thomson v. Wooster, 114 U.S. 104, 115 (1885)) (“The party in whose favor a default has been entered is entitled to the benefit of all reasonable inferences from the evidence tendered.”); United States v. Torres, Case No. 2:12-cv-10530-SVW, 2013 WL 7137587, at *4 (C.D. Cal. Apr. 17, 2013) (citing cases holding that the movant is entitled to all reasonable inferences from the evidence offered). 23 33 Docket No. 1 at ¶ 23. 24 34 See Docket No. 80-1. 25 35 See Docket No. 17 at ¶ 1; see also Docket No. 22 at ¶ 3 and 4. 26 36 See id. at ¶ 19. 27 37 28 Docket No. 80-1, Ex. 1-A at 13. Indeed, RMG stated in its third-party complaint that it had received numerous complaints from recipients of text messages “purportedly sent on RMG’s behalf.” Docket No. 22 at ¶ 21. 6 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT 4. 1 The Amount of Money at Stake is Reasonable Fourth, the court considers the amount of money at stake in this case. “Default judgment is 2 3 disfavored where the sum of money at stake is too large or unreasonable in light of defendant’s 4 actions.” 38 “The Court considers Plaintiff’s declarations, calculations, and other documentation of 5 damages in determining if the amount at stake is reasonable.” 39 Trindade seeks a judgment of 6 $1,500 in damages. 40 Section 227(c)(5) of the TCPA permits a claimant to recover “up to $500 in 7 damages” for each violation, plus a three times multiplier if the violation was willful or knowing. 41 8 9 United States District Court For the Northern District of California 10 11 Because Trindade alleges that he received more than one text message call from RMG in violation of the TCPA, 42 the amount sought therefore is reasonable and consistent with the statutorily prescribed damages. 12 5. 13 Fifth, the court must consider the possibility of disputed material facts. Following entry of 14 15 16 No Material Facts Are in Dispute default, the court “takes all well-pleaded facts, except those pertaining to damages, as true.” 43 Trindade’s claims, moreover, are supported by clear record evidence, including RMG’s answer, third-party complaint and responses to interrogatories. 44 In sum, the weight of evidence supports 17 18 the damages sought. 19 20 38 21 Truong Giang Corp. v. Twinstar Tea Corp., Case No. 3:06-cv-03594-JSW, 2007 WL 1545173, at *12 (N.D. Cal. May 29, 2007). 22 39 Id. 23 40 See Docket No. 80 at 2. 24 41 47 U.S.C. § 227(b)(3)(B)-(C). See also Heidorn, 2013 WL 6571629, at *15. 25 42 26 Trindade alleges that he received a text message call on August 13, 2012, and that RMG “presently continues to make” such calls. Docket No. 1 at ¶ 15 and 17. 43 Truong, 2007 WL 1545173, at *12. 44 See Docket Nos. 1, 17, 22 and 80-1, Ex. 1-A. 27 28 7 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT 6. 1 RMG’s Default Is Not the Result of Excusable Neglect Sixth, the court must consider whether RMG’s failure to appear was due to excusable 2 3 neglect. RMG actively participated in this litigation for over a year, filing an answer and a 4 third-party complaint and responding to interrogatories. 45 On November 7, 2013, however, RMG’s 5 attorneys withdrew as counsel of record. 46 In the interim, RMG has not communicated with 6 opposing counsel or filed anything on the docket. 47 Courts in this district have held that where a 7 8 9 defendant “was aware of Plaintiff’s action” and later stopped actively participating in the case, a finding of excusable neglect is unwarranted. 48 7. United States District Court For the Northern District of California 10 Public Policy Favors Default Judgment Seventh, the court must consider whether default judgment comports with the legal 11 12 principles undergirding the Federal Rules of Civil Procedure. While the Federal Rules favor 13 decisions on the merits, this preference standing alone is not dispositive.49 A decision on the 14 merits is not possible where defendants have discontinued their participation in the proceedings. 15 The baseline preference to adjudicate cases on the merits thus does not preclude a trial court from 16 entering default judgment. 17 On balance, the Eitel factors support entry of default judgment. 18 19 20 45 See Docket Nos. 17, 22 and 80-1, Ex. 1-A. 21 46 See Docket No. 70. 22 47 23 See Docket No. 80-1 at ¶ 6. RMG also has not evidenced any intent to take on new representation in this case. 48 24 25 26 Heidorn, 2013 WL 6571629, at *9 (finding no excusable neglect where Defendant received the complaint and contacted Plantiff to discuss the possibility of settlement); see also Softwareworks Grp., Inc. v. IHosting, Inc., Case No. 5:06-cv-04301-HRL, 2007 WL 2187306, at *1 (N.D. Cal. Jul. 27, 2007) (finding no excusable neglect where Defendants “ceased contact with Plaintiff and the court” during discovery proceedings). 49 27 28 See Zazenski v. Danner, Case No. 5:12-cv-02344-RMW-PSG, 2013 WL 5513437, at *5 (N.D. Cal. Oct. 4, 2013); see also Kloepping v. Fireman’s Fund, Case No. 3:94-cv-02684-THE, 1996 WL 75314, at *3 (N.D. Cal. Feb. 13, 1996). 8 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT 1 B. No Hearing is Necessary Because Trindade’s Damages Are Calculable and Reasonable After determining liability, the court then calculates the amount of damages to be 2 3 awarded. 50 Although “factual allegations relating to liability are taken as true upon entry of 4 default, allegations as to amount of damages are not automatically accepted.” 51 “In the 5 Ninth Circuit, it is established that ‘a default judgment for money may not be entered without a 6 hearing unless the amount claimed is a liquidated sum or capable of mathematical calculation.’” 52 7 8 9 When the damages claimed are not readily ascertainable from the pleadings and the record, the court may hold a hearing to value damages. 53 As previously noted, the TCPA permits a claimant who has received more than one call United States District Court For the Northern District of California 10 11 violating its provisions to recover $500 for each violation, plus trebling if the violations were 12 willful or knowing. 54 Trindade contends that he is entitled to statutory damages for one violation 13 of the TCPA, trebled because “it is clear that RMG had knowledge that unsolicited text messages 14 were being sent on its behalf.” 55 Trindade therefore seeks a judgment of $1,500 in damages. 56 The 15 basis for this amount is readily ascertainable from the pleadings and record. Trindade alleges one 16 17 18 call with particularity, providing a date and content, as well as the telephone number from which the call was made. 57 Trindade also alleges other calls and provides the content of those calls and 19 50 20 See Zazenski, 2013 WL 5513437, at *5. 51 21 Truong, 2007 WL 1545173, at *13 (citing TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987)). 22 52 23 53 24 Id. (quoting Davis v. Fendler, 650 F. 2d 1154, 1161 (9th Cir. 1981)). See Fed. R. Civ. P. 55(b)(2) (“The court may conduct hearings or make referrals—preserving any federal statutory right to a jury trial—when, to enter or effectuate judgment, it needs to” determine the amount of damages.). 25 54 § 227(b)(3)(B)-(C). See also Heidorn, 2013 WL 6571629, at *15. 26 55 Id. 27 56 See Docket No. 80 at 8-9. 28 57 See Docket No. 1 at 4. 9 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT 1 2 the telephone numbers from which those calls were made. 58 The statutory damages sought are warranted. Trebling also is appropriate. 59 RMG admits that it had knowledge of the TCPA 60 and that it 3 4 had knowledge that the calls at issue were being made. 61 Although Trindade seeks statutory 5 damages for a single violation of the TCPA, the evidence in the record shows that RMG contracted 6 with third-party publishers to generate many text message calls in violation of the statute. 62 7 Default judgment in the amount of $1,500 will follow. 8 9 United States District Court For the Northern District of California 10 IT IS SO ORDERED. Dated: July 18, 2014 11 _________________________________ PAUL S. GREWAL United States Magistrate Judge 12 13 14 15 16 58 17 18 See Docket No. 1 at 4-5. See also Heidorn, 2013 WL 6571629, at *15 (“Telephone numbers are significant because they establish that Plaintiff had some basis for concluding that the alleged calls were from Defendant or an agent of Defendant.”). 59 19 20 21 22 23 The court observes that a split in authority exists regarding what qualifies as “knowing” conduct warranting trebling. See J2 Global Commc’ns, Inc. v. Blue Jay Inc., Case No. 4:08-cv-4254-PJH, 2009 WL 4572726, at *7 (N.D. Cal. Dec. 1, 2009) (“There appears to be a split in authority as to what predicate conduct is required before a treble damages award may be issued.”). Some courts have held that a defendant must know that the making of the call violates the TCPA, while others have held that a defendant need only know that the call is being made. See id. (citing case law from various jurisdictions). The court need not decide this issue, as treble damages are appropriate here under either standard. 60 27 See Docket No. 80-1, Ex. 1-C at 127: RMG admits that prior to September 12, 2012, the date the Class Action Complaint in this matter was filed, Reach Media Group, LLC knew that under 47 U.S.C. § 227(b)(1)(A)(iii), it is unlawful for any person within the United States “to make any call (other than a call made for emergency purposes or made with prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone service . . . .” 61 Docket No. 80-1, Ex. 1-A at 13. 28 62 See Docket Nos. 17, 22 and 80-1, Ex. 1-A. 24 25 26 10 Case No. 5:12-cv-04759-PSG ORDER GRANTING TRINDADE’S MOTION FOR DEFAULT JUDGMENT

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