Bultemeyer v. CenturyLink Incorporated

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8

Lydia B ultemeyer, ) No. CV-14-02530-PHX-SPL ) 9 ) 10 Plaintiff, ) ORDER vs. ) ) 11 ) CenturyLink Incorporated, ) 12 ) 13 Defendant. ) ) 14 )

15 Before the Court is Defendant’s Motion for Bond or Stay Execution (Doc. 301), 16 Plaintiff’s Response (Doc. 303), and Defendant’s Reply (Doc. 304). Also pending before 17 the Court is Defendant’s Motion to Decertify Class (Doc. 259), which has been fully 18 briefed (Docs. 264, 265). The Court now rules as follows. 19 I. BACKGROUND 20 On November 14, 2014, Plaintiff Lydia Bultemeyer filed this lawsuit alleging that 21 Defendant CenturyLink, Inc. (“CenturyLink”) violated the Fair Credit Reporting Act 22 (“FCRA”), 15 U.S.C. § 1681b, by obtaining the credit reports of Plaintiff and putative class 23 members without a permissible purpose. (Doc. 1). On February 2, 2023, the Court certified 24 this matter as a class action pursuant to Federal Rule of Civil Procedure (“Rule”) 23(b)(3) 25 on behalf of: 26 [E]very individual in the United States about whom Defendant CenturyLink obtained a consumer credit report using the 27 personal information the individual entered into CenturyLink’s ecommerce website from November 14, 2012 through 28 November 14, 2014 and who did not sign an arbitration agreement or class action waiver with CenturyLink. 1 2 (Doc. 178 at 10). 3 On September 16, 2024, following a jury trial, judgment was entered in favor of 4 Plaintiff. (Doc. 251). The jury found that Defendant violated the FCRA and awarded 5 Plaintiff damages in the amount of $500.00 in statutory damages and $2,000.00 in punitive 6 damages per class member. (Id.; Doc. 287). On November 18, 2024, the Court granted 7 Plaintiff’s Motion to Amend/Correct Clerk’s Judgment pursuant to Federal Rule of Civil 8 Procedure 60(a) to add the following language: 9 This judgment applies to the 56,075 individuals to whom the Rule(c)(2) notice was directed, who fall under the certified 10 class definition, none of whom has requested exclusion, and whom the Court finds to be members of the certified class in 11 this matter. 12 (Doc. 287 at 7). 13 Defendant filed its Motion to Decertify Class on September 19, 2024, days after the 14 conclusion of trial. (Doc. 259). On October 16, 2024, Defendant filed a Notice of Appeal 15 to the Ninth Circuit Court of Appeals. (Doc. 273). The Ninth Circuit issued an order staying 16 the appeal until the district court ruled on the parties’ timely tolling motions, which did not 17 include the Motion to Decertify Class. (Doc. 276). Subsequently, Defendant filed the 18 present Motion for Bond or Stay Execution. (Doc. 301). 19 II. LEGAL STANDARD 20 “Filing a notice of appeal typically divests district courts of jurisdiction over the 21 matter appealed.” FTC v. Qyk Brands, LLC, 2022 U.S. Dist. LEXIS 129205, at *4 (C.D. 22 Cal. June 21, 2022) (citing Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58 23 (1982)). However, under Federal Rule of Appellate Procedure 8, parties “must ordinarily 24 move first in the district court” for “a stay of the judgment or order of a district court 25 pending appeal” or “approval of a bond or other security provided to obtain a stay of 26 judgment.” Fed. R. App. P. 8(a)(1) (emphasis added). Rule 62(b) outlines the procedure 27 for a party to obtain a stay “[a]t any time after judgment is entered” by posting a 28 supersedeas bond. Fed. R. Civ. P. 62(b). The bond protects the prevailing party “from the 1 risk of a later uncollectible judgment and compensates [them] for delay in the entry of final 2 judgment.” N.L.R.B. v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988). “District courts have 3 inherent discretionary authority in setting supersedeas bonds.” Rachel v. Banana Republic, 4 831 F.2d 1503, 1505 n.1 (9th Cir. 1987). Courts in the Ninth Circuit frequently “set 5 supersedeas bonds at 120[] percent of the amount of the final judgment, to account for 6 interest, costs of appeal, and any damages for delay.” Sw. Fair Hous. Council v. WG 7 Scottsdale LLC, CV-19-00180-TUC-RM, 2023 WL 183680, at *1 (D. Ariz. Jan. 13, 2023) 8 (collecting cases). Where posting a supersedeas bond in the full amount of judgment would 9 impose an undue financial burden on an appellant, the Court may require the appellant to 10 post a supersedeas bond of a lesser amount. See, e.g., Lowery v. Rhapsody Int’l, Inc., 2022 11 WL 267442, at *2 (N.D. Cal. Jan. 28, 2022). However, the “defendant bears the burden for 12 why it should not have to post a full security bond.” Nat’l Grange of the Order of Patrons 13 of Husbandry v. Cal. Guild, 2019 U.S. Dist. LEXIS 77185, at *6 (E.D. Cal. May 7, 2019) 14 (citing Poplar Grove Planting & Refining Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 15 1191 (5th Cir. 1979)). 16 III. DISCUSSION 17 a. Clerk’s Judgment 18 As a threshold matter, Defendant argues that the Amended Clerk’s Judgment (Doc. 19 288) is not yet final pursuant to Federal Rule of Civil Procedure (“Rule”) 58(b)(2) because 20 “the Amended Judgment was not signed by the Court.” (Doc. 301 at 2). Under Rule 21 58(b)(2), “the court must promptly approve the form of judgment, which the clerk must 22 promptly enter, when . . . the jury returns a special verdict or a general verdict with answers 23 to written questions[.]” Fed. R. Civ. P. 58(b)(2)(A). The Court did so upon the conclusion 24 of trial. (See Docs. 250, 251). Subsequently, as noted above, the Court granted Plaintiff’s 25 Motion to Amend/Correct Clerk’s Judgment pursuant to Federal Rule of Civil Procedure 26 60(a) to specify that the damages total $500 in statutory damages per class member and 27 $2,000 in punitive damages per class member, and to add the following language: 28 This judgment applies to the 56,075 individuals to whom the Rule(c)(2) notice was directed, who fall under the certified 1 class definition, none of whom has requested exclusion, and whom the Court finds to be members of the certified class in 2 this matter. 3 (Doc. 287 at 7). 4 Under Rule 58(a)(5), “[e]very judgment and amended judgment must be set out in 5 a separate document, but a separate document is not required for an order disposing of a 6 motion . . . for relief under Rule 60.” Fed. R. Civ. P. 58(a)(5). Thus, as Plaintiff correctly 7 notes (Doc. 303 at 4), Rule 58 is abundantly clear that an Amended Judgment pursuant to 8 Rule 60(a) does not require a separate document. Defendant does not submit an argument 9 as to why Rule 58(a)(5) would not apply to the Rule 60(a) Amended Judgment in this case. 10 The Court finds it need not take further action to finalize the Amended Judgment. 11 Moreover, to the extent that Defendant argues that the judgment is not “final” 12 because the parties have yet to undergo a claims administration process, the Court rejects 13 such argument. (Doc. 301 at 3–4). In class action cases where individualized damages 14 calculations are needed—such as securities fraud class actions where each class member 15 has suffered varying amounts of actual damages—courts have found that entry of final 16 judgment is inappropriate until after those damages are properly assessed. See generally In 17 re Vivendi Universal, S.A. Sec. Litig., 284 F.R.D. 144, 161 (S.D.N.Y. 2012) (finding there 18 is no final judgment in securities litigation class action where “individual reliance and 19 damages have yet to be resolved.”); Allapattah Services, Inc. v. Exxon Corp., 333 F.3d 20 1248, 1251 (11th Cir. 2003), aff’d sub nom. Exxon Mobil Corp. v. Allapattah Services, Inc., 21 545 U.S. 546 (2005) (finding in case where the defendant overcharged dealers for fuel 22 purchases that while liability “was decided properly on a class-wide basis . . . the 23 determination of the amount that each dealer was overcharged during the class period must 24 take place on an individual basis, taking into account the amount of compensatory damages 25 to which each dealer is entitled[,]” and as such, entry of an aggregate final judgment was 26 not required). 27 However, in this case, no such individualized damages calculations are needed. 28 Defendant does not cite, nor is the Court aware of, any authority that supports the argument 1 that a judgment is not final—despite a jury’s finding of liability on a class-wide basis and 2 assessment of statutory damages per class member—until a claims administration process 3 is held to verify that individuals who received class notice in fact are members of the class. 4 Here, the jury determined that Defendant was liable and awarded per-violation statutory 5 damages to each class member, and a judgment was entered as to that verdict. Identifying 6 specific class members is not a separate claim or element necessary to final judgment. Cf. 7 Parks v. Pavkovic, 753 F.2d 1397, 1402 (7th Cir. 1985) (Once there is a final judgment, 8 “calculating the actual amount owed each class member . . . is not the resolution of a 9 separate claim but merely the disbursement stage.”); Lyngaas v. Curaden AG, 436 F. Supp. 10 3d 1019, 1029 (E.D. Mich. 2020), aff’d, 992 F.3d 412 (6th Cir. 2021) (noting that “a final 11 judgment will be entered by the Court before the claim forms and affidavits are sent to 12 potential class members” to conduct claims administration of TCPA class action where 13 class members received statutory damages); Krakauer v. Dish Network, LLC, 1:14-CV- 14 333, 2017 WL 3206324, at *5 (M.D.N.C. July 27, 2017) (noting that entry of a final 15 judgment “is no doubt appropriate” even where some class member’s identities were 16 unknown in a TCPA case awarding per-violation statutory damages, but exercising 17 discretion to decline entering final judgment prior to class administration process). 18 All told, the Court is unpersuaded by Defendant’s argument that the judgment is not 19 yet final and ripe for execution and therefore a supersedeas bond is unneeded to preclude 20 execution of the judgment. As explained below, the Court finds that a supersedeas bond 21 and stay of execution of the judgment—and therefore a stay of any claims administration 22 process—is appropriate while this action is on appeal. 23 b. Proposed Supersedeas Bond 24 Here, Defendant seeks to post a bond in the amount of $85 million, which it asserts 25 “is appropriate and sufficient to protect the interests of class members while the appeal is 26 pending.” (Doc. 301 at 5). Defendant also asserts that this proposed bond is appropriate 27 due to the complexities involved in calculating the actual final judgment amount prior to 28 any claims administration process. (See id. at 4–5). Plaintiff asserts that the Court should 1 only enter a stay of execution should Defendant post a bond in the amount of 2 $168,225,000.00, which amounts to 120 percent of the total damages if all 56,075 3 individuals who received class notice qualify as class members. (Doc. 303 at 3, 8). 4 The parties have consistently disputed the size of the proposed class—specifically, 5 whether all 56,075 individuals who Defendant identified as potential class members and 6 who received the class notice qualify as class members under the class definition. 7 Defendant has contended that it manually searched this class list and identified one member 8 of the class list who signed a class action waiver and thus does not qualify as class member. 9 (Doc. 266 at 6–7). Defendant argues that individualized claim determinations will be 10 necessary to identify which of the 56,075 individuals that received the class notice qualify 11 as class members. (Doc. 301 at 6). Because a claims administration process is needed and 12 because that process will likely result in a reduction of class members who will receive 13 damages, Defendant argues that a supersedeas bond accounting for approximately half of 14 the 56,075 potential class members is appropriate.1 (Id. at 7). Defendant asserts that this 15 amount will adequately protect the interests of class members and “is further justified in 16 this case because costs of maintaining the bond, which will be in the millions of dollars per 17 year, will be taxable to plaintiff in the event of reversal on appeal.” (Id.). Plaintiff asserts 18 that Defendant has had ample opportunity to identify which of the 56,075 individuals who 19 received class notice do not qualify as class members and has failed to do so. (Doc. 303 at 20 2–3). Accordingly, Plaintiff requests that the Court require a security bond representing 21 120 percent of the judgment as applied to all 56,075 individuals. (Id. at 3). 22 This Court has repeatedly found that Defendant is the party that identified these 23 24 1 The Court is skeptical of Defendant’s argument that trial evidence supports an expectation “that the claims administration process will result in distribution of damages 25 to at most approximately 50% of the 56,075 individuals.” (Doc. 301 at 6–7). Eric Fressle, CenturyLink’s Lead Credit Analyst, testified at trial that Defendant ran external credit 26 checks on approximately 12,000 to 15,000 potential customers per month during the class period, and that approximately 40 percent of those individuals did not complete the order 27 process. (See Doc. 247 at 58–60). As this Court has previously noted (Doc. 287 at 4), this estimation would far exceed the 56,075 individuals included on Defendant’s proposed class 28 list. 1 56,075 individuals as those on whom it obtained a consumer credit report during the class 2 period and whom they could not confirm had signed a class waiver or arbitration provision. 3 (Doc. 193 at 3; Doc. 287 at 4). This Court has also repeatedly found that Defendant was 4 the only party with the knowledge of which individuals it pulled external credit reports of 5 and who did not sign class action or arbitration waivers with Defendant. (Doc. 178 at 7–9; 6 Doc. 287 at 3–4; Doc. 295 at 3 n.2). 7 Defendant, as the party in possession of information about the individuals who it 8 collected credit reports on and who did not sign a class action or arbitration waiver, has 9 had multiple chances to identify which of the 56,075 individuals who received class notice 10 as potential class members do not actually fall within the class definition. Defendant has 11 thus far identified a single individual.2 (Doc. 266 at 6–7). While this Court has 12 acknowledged that a claims administration process is appropriate to ensure that non-class 13 members do not receive damages (Doc. 287 at 5), the Court is dubious that the class size 14 will be reduced by half through this process. As such, the Court finds it inappropriate to 15 require a supersedeas bond that amounts to approximately half of the judgment should the 16 class size remain the same. Instead, in its discretion, the Court will require Defendant to 17 post a supersedeas bond totaling 120 percent of the potential damages calculated based on 18 the proposed 56,075-individual class list. This amounts to $168,225,000.00. 19 c. Motion to Decertify Class 20 Following the conclusion of trial, Defendant filed its Motion to Decertify Class 21 (Doc. 259). Defendant subsequently filed its Notice of Appeal to the Ninth Circuit Court 22 of Appeals. (Doc. 273). The Ninth Circuit issued an order staying the appeal until this Court 23 ruled on the timely tolling motions filed on September 30 and October 15, 2024. (Doc. 24 276). These motions include Plaintiff’s Motion to Amend/Correct Clerk’s Judgment (Doc.

25 2 The Court speculates that Defendant’s manual searches of the proposed class list 26 would have identified far more than one individual who does not qualify as a class member, if, as Defendant asserts, a claims administration process is likely to conclude that far less 27 than half of the 56,075 individuals qualify as class members. Thus, the Court finds it unlikely that the class size will be so significantly reduced in the claims administration 28 process as to warrant a major reduction of a supersedeas bond. 263), Defendant’s Renewed Motion for Judgment as a Matter of Law (Doc. 267), and 2| Defendant’s Motion for New Trial (Doc. 269), all of which this Court has now ruled on. 3 | Upon filing of the appeal, this Court was divested of jurisdiction to rule on Defendant’s 4| Motion to Decertify Class. As such, the Motion (Doc. 259) will be denied without prejudice for lack of jurisdiction. Accordingly, 6 IT IS ORDERED that Defendant’s Motion for Bond or Stay Execution (Doc. 301) is granted as modified. Defendant shall post a supersedeas bond in the amount of $168,225,000.00. 9 IT IS FURTHER ORDERED that Defendant’s Motion to Decertify Class (Doc. 10 | 259) is denied without prejudice for lack of jurisdiction. 11 Dated this 12th day of August, 2025. 12 13 4 LCoS 15 16 17 18 19 20 21 22 23 24 25 26 27 28