Ewing v. DME Capital, LLC

• Court: District Court, S.D. California
• Decided: December 4, 2024
• Docket: 3:24-cv-00692
• Status: Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF CALIFORNIA 3 Anton EWING, Case No.: 3:24-cv-0692-AGS-JLB 4 Plaintiff, ORDER GRANTING IN PART MOTION FOR DEFAULT 5 v. JUDGMENT (ECF 6) 6 DME CAPITAL, LLC, 7 Defendant. 8 9 The Clerk entered default against defendant DME Capital, LLC. Plaintiff now 10 moves to convert that default entry to a default judgment. 11 BACKGROUND 12 Plaintiff Anton Ewing is the “owner and sole user of [a] personal, private residential 13 cellular phone number.” (ECF 1, at 3.) Since 2012, Ewing’s number has been registered on 14 the National Do Not Call Registry. (Id. at 20.) 15 Ewing claims that defendant DME called his cell phone 11 times from August 2022 16 to April 2024 and texted him twice in January 2024. (Id. at 18.) Ewing did not have a 17 personal or business relationship with DME. (Id. at 14, 24.) In each of these calls, “Ewing 18 heard a “very clear ‘bubble popping’ type sound followed by a rather long pause before 19 the artificial-voice prerecorded message began to play on the call.” (Id. at 14.) Then, Ewing 20 “was required to hit ‘1’ to be transferred to a live operator.” (Id.) On one occasion, Ewing 21 was connected to a DME representative, Mitchell Ekdeshman. (Id. at 9, 13.) Ekdeshman 22 admitted that he used “computer software that stores and automatically dials the phone 23 numbers without any input from him.” (Id. at 19.) In addition, at the call’s conclusion, 24 Ekdeshman revealed that DME “does in fact record all of its solicitation calls.” (Id. at 9.) 25 Based on these communications, Ewing sued DME under the federal Telephone 26 Consumer Protection Act, the California Invasion of Privacy Act, and the California 27 Consumer Legal Remedies Act. (See generally ECF 1.) He contends that DME’s conduct 28 violated: (1) TCPA’s limitations on automatic telephone-dialing systems, 47 U.S.C. 1 § 227(b)(1); (2) TCPA’s restrictions on calls to phone numbers on the National Do Not 2 Call Registry, id. § 227(c)(5); (3) CIPA’s prohibitions on recording cellular phone calls 3 without consent, Cal. Penal Code §§ 632.7, 637.2; and (4) the CLRA’s prohibitions on 4 disseminating unsolicited prerecorded messages, Cal. Civ. Code § 1770(a)(22)(A). (See 5 generally ECF 1.) Ewing now moves for a default judgment for injunctive relief and 6 $104,480.00. (ECF 6, at 5.) He also seeks to depose DME. (Id. at 7.) 7 DISCUSSION 8 A. Default Judgment 9 When a defendant fails to defend, the “court’s decision whether to enter a default 10 judgment is a discretionary one.” See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 11 1980). The court’s discretion is guided by several factors: (1) “the possibility of prejudice 12 to the plaintiff,” (2) “the merits of plaintiff’s substantive claim,” (3) “the sufficiency of the 13 complaint,” (4) “the sum of money at stake,” (5) the “possibility of a dispute concerning 14 material facts,” (6) whether “excusable neglect” caused the default, and (7) the “strong 15 policy” “favoring decisions on the merits.” Eitel v. McCool, 782 F.2d 1470, 1471–72 16 (9th Cir. 1986). “Upon default,” the well-pleaded “factual allegations of the complaint, 17 except those relating to the amount of damages, will be taken as true.” Geddes v. United 18 Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977). 19 1. Prejudice to Plaintiff 20 A plaintiff suffers prejudice if default judgment is denied, because the plaintiff then 21 has no “other recourse for recovery.” PepsiCo, Inc. v. California Sec. Cans, 238 F. Supp. 22 2d 1172, 1177 (C.D. Cal. 2002); see also Collins v. Enver Solar Inc., No. SACV19-00146- 23 JLS-KES, 2021 WL 4551174 (C.D. Cal. May 26, 2021) (finding that the plaintiff would 24 “not be able to recover the statutory damages to which he is entitled”). Some of Ewing’s 25 claims are brought under federal and state laws that provide a statutory remedy. See 26 47 U.S.C. § 227(b)–(c); Cal. Penal Code § 637.2(c); Cal. Civ. Code § 1770(a)(22)(A). 27 If his motion is denied, Ewing will lose this remedy. Thus, the prejudice factor weighs in 28 favor of default judgment. 1 2. Merits of the Claims and Sufficiency of the Complaint 2 When no one defends against the claims, as here, the next two factors—“the 3 substantive merits of the plaintiff’s claim and the sufficiency of the plaintiff’s 4 complaint”—tend to dovetail and “are frequently analyzed together.” GS Holistic, LLC v. 5 T. Trading LLC, No. C23-0327JLR, 2024 WL 3759774, at *2 (W.D. Wash. Aug. 12, 2024). 6 In this context, these factors favor a default judgment when the complaint’s allegations are 7 “sufficient to state a claim for relief.” Id. 8 a. TCPA Auto-Dialer Violations, 47 U.S.C. § 227(b) 9 For the TCPA auto-dialer violation, a plaintiff must show: “(1) the defendant called 10 a cellular telephone number; (2) using an automatic telephone dialing system; (3) without 11 the recipient’s prior express consent.” Meyer v. Portfolio Recovery Assocs., 707 F.3d 1036, 12 1043 (9th Cir. 2012). “A text message to a cellular telephone [also] . . . qualifies as a ‘call’” 13 under the TCPA. Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 156 (2016) (discussing 14 47 U.S.C. § 227(b)(1)(A)(iii)). According to the complaint, defendant called Ewing’s cell 15 phone 11 times and texted it twice; DME agent Ekdeshman admitted to using an auto-dialer 16 for telemarketing calls like the ones made to Ewing; Ewing heard a distinct bubble-popping 17 sound at the beginning of the calls that is plausibly consistent with the use of auto-dialers; 18 and Ewing did not provide prior consent to receive these calls. (ECF 1, at 4, 11, 14.) Ewing 19 thus states an auto-dialer claim. 20 b. TCPA “Do Not Call List” Violations, 47 U.S.C. § 227(c) 21 To establish a TCPA violation regarding the Do Not Call list, Ewing must show that 22 he received “more than one telephone call that violates regulations under the TCPA from 23 the same entity [or person] within a twelve-month period.” Barton v. JMS Assoc. Mktg., 24 LLC, No. 21-35836, 2023 WL 2009925, at *2 (9th Cir. Feb. 15, 2023) (citing 47 U.S.C. 25 § 227(c)(5)). The relevant regulation prohibits anyone from initiating “any telephone 26 solicitation to” a “residential telephone subscriber who has registered his or her telephone 27 number on the national do-not-call registry.” 47 C.F.R. § 64.1200(c)(2). In 2012, Ewing 28 listed his phone number on that registry, and he uses the phone for personal and private 1 use. (ECF 1, at 12, 15.) Yet from 2022 to 2024 DME called Ewing’s phone 11 times and 2 texted him twice for solicitation purposes. (Id. at 18.) These allegations state a claim for 3 contravening the Do Not Call list under the TCPA. 4 c. CIPA Call-Recording Claim, Cal. Penal Code § 632.7 5 The elements of the CIPA call-recording claim are that: (1) defendant “recorded a 6 telephone call with [plaintiff],” (2) “one of the parties to the recorded call was using a cell 7 phone,” and (3) “plaintiff did not consent to the recording.” NEI Contracting & Eng’g, Inc. 8 v. Hanson Aggregates Pac. Sw. Inc., No. 12-cv-1685-BAS-JLB, 2016 WL 4886933, at *3 9 (S.D. Cal. Sept. 15, 2016); see Cal. Penal Code § 632.7. According to the complaint, DME 10 called Ewing’s cell phone 11 times without consent. (ECF 1, at 19.) And on January 11, 11 2024, Ekdeshman allegedly conceded to Ewing that DME “does in fact record all of its 12 solicitation calls.” (Id. at 9.) So, Ewing states a CIPA claim as well. 13 d. CLRA Claim, Cal. Civil Code § 1770(a)(22)(A) 14 California’s Consumer Legal Remedies Act prohibits “[d]isseminating an 15 unsolicited prerecorded message by telephone without an unrecorded, natural voice” first 16 providing the recipient “the name of the caller or the organization being represented, and 17 either the address or the telephone number of the caller.” Cal. Civ. Code § 1770(a)(22)(A). 18 CLRA further prohibits solicitation “without obtaining the consent of that person to listen 19 to the prerecorded message.” Id. These prohibitions only apply to calls “intended to result 20 or that result[] in the sale or lease of goods and services to any consumer,” and excludes 21 certain calls and “message[s] disseminated to a customer” or made in the course of an 22 established relationship. Id. § 1770(a)(22)(B). 23 Ewing alleges that DME called him 11 times from 2022 to 2024. (ECF 1, at 18). 24 On each call, he was prompted by a prerecorded message “to hit ‘1’ to be transferred to a 25 live operator.” (Id. at 14.) DME “is in the business of selling merchant cash advance 26 services,” and it sought through these communications “to get California residents to buy 27 their loan programs.” (Id. at 3, 16.) Ewing and DME did not have a “pre-existing business 28 relationship” nor was Ewing its “customer or client.” (Id.) Further, Ewing never gave 1 “consent or permission . . . to initiate each call to [him].” (Id. at 34.) Ewing states a claim 2 under the CLRA. 3 Because Ewing “state[s] a claim on which [he] may recover” for all four causes of 4 action, the second and third Eitel factors weigh in favor of default judgment. See Ewing v. 5 Senior Life Planning, LLC, No. 19-cv-1005-BAS-LL, 2019 WL 4573703, at *3 (S.D. Cal. 6 Sept. 18, 2019). 7 3. Amount at Stake 8 Default judgment is disfavored if the amount requested is “too large or unreasonable 9 in light of defendant’s actions.” Roylance v. ALG Real Est. Servs., No. 5:14-CV-02445- 10 PSG, 2015 WL 1522244, at *12 (N.D. Cal. Mar. 16, 2015), report and recommendation 11 adopted as modified, No. 14-CV-02445-BLF, 2015 WL 1544229 (N.D. Cal. Apr. 3, 2015). 12 But when plaintiff’s request is “consistent with the statutorily prescribed damages,” the 13 amount is “reasonable.” Trindade v. Reach Media Grp., No. 5:12-CV-04759-PSG, 2014 14 WL 3572132, at *4 (N.D. Cal. July 18, 2014). For three of his four causes of action (those 15 under the TCPA and CIPA), Ewing requests only amounts expressly allowed by statute, so 16 his prayer for damages as to those three claims is reasonable and favors default judgment. 17 (See ECF 1, at 36–37.) For his fourth claim—under the CLRA, which specifies no 18 statutory-damage amount—Ewing requests $2,500 per call “based on the harassment and 19 civil stalking engaged in by [DME].” (Id. at 34.) The Court need not accept as true Ewing’s 20 allegations “relating to the amount of damages.” See Geddes, 559 F.2d at 560. And no 21 matter how annoying it may have been to receive those 11 calls, this figure would seem 22 excessive and “unreasonable in light of defendant’s actions.” See Roylance, 2015 WL 23 1522244, at *12. But given that the rest of Ewing’s claimed damages are statutorily 24 prescribed, this factor on the whole weighs neutrally or slightly favors default judgment. 25 4. Dispute of Material Facts 26 At this point, there is no possibility of a dispute over the material facts, as no one 27 has appeared to defend or offer a dispute. This factor weighs in favor of default judgment. 28 1 5. Excusable Neglect 2 The issue of excusable neglect “favors default judgment where the defendant has 3 been properly served or the plaintiff demonstrates that the defendant is aware of the 4 lawsuit.” Wecosign, Inc. v. IFG Holdings, Inc., 845 F. Supp. 2d 1072, 1082 (C.D. Cal. 5 2012). Defendant was properly served on April 25, 2024, which supports a default 6 judgment. (See ECF 3.) 7 6. Public Policy 8 Finally, the public-policy prong weighs against a default judgment and towards a 9 decision on the merits. See Hunter v. TBDC, LLC, No. C-08-4158, 2009 WL 224958, at *3 10 (N.D. Cal. Jan. 29, 2009) (citing Pena v. Seguros La Comercial, S.A., 770 F.2d 811, 814 11 (9th Cir. 1985)). 12 In sum, at least five discretionary factors favor granting default judgment (and 13 another one is neutral or slightly favors it), while the public-policy factor alone weighs 14 against it. A default judgment is proper. 15 B. Remedies 16 1. Damages 17 Ewing asks for: (1) $1,500 for each communication for willfully violating TCPA’s 18 restrictions on automatic telephone dialing systems, 47 U.S.C. § 227(b)(1)(A), (b)(3); 19 (2) $1,500 for each communication for willfully violating TCPA’s restrictions on multiple 20 calls to a phone on the National Do Not Call Registry, id. § (c)(5); (3) $5,000 for each 21 phone call for violating CIPA’s prohibition on intentionally recording cellular phone calls 22 without consent, Cal. Penal Code §§ 632.7, 637.2(a)(1); and (4) $2,500 for each call for 23 violating the CLRA prohibition of unsolicited prerecorded messages, Cal. Civ. Code 24 § 1770(a)(22)(A). (ECF 1, at 29, 33–34.) The TCPA allows “separate recoveries” for both 25 auto-dialer and Do Not Call Registry offenses, “even if the violations occurred in the same 26 telephone call.” See Senior Life Planning, 2019 WL 4573703, at *6. 27 28 1 a. Auto-Dialer 2 The statutory-damage amount for each TCPA auto-dialer transgression is generally 3 $500. See 47 U.S.C. § 227(b)(3)(B). But if “the defendant willfully or knowingly violated” 4 the regulations, the Court “may, in its discretion,” treble statutory damages to $1,500 per 5 auto-dialed call. Id. § 227(b)(3). Courts typically “exercise[] their discretion to award treble 6 damages” when either “the defendant had a prior judgment against it for violating the 7 TCPA” or “statutory damages were trivial.” Ewing v. CSOLAR, No. 22-cv-0720-WQH- 8 JLB, 2022 WL 4449326, at *5 (S.D. Cal. Sept. 22, 2022) (declining treble damages when 9 there was “no allegation that Defendant had a prior judgment against it for violating the 10 TCPA”); see Senior Life Planning, 2019 WL 4573703, at *7 (denying treble damages when 11 it was unclear if a prior TCPA lawsuit “was filed before the [current case’s] telephone 12 calls” and there was no other support for plaintiff’s “allegation that Defendant has been 13 repeatedly sued for a violation of the TCPA”). 14 Ewing provides no evidence of, nor does he allege, any prior TCPA judgments 15 against DME. The Court believes the standard statutory damages will sufficiently deter 16 future TCPA transgressions. Thus, the Court declines Ewing’s request for treble damages 17 and awards $500 per auto-dialer violation. For the thirteen communications—11 calls and 18 two text messages—Ewing is entitled to $6,500. 19 b. National Do Not Call Registry 20 The damages analysis is similar for the National Do Not Call Registry misdeeds. 21 Under the TCPA, statutory damages for each violation are $500, which courts may treble 22 to $1,500 when the defendant acts “willfully or knowingly.” 47 U.S.C. § 227(c)(5). For the 23 same reasons discussed above, the Court denies treble damages and imposes $500 per 24 breach of the Do Not Call Registry provision, that is, an additional $6,500. 25 c. Phone Recordings Without Consent 26 Under CIPA, “statutory damages [of $5,000] are available for each” 27 nonconsensually recorded phone call. McCabe v. InterContinental Hotels Grp. Res., No. 28 12-CV-04818 NC, 2012 WL 13060326, at *6 (N.D. Cal. Dec. 18, 2012); see also Cal. 1 Penal Code § 637.2(a). For the 11 alleged recorded phone calls, Ewing’s CIPA statutory 2 damages amount to $55,000. 3 In total, the statutory damages for all TCPA and CIPA violations are $68,000. 4 d. Unsolicited Prerecorded Phone Calls in the Absence of a Business Relationship 5 Although Ewing provided evidence that DME violated the CLRA by using a 6 prerecorded, artificial voice on each telephone call, he failed to provide express evidence 7 of damages resulting from DME’s 11 documented violations. See Cal. Civ. Code 8 § 1780(a)(1) (providing for the recovery of actual damages, not statutory damages); 9 CSOLAR, 2022 WL 4449326, at *5. Therefore, Ewing has not demonstrated that he is 10 entitled to damages on his CLRA claim.1 11 2. Costs 12 Ewing is entitled to the $480 in costs that he requests—$405 for filing fees and $75 13 for service-of-process fees. See Ellis v. Energy Enter. USA, No. 17-cv-00497-VKD, 2018 14 WL 6816112, at *7 (N.D. Cal. Nov. 20, 2018) (awarding costs for “filing fees” and “service 15 of process” under 28 U.S.C. § 1920); (see also ECF 6, at 5; ECF 1-3 at 1). 16 3. Injunctive Relief 17 Finally, the Court denies Ewing’s requests for injunctive relief. (See ECF 6 at 5, 7, 18 16–17.) A “plaintiff is not automatically entitled to an injunction simply because it proves 19 its affirmative claims.” PepsiCo, 238 F. Supp. 2d at 1177 (citing Pyrodyne Corp. v. 20 Pyrotronics Corp., 847 F.2d 1398, 1402 (9th Cir. 1988)). Rather, plaintiffs seeking 21 injunctions “must satisfy a four-factor test,” demonstrating, among other things, that they 22 have “suffered an irreparable injury” and that “monetary damages[] are inadequate to 23

24 1 Ewing further requests “permission to depose DME [] for one hour only.” (ECF 6, 25 at 7.) That motion is denied. Ewing has not explained how “the discovery sought . . . is reasonably calculated to lead to evidence in support of [his] motion for default judgment 26 [or] request for damages,” see Twitch Interactive, Inc. v. Johnston, No. 16-CV-03404-BLF, 27 2017 WL 1133520, at *3 (N.D. Cal. Mar. 27, 2017), nor “how he expects to get Defendant [who failed to defend the action] to respond to discovery requests,” see Senior Life 28 1 || compensate for that injury.” eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006). 2 || Ewing has not shown any irreparable injury that must be remedied with an injunction, nor 3 monetary damages are inadequate to make him whole. (See generally ECF 1; ECF 6.) 4 CONCLUSION 5 Plaintiff's motion for default judgment is GRANTED IN PART as set forth above, 6 |}and his request for additional discovery is DENIED. The Clerk will enter judgment in 7 || plaintiff's favor and against DME Capital, LLC for $68,480, including $68,000 in damages 8 || and $480 in costs. The Clerk is directed to close this case. 9 || Dated: December 4, 2024

ll Hon. rew G. Schopler United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28