Naiman v. Adjustable Bedding Concepts, Inc.

Opinion

Plaintiff, No. 2:19-cv-0702 MCE DB v. ADJUSTABLE BEDDING CONCEPTS, FINDINGS AND RECOMMENDATIONS INC., D/B/A/ EASY REST, Defendant. This matter came before the undersigned on December 6, 2019, pursuant to Local Rule 302(c)(19), for hearing of plaintiff’s motion for default judgment. (ECF No. 12.) Attorney Timothy Sostrin appeared on behalf of the plaintiff. No appearance was made on behalf of the defendant. At that time, oral argument was heard and the motion was taken under submission. Having considered all written materials submitted with respect to the motion, and after hearing oral argument, the undersigned recommends that the motion for default judgment be granted as explained below. Plaintiff Sidney Naiman initiated this action through counsel on April 25, 2019, by filing a complaint and paying the required filing fee. (ECF No. 1.) The complaint alleges that beginning in December of 2017, defendant Adjustable Bedding Concepts began placing numerous telephone calls to the cellular telephone number xxx-xxx-6443 belonging to the plaintiff using an automatic telephone dialing system. (Compl. (ECF No. 1) at 2.1) On May 25, 2018, plaintiff instructed the defendant to no longer call. (Id. at 2.) On June 4, 2018, an attorney representing plaintiff sent a written request for the calls to cease. (Id.) But the calls continued on multiple occasions. (Id. at 1-2.) Pursuant to these allegations, the complaint alleges the defendant violated the Telephone Consumer Protection Act, (“TCPA”), 47 U.S.C. § 227, et seq. (Id. at 7.) Plaintiff filed proof of service on defendant on April 25, 2019. (ECF No. 3.) On July 1, 2019, plaintiff filed requests for entry of defendant’s default. (ECF No. 7.) The Clerk entered defendant’s default on July 2, 2019. (ECF No. 8.) On October 14, 2019, plaintiff filed the pending motion for default judgment. (ECF No. 9.) Plaintiff’s motion seeks statutory damages in the amount of $33,000.2 (ECF No. 9-1 at 10.) The motion came for hearing before the undersigned on December 6, 2019. (ECF No. 12.) Despite being served with notice of the motion and hearing, no defendant appeared at the hearing or filed an opposition to plaintiff’s motion for default judgement. (ECF No. 9-4; ECF No. 11.) Federal Rule of Civil Procedure 55(b)(2) governs applications to the undersigned for default judgment. Upon entry of default, the complaint’s factual allegations regarding liability are taken as true, while allegations regarding the amount of damages must be proven. Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323 (7th Cir. 1983) (citing Pope v. United States, 323 U.S. 1 (1944); Geddes v. United Fin. Group, 559 F.2d 557 (9th Cir. 1977)); see also DirectTV v. Huynh, 503 F.3d 847, 851 (9th Cir. 2007); TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). ////

1 Page number citations such as this are to the page number reflected on the court’s CM/ECF system and not to the page numbers assigned by the parties. 2 Plaintiff’s motion makes reference to seeking costs without providing any specifics. Plaintiff shall consult Local Rule 292. Where damages are liquidated, i.e., capable of ascertainment from definite figures contained in documentary evidence or in detailed affidavits, judgment by default may be entered without a damages hearing. Dundee, 722 F.2d at 1323. Unliquidated and punitive damages, however, require “proving up” at an evidentiary hearing or through other means. Dundee, 722 F.2d at 1323-24; see also James v. Frame, 6 F.3d 307, 310-11 (5th Cir. 1993). Granting or denying default judgment is within the court’s sound discretion. Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986); Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). The court is free to consider a variety of factors in exercising its discretion. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Among the factors that may be considered by the court are (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 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. Eitel, 782 F.2d at 1471-72 (citing 6 Moore’s Federal Practice ¶ 55-05[2], at 55-24 to 55-26). A. Appropriateness of the Entry of Default Judgment under the Eitel Factors Plaintiff’s motion for default judgement seeks judgement on the two claims presented in the complaint: a cause of action under 47 U.S.C. § 227(b)(1)(A)(i), and a cause of action under 47 U.S.C. § 227(c). (Pl.’s MDJ (ECF No. 9-1) at 7.) The factual allegations of plaintiff’s complaint are taken as true pursuant to the entry of default against the defendant. 1. Factor One: Possibility of Prejudice to Plaintiff The first Eitel factor considers whether plaintiff would suffer prejudice if default judgment is not entered. When a defendant has failed to appear and defend the claims, a plaintiff will be without recourse and suffer prejudice unless default judgment is entered. Vogel v. Rite Aid Corp., 992 F.Supp.2d 998, 1007 (C.D. Cal. 2014) (granting a default judgement for a disabled plaintiff suing under the ADA and Unruh Act, relying upon this rationale). Here, the defendant has failed to appear and defend against plaintiff’s claims of violation of the TCPA. Absent entry of default judgement, plaintiff would likely be without recourse against the defendant. Because plaintiff will suffer prejudice if left without recourse, this factor favors an entry of default judgment. 2. Factors Two and Three: The Merits of Plaintiff’s Substantive Claims and the Sufficiency of the Complaint The second and third factors are (1) the merits of plaintiff’s substantive claim, and (2) the sufficiency of the complaint. Eitel, 782 F.2d at 1471-72. Thus, the second and third Eitel factors require plaintiff to state a claim on which plaintiff can recover. PepsiCo, Inc. v. California Security Cans, 238 F.Supp.2d, 1172, 1175 (2002); see Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978). Given the close relationship between the two inquiries, factors two and three are considered together. As noted above, plaintiff seeks default judgment on the complaint’s claims of violation of two provisions of the Telephone Consumer Protection Act. (1) Telephone Consumer Protection Act “The TCPA establishes the substantive right to be free from certain types of phone calls and texts absent consumer consent.” Van Patten v. Vertical Fitness Group, LLC, 847 F.3d 1037, 1043 (9th Cir. 2017) (citation and quotation omitted). Specifically, 47 U.S.C. § 227(b) of the TCPA make is “unlawful ‘to make any call (other than . . . with the 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.’” Henderson v. United Student Aid Funds, Inc., 918 F.3d 1068, 1071 (9th Cir. 2019) (quoting 47 U.S.C. § 227(b)(1)(A)(iii)). 47 U.S.C. § 227(c) of the TCPA is violated when a call is placed to a “[a] residential telephone subscriber who has registered his or her telephone number on the national do-not-call registry of persons who do not wish to receive telephone solicitations that is maintained by the Federal Government.” 47 C.F.R. § 64.1200(2)(c). In this regard, 47 C.F.R. § 64.1200 provides that, “No person or entity shall initiate any telephone solicitation to: . . . (2) A residential telephone subscriber who has registered his or her telephone number on the national do-not-call registry of persons who do not wish to receive telephone solicitations that is maintained by the Federal Government. Such do-not-call registrations must be honored indefinitely, or until the registration is cancelled by the consumer or the telephone number is removed by the database administrator.” “This regulation also applies to wireless telephone subscribers who have registered their numbers on the national do-not-call registry.” Heidorn v. BDD Marketing & Management Company, LLC, Case No. C-13-0229 JCS, 2013 WL 6571629, at *10 (N.D. Cal. Aug. 19, 2013) (citing 47 C.F.R. § 64.1200(e)). “[D]irect-to-voicemail messages are a ‘call’ under the TCPA[.]” Saunders v. Dyck O’Neal, Inc., 319 F.Supp.3d 907, 912 (W.D. Mich. 2018). Here, the complaint alleges that plaintiff’s 6443 phone number was registered on the National Do Not Call List at all relevant times. (Compl. (ECF No. 1) at 2.) Despite that registration, defendant used an automated telephone dialing system to call plaintiff’s cellular phone “on numerous occasions” between December 2017 and October 2018. (Id.) “Despite Plaintiff’s instructions to no longer call, Defendant continued to call the 6443 number for telemarketing purposes on numerous occasions[.]” (Id.) The undersigned finds that the complaint has stated claims for violation of the TCPA. See Meyer v. Portfolio Recovery Associates, LLC, 707 F.3d 1036, 1043 (9th Cir. 2012) (highlighting that the three elements of a TCPA claim as (1) the defendant called a cellular telephone number; (2) using an automatic telephone dialing system; (3) without the recipient’s prior express consent); Drew v. Lexington Consumer Advocacy, Case No. 16-cv-0200 LB, 2016 WL 9185292, at *7 (N.D. Cal. Aug. 11, 2016) (“Mr. Drew thus states a claim for violation of § 64.1200(c)(2) because Lexington messaged him while his phone number was on the do-not-call registry.”) The second and third Eitel factors thus weigh in favor of the entry of default judgment. 3. Factor Four: The Sum of Money at Stake in the Action Under the fourth factor cited in Eitel, the undersigned “must consider the amount of money at stake in relation to the seriousness of Defendant’s conduct.” Eitel, 782 F.2d at 1471-72; see also Philip Morris U.S.A. Inc. v. Castworld Prods., 219 F.R.D. 494, 500 (C.D. Cal. 2003). In this case, plaintiff seeks statutory damages of $33,000. (Pl.’s MDJ (ECF No. 9-1) at 10.) The undersigned does not find the overall sum of money at stake to be so large or excessive as to militate against the entry of default judgment. See Freligh v. Roc Asset Solutions, LLC, Case No. 16-cv-0653 MEJ, 2016 WL 3748723, at *6 (N.D. Cal. June 8, 2016) (“Because this amount is neither substantial nor unreasonable and the statutory damages are tied to Defendant’s misconduct, the fourth factor weighs in favor of default judgment.”). 4. Factor Five: The Possibility of a Dispute Concerning Material Facts This Eitel factor considers the possibility that material facts are disputed. “Upon entry of default, all well-pleaded facts in the complaint are taken as true, except those relating to damages.” PepsiCo, Inc., 238 F.Supp.2d at 1177. Here, there appears to be no material facts in dispute. This factor weighs in favor of a default judgment. 5. Factor Six: Whether the Default Was Due to Excusable Neglect This Eitel factor considers the possibility that the defendant’s default was the result of excusable neglect. Despite having been properly served with plaintiff’s complaint, the requests for entry of default, and the instant motion for default judgment defendant has been non- responsive in this action. (ECF Nos. 6, 7-1, 9-4, 11.) Thus, the record suggests that the defendant has chosen not to defend this action, and that the default did not result from excusable neglect. Accordingly, this Eitel factor favors the entry of default judgment. 6. Factor Seven: The Strong Policy Underlying the Federal Rules of Civil Procedure Favoring Decisions on the Merits The final Eitel factor examines whether the strong policy favoring deciding cases on the merits prevents a court from entering default judgment. Eitel, 782 F.2d at 1472. Generally, default judgments are disfavored, and a case should be decided on the merits whenever possible. See Pena v. Seguros La Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 1985). However, where a defendant’s failure to appear “makes a decision on the merits impractical, if not impossible” entry of default judgment is warranted. PepsiCo, Inc., 238 F.Supp.2d at 1177; see also Craigslist, Inc. v. Naturemarket, Inc., 694 F.Supp.2d 1039, 1061 (N.D. Cal. 2010). Because the defendant has failed to respond in this matter, a decision on the merits is impossible. Therefore, the seventh Eitel factor does not preclude the entry of default judgment. //// //// 7. Summary of Eitel Factors In sum, upon consideration of all the Eitel factors the undersigned finds that plaintiff is entitled to a default judgment against the defendant and recommends that such a default judgment be entered. The undersigned therefore turns to plaintiff’s requested damages. B. Terms of the Judgment to Be Entered 1. Statutory Damages Plaintiff’s motion seeks $33,000 in statutory damages based on multiple violations of the two provisions of the TCPA discussed above. (Pl’s. MDJ (ECF No. 9-1) at 3-4.) A plaintiff “may recover statutory damages for the § 227(b) and § 227(c) violations even though these violations arise from the same telephone contact.” Drew v. Lexington Consumer Advocacy, Case No. 16-cv-0200 LB, 2016 WL 9185292, at *10 (N.D. Cal. Aug. 11, 2016); see also Charvat v. NMP, LLC, 656 F.3d 440, 449 (6th Cir. 2011) (“a person may recover statutory damages of $1500 for a willful or knowing violation of the automated-call requirements, § 227(b)(3), and $1500 for a willful or knowing violation of the do-not-call-list requirements, § 227(c)(5)—even if both violations occurred in the same telephone call”). Subject to the court’s discretion, plaintiffs who establish a violation of the TCPA “may recover the greater of their actual monetary loss or $500 per violation and treble damages where a violation is willful or knowing.” Gallion v. Charter Communications Inc., 287 F.Supp.3d 920, 923 (C.D. Cal. 2018) (citing 47 U.S.C. § 227(b)(3)). Here, the motion for default judgment asserts that Plaintiff “received seventeen phone calls from Easy Rest and each one of those call violated both provisions of the TCPA.” (Pl.’s MDJ (ECF No. 9-1) at 4.) For nine of those phone calls, Plaintiff seeks $500 for each of the dual violations of the TCPA because the calls “were placed before Plaintiff called Easy Rest to make a direct do-not-call request,” for a total of $9,000. (Id.) With respect to the other eight calls, Plaintiff seeks $1,500 for each of the dual violations of the TCPA because the calls occurred after Plaintiff “explicitly told Easy Rest to stop calling,” for a total of $24,000. (Id.) Thus, in total plaintiff seeks an award of $33,000 in damages. (Id.) //// Although plaintiff’s allegations may be sufficient to establish that some of the defendant’s actions were willful, there is no evidence that defendant has repeatedly engaged in such conduct or that an award of the statutory minimum would be insufficient to dissuade defendant from future violations of the TCPA. Accordingly, the undersigned finds that an award of $17,000 in statutory damages is more than sufficient to accomplish the goals of the TCPA. See Ellis v. Energy Enterprise USA, Inc., Case No. 17-cv-0497 VKD, 2018 WL 6816112, at *6 (N.D. Cal. Nov. 11, 2018) (“On this record, an award of minimum statutory damages in the amount of $8,000 is sufficient to address the violations claimed and to serve the purposes of the TCPA’s remedial provisions.”); Heidorn, 2013 WL 6571629, at *17 (“Although Plaintiff’s allegations are sufficient to establish that Defendant acted willfully, it finds that the $11,000.00 statutory damage award is sufficient to accomplish the purposes of the TCPA.”) Accordingly, the undersigned recommends that plaintiff be awarded a total of $17,000 in statutory damages. For the reasons set forth above, IT IS HEREBY RECOMMENDED that: 1. Plaintiff’s October 14, 2019 motion for default judgment (ECF No. 9) be granted; 2. Judgment be entered against defendant Adjustable Bedding Concepts, Inc.; 3. Defendant be ordered to pay plaintiff $17,000 in statutory damages; and 4. This case be closed. These findings and recommendations will be submitted to the United States District Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1) (2018). Within thirty (30) days after these findings and recommendations are filed, any party may file written objections with the court. A document containing objections should be titled “Objections to Magistrate Judge’s Findings and Recommendations.” Any reply to the objections shall be served and filed within fourteen (14) days after service of the objections. The parties are advised that //// //// //// 2 fh VY EMO INS ED □□□ tO POM MOOI □□ FP OAYyet Vv VIS

failure to file objections within the specified time may, under certain circumstances, waive the right to appeal the District Court’s order. See Martinez v. YIst, 951 F.2d 1153 (9th Cir. 1991). Dated: August 31, 2020 UNITED STATES MAGISTRATE JUDGE DLB:Jen-Ann(6) DB\orders\orders.civil\naiman0702.mdj.f&rs