Reyes v. Educational Credit Management Corp.

322 F.R.D. 552
CourtDistrict Court, S.D. California
DecidedSeptember 20, 2017
DocketCase No. 15-cv-00628-BAS-AGS
StatusPublished

This text of 322 F.R.D. 552 (Reyes v. Educational Credit Management Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reyes v. Educational Credit Management Corp., 322 F.R.D. 552 (S.D. Cal. 2017).

Opinion

ORDER GRANTING PLAINTIFF’S MOTION FOR CLASS CERTIFICATION

[ECF No. 76]

Hon. Cynthia Bashant, United States District Judge

Plaintiff AJ Reyes brings this putative class action against Defendant Educational Credit Management Corporation (“ECMC”) alleging violations of California’s Invasion of Privacy Act (“CIPA”), Cal. Penal Code §§ 630 et seq. (Compl. ¶¶ 82-92, ECF No. 1.) Plaintiff now moves for certification of a proposed class pursuant to Federal Rule of Civil Procedure 23. (ECF No. 76.) ECMC filed an opposition — arguing generally that Plaintiff fails to satisfy the requirements of Rule 23— to which Plaintiff replied. (ECF Nos. 80, 90.) [557]*557Both parties also submitted supplemental briefing. (ECF Nos. 99,102.)

The Court finds this motion suitable for determination on the papers submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For the reasons that follow, the Court GRANTS Plaintiffs Motion for Class Certification under Rule 23(b)(2) and (b)(3), with the Court’s amendment to the class definition as discussed below.

I. BACKGROUND

ECMC is a guaranty agency in the Federal Family Education Loan Program (“FFELP”) under the Higher Education Act of 1965, 20 U.S.C. §§ 1071 et seq. (Skerbinc Decl. ¶ 4, ECF No. 25-2.) As such, ECMC helps to administer the FFELP as a guarantor of federal student loans on behalf of the United States Department of Education. (Id.) In carrying out this role, the company is tasked with “engag[ing] in reasonable and documented collection activities” on loans that have gone into default. See 34 C.F.R, § 682.410(b)(6)(i). As detailed below, Plaintiff claims ECMC violated CIPA in the course of dealing with Plaintiff and other putative class members by phone regarding them student loan debts.

A. ECMC’s Recording Practice and Phone System

ECMC has an internal policy of recording all inbound and outbound calls that reach a live customer service representative using a phone system provided by Noble Systems Corporation (“Noble Phone System”). (See Mott Dep. 36:13-24, ECF No. 76-4.) In addition to an audio recording of each call, the Noble Phone System creates a record of the caller’s telephone number, the ECMC phone line used, the date and time of the call, the hold and call duration, and the name of the agent who handled the call. (See id. 141:3-13; see also Noble Phone System Call Data for Plaintiff, Mot. Ex. 3, ECF No. 106-1.) ECMC’s stated policy is to maintain all call recordings and call logs from the Noble Phone System for two years. (Mott Dep. 122:5-14.)1

Both parties agree that, during the proposed class period of August 2, 2014, to March 31, 2015 (“Class Period”), the Noble Phone System was programmed incorrectly for thirteen of ECMC’s phone lines. (See Mott Dep. 96:17-99:12, 101:15-25.) Plaintiff contends that the error affected whether inbound callers would hear the following prerecorded message: “Thank you for calling ECMC. This call is being recorded. Please hold while we connect you to an available representative.” (See id. 33:7-9.) Specifically, the error involved the use of a “0” in the phone system’s “Info Field.” (See id. 96:17— 99:12.) The Info Field governs how ECMC’s pre-recorded warning is routed and played by the Noble Phone System. (See id. 96:1— 99:12, 101:15-25; see also Noble Phone System Manual — Message Routing List Columns, Mot. Ex. 6, ECF No. 106-4 (describing how the Info Field is coded to route messages).)

The incorrect setting rendered ECMC’s pre-recorded warning “non-mandatory.” (See Mott Dep. 96:17-99:12, 101:15-25.) When a message is set to non-mandatory, the Noble Phone System stops playing the message when a live agent becomes available to take the call. (Id.) Noble Phone System Manual— Message Routing Options, Mot. Ex. 5, ECF No. 106-3.) If a live agent is available at the outset of the call, then the caller may be connected directly to the agent, and the warning message will not play. (Noble Phone System Manual — Message Routing Options.) ECMC described this as a violation of the company’s usual practice, which is to set the warning message to “mandatory” for all inbound callers. (See Mott Dep. 65:2-16, 101:15-25.) Mandatory messages play in full “even if an agent becomes available while the message is playing.” (Id. 65:3-12; Noble Phone System Manual — Message Routing Options.) While ECMC’s policy for outbound [558]*558calls and call transfers is for its agents to notify customers that they are on a recorded line, the pre-recorded message is the only warning that ECMC requires on inbound calls. (Mott Dep. 30:2-14, 30:21-31:19.)

B. Plaintiff’s Class Action

Plaintiff contends that when he called ECMC at phone number (866) 946-6306 during the Class Period, the warning message did not play, and so he was not notified that his conversation would be recorded. (Reyes Decl. ¶ 4, EOF No. 76-21.) Plaintiff posits that this was the result of ECMC’s use of the non-mandatory setting for the line that he called. {See Mot. 6:19-21, EOF No. 76-1; see also Mott Dep. 143:20-144:6, 144:21-146:1, 146:22-146:12.) Plaintiff further maintains that ECMC’s agents did not warn him at any time during the calls that they would be recorded and that he was unaware of the recording throughout. (Reyes Decl. ¶¶ 4 — 5, 7.) Accordingly, he claims that ECMC recorded him without his express or implied consent. {Id ¶ 7.)

Consequently, Plaintiff alleges that ECMC violated California’s Invasion of Privacy Act (“CIPA”), Cal. Penal Code § 630 et seq. (Compl. ¶¶ 82-92.) California Penal Code § 632.7(a) makes it unlawful to “intentionally record[ ] ... a communication” with a “cellular radio telephone” “without the consent of all parties.” The statute creates a private right of action, providing for the greater of $5,000 or three times the actual damages, if any, for each violation in addition to injunc-tive relief. Cal. Penal Code § 637.2(a)-(b). Plaintiff further contends that ECMC surreptitiously recorded thousands of inbound calls placed from cellular phone numbers with California area codes to thirteen of ECMC’s forty-eight phone lines during the Class Period. (Mot. 3:22-4:7; see also Hansen Decl. ¶21, ECF No. 76-22; Mott Dep. 116:14-117:5.)

Plaintiff filed this putative class action on behalf of a statewide class of cellular telephone users recorded by ECMC without their consent. Plaintiff now moves to certify the following class pursuant to Federal Rule of Civil Procedure 23(a), (b)(2), and (b)(3):

All individuals who, between August 2, 2014, to March 31, 2015, inclusive (the “Class Period”), participated in an inbound telephone conversation with a live representative of ECMC that was: (1) placed to an ECMC phone line with a “0” in the Info field for the audio file that contained the verbiage “this call is being recorded”; (2) made from a telephone number that includes a California area code...; and (3) transmitted via cellular telephone.

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Bluebook (online)
322 F.R.D. 552, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reyes-v-educational-credit-management-corp-casd-2017.