Wright v. USAA Savings Bank

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 VANESSA WRIGHT, No. 2:19-cv-00591 WBS CKD 13 Plaintiff, 14 v. MEMORANDUM AND ORDER RE: CROSS-MOTIONS FOR SUMMARY 15 USAA SAVINGS BANK; USAA FEDERAL JUDGMENT SAVINGS BANK, 16 Defendants. 17

18 ----oo0oo---- 19 Charles Wright filed this action against defendants 20 USAA Savings Bank (“USAA SB”) and USAA Federal Savings Bank 21 (“USAA FSB”) alleging that defendants auto-dialed calls to 22 plaintiff’s cellphone without his consent in violation of the 23 Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, et 24 seq., and the Rosenthal Fair Debt Collection Practices Act 25 (“Rosenthal Act”), Cal. Civ. Code § 1788, et seq. Before the 26 court are the parties’ cross-motions for summary judgment. 27 (Docket Nos. 36 & 37.) 28 1 I. Factual Background 2 Mr. Wright applied for, and was approved for, at least 3 one credit card with USAA Savings Bank. (Defs.’ Resp. to Pl.’s 4 Statement of Undisputed Facts (“SUF”) at 1:6-10 (Docket No. 44- 5 1).) In Mr. Wright’s application for the credit card account, he 6 listed his cellular telephone number. (Id. at 1:11-13.) In 7 2018, Mr. Wright developed terminal cancer. (Id. at 1:14.) Mr. 8 Wright’s wife, Vanessa Wright, quit her full-time job to care for 9 Mr. Wright. (Id. at 1:14-15.) As a result, neither Mr. Wright 10 nor Ms. Wright could make further payments on the USAA Savings 11 Bank credit card account. (Id. at 1:15-17.) 12 From July 16, 2018 through January 30, 2019, USAA FSB, 13 the servicer of the USAA SB account, called the number Mr. Wright 14 provided in his application in an attempt to contact Mr. Wright 15 regarding the account. (Pls.’ Resp. to Defs.’ SUF ¶ 22.) To 16 contact Mr. Wright, USAA FSB used the Aspect Dialing System. 17 (Id. ¶ 23.) The Aspect Dialing System is a predictive dialer 18 that does not have, and is not capable of using, a random or 19 sequential number generator for dialing telephone numbers to be 20 called. (Id.; Dep. of Michelle Deneen at 44:12-25 (Docket No. 21 36-1).) 22 In response to those calls, plaintiff sought legal 23 representation to address the financial issues facing his 24 household. (Defs.’ Resp. to Pl.’s SUF at 1:19-21.) Plaintiff’s 25 counsel prepared a letter of representation and of revocation of 26 consent to call Mr. Wright. (Id. at 1:22-24.) Counsel then 27 mailed the letter to USAA SB’s headquarters at 3773 Howard Hughes 28 Parkway, Suite 190N, Las Vegas, NV 89169 (“Las Vegas address”). 1 (Docket No. 36-1.) 2 USAA SB and USAA FSB, however, never provided the Las 3 Vegas address as an address to send account correspondence. 4 (Pl.’s Resp. to Defs.’ SUF ¶¶ 12, 16.) Instead, after Mr. Wright 5 opened the account, and every month for the next 18 years, USAA 6 FSB sent Mr. Wright an account statement with 10750 McDermott 7 Fwy, San Antonio, Texas 78288 (“San Antonio address”) as the 8 return address. (Id. ¶¶ 8-9.) Every statement—-over 200 in 9 total—-was from, and contained, this address. (Id. ¶ 9). Every 10 statement also listed the San Antonio address for making account 11 payments. (Id. ¶ 10.) After Mr. Wright’s account became 12 delinquent, and in addition to the monthly statements, USAA FSB 13 began to send payment reminders to Mr. Wright. (Id. ¶ 14.) Like 14 the monthly statements, every payment reminder contained the San 15 Antonio address as the return address. (Id. ¶ 15.) 16 Further, both the monthly statements and the payment 17 reminder letters referred Mr. Wright to USAA’s website, USAA.com, 18 for additional information regarding his account. (Decl. of 19 Michelle Deneen (“Deenan Decl”) ¶ 20 (Docket No. 39-1); Defs.’ 20 Mot. Summ. J., Exs. A-2, A-3 (Docket Nos. 39-3, 39-4).) USAA’s 21 website contains a “Contact Us” page, with specific mailing 22 addresses for its various business lines, including its bank. 23 (Deneen Decl. ¶ 21.) The website listed USAA Federal Savings 24 Bank’s mailing address as the San Antonio address and did not 25 list the Las Vegas address anywhere on the website. (Deneen 26 Decl. ¶¶ 23-24; Defs.’ Mot. Summ. J., Ex. A-4 (Docket No. 39-5); 27 Pl.’s Resp. to Defs.’ SUF ¶ 20.) 28 Although there is no evidence that USAA provides the 1 Las Vegas address to any of its members for sending account 2 correspondence, USAA SB does receive mail at its Las Vegas 3 headquarters. (Pl.’s Resp. to Defs.’ SUF ¶ 21.) The Las Vegas 4 address, however, is a large corporate office building at which 5 USAA SB is only one tenant. (Id. ¶ 25.) Only five to six 6 employees work for USAA SB at that address. (Id. ¶ 26.) The Las 7 Vegas address has a front desk not owned or controlled by USAA 8 SB. (Id. ¶ 30.) Because USAA SB does not sign for, and cannot 9 control the receipt of, correspondence at the Las Vegas address, 10 USAA SB never provides the Las Vegas address to its members for 11 purposes of sending account correspondence. (Id. ¶ 32.) 12 In the event that correspondence does reach USAA SB at 13 the Las Vegas address, the correspondence is transmitted to USAA 14 FSB’s headquarters at the San Antonio address. (Id. ¶ 28.) Such 15 an event is infrequent, however, because USAA SB receives 16 approximately only six pieces of mail per month at the Las Vegas 17 address. (Id.) By contrast, USAA FSB receives approximately 18 1.8 million pieces of mail per month at the San Antonio address. 19 (Id. ¶ 29.) 20 Mr. Wright’s October 2018 letter was sent via certified 21 mail and the USPS confirmation notice associated with the letter 22 verifies that the letter was “delivered to the front desk, 23 reception area, or mail room . . . in LAS VEGAS NV 89169.” 24 (Pl.’s Mot. Summ. J., Ex. D at 1 (Docket No. 36-3).) Defendants 25 contend that they did not sign for any certified mail and that 26 they have no record of ever receiving the letter. (Pl.’s Resp. 27 to Defs.’ SUF ¶¶ 33-34.) Accordingly, the notice of revocation 28 of consent to call Mr. Wright was not processed or otherwise 1 applied to Mr. Wright’s account. (Id. ¶ 34.) 2 After defendants continued calling, plaintiff filed 3 this suit alleging the following causes of action: (1) violation 4 of the Rosenthal Fair Debt Collection Practices Act, Cal. Civ. 5 Code §1788, et seq.; and (2) violation of the Telephone Consumer 6 Protection Act (TCPA), 47 U.S.C. § 227, et seq. (First Amended 7 Complaint (Docket No. 16).) Mr. Wright passed shortly after 8 filing suit, and this court granted Ms. Wright’s motion to 9 substitute plaintiff. (Docket No. 24). 10 II. Telephone Consumer Protection Act Claim (Count Two) 11 “[T]he TCPA forbids calls placed using an automated 12 telephone dialing system [(“ATDS”)]” without “the prior express 13 consent of the called party.” Duguid v. Facebook, Inc., 926 F.3d 14 1146, 1149 (9th Cir. 2019) (quoting 47 U.S.C. § 227(b)(1)(A)). A 15 defendant’s “willful and knowing” violation of the statute 16 entitles a plaintiff to treble damages. 47 U.S.C. § (b)(3). 17 Plaintiff argues that defendants called plaintiff without his 18 consent because plaintiff revoked his consent via the October 19 2018 letter, and that because defendants were on notice that the 20 communication was unsolicited plaintiff is entitled to treble 21 damages. Defendants on the other hand argue that the device used 22 to contact plaintiff does not constitute an ATDS under the 23 statute and that, even if it does, plaintiff did not effectively 24 revoke consent to be called. 25 A. Whether the Aspect Dialing System Is An ATDS 26 Since the enactment of the TCPA in 1991, the definition 27 of ATDS has remained the same: “equipment which has the capacity 28 —-(A) to store or produce telephone numbers to be called, using a 1 random or sequential number generator; and (B) to dial such 2 numbers.” 47 U.S.C. § 227(a)(1); Marks v. Crunch San Diego, LLC, 3 904 F.3d 1041, 1044-45 (9th Cir. 2018). 4 Between 2003 and 2015, the Federal Communications 5 Commission (“FCC”) issued a series of rulings to determine 6 whether predictive dialers, such as the Aspect Dialing System, 7 which do not “dial[] a random or sequential block of numbers,” 8 but rather “automatically dial[] a list of numbers that had been 9 preprogrammed and stored in the dialer” constitute automated 10 telephone dialing systems under the statute. Rules & Regulations 11 Implementing the Tel. Consumer Prot. Act of 1991, 18 FCC Rcd. 12 14,014, 14,017, 14,022 (2003) (“2003 Order”); Marks, 904 F.3d at 13 1045. 14 In its 2012 Order, the FCC reasoned that the statutory 15 definition of ATDS “covers any equipment that has the specified 16 capacity to generate numbers and dial them without human 17 intervention regardless of whether the numbers called are 18 randomly or sequentially generated or come from calling lists.” 19 Rules & Regulations Implementing the Tel. Consumer Prot. Act of 20 1991, 27 FCC Rcd. 15,391, 15,392 n.5 (2012). In 2015, however, 21 the FCC endorsed the opposite view that a device “would not meet 22 the definition of an ATDS unless it had the capacity to dial 23 random or sequential numbers.” Marks, 904 F.3d at 1046 (citing 24 Rules & Regulations Implementing the Tel. Consumer Prot. Act of 25 1991, 30 FCC Rcd. 7691, 7971-72 (2015) (“2015 Declaratory 26 Ruling”)). 27 In response to the uncertainty following the FCC’s 2015 28 Declaratory Ruling, “a large number of regulated entities 1 challenged the FCC’s definition of an ATDS.” Marks, 904 F.3d at 2 1046. The petitions were consolidated in the D.C. Circuit. See 3 Consolidated Order, ACA Int’l v. FCC, 885 F.3d 687 (D.C. Cir. 4 2018). Concluding that the FCC cannot, “consistent with reasoned 5 decision-making, espouse both competing interpretations [of ATDS] 6 in the same order,” the court “set aside the Commission’s 7 treatment of those matters.” Id. at 703. 8 After the D.C. Circuit issued its opinion in ACA 9 International, the Ninth Circuit addressed the definition of ATDS 10 in Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018). 11 After establishing that “the FCC’s prior orders on [the 12 definition of ATDS] are no longer binding,” the Marks court 13 concluded that “the statutory definition of ATDS is not limited 14 to devices with the capacity to call numbers produced by a 15 ‘random or sequential number generator,’ but also includes 16 devices with the capacity to dial stored numbers automatically.” 17 Id. at 1049-50. 18 Because under Marks a device that has the capacity to 19 “store numbers to be called . . . and to dial such numbers” is an 20 ATDS, id., and because it is undisputed that the Aspect Dialing 21 System calls, without human intervention, a list of stored phone 22 numbers identified by USAA’s loss mitigation algorithm (Deneen 23 Decl. at 43:6-23, 44:19-25), defendants’ Aspect Dialing System is 24 an ATDS. 25 Defendants argue that the Ninth Circuit’s decision in 26 Marks is not controlling. Specifically, defendants contend that 27 the D.C. Circuit’s decision in ACA International invalidated only 28 the FCC’s 2003, 2012, and 2015 Orders. (Defs.’ Mot. Summ. J. at 1 10.) As a result, the FCC’s 1992 and 1995 Orders, which conclude 2 that to be an ATDS the system must itself generate numbers “in a 3 random or sequential fashion,” control here. In Re Rules & 4 Regulations Implementing the TCPA of 1991, 7 F.C.C. Rcd. 8752, 5 8769 ¶ 47 (1992) (“1992 Order”); see In Re Rules and Regulations 6 Implementing the TCPA of 1991, 10 FCC Rcd. 12391, ¶ 19 (1995) 7 (“1995 Order”). Because the Aspect Dialing System does not 8 generate numbers randomly or sequentially, defendants contend 9 that the system at issue is not an ATDS under the statute. 10 This court is bound by Marks. Defendants’ proposition 11 to the contrary is unpersuasive. First, the FCC did not consider 12 the question of whether an autodialer constituted an ATDS under 13 the TCPA until 2003. See 2003 Order ¶ 130; Marks, 904 F.3d at 14 1045 (describing how growing FCC concern with autodialers 15 “warranted modifications to the existing rules” in 2003). 16 Assuming defendants’ contention that every FCC order prior to 17 2003 still stands is correct, no FCC guidance on autodialers 18 would bind this court. 19 Second, defendants’ interpretation of ACA International 20 is incorrect. The D.C. Circuit did not discretely vacate just 21 the FCC’s 2003, 2012, and 2015 orders. Instead, the ACA 22 International court broadly “invalidated the FCC’s interpretation 23 of the two key questions raised by the statutory definition of an 24 ATDS, namely: ‘(i) when does a device have the “capacity” to 25 perform the two enumerated functions; and (ii) what precisely are 26 those functions?’” Marks, 904 F. 3d at 1047 (citing ACA Int’l, 27 885 F.3d at 695). Notably, the ACA International court made no 28 reference to the 1992 and 1995 Orders and their continuing 1 validity. Because the D.C. Circuit “set aside the Commission’s 2 treatment” of what “functions a device must perform to qualify as 3 an autodialer,” ACA Int’l, 885 F.3d at 703, defendants’ 4 proposition that the ACA International court left in place any 5 FCC orders describing those functions is untenable. 6 Third, the Ninth Circuit’s subsequent decision in 7 Duguid v. Facebook, Inc., 926 F.3d 1146 (9th Cir. 2019), 8 “confirms that Marks is the law” in this circuit. Lamkin v. 9 Portfolio Recovery Assocs., LLC, No. 2:18-CV-03071-WBS-KJN, 2019 10 WL 4670829, at *4 (E.D. Cal. Sept. 25, 2019). The Duguid court 11 reiterated that ACA International “wipe[d] the definitional slate 12 clean,” requiring the Ninth Circuit to “beg[in] anew to consider 13 the definition of ATDS under the TCPA.” Id. at 1150 (quoting 14 Marks, 904 F.3d at 1041). The Marks court “clarif[ied] any 15 ambiguity” regarding what functions an ATDS must have and “[t]hat 16 definition governs.” Id. 17 Accordingly, because under Marks a device that has the 18 capacity to “store numbers to be called . . . and to dial such 19 numbers” is an ATDS, 904 F.3d at 1052, and because it is 20 undisputed that the Aspect Dialing System calls stored phone 21 numbers, this court finds that defendants’ Aspect Dialing System 22 is an ATDS. 23 B. Whether Mr. Wright Effectively Revoked His Consent 24 Under the TCPA, “consumers may revoke consent through 25 any reasonable means,” “using any reasonable method including 26 orally or in writing.” 2015 FCC Order, ¶¶ 55, 64. “A caller may 27 not limit the manner in which revocation may occur.” Id. ¶ 47. 28 When assessing whether a particular means of revocation used by a 1 consumer was reasonable, courts look to the “totality of the 2 facts and circumstances surrounding that specific situation, 3 including, for example, whether the consumer had a reasonable 4 expectation that he or she could effectively communicate his or 5 her request for revocation to the caller in that circumstance, 6 and whether the caller could have implemented mechanisms to 7 effectuate a requested revocation without incurring undue 8 burdens.” 2015 Order ¶ 64 n.233; ACA Int’l, 885 F.3d at 709 (“In 9 assessing whether a revocation request meets the ‘reasonable 10 means’ standard, the Commission said it would consider ‘the 11 totality of the facts and circumstances.’”); Silver v. 12 Pennsylvania Higher Educ. Assistance Agency, No. 14-CV-00652-PJH, 13 2020 WL 607054, at *16 (N.D. Cal. Feb. 7, 2020). 14 Under the facts presented here, no reasonable trier of 15 fact could find that plaintiff used reasonable means to revoke 16 consent. Defendants never made the Las Vegas address known to 17 customers, nor did they communicate to its customers that the Las 18 Vegas address was an appropriate destination for customers’ 19 account-related inquiries.1 Mr. Wright received over 200 20 statements and monthly payment reminders from the San Antonio 21 address. (Pl.’s Resp. to Defs.’ SUF ¶¶ 9, 15.) Each of those 22 documents listed the San Antonio address as the correct address 23 for account-related correspondence. (Id. ¶ 10.) Further, each 24 of those documents listed USAA’s webpage as a resource, which 25 also listed the San Antonio address as the appropriate mailing 26

27 1 Although the Las Vegas address is the address of USAA SB headquarters, a cursory Google search for “USAA SB 28 headquarters” still points to the San Antonio address. 1 address. (Deenan Decl. ¶ 20.) Given defendants’ consistent 2 communications with plaintiff over the course of 18 years, no 3 reasonable juror could find that plaintiff had a reasonable 4 expectation that he could effectively communicate his request to 5 revoke his consent at the Las Vegas address. 6 Moreover, plaintiff cannot establish that defendants 7 received the revocation letter. Defendants have no record of 8 receiving the notice. (Id. ¶¶ 33-34.) The USPS confirmation 9 notice confirms only that the letter was “delivered to the front 10 desk, reception area, or mail room . . . in LAS VEGAS NV 89169.” 11 (Pl.’s Mot. Summ. J., Ex. D at 1.) Not only does the 12 confirmation notice not list the complete address, but also, the 13 notice confirms receipt only by the front desk. Plaintiff does 14 not dispute that USAA SB does not own or control the front desk, 15 or that USAA SB does not sign for, and cannot control the receipt 16 of, correspondence at the Las Vegas address. (Pl.’s Resp. to 17 Defs.’ SUF ¶¶ 30, 32.) Indeed, defendants’ lack of control over 18 the front desk is one of the reasons USAA SB never provides the 19 Las Vegas address to its members. (Id. ¶ 32.) There is 20 accordingly insufficient evidence to support a finding that 21 defendants received the letter. 22 Moreover, based upon the court’s colloquy with counsel 23 at oral argument, it clearly appears that the choice to send the 24 letter to Las Vegas arose not from a genuine expectation that 25 defendants would process Las Vegas correspondence, but rather 26 from an attempt by counsel simply to create a record for 27 litigation. The court notes that it was plaintiff’s counsel –- 28 not plaintiff -- who chose to mail the letter to the Las Vegas 1 address. With over 90 TCPA cases filed by plaintiff’s attorney 2 in the Eastern District of California, he should have known how 3 to effectively contact a lender. Indeed, counsel has filed suit 4 for a violation of the TCPA against USAA SB before. See, e.g., 5 Aycock v. USAA Savings Bank, No. 2:18-cv-00626-JAM-EFB (Filed 6 March 22, 2018). In Aycock, plaintiff’s counsel similarly argued 7 that plaintiff had revoked consent to be called via a letter 8 drafted by plaintiff’s counsel. (Compl. ¶¶ 19-20 (Case No. 2:18- 9 cv-00626-JAM-EFB, Docket No. 1).) By August 2018, the parties in 10 Aycock had filed a Joint Status Report wherein defendant stated 11 that “Plaintiff did not effectively revoke consent.” (Joint 12 Status Report at 1 (Case No. 2:18-cv-00626-JAM-EFB, Docket No. 13 9).) By the time plaintiff’s counsel sent the letter at issue in 14 this case, counsel was on notice that his method of revocation 15 may present some issues and admitted as much during oral 16 argument. It therefore strikes the court as disingenuous for 17 counsel to argue that he sent the letter to Las Vegas to revoke 18 his client’s consent, and not simply to set defendant up for this 19 litigation.2 20 Considering that the choice of address appears to be a 21 part of plaintiff counsel’s legal strategy and not a regular 22 2 Plaintiff’s counsel argues that defendants constantly 23 hide behind different entities when responding to litigation. (Pl.’s Opp’n at 4.) Specifically, plaintiff argues that when 24 plaintiff sues one of the defendants, the sued defendant will argue that the appropriate party is the other defendant. Even if 25 true, service of process and appropriate revocation of consent are two different issues. Further, plaintiff here sued both 26 defendants, so the tactic plaintiff describes was not at play 27 here. If defendant was unsure of which address was correct, and actually intended the calls to stop, there is no explanation of 28 why counsel would not send a revocation letter to both addresses. 1 consumer’s contact with a lender, and that USAA SB has previously 2 objected to counsel’s notice method, the court concludes that a 3 reasonable person, after receiving hundreds of notices pointing 4 to San Antonio, could not have expected to effectively revoke 5 consent by contacting a corporate building in Las Vegas. Because 6 plaintiff did not effectively revoke his consent, the court will 7 grant defendants’ motion for summary judgement. 8 III. Rosenthal Act Claim (Count One) 9 To establish a violation of the Rosenthal Act, 10 plaintiff must prove: (1) the plaintiff is a “debtor”; (2) the 11 debt at issue is a “consumer debt”; (3) the defendant is a “debt 12 collector”; and (4) that the defendant violated one of the 13 liability provisions of the Rosenthal Act. Long v. Nationwide 14 Legal File & Serve, Inc., No. 12-CV-03578, 2013 U.S. Dist. LEXIS 15 132971, *56-57 (N.D. Cal. Sept. 17, 2013). Defendants dispute 16 only prong four. 17 Here, plaintiff alleges that the calls made to Mr. 18 Wright after October 15, 2018 violated Section 1788.14(c) of the 19 Rosenthal Act, which prohibits communicating “with the debtor 20 with regard to the consumer debt, when the debt collector has 21 been previously notified in writing by the debtor’s attorney that 22 the debtor is represented by such attorney . . . .” Cal. Civ. 23 Code § 1788.14(c). To show that defendants violated Section 24 1788.14(c), plaintiff must establish that defendants had “actual 25 knowledge” that Mr. Wright was represented by an attorney. Munoz 26 v. Cal. Bus. Bureau, Inc., No. 1:15-CV-01345-BAM, 2016 WL 27 6517655, at *8 (E.D. Cal. Nov. 1, 2016). 28 For the reasons above, the court finds as a matter of MAIS UU EERO MVVUIOCTE PON Veer PF AY AT tt

1 law that defendants either did not receive or did not process the 2 letter and therefore did not have actual knowledge that plaintiff 3 was represented by an attorney. Accordingly, the court will 4 grant defendants’ motion for summary judgment on plaintiff’s 5 Rosenthal Act claim. 6 IT IS THEREFORE ORDERED that defendants’ motion for 7 summary judgment (Docket No. 37) be, and the same hereby is, 8 GRANTED. 9 IT IS FURTHER ORDERED that plaintiff’s motion for 10 summary judgment (Docket No. 36) be, and the same hereby is, 11 DENIED. 12 | Dated: May 21, 2020 . - ak. a bean, (hi. WILLIAM B. SHUBB 14 UNITED STATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14