United States District Court, N.D. California, San Jose Division
July 18, 2014
DAVID TRINDADE, Plaintiff,
REACH MEDIA GROUP, LLC, Defendant.
ORDER GRANTING TRINDADE'S MOTION FOR DEFAULT JUDGMENT (RE: DKT No. 80)
PAUL S. GREWAL, Magistrate Judge.
Before the court is Plaintiff David Trindade's motion for default judgment. Defendant Reach Media Group, LLC has not filed any opposition. Having reviewed the motion and the record, the court GRANTS Trindade's motion for default judgment.
On September 12, 2012, Trindade filed this suit as a putative class action, alleging that RMG made, or had made on its behalf, unsolicited text message calls to Trindade and the other members of the putative class. The alleged text message calls stated that lenders were offering cash loans and directed recipients to information collection and payday loan offer websites. Trindade alleged that RMG's actions violated the Telephone Consumer Protection Act and sought injunctive relief, statutory damages, costs and attorney's fees.
On November 1, 2012, RMG filed its answer. RMG admitted that, as part of its business as a "publisher network, " it generated leads "by contracting with third-party publishers to advertise payday loan offers to consumers through text messages." RMG also admitted that it owned two of the websites alleged in the complaint. RMG denied, however, that it generated leads "by making text message calls or having them made on its behalf to drive consumers to information collection websites and payday loan offers" or that it made, or had made on its behalf, the alleged text message calls.
On November 15, 2012, RMG filed a cross-complaint against third-party Defendants Ryan Lenahan, Kyle Danna and Eagle Web Assets Inc. alleging that the third-party Defendants contracted with RMG as third-party publishers and subsequently edited the content of text message advertisements designed by RMG in violation of their contracts. RMG alleged that the third-party Defendants therefore were required to indemnify RMG against any claims arising from breach of their contracts. RMG's concurrent responses to Trindade's interrogatories were consistent with these allegations. All of RMG's claims against the third-party defendants, however, were eventually dropped. The court dismissed all of the claims against Danna with leave to amend for lack of personal jurisdiction. The court also dismissed the breach of contract, breach of warranty, tortious interference with contractual relations and tortious interference with prospective economic advantage claims against Lenahan with leave to amend. RMG then filed notice of its intent not to file an amended third-party complaint and not to serve Eagle Web Assets Inc.,  as well as a stipulation to the dismissal of all of its claims against Lenahan.
On November 8, 2013, the court granted RMG's counsel leave to withdraw as counsel of record. In the interim, RMG has not actively litigated this case - for example, RMG has not responded to Trindade's discovery requests or filed anything on the docket. On January 27, 2014, the Clerk entered default pursuant to Fed.R.Civ.P. 55(a) against RMG. Trindade now seeks entry of default judgment only as to his individual claim.
II. LEGAL STANDARDS
After entry of default, district courts are authorized to enter default judgment, so long as the judgment does not "differ in kind from, or exceed in amount, what is demanded in the pleadings." Entry of default judgment is discretionary. To determine whether default judgment is warranted, the court balances the Eitel factors: "(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."
A. The Eitel Factors
1. Potential Prejudice to Trindade
The first Eitel factor considers potential prejudice to Trindade. If the court does not grant Trindade's motion for default judgment, Trindade has no alternative recourse.
2. Trindade's Claim Is Meritorious
Second, the court looks to the merits of Trindade's complaint. "In considering the sufficiency of the complaint and the merits of the plaintiff's substantive claims, facts alleged in the complaint not relating to damages are deemed to be true upon default."
Trindade's complaint alleges that RMG violated Section 227(b)(1)(A)(iii) of the TCPA. Section 227(b)(1)(A)(iii) prohibits making a call to a telephone number assigned to a cellular telephone service using an automatic telephone dialing system ("ATDS"), except for emergency purposes or with the prior express consent of the called party. The Ninth Circuit has clarified the statute's language, holding that "a text message is a call' within the TCPA" and that an ATDS is equipment that "has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator."
Trindade asserts his TCPA claim under Section 227(c)(5) of the TCPA,  which provides a private right of action for any "person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed under this subsection." Trindade alleges that RMG made, or had made on its behalf,  and "presently continues to make, " text message calls to his cellular telephone without his consent. He claims, for example, that he received one such call on August 13, 2012. Trindade alleges that these text message calls were made using an ATDS, which "had the capacity to store or produce telephone numbers to be called using a random or sequential number generator, and to dial such numbers." Trindade's complaint thus states a valid claim under the TCPA.
3. Trindade's Complaint is Well-Supported by the Record
Third, the court must consider the sufficiency of Trindade's complaint. Trindade's allegations are supported by the declaration of Trindade's attorney Benjamin Richman and 151 pages of supporting exhibits. RMG's answer, third-party complaint and responses to interrogatories also support Trindade's allegations. These documents establish that RMG contracted with third-party publishers to advertise via text messages,  owned two of the websites alleged in the complaint and was aware that the third-party defendants sent "text messages to cellular phone numbers." The allegations in the complaint thus are well-supported by the record.
4. The Amount of Money at Stake is Reasonable
Fourth, the court considers the amount of money at stake in this case. "Default judgment is disfavored where the sum of money at stake is too large or unreasonable in light of defendant's actions." "The Court considers Plaintiff's declarations, calculations, and other documentation of damages in determining if the amount at stake is reasonable." Trindade seeks a judgment of $1, 500 in damages. Section 227(c)(5) of the TCPA permits a claimant to recover "up to $500 in damages" for each violation, plus a three times multiplier if the violation was willful or knowing. Because Trindade alleges that he received more than one text message call from RMG in violation of the TCPA,  the amount sought therefore is reasonable and consistent with the statutorily prescribed damages.
5. No Material Facts Are in Dispute
Fifth, the court must consider the possibility of disputed material facts. Following entry of default, the court "takes all well-pleaded facts, except those pertaining to damages, as true." Trindade's claims, moreover, are supported by clear record evidence, including RMG's answer, third-party complaint and responses to interrogatories. In sum, the weight of evidence supports the damages sought.
6. RMG's Default Is Not the Result of Excusable Neglect
Sixth, the court must consider whether RMG's failure to appear was due to excusable neglect. RMG actively participated in this litigation for over a year, filing an answer and a third-party complaint and responding to interrogatories. On November 7, 2013, however, RMG's attorneys withdrew as counsel of record. In the interim, RMG has not communicated with opposing counsel or filed anything on the docket. Courts in this district have held that where a defendant "was aware of Plaintiff's action" and later stopped actively participating in the case, a finding of excusable neglect is unwarranted.
7. Public Policy Favors Default Judgment
Seventh, the court must consider whether default judgment comports with the legal principles undergirding the Federal Rules of Civil Procedure. While the Federal Rules favor decisions on the merits, this preference standing alone is not dispositive. A decision on the merits is not possible where defendants have discontinued their participation in the proceedings. The baseline preference to adjudicate cases on the merits thus does not preclude a trial court from entering default judgment.
On balance, the Eitel factors support entry of default judgment.
B. No Hearing is Necessary Because Trindade's Damages Are Calculable and Reasonable
After determining liability, the court then calculates the amount of damages to be awarded. Although "factual allegations relating to liability are taken as true upon entry of default, allegations as to amount of damages are not automatically accepted." "In the Ninth Circuit, it is established that a default judgment for money may not be entered without a hearing unless the amount claimed is a liquidated sum or capable of mathematical calculation.'" When the damages claimed are not readily ascertainable from the pleadings and the record, the court may hold a hearing to value damages.
As previously noted, the TCPA permits a claimant who has received more than one call violating its provisions to recover $500 for each violation, plus trebling if the violations were willful or knowing. Trindade contends that he is entitled to statutory damages for one violation of the TCPA, trebled because "it is clear that RMG had knowledge that unsolicited text messages were being sent on its behalf." Trindade therefore seeks a judgment of $1, 500 in damages. The basis for this amount is readily ascertainable from the pleadings and record. Trindade alleges one call with particularity, providing a date and content, as well as the telephone number from which the call was made. Trindade also alleges other calls and provides the content of those calls and the telephone numbers from which those calls were made. The statutory damages sought are warranted.
Trebling also is appropriate. RMG admits that it had knowledge of the TCPA and that it had knowledge that the calls at issue were being made. Although Trindade seeks statutory damages for a single violation of the TCPA, the evidence in the record shows that RMG contracted with third-party publishers to generate many text message calls in violation of the statute. Default judgment in the amount of $1, 500 will follow.
IT IS SO ORDERED.