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Ades v. Omni Hotels Mgmt. Corp.

United States District Court, C.D. California

September 8, 2014

STEVEN ADES, ET AL.
v.
OMNI HOTELS MANAGEMENT CORP., ET AL

Page 1000

[Copyrighted Material Omitted]

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For Plaintiffs: James Hannink, James Clapp, Zev Zysman.

For Defendants: Angela Agrusa.

OPINION

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Honorable CHRISTINA A. SNYDER.

CIVIL MINUTES - GENERAL Proceedings: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 56

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I. INTRODUCTION

Plaintiffs Steven Ades (" Ades" ) and Hart Woolery (" Woolery" ) filed the instant putative class action on March 15, 2013 in Los Angeles County Superior Court. Defendant in this action is Omni Hotels Management Corporation (" Omni" ). Omni removed the case to this Court based on diversity of citizenship on April 8, 2013. Dkt. #1. Plaintiffs have since sought to substitute Jonathan Murphy (" Murphy" ) for Woolery as class representative. Dkt. #55, 59.

On April 29, 2013, plaintiffs filed the First Amended Complaint (" FAC" ). The FAC asserts claims for relief pursuant to the California Invasion of Privacy Act (" CIPA" ), California Penal Code § 630 et seq. In brief, these claims assert that plaintiffs called Omni's toll-free telephone numbers and provided Omni representatives with personal information. FAC ¶ ¶ 16 - 17. Plaintiffs allege that when they placed their calls to Omni's toll-free telephone numbers, they were not apprised that the call might be recorded. Id. Plaintiffs further allege that Omni has a company-wide policy of recording inbound telephone conversations with consumers without seeking permission or informing consumers about the monitoring. Id. ¶ ¶ 18 - 19.

Omni filed a motion for summary judgment on July 30, 2014, Dkt. #63, and a corrected memorandum of points and authorities in support thereof on August 1, 2014, Dkt. #65. Plaintiffs filed an opposition on August 18, 2014. Dkt. #67. Omni replied on August 28, 2014. Dkt. #72. The parties appeared at oral argument on September 8, 2014. After considering the parties' arguments, the Court finds and concludes as follows.

II. BACKGROUND[1]

Plaintiffs brought this suit on behalf of themselves and " [a]ll individuals who, between March 15, 2012 and March 22, 2013, inclusive (the 'Class Period'), while physically present in California, participated in a telephone call with a live representative of Omni" that was placed to one of several Omni toll-free numbers, made from a telephone number with a California area code, and transmitted via the AT& T, Verizon Wireless, or Sprint cellular telephone networks. Dkt. #59. Plaintiffs contend that they called Omni's toll-free phone number and, without being warned that their calls were being recorded, provided Omni representatives with personal information including their names, phone numbers, e-mail addresses, and credit card numbers and expiration dates. FAC ¶ ¶ 16-17. Plaintiffs allege that unwarned and unconsented recording and monitoring of inbound calls pursuant to Omni company policy violated § 632.7 of CIPA, entitling them to statutory damages. Id. ¶ ¶ 31-46. The calls at issue were placed to an Omni call center located in Omaha, Nebraska. Defendant's Statement of Uncontroverted Facts (" DSUF" ) ¶ ¶ 1-2; Plaintiff's Statement of Disputes of Material Fact (" PSDMF" ) ¶ ¶ 1-2.

Omni states that all relevant incoming calls were recorded solely for quality assurance purposes. DSUF ¶ ¶ 2, 4. While disputing that this is relevant to the motion for summary judgment, plaintiffs cite evidence that the recordings were also made so that Omni personnel could consult them in the event of a dispute between Omni and a customer. PSDMF ¶ ¶ 2 ,4. Omni contends that, at all times relevant

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to this motion, it neither had nor has the ability to " identify an incoming cellular caller's location or state residency." DSUF ¶ 5. Plaintiff denies this, and argues that Omni could identify the origin of calls by (1) retaining a " location information services company to provide Omni with real-time data . . . indicating the originating cell tower location; (2) utilizing an " Integrated Voice Response" system that would ask callers to indicate by pressing a keypad button whether they were calling from California; (3) instructing its agents to ask whether customers are calling from California; or (4) using the caller's area code as a " reasonable proxy for geographic location." PSDMF ¶ ¶ 5, 6. Since the filing of this lawsuit, Omni has implemented an automated notification stating that calls to the Omaha call center may be recorded. PSDMF ¶ 13.

III. LEGAL STANDARD

Summary judgment is appropriate where " there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party bears the initial burden of identifying relevant portions of the record that demonstrate the absence of a fact or facts necessary for one or more essential elements of each claim upon which the moving party seeks judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

If the moving party meets its initial burden, the opposing party must then set out specific facts showing a genuine issue for trial in order to defeat the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also Fed.R.Civ.P. 56(c), (e). The nonmoving party must not simply rely on the pleadings and must do more than make " conclusory allegations [in] an affidavit." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); see also Celotex, 477 U.S. at 324. Summary judgment must be granted for the moving party if the nonmoving party " fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322; see also Abromson v. Am. P. Corp., 114 F.3d 898, 902 (9th Cir. 1997).

In light of the facts presented by the nonmoving party, along with any undisputed facts, the Court must decide whether the moving party is entitled to judgment as a matter of law. See T.W. Elec. Serv., Inc. v. P. Elec. Contractors Ass'n, 809 F.2d 626, 631 & n.3 (9th Cir. 1987). When deciding a motion for summary judgment, " the inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation omitted); Valley Nat'l Bank of Ariz. v. A.E. Rouse & Co., 121 F.3d 1332, 1335 (9th Cir. 1997). Summary judgment for the moving party is proper when a rational trier of fact would not be able to find for the nonmoving party on the claims at issue. See Matsushita, 475 U.S. at 587.

IV. DISCUSSION

Omni advances five arguments in support of its motion. First, it argues that Nebraska law, not California law, governs Omni's conduct. Second, it maintains that if § 632.7 is imposed on Omni's national call center as plaintiffs urge, it would violate the dormant Commerce Clause of the federal Constitution. Third, Omni contends that the statutory damages sought

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by plaintiffs violate the Excessive Fines Clause of the federal Constitution and the due process guarantees of the California and federal constitutions. Fourth, it argues that § 632.7 does not apply to call participants. Finally, Omni denies that plaintiffs have been " injured" as required to bring a damages claim under § 632.7. Each argument is addressed in turn.

A. Choice of Law

" Federal courts sitting in diversity jurisdiction look to the law of the forum state in choice-of-law determinations." Fields v. Legacy Health Sys., 413 F.3d 943, 950 (9th Cir. 2005). California applies a three-step " government interest" test to choice-of-law issues, which the state's Supreme Court has articulated as follows:

First, the court determines whether the relevant law of each of the potentially affected jurisdictions with regard to the particular issue in question is the same or different. Second, if there is a difference, the court examines each jurisdiction's interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists. Third, if the court finds that there is a true conflict, it carefully evaluates and compares the nature and strength of the interest of each jurisdiction in the application of its own law " to determine which state's interest would be more impaired if its policy were subordinated to the policy of the other state," and then ultimately applies the law of the state whose interest would be the more impaired if its law were not applied.

Kearney v. Salomon Smith Barney, Inc., 39 Cal.4th 95, 107-08, 45 Cal.Rptr.3d 730, 137 P.3d 914 (1996) (internal quotation marks omitted). Omni makes two ...


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