United States District Court, N.D. California, San Jose Division
REPORT AND RECOMMENDATION THAT PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT BE GRANTED-IN-PART (Re: Docket No. 14)
PAUL S. GREWAL, Magistrict Judge.
Approximately five years ago, Plaintiff Gerald Roylance received the first of multiple unwanted telephone calls offering him a home mortgage at a supposedly "incredible" rate. The calls came at the direction of Defendants ALG Real Estate Services, Inc., Mark Augustus and Donecia La Shaun Augustus. Not satisfied with the Defendants' response-or lack thereof- Roylance filed this suit, alleging that Defendants' actions violated the Telephone Consumer Protection Act, California's Unfair Competition Law, California's False Advertising Law and the California Public Utilities Code.
Because Defendants have not appeared, following an entry of default, Roylance now moves for a default judgment. While the undersigned is persuaded that a default judgment is warranted with respect to at least some of Roylance's claims, Defendants have not consented to magistrate judge jurisdiction pursuant to 28 U.S.C. Section 636(c) and Fed.R.Civ.P. 72(a). The court therefore ORDERS reassignment to a district judge, and recommends that default judgment against defendants be granted in part.
When a party against whom a judgment for affirmative relief is sought "has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, " the court may enter default judgment against that party. The court has "broad latitude to impose the sanction of default" at any point to ensure the "orderly and expeditious conduct of litigation." "The district court's decision whether to enter a default judgment is a discretionary one."
The factors the court may consider include: (1) the possibility of prejudice to the plaintiff; (2) the substantive merits of plaintiff's claim; (3) the sufficiency of the complaint; (4) the amount of money at stake; (5) the possibility of dispute as to any material facts in the case; (6) whether default resulted from excusable neglect; and (7) the strong policy of the Federal Rules of Civil Procedure favoring decisions on the merits.
According to his complaint, Roylance received an anonymous prerecorded message on his residential telephone line in May 2010 from a blocked telephone number. The message offered a "thirty-year loan at an incredible interest rate of four point five percent." The message did not state the identity of the caller, provide the caller's telephone number or ask permission to play the message. Instead, Roylance was invited to "press one" to receive more information about the program. After Roylance complied in order to identify the caller, the automated message asked him to provide his name and telephone number, which Roylance did.
Roylance then received a live call about the loan described in the prerecorded call. The call came from a blocked number, but the person on the phone identified himself as Mark Augustus. After some discussion Mark Augustus told Roylance that he would send Roylance some papers. He then called Roylance again from a blocked number seeking more information and told Roylance that "he would mail the papers that day."
The next day, Roylance received papers which offered a mortgage at an interest rate of 4.5 percent for thirty years and identified ALG and listed Donecia Augustus under her former name of Donecia Montgomery as the broker's representative. The papers stated that Roylance should return them to ALG and listed addresses for ALG and Mark Augustus. These papers provided the same telephone name for Mark Augustus and Donecia Augustus.
The next day after that Roylance sent letters by certified mail to the addresses listed for ALG and Mark Augustus on the loan papers. These letters stated that the solicitation was unlawful and asked ALG to place Roylance on and send him a copy of its do-not-call list. Defendants did not respond to his letters. Roylance subsequently received five identical anonymous prerecorded calls on his residential telephone line. All of these calls blocked caller identification.
Roylance then filed this suit, claiming that the defendants violated the Telephone Consumer Protection Act, California's Unfair Competition Law, California's False Advertising Law and the California Public Utilities Code. A summons was subsequently issued.
After Defendants did not appear or otherwise respond to the suit, Roylance moved for entry of default. The Clerk entered default as requested.
At issue is whether default judgment should be granted. Because the Eitel factors weigh in favor of default judgment as to some but not all of Roylance's claims, the court recommends that default judgment be granted in part.
First, the potential prejudice to Roylance weighs in favor of default judgment. If the court does not grant Roylance's motion for default judgment, Roylance has no alternative recourse.
Second, Roylance's complaint sets forth facts sufficient to state causes of action under the TCPA and California Civil Code Section 3294, at least against ALG and Mark Augustus. "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."
Section 227(b)(1)(B) of the TCPA prohibits the initiation of "any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, " subject to exceptions. Roylance has standing to assert this claim because Section 277(b)(3)(A)-(B) provides that a person may bring "an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation" or an action "to receive $500 in damages for each such violation."
Roylance has established that the six prerecorded calls he received violated Section 227(b)(1)(B) because these calls were prerecorded, were made to his residential telephone line and advertised mortgages. Further, as Roylance notes, the fact that he did not answer all of the calls does not take the unanswered calls outside of the scope of the TCPA because Section 227(b)(1)(B) does not require the plaintiff to answer each call. That he "did not have a business relationship with any [d]efendant prior to the prerecorded call" and had not given defendants prior permission to transmit prerecorded messages to his telephone line shows that Roylance did not give prior express consent to these calls.
Calls that are "initiated for emergency purposes" or which the FCC otherwise exempts do not violate Section 227(b)(1)(B). The FCC may exempt "calls made for commercial purposes" that "will not adversely affect the privacy rights that this section is intended to protect" and "do not include the transmission of any unsolicited advertisement." The urgency with which one might desire to respond to an offer of a loan at supposedly "incredible" interest rate aside, calls advertising mortgages are clearly not initiated for emergency purposes. Roylance has alleged facts sufficient to show that the ...