Freeman v. Wilshire Commercial Capital L.L.C.

          ORDER

          WILLIAM B. SHUBB, UNITED STATES DISTRICT JUDGE

         Plaintiffs brought this putative class action on July 6, 2015, alleging that defendant Wilshire Commercial Capital, LLC used an Automatic Telephone Dialing System ("ATDS") to unlawfully call plaintiffs and the putative class without their prior express consent in violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et seq. At the initial status conference on October 26, 2015, the parties agreed to stay all proceedings, with the exception of certain limited discovery, pending the resolution of certain dispositive motions in a previously-filed and substantially similar putative class action pending against defendant in the Southern District of California ("Banarji"). (See Docket No. 19); Banarji v. Wilshire Commercial Capital, LLC, Civ. No. 3:14-2967 BEN KSC (S.D. Cal. filed Dec. 17, 2014). In the meantime, the parties agreed to conduct limited discovery in the present action on the capacity of the dialing system that defendant used.

         At a further status conference on April 11, 2016, the parties informed the court that the Southern District of California denied class certification in Banarji and the plaintiff in that action had filed an interlocutory appeal that was likely going to be dismissed by the Ninth Circuit. (See Docket No. 28.) The parties agreed that, notwithstanding Banarji, the present action should proceed in this district, and the court lifted the stay of the proceedings here. (Id.) Since April 11, 2016, the Ninth Circuit has dismissed the Banarji plaintiff's interlocutory appeal, and the Southern District of California has similarly denied the Banarji plaintiff's motion for a certificate of appealability of the order denying class certification. Banarji (ECF Nos. 57, 59). Because the class claims in Banarji can no longer proceed, Banarji does not substantially overlap with the present action.

         The parties now inform the court, however, that there is yet another previously-filed and substantially similar putative class action currently pending in the Western District of Pennsylvania ("Duchene"). (See Docket No. 29); Duchene v. Westlake Services, LLC, Civ. No. 2:13-1577 MRH (W.D. Pa. filed Sept. 26, 2013). That action asserts similar TCPA class claims against defendant's parent company--Westlake Services, LLC ("Westlake")--and its agents. Plaintiffs contend that defendant should have notified plaintiffs and the court of the Duchene action in the Notice of Related Action that defendant filed on August 31, 2015. (See Docket No. 12.) Defendant argues, however, that Duchene is not related to the present action because "[t]he Duchene matter was filed against Westlake Services, LLC and at no time was Defendant Wilshire Commercial Capital, LLC a party thereto or encompassed within the class definition." (Docket No. 29 at 2-3.)

         Defendant's argument that Duchene is not a related case is puzzling to say the least. The complaint in Duchene alleges that Westlake and its agents used an ATDS to call the putative class members, who were listed as personal references on loan applications, without their prior express consent in violation of the TCPA. Duchene Compl. ¶¶ 1, 22-28 (ECF No. 1). The Complaint in the present action similarly alleges that defendant--which is Westlake's subsidiary--used an ATDS to unlawfully call the putative class members, who were also listed as references on loan applications, without their prior express consent in violation of the TCPA. (Compl. ¶¶ 1, 20-29 (Docket No. 2).) Both lawsuits seek to represent a class of persons in the United States who received such calls during the four years preceding the filing of the actions. (Compl. ¶ 29); Duchene Compl. ¶ 28.

         On February 22, 2016, the Western District of Pennsylvania in Duchene granted preliminary approval of a class action settlement and conditionally certified the settlement class as:

All persons to whom Westlake, its agents and/or its independent contractors between January 11, 2012, and November 7, 2013 placed a telephone call using an automatic telephone dialing system or an artificial or prerecorded voice to the person's cellular telephone in connection with the confirmation of a loan applicant's references.

Duchene Prelim. Approval Order at 3 (ECF No. 108).^[1] The approved Settlement Agreement in Duchene defines "Westlake" as:

Westlake Services, LLC d/b/a Westlake Financial Services and all Westlake entities, subsidiaries, affiliates, agents, identified independent contractors, and identified vendors, including their predecessor and successor entities and related entities, that participated in making the Calls . . . or in any other act or omission alleged in the Complaint to have been wrongful.

Id. Settlement Ag. art. II, ¶ 2 (ECF No. 107-1) (emphasis added).

         The Settlement Agreement in Duchene provides that, upon final approval, all claims by the settlement class members shall be dismissed with prejudice and "[n]o other action, demand, suit, arbitration or other claim may be pursued against Westlake or the related entities released herein with respect to the Calls or released claims." Id. art. V, ¶ 1(a)-(b). Additionally, the Settlement Agreement provides that, upon final approval, the settlement class members "and all those who claim through them or who assert claims (or could assert claims) on their behalf)" shall release "Westlake . . . and its parents, subsidiaries, affiliates, officers, directors, employees, attorneys, shareholders, agents, independent contractors, vendors and assigns" from "all past, present and future claims . . . from the beginning of the world until today, " arising out of the use "of any [ATDS] to make Calls to a cellular telephone number . . . in connection with efforts to contact or attempt to contact Settlement Class Members, including but not limited to claims arising under . . . the TCPA." Id. art. II, ¶ 24 (emphasis added); Id. art. V, ¶ 1(c).^[2]

         The final approval hearing in Duchene was held on July 12, 2016. Following that hearing, the district court in Duchene issued a minute order stating that "[a]n appropriate Order will issue." Id. (ECF No. 138). The court in Duchene also stated in its preliminary approval order that: "Pending final determination of whether the Settlement should be approved, Plaintiff, all persons in the Settlement Class, and persons purporting to act on their behalf are enjoined from commencing or prosecuting (either directly, representatively, or in any other capacity) any released claim against any of the released parties in any action, arbitration or proceeding in any court, arbitration forum or tribunal." Id. Prelim. Approval Order at 7.

         In light of the events in the Duchene action and pursuant to the provisions of Federal Rule of Civil Procedure 16, the court finds that a continuance of the July 18, 2016 status conference in this matter is warranted pending the Western District of Pennsylvania's ruling on the final approval of the class action settlement in Duchene. The court will therefore continue the July 18, 2016 status conference to August 15, 2016.

         Counsel are required to appear at the August 15, 2016 status conference and be prepared to address the following issues: (1) whether any claims in the present action are or will be barred if final approval of the class action settlement in Duchene is granted; and (2) if final approval of the class action settlement has not been granted in Duchene by the August 15, 2016 status conference, whether the present action should be stayed pending the resolution of the Duchene class action settlement. Prior to the August 15, 2016 status conference, the parties shall file an ...