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McCurley v. Royal Seas Cruises, Inc.

United States District Court, S.D. California

July 10, 2019

JOHN MCCURLEY, DAN DEFOREST, individually and on behalf of all others similarly situated, Plaintiffs,



         In this consolidated case, California resident Plaintiffs John McCurley and Dan DeForest claim that they received calls to their cell phones for telemarketing purposes placed on behalf of Defendant Royal Seas Cruises, Inc. (“Royal”), a Florida-based company, without Plaintiffs' prior express consent and with the use of an automated telephone dialing system or pre-recorded voice, in violation of the federal Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. §§ 227 et seq. (ECF No. 31, Consolidated Complaint [hereinafter “Complaint” or “Compl.”] ¶¶ 94-101.) DeForest also claims that the alleged calls he received violated California's Invasion of Privacy Act (“CIPA”), Cal. Penal Code §§ 630 et seq. (Compl. ¶¶ 102-111.) Plaintiffs previously moved for certification of nationwide TCPA classes under Rule 23(b)(2) and (b)(3). (ECF No. 49.) The Court granted in part and denied in part Plaintiffs' motion, resulting in certification of a nationwide Rule 23(b)(3) TCPA class and transfer subclass. See McCurley v. Royal Seas Cruises, Inc., No. 17-cv-00986- BAS-AGS, -F.R.D.-, 2019 WL 1383804 (S.D. Cal. Mar. 27, 2019).

         Royal now moves for leave to file an amended answer, (ECF Nos. 94, 99), and submits a copy of its Proposed First Amended Answer (“PFAA”), (ECF No. 94-2 Ex. A; ECF No. 97 (redline)).[1] Royal proposes three amendments, only one of which Plaintiffs oppose. (ECF No. 98.) In its first set of proposed amendments, Royal seeks to amend its prior responses to certain allegations in the operative Complaint. (PFAA ¶¶ 58-61, 77-78, 126, 129, 141.) Royal also proposes an “affirmative defense” that the CIPA claims of the putative class have been “waived” as a result of DeForest's failure to timely move for class certification under the scheduling order in this case. (Id. ¶ 147.) Plaintiffs have not opposed these amendments. In the absence of any other countervailing consideration, the Court grants Royal's request solely for these amendments. The Court expresses no view on the merits of these proposed amendments.

         Plaintiffs oppose Royal's remaining proposed amendment in which Royal requests leave to plead an “affirmative defense” of lack of personal jurisdiction against the claims of absent out-of-state class members based on Bristol-Myers Squibbs Company v. Superior Court of California, 137 S.Ct. 1773 (2017). (PFAA ¶ 146.) For the reasons herein, the Court denies Royal leave to add its proposed personal jurisdiction defense.


         As the Court has noted, this case is a consolidation of two separately filed actions by two California resident Class Plaintiffs against a defendant company incorporated and with its principal place of business in Florida. (Compl. ¶¶ 18-21.) Plaintiff McCurley filed his putative nationwide class action complaint against Royal on May 12, 2017 in the Southern District of California, solely alleging TCPA claims. (ECF No. 1.) Less than a month later, Plaintiff DeForest filed his putative nationwide class action complaint against Royal in the Central District of California, alleging TCPA and CIPA violations. (DeForest v. Royal Seas Cruises, Inc. [hereinafter “DeForest”], No. 17-cv-1988-BAS-AGS, ECF No. 1.) Royal answered each complaint on July 28, 2017. (ECF No. 17; DeForest, ECF No. 19.) DeForest's case was transferred to the Southern District and the cases were consolidated thereafter, both at the parties' request. (DeForest, ECF No. 21-23; ECF No. 27.) Plaintiffs filed the consolidated operative Complaint on December 20, 2017. (ECF No. 31.) Like the pre-consolidation pleadings, the Complaint alleges a putative nationwide TCPA class. Royal did not move to dismiss, but instead answered the Complaint on January 8, 2018. (ECF No. 32.)

         Roughly seven months after Royal's answer, Plaintiffs moved for certification of a nationwide TCPA class and a subclass of persons transferred by non-party Prospects DM to Royal. (ECF No. 48.) Royal filed its opposition to class certification on October 22, 2018. (ECF No. 58.) In opposition, Royal raised a Bristol-Myers-based personal jurisdiction defense to the proposed classes:

As an initial matter, the Court is precluded from certifying these nationwide classes described by Plaintiffs, as the Court lacks general personal jurisdiction over Royal to do so. See Bristol-Myers Squibb Co. v. Superior Ct. of Cal., San Francisco Cty., 137 S.Ct. 1773 (2017) (a court can validly exercise personal jurisdiction over a non-resident's claims only where the court has general jurisdiction over the defendant or specific jurisdiction over the non-resident's claims). Royal is undisputedly not within this Court's general personal jurisdiction: it is incorporated under the laws of the State of Florida, has its principal place of business in Florida, and has no other systematic contact (to the extent relevant) in California.

         To support this argument, Royal directed the Court to cases in which district courts relied on Bristol-Myers to dismiss at the pleading stage any claims of absent nonresident putative class members against a defendant subject only to specific jurisdiction in the forum. (Id. at 24 n.95 (citing Am.'s Health & Res. Ctr., Ltd. v. Promologics, Inc., No. 16 C 9281, 2018 WL 3474444, *2 (N.D. Ill. July 19, 2018); DeBernardis v. NBTY, Inc., No. 17 C 6125, 2018 WL 461228, *2 (N.D. Ill. Jan. 18, 2018)).) And consistent with this argument, Royal contended that the purported restraints on this Court's exercise of personal jurisdiction meant that any certified TCPA classes would need to be limited to California residents. (Id. at 27 n.108 (arguing that “in light of Bristol-Myers, and the Court's lack of general jurisdiction over Royal, Plaintiffs fail to explain how they would identify persons who were in California at the time they received a call.”).)

         In the class certification order, the Court addressed Royal's personal jurisdiction argument as a threshold matter before considering whether the proposed classes satisfied the Rule 23 class certification requirements. The Court, however, had no occasion to resolve the merits of Royal's Bristol-Myers-based personal jurisdiction argument because the Court concluded that “Royal has waived any personal jurisdiction challenge.” McCurley, ___F.R.D.___, 2019 WL 1383804, at *15.

         To reach this conclusion, the Court considered the rules “baked into Rule 12(b)(2), which calls on the party to assert a personal jurisdiction challenge early in the litigation, and Rule 12(h), which ‘is unequivocal that waiver follows' from the failure to promptly assert a personal jurisdiction defense.” Id. at *17 (quoting Mussat v. Enclarity, Inc., 362 F.Supp.3d 468, 477 (N.D. Ill. 2019)). The Court observed that under Rule 12(h), “[c]hallenges to alleged defects in a district court's personal jurisdiction are expressly waived unless a defendant timely asserts the defense in a motion to dismiss or in a responsive pleading.” Id. (citing Fed.R.Civ.P. 12(h)(1) and collecting various cases). Acknowledging the Rule 12(g)(2) exception to waiver for a defense or objection unavailable at the time of an earlier motion to dismiss or responsive pleading, the Court found the exception inapplicable because Bristol-Myers involved a “straightforward application” of “settled principles.” of personal jurisdiction. Id. at *15-16 (quoting Bristol-Myers, 137 S.Ct. at 1781-82). Thus, the Court determined that “[a]n untimely personal jurisdiction defense-regardless of whether it is based on Bristol-Myers-is waived at the later stages of a litigation if the defense was not timely asserted.” Id. at *16.

         Applying these principles, the Court compared Plaintiffs' pre-consolidation pleadings and the Complaint-all of which alleged a nationwide putative TCPA class-with Royal's three answers, including Royal's operative answer filed six months after Bristol-Myers, and found that none of Royal's defensive moves raised any personal jurisdiction defense. Id. at *16 (citing ECF Nos. 1, 17, DeForest, ECF Nos. 1, 19; ECF Nos. 31, 32)). Thus, “[u]nder a straightforward application of Rule 12(h), Royal has waived its personal jurisdiction challenge to alleged defects in this Court's authority to exercise personal jurisdiction over Royal, including for the purposes of certifying the proposed nationwide classes.” Id. at *16. Underscoring that lack of personal jurisdiction is a defense that a party alone waives through its failure to timely assert the defense, the Court refused to “excuse Royal's failure to timely and promptly vindicate its own rights” to “unilaterally . . . strike down portions of the proposed classes” based on an untimely asserted personal jurisdiction defense. Id. at *17.

         Royal's present Rule 15(a)(2) request to amend its answer to add a personal jurisdiction defense comes in the wake of the Court's reasoned rejection of Royal's opposition argument in the class certification order, (ECF No. 94), and nearly sixteen months after Royal filed its operative answer, (ECF No. 32).

         LEGAL ...

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