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Berman v. Freedom Financial Network, LLC

United States District Court, N.D. California

September 4, 2019

Daniel Berman, Plaintiff,
Freedom Financial Network, LLC, et al., Defendants.


          Yvonne Gonzalez Rogers United States District Court Judge

         In the instant action, plaintiff Daniel Berman, on behalf of himself and a putative class, alleges violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. section 227 et seq. by means of autodialed text messages and prerecorded voice calls as part of a telemarketing campaign by Lead Science, LLC (also known as “Drips”) and Fluent, Inc. (“Fluent”) promoting the services of Freedom Financial Network, LLC and Freedom Debt Relief, LLC (collectively “Freedom”). Berman alleges a total of four claims: one for violation of section 227(b)(1) for “robocalling, ” i.e. placing non-emergency calls or text messages to a cell phone number using and automatic dialing system and/or an artificial or pre-recorded voice without his prior express written consent; a second for violation of section 227(c) for unsolicited telemarketing calls and texts to a residential telephone number listed on the National Do Not Call Registry (“NDNCR”); and two additional claims for willful violations of sections 227(b)(1) and 227(c).

         Pending before the Court are: defendants' (1) motion for summary judgment and (2) motion to limit the admissibility of portions of a supplemental expert report by Benjamin H. Beecher; and (3) plaintiff's motion for class certification. Having carefully considered the papers submitted[1], the admissible evidence[2], and the pleadings in this action, and for the reasons set forth below, the Court rules as follows:

(1) The motion for summary judgment (Dkt. No. 156) is Denied;
(2) The motion to limit admissibility of the supplemental Beecher Report (Dkt. No. 153) is Granted In Part And Denied In Part as stated herein; and
(3) With respect to the motion for class certification (Dkt. No. 139), the motion is Denied Without Prejudice to plaintiff renewing the motion to address the matters discussed herein.

         I. Legal Principles Applicable To The Motions

         A. Summary Judgment

         Summary judgment is appropriate when “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). “A party asserting that a fact cannot be or is genuinely disputed must support that assertion by . . . citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits, or declarations, stipulations . . . admissions, interrogatory answers, or other materials, ” or by “showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Rule 56(c)(1)(A), (B). Thus, summary judgment is mandated “against a party who 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.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

         A moving party defendant bears the burden of specifying the basis for the motion and the elements of the causes of action upon which the plaintiff will be unable to establish a genuine issue of material fact. Id. at 323. The burden then shifts to the plaintiff to establish the existence of a material fact that may affect the outcome of the case under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         In the summary judgment context, a court construes all disputed facts in the light most favorable to the non-moving party. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004). If the plaintiff “produces direct evidence of a material fact, the court may not assess the credibility of this evidence nor weigh against it any conflicting evidence presented by” defendants. Mayes v. WinCo Holdings, Inc., 846 F.3d 1274, 1277 (9th Cir. 2017). “[C]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from facts are jury functions, not those of a judge.” George v. Edholm, 752 F.3d 1206, 1214 (9th Cir. 2014) (alteration in original) (quotation omitted). Thus “where evidence is genuinely disputed on a particular issue- such as by conflicting testimony-that issue is inappropriate for resolution on summary judgment.” Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th Cir. 2017) (internal quotation mark omitted); Santos v. Gates, 287 F.3d 846, 852 (9th Cir. 2002) (same).

         B. Substantive Law Applicable to the Claims Herein

         To prevail on a claim under the TCPA, a plaintiff must establish that a defendant: (i) “made” text message calls (ii) using an automatic telephone dialing system (“ATDS”).[3] 47 U.S.C. § 227(b)(1). The Ninth Circuit has determined that proof of “[e]xpress consent is not an element of a plaintiff's prima facie case but is an affirmative defense for which the defendant bears the burden.” Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1044 (9th Cir. 2017). Under applicable regulations:

The term prior express written consent means an agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered. (i) The written agreement shall include a clear and conspicuous disclosure informing the person signing that:
(A) By executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice; and
(B) The person is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property, goods, or services.
(ii) The term “signature” shall include an electronic or digital form of signature, to the extent that such form of signature is recognized as a valid signature under applicable federal law or state contract law.

47 C.F.R. § 64.1200(f)(8). The regulations require that the written agreement include “a clear and conspicuous disclosure informing the person signing” that they are “authoriz[ing] . . . telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice.” 47 C.F.R. § 64.1200(f)(8(i)(A); see also In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 27 FCC Rcd. 1830, 1844 ¶ 33 (2012).[4]

         II. Evidentiary Issues

         A. Defendants' Motion to Strike Portions of Beecher Report

         As a preliminary matter, the Court considers the admissibility of certain opinion evidence offered by plaintiff in the form of an expert report by Benjamin H. Beecher. Defendants move to strike portions of portions of paragraphs 10(a), 20, 22, 24, 26, 27, 29, and 31 of the expert report of Beecher pursuant to Federal Rules of Evidence 104, 401, 402, 403, 702 and 704. Defendants contend the opinions offered by Beecher are not reliable or relevant and should not be considered in connection with the pending motions. More specifically, defendants contend: (1) Beecher offers opinions on matters as to which he has not demonstrated that he has expertise; (2) his opinions are speculative to the extent they are based upon defendants' undisclosed intent; (3) he offers improper legal conclusions and legal analysis.

         Under Rule 702, expert opinion evidence must be both reliable and relevant. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589-91 (1993); Primiano v. Cook, 598 F.3d 558, 567 (9th Cir. 2010). The district court functions as a gatekeeper, determining the relevance and reliability of expert testimony and deciding whether it will be admitted. Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011) (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137, 145, 147-49 (1999)). The admissibility of an expert opinion requires a three-step analysis:

The admissibility of expert testimony, Rule 702, requires that the trial court make several preliminary determinations, Rule 104(a). The trial court must decide whether the witness called is properly qualified to give the testimony sought. A witness may be qualified as an expert on the basis of either knowledge, skill, experience, training, or education or a combination thereof, Rule 702. The trial court must further determine that the testimony of the expert witness, in the form of an opinion or otherwise, will assist the trier of fact, i.e., be helpful, to understand the evidence or to determine a fact in issue, Rule 702(a). Finally the trial court must determine that as actually applied in the matter at hand, Rule 702(d), to facts, data, or opinions sufficiently established to exist, Rule 702(b), including facts, data, or opinions reasonably relied upon under Rule 703, sufficient assurances of trustworthiness are present that the expert witness' explanative theory produced a correct result to warrant jury acceptance, i.e., a product of reliable principles and methods, Rule 702(c).

         Michael H. Graham, 5 Handbook of Fed. Evid. § 702:1 (7th ed.) (footnotes omitted). The objective “is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.” Kumho Tire Co., 526 U.S. at 152.

         An expert is generally not permitted to opine on an ultimate issue of fact except in limited circumstances, since such opinions may “invade the province of” the jury. See Nationwide Transport Finance v. Cass Information Systems, Inc., 523 F.3d 1051, 1060 (9th Cir. 2008) (“evidence that merely tells the jury what result to reach is not sufficiently helpful to the trier of fact to be admissible”). Nor may an expert opine on questions which are matters of law for the court. See Id. at 1058 (deciding questions of law is the exclusive province of the trial judge); McHugh v. United Service Auto Assoc., 164 F.3d 451, 454 (9th Cir. 1999) (expert testimony cannot be used to provide the legal meaning or interpretation of insurance policy terms); Aguilar v. Int'l Longshoremen's Union Local No. 10, 966 F.2d 443, 447 (9th Cir. 1992) (expert opinion that reliance was reasonable and foreseeable were inappropriate subjects for expert testimony). However, as a practical matter, experts may express opinions based upon hypotheticals and information which would otherwise be inadmissible hearsay on its own.

         Defendants contend that Beecher does not have expertise in the areas in which he offers opinions, specifically questions of whether certain website designs may confuse or manipulate users. While conceding that Beecher has expertise in web design, defendants contend that his lack of training and expertise in psychology or consumer behavior preclude his opinions from consideration. They further argue that expressing opinions in terms describing Fluent's web design as deceptive, confusing, or misleading constitutes legal analysis and conclusions that Beecher is not permitted to offer.

         Beecher is a web development practitioner and Chief Technology Officer of a web development and design consultancy firm. His daily work includes the design of websites that solicit a user's consent to receive marketing communications. (Fougner Expert Motion Decl., Dkt. No. 163-1, Exh. [“Beecher Depo.”] at 28:17-29:12.) He has formal training in business process-focused software engineering, the design of user interface and registration pages, and user-experience design to ensure that users understand how their personal information will be used and disclosed when interacting with a web page. (Beecher Depo. at 20-26, 35; Fougner Decl. in Support of Class Certification [“Fougner CC Decl.”], Dkt. No. 144, Exh. G [“Supp. Beecher Report”] ¶¶ 3-5.) Beecher therefore has a foundation for his opinions regarding the deceptiveness of the Fluent web interface “user flow.” While Beecher may not opine on the ultimate issues in the case, such as whether a user's registration constituted express consent to be contacted for purposes of the TCP A, Beecher may offer opinions on the issue of whether the design of the Fluent website would be likely to mislead or confuse a typical user. Plaintiff is, however, cautioned that Beecher may not testify as to whether a particular user or group of users was confused or misled absent a factual basis for so stating (e.g., survey data).

         For purposes of the motions pending, the Court has construed the following statements to pertain to a typical user based upon Beecher's stated expertise as to standards for webpage design; and the motion to strike these statements is Denied on those grounds:

• portion of paragraph 20 (both the "Fluent makes the user unsure. . ." portion and the ". . . imply that agreeing to the emails is required to continue" portion);
• paragraph 22 fn. 2;
• paragraph 23;
• portion of paragraph 24 ("the screen immediately . . ." and "The screen appears to have been designed . . .");
• paragraph 26; and
• paragraph 29 To the extent that those statements suggest that Beecher is offering an opinion as to a particular user or users, such opinions will not be permitted at trial or in further proceedings.

         The motion to strike is GRANTED as to the portion of Beecher's report opining on the intentions of defendants or legal conclusions, both of which are outside his expertise and not properly within the province of expert testimony. Thus, the objections to the following are Sustained and these portions of the supplemental report are Stricken:

• portion of paragraph 10 stating "unfair and not clear and conspicuous;"
• portion of paragraph 20 stating "with every intention of coercing and manipulating its visitors,"
• portion of paragraph 24 stating "this confusion is intentional;"
• portion of paragraph 27 stating "unfair;"
• portions of paragraph 31 stating "This scheme used by Fluent to obtain purported consent from consumers was unfair" and "not clear and conspicuous."

         B. Plaintiffs Objections

         1.Newly-Produced User Flow

         Plaintiff objects to Exhibit 1 to the Bhadania Declaration in support of defendants' opposition to class certification, Dkt. No. 152-3 (hereinafter, "March 2019 Bhadania Decl."). Berman argues that defendants failed to produce the entire multi-page “flow” for the purported registration and TCPA consent as to Berman's phone number and therefore cannot rely on it in connection with these motions.

         In this litigation, Bhadania previously submitted a declaration dated April 30, 2018 (Dkt. No. 16-1) which described the “flow” by which the plaintiff's phone number was registered on a Fluent website. Bhadania stated that the Fluent website “assigns a unique visitor ID to that user in real time in the Database and then contemporaneously stores several pieces of information about the user including where the user came from before accessing the site, their IP address and their browser user agent . . . .[and] then displays a series of webpages based on the information gathered and information supplied by the user.” (Id. at ¶ 4.) Bhadania averred that, based upon his research of the user experience and information stored in the database concerning registration of Berman's phone number, the user registered through, a website owned and operated by American Prize Center LLC.” (Id. at ¶ 6.) Bhadania stated that, “[U]pon landing on the site, ” the user “agreed to the Terms and Conditions of the Site by clicking the ‘Enter to Win!' button on the registration page” and “[a]bove the ‘Enter to Win!” button the following sentence is produced: ‘I understand and agree to the Terms & Conditions which includes mandatory arbitration and Privacy Policy.'” (Id. at ¶¶ 9, 10.) The declaration included a single image that Bhadania described as a “regenerated HTML representation of the page showing the agreement to the Terms and Conditions of the user.” (Id. ¶ 10.)

         Defendants now offer a declaration from Bhadania explaining that his original declaration did not regenerate the entire set of webpages that the user who registered Berman's phone number would have seen. Bhadania states that he has now “replicated and pieced together” all the webpages the registrant would have seen for “the vast majority of the flow related to the Berman lead, ” the only difference being that the “actual flow” would have included approximately fifty survey questions but the attached exhibit includes only two. (Dkt. No. 152-3 at ¶¶ 4-7.)

         In response to motions to compel responses to plaintiff's discovery seeking defendants' evidence that plaintiff and other putative class members expressly consented to be contacted, defendants were warned repeatedly that their failure to produce documents in support of their express consent defense would mean that they would not be able to rely on those documents in later proceedings. (See Dkt. No. 137 [February 6, 2019 Order of Magistrate Judge Corley] at 2:1-3; Dkt. No. 162 [March 13, 2019 Order of Magistrate Judge Corley] at 1:21-22; see also hearing transcripts at Dkt. No. 121 at 30:25- 31:3; Dkt. No. 130 at 37:24; and Dkt. No. 132 at 22:13-20.) Based upon defendants' failure to produce this more fulsome “user flow” for the registration of plaintiff's phone number, the Court Sustains plaintiff's objection and will not consider it in connection with the pending class certification and summary judgment motions.

         2. Sean ...

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