Litigation, Litigation, Go Away, Come Again Another Day: TCPA Lawsuit Stayed Pending FCC’s Resolution of Issues

Last week, a Seattle federal court granted the ridesharing company Lyft’s motion to stay a TCPA class action lawsuit brought against it pending resolution of two recent petitions for declaratory rulings currently before the FCC. The court noted that a ruling in the FCC petitions may resolve the issues in the case and ordered the parties to report back in six months or after the FCC issues a pertinent order. In the suit, the plaintiff alleged that Lyft sent messages to the contacts of its users without those contacts’ prior express consent. The stay was based on the doctrine of primary jurisdiction – a doctrine whereby a court may exercise its discretion to pause judicial proceedings pending the resolution “of an issue within the special competence of an administrative agency” such as “technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry.” (Slip Op. at 3) (quoting Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir. 2008)).

The Lyft court based the stay on two FCC petitions:

• A October 2013 petition by Glide Talk, Ltd., requesting a ruling regarding the types of equipment qualifying as an automatic telephone dialing system (ATDS); that software/app providers offering the ability to send invitation messages do not “make” a call under the TCPA merely by facilitating the ability of their users to send the text messages, but that , if the provider does “make” that call, third-party consent is sufficient for non-telemarketing, user-initiated invitational messages. (Slip Op., at 4.)
• A March 2014 petition by TextMe requesting a ruling that an ATDS is only equipment that, at the time of use, could in fact perform the functions described in the TCPA without human intervention and without first being technologically altered; and that the software provider does not “make” calls under the TCPA – rather, that its users make such calls. (Id.)

The Lyft court concluded that a stay was appropriate for several reasons – the two petitions “ask the FCC to resolve to the very issues that this case would require the Court to resolve,” Congress has vested the FCC with authority to make rules and implement the TCPA, and the FCC possesses expertise over the issues addressed by the TCPA. The court also noted that the parties primarily rely on district court cases, which “demonstrate both the need for uniform administration of the TCPA—particularly uniform interpretation of ‘ATDS’ and the need for guidance from the FCC as to whether invitational text messages are actionable under the TCPA.” Accordingly, the district court stayed the entire case and ordered the parties to file a status report in six months or within 10 days of any FCC ruling in the interim. (Slip Op., at 5-6.)

The Lyft case is not the first to stay TCPA litigation pending an FCC ruling. See, e.g., Hurrle v. Real Time Resolutions, Inc., No. C13-5765, 2014 U.S. Dist. LEXIS 22204 (W.D. Wash. Feb. 20, 2014); Mendoza v. UnitedHealth Group Inc., No. C 13-1553, 2014 U.S. Dist. LEXIS 1616 (N.D. Cal. Jan. 6, 2014); Glauser v. Twilio, Inc., No. 11-2584-PJH, 2012 U.S. Dist. LEXIS 9648 (N.D. Cal. Jan. 27, 2012). However, obtaining a stay in TCPA litigation still is not commonplace.

The significance of the Lyft stay order is that it builds precedent that staying TCPA litigation is an appropriate result when on-point issues are pending before the FCC. Companies that are defending a TCPA lawsuit may find the Lyft stay order to be a valuable arrow in their quiver if one of the many petitions pending before the FCC may resolve at least some of the issues involved in the lawsuit.