Kazerouni Law Group, APC A Consumer Protection Law Firm
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10.0Mohammad Reza Kazerouni

July 2014 Archives


After more than two years of litigating Plaintiff's Telephone Consumer Protection Act class action, the Honorable Gonzalo P. Curiel of the Southern District of California approved the Kazerouni Law Group, APC's $2.5 million settlement with Defendants Schwan's Home Service, Inc.; and, Customer Elation, Inc. ("Defendants"). [A true and correct copy of Judge Curiel's Order is available here]. Only after defeating Defendant's tenacious defense, including a Motion to Decertify Plaintiff's class, did the Parties amicably resolved the dispute. [Judge Curiel's Order, 5:8-18]. Due to the complexity of the issues and inherent risks in moving forward with litigation, the Court determined that the classwide settlement was "fundamentally fair, reasonable, adequate, and in the best interest of the Class Members." [Id. at 10:8-10].


On July 11, 2014, the Honorable Otis D. Wright II of the Central District of California denied Defendant SGS Automotive Services, Inc.'s ("SGS") Motion to Dismiss Plaintiff's Complaint. [A true and correct of Judge Wright's Order is attached here]. In their Motion, SGS argued that: (i) California Penal Code § 632 ("§ 632.7") violated the First Amendment; and, (ii) 632.7 violated the Dormant Commerce Clause. [Judge Wright's Order, 4:2-7].As a preliminary matter, § 632.7 states:"Every person who, without the consent of all parties to a communication, intercepts or receives and intentionally records, or assists in the interception or reception and intentional recordation of, a communication transmitted between two cellular radio telephones, a cellular radio telephone and a landline telephone, two cordless telephones, a cordless telephone and a landline telephone, or a cordless telephone and a cellular radio telephone, shall be punished." [Id. at 2:5-11].In layman's terms § 632.7 prohibits recording a telephone communication involving a cellular telephone without the knowledge and/or consent of all parties involved in said telephone call.First, SGS argued that § 632.7 "violate[d] the First Amendment because it is overbroad, burdening substantially more speech than necessary to serve the State's interest in the statute." [Id. at 4:2-7]. However, Judge Wright rejected this argument stating that § 632.7 "does not run afoul of First Amendment protections." [Id. at 5:10-11]. In so holding, Judge Wright held that this content neutral statute complies with the "well-established purpose of § 632.7 [which] is to protect the privacy of cellular phone communications of California residents." [Id. at 5:7-8]. "[T]he California Constitution explicitly confers a right of privacy on California citizens, and the Supreme Court has made clear that individuals have a reasonable expectation of privacy in telephone communications. [citation omitted]. Accordingly, the Court finds that privacy protection of cellular phone communications is unrelated to speech and constitutes an important government interest." [Id. at 5-6:22-5].Moreover, Judge Wright also rejected SGS' First Amendment claim stating that "the burden [in compliance with § 632.7] is relatively insignificant. [Id. at 6:11-13]. "The only burden on speech activity imposed by the statute is that parties to a phone call involving a cellphone must be informed that the call is being recorded, after which consent may be given or the phone call ended." [Id. at 6:13-15]. In addition, "[t]he statute is also narrowly tailored, restricting no more speech than necessary to further the government's interest in protecting citizens' privacy in communications involving cellular phones. The statute regulates only cellular phone communications - it does not prohibit recording of all communications." [Id. at 6:13-19]. Thus. the Court denied SGS' argument on this issue. [Id.].Second, Judge Wright quickly denied SGS' argument that § 632.7 is unconstitutionally vague. [Id. at 8:13-14]. After reviewing the briefing, Judge Wright stated that § 632.7 "does not encourage arbitrary or discriminatory enforcement." [Id. at 8:1-2]. In fact, "[n]othing in the language of § 632.7 leaves compliance open to interpretation." [Id. at 8:9-11]. Thus. the Court denied SGS' argument on this issue. [Id.].The Kazerouni Law Group, APC believes that this is a strong ruling that further explains the strong privacy rights the California Legislature sought to protect with § 632.7.


On July 3, 2014, Yahoo! Inc. lost its Motion for Reconsideration of the Honorable Gonzalo P. Curiel's Order Denying Motion for Summary Judgment. [See Judge Curiel's Order here]. In so doing, the Court reaffirmed its decision to follow binding Ninth Circuit authority as opposed to unpublished State Court decisions. Specifically, Judge Curiel stated held that a "predictive dialer" does constitute an "automatic telephone dialing system" ("ATDS") subject to the Telephone Consumer Protection Act ("TCPA"). [Judge Curiel's Order, 4:18-28]. After reviewing the Parties' arguments, Judge Curiel felt "bound by Ninth Circuit authority" to rule against Yahoo! for the second time. Moreover, the Court also rejected Yahoo!'s argument that Yahoo!'s predictive dialer did not constitute an ATDS because said dialing equipment lacked the "present capacity to store or produce numbers using a random or sequential number generator." [Id. at 7:15-22]. Again, the Court relied upon binding Ninth Circuit authority to reject this argument stating that Satterfield held that the "TCPA focuses on the equipment's capacity rather than present use. Meyer, 707 F.3d at 1043. The Court further found that because the defendant used its equipment as a predictive dialer, which the FCC has found has the requisite 'capacity,'" a random or sequential number generator is not relevant to whether the dialing equipment constitutes an ATDS. [Judge Curiel's Order, 8:1-14]. Thus, the Court affirmed its denial of Yahoo!'s Motion for Summary Judgment based upon binding Ninth Circuit authority in favor of the Kazerouni Law Group, APC.

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