Facts

Educational Credit Management Corporation (ECMC) is a nonprofit, guaranty agency with the Federal Family Education Loan Program. As part of its business practice, ECMC placed and received a large number of calls. ECMC recorded all inbound and outbound calls that reached a live customer service representative using Noble Systems Corporation's phone dialer system. For those calling ECMC, the Noble Dialer system was programmed to play a four second pre-recorded opening message stating that the call was being recorded. The Noble Dialer also provided ECMC with the option to play the message as a mandatory or non-mandatory, with the mandatory message playing regardless if a representative becomes available whereas the non-mandatory would be interrupted if the live representative came on the line. During the time period of August 2014 to March 2015, the Noble Dialer was incorrectly programmed so that some of ECMC's phone lines had the opening message set as non-mandatory for inbound calls. During that time frame, ECMC identified 2,218 connected inbound calls from cell phone numbers with California area codes. AJ Reyes filed a class action suit alleging violations of the California Invasion of Privacy Act (CIPA) and the Telephone Consumer Protection Act (TCPA). On May 16, 2016, Judge Cynthia Bashant granted summary judgment as to the TCPA claim, leaving only the CIPA claim. Class certification was granted but ECMC received permission from the Ninth Circuit to appeal the certification. Judge Bashant then stayed proceedings and denied Reyes' motion to add Beheshta Mahboob as a party. On March 16, 2018, Mahboob then filed an action in USDC Central alleging the same class action complaints which was stayed by the judge pending resolution of the appeal. On July 23, 2019, the Ninth Circuit vacated the class certification order and remanded the case for the district court to determine for Reyes to prove he did not hear the recording warning because if he did hear it, he could not be a class member and the lawsuit would have to be dismissed. Judge Bashant allowed Reyes to add Mahboob. After finding that Reyes failed to show that he did not hear the prerecorded message, the district court dismissed him. On March 10, 2020, ECMC filed a petition of Writ of Mandamus with the Ninth Circuit, arguing that Judge Bashant failed to execute the Ninth Circuit's mandate. That petition was denied and on April 21, 2020, the judge in the Central District action granted the parties' joint motion to dismiss Mahboob's case in that court without prejudice. On September 24, 2020, the action was transferred to the USDC Southern and Mahboob filed for class certification. On May 10, 2021, ECMC filed an opposition, arguing that Mahboob should not have been permitted to join the lawsuit given the Ninth Circuit's direction that the lawsuit should be dismissed if it was determined that Reyes never had a claim and adding Mahboob was not allowed given that circumstance.

PLAINTIFFS' CONTENTIONS: Plaintiff contended that as a result of the negligent dialing system setup and failure to notice the error, defendant violated CIPA thousands of times by wrongly recording private telephone calls with its customers without their consent.

DEFENDANT'S CONTENTIONS: Defendant contended that the district court lacked the authority to grant the opposed request to add Mahboob as a plaintiff before determining whether Reyes met his burden as required by the Ninth Circuit and because Reyes failed to meet his burden of providing that he did not hear the warning, the court was required to dismiss the case for lack of jurisdiction.

Result

The court dismissed the action.