Loftus v. SignPost, Inc.

Background

William Loftus brought a proposed class action against Signpost Inc. under the Telephone Consumer Protection Act of 1991 (TCPA), a federal law restricting certain automated calls. Loftus alleged that Signpost used an automatic telephone dialing system to make automated business-solicitation calls. He alleged that he received three such calls on his wireless number without consent. He also alleged that Signpost failed to maintain and use required do-not-call procedures.

The motion to stay

Signpost moved to stay, or temporarily pause, the case. It initially relied on anticipated appellate decisions about the meaning of an automatic telephone dialing system and on a request for guidance by the Federal Communications Commission. After the Supreme Court agreed to hear Barr v. American Association of Political Consultants, Signpost argued that the Supreme Court’s decision was the most important reason to pause the case.

The issue in Barr concerned whether the TCPA’s government-debt exception violated the First Amendment and, if so, whether that exception should be separated from the rest of the automated-call restriction. The Second Circuit had already decided Duran, resolving one of the three grounds Signpost had originally offered for a stay.

Court’s reasoning

The court explained that district courts may pause proceedings to manage their dockets efficiently. It considered the interests of Loftus, Signpost, the courts, nonparties, and the public. The court found that Signpost had a substantial interest in avoiding potentially unnecessary litigation in a proposed class action. It also reasoned that the Supreme Court’s decision might make the action moot or provide guidance affecting how the case should proceed.

The court found that third parties, the court system, and the public also had interests in avoiding unnecessary discovery, expense, and use of judicial resources. Although Loftus argued that delay could risk the destruction of documents, Signpost stated that it understood its preservation obligations and had instituted a litigation hold. The court concluded that the stay would be brief and would not substantially prejudice Loftus.

Disposition

The court granted Signpost’s motion to stay the case. The case was stayed until July 17, 2020. The parties were required to provide a status report on or before that date, including the effect of any Supreme Court decision in Barr. The clerk was directed to close Docket No. 27. The opinion did not decide whether Signpost violated the TCPA or whether the proposed class should be certified.