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Uber Loses Bid to Freeze Spam Class Actions

SAN FRANCISCO (CN) - A federal judge on Friday rejected Uber's request to stay proceedings in two class actions pending the results of appeals that could reshape the Telephone Consumer Protection Act.

Uber attorney Debra Bernard made her case to U.S. District Judge Jon Tigar during a Thursday hearing, arguing that potential changes to the law could force the judge to revisit issues that will soon be decided in the two lawsuits.

Plaintiffs in both class actions - Lathrop v. Uber and Kafatos v. Uber - claim the ride-hailing company violated the Telephone Consumer Protection Act by sending unsolicited text messages to recruit new drivers.

Kristen Sagafi, attorney for the Lathrop plaintiffs, said waiting for two higher courts to rule on the appeals would unreasonably delay justice. She said many issues raised in those appeals are irrelevant to the case at hand.

In a ruling issued Friday morning, Tigar denied Uber's motion to stay, finding any hardships Uber might suffer in having to produce additional discovery because of the appeals do not justify staying the cases.

The two appeals in question are before the D.C. Circuit and U.S. Supreme Court.

In Spokeo Inc. v. Robins, the Supreme Court must decide whether plaintiffs who suffer no concrete injury have standing to sue.

Whether people that received unwanted text messages without being charged for them qualify for Article III standing is an issue central to both lawsuits, Bernard told the judge.

Sagafi countered that Spokeo would have no bearing on her clients' case because the plaintiffs do allege a concrete injury stemming from the unwanted texts.

With the advent of unlimited call and texting plans, getting charged for calls and messages has become less common, Bernard argued. She said the law requires that plaintiffs allege a concrete injury, such as an added phone charge, to establish standing.

"Do you think your time has an opportunity cost?" Tigar asked, suggesting that a nonmonetary injury could also be established.

"In a world where there's no penalty for sending text messages, how many would you receive?" Tigar asked.

Bernard responded that statutory fines of $500 to $1,500 for violating the law exist, but that doesn't mean plaintiffs should be able to sue in Federal Court or bring class actions if they did not suffer concrete harm.

Another appeal pending before the D.C. Circuit, ACA International et al. v. Federal Communications Commission, challenges an FCC order issued in June 2015, which redefined certain terms in the Telephone Consumer Protection Act of 1991.

The ruling clarified definitions of "automatic telephone dialing system" and "called party," along with what qualifies as "revocation of consent."

The meaning of automatic dialing system was changed to encompass a system's present and potential capacity, a move that Uber and other interested companies strongly disagree with.

"If your honor determines we have to go forward in this case because the way the text messages are sent constitute an [automatic dialing system], then the D.C. Circuit disagrees with that, then we go forward with class certification finding the outcome has to be revisited," Bernard said.

In its ruling, the FCC decided that a "called party" can be either the subscriber of a phone number or the nonsubscribing customary user of that number.

Bernard said that issue directly affects one named plaintiff in the Lathrop case, Julie McKinney , who sued Uber for receiving unsolicited text messages even though her husband allegedly signed up with Uber and had the phone in his name.

"He's the one that signed up," Bernard said. "Uber tried to contact him, but she's the named plaintiff."

The FCC also adopted what Uber considers a broad interpretation of "revocation of consent," which the company says makes it tough to pinpoint what terms and phrases signal a request to stop sending messages.

"It's a very nebulous standard that companies cannot live up to," Bernard said of the "revocation of consent" definition. "If someone says, 'Please stop texting me' or 'I don't want to get these anymore,' there are technological barriers for companies to recognize that."

She added that some named plaintiffs in both suits claim they tried to opt out from receiving messages by using terminology the company has no ability to recognize.

Adrian Bacon, representing the Kafatos plaintiffs, argued that no "seismic change" is being requested in the appeal before the D.C. Circuit, and that the issues in both lawsuits have been well established through extensive litigation.

"The Supreme Court will probably ultimately have to weigh in on this," Bacon said. "Somebody's going to appeal this thing, and it will take a few years to work out. That's not a burden the plaintiffs should have to bear."

Turning to discovery issues, Tigar ordered Uber to submit to a Jan. 20 deposition regarding its ability to pull data and produce discovery on its text logs, which the Lathrop plaintiffs say are crucial to determine the scope of their proposed class and to identify class members.

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