Zephyr v. Saxon Mortgage Services, Inc.
873 F. Supp. 2d 1223
E.D. Cal.2012Background
- Zephyr, a California resident, sues Saxon Mortgage Services, a Texas corporation, under CAFA for calls about mortgage lending/ servicing to California residents.
- Zephyr alleges Saxon recorded outbound calls from Texas to California class members without consent, violating Penal Code §§ 632 and 632.7.
- Plaintiff seeks to represent a class of all California residents who received such calls, with statutory damages, injunctive relief, and fees.
- Saxon moves to dismiss under Rule 12(b)(6), arguing the application of §§ 632 and 632.7 to its interstate calls violates the dormant Commerce Clause.
- Requests for judicial notice concerning legislative history and Saxon’s California mortgage servicer license are considered; the court grants these requests.
- Procedural posture: issue is whether California privacy statutes can be applied to out-of-state conduct; the court denies the motion to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Dormant Commerce Clause viability of §§ 632, 632.7 | Zephyr argues CA statutes apply to out-of-state calls to CA residents to protect privacy. | Saxon asserts the statutes burden interstate commerce and conflict with Texas law; impermissible under dormant Commerce Clause. | Statutes do not violate the dormant Commerce Clause as applied here. |
Key Cases Cited
- Kearney v. Salomon Smith Barney, 39 Cal.4th 95 (Cal. 2006) (chosen law governs, California privacy protections apply to California clients)
- Healy v. The Beer Inst., 491 U.S. 324 (U.S. 1989) (interstate regulation and Commerce Clause scope)
- Goldstene v. Pacific Merchant Shipping Ass'n, 639 F.3d 1154 (9th Cir. 2011) (balancing incidental burdens on interstate commerce)
- Sullivan v. Oracle Corp., 662 F.3d 1265 (9th Cir. 2011) (two categories of state regulation burdening interstate commerce; Pike balancing test)