Plaintiff Darcel Keyes commenced this litigation against Ocwen Loan Servicing, LLC ("Ocwen") on May 10, 2017. See Dkt. No. 1. In her second amended complaint, she raises four claims: negligent violations of the Telephone Consumer Protection Act ("TCPA"),
The parties have filed cross-motions for partial summary judgment. Keyes was first to move for partial summary judgment and did so on May 30, 2018. Dkt. No. 52. She requests that the Court grant her summary judgment as to Ocwen's liability under both the TCPA and the MRCPA. See
On May 30, 2018, the same day that Keyes moved for summary judgment, Ocwen requested that the Court exclude the expert report of Jeffrey Hansen, which Keyes relies on in her motion for partial summary judgment. See Dkt. No. 54. Keyes responded to the motion to exclude on June 13, 2018. See Dkt. No. 74. Then, on June 20, 2018, Ocwen replied in support of its motion. See Dkt. No. 81.
Ocwen also moved for partial summary judgment on May 30, 2018. See Dkt. No. 56. It requests an entry of judgment оn Keyes's TCPA claims, Counts I and II, and requests that the Court rule in its favor on damages regarding Keyes's MRCPA claims, Counts III and IV. See
Presently before the Court are Ocwen's Motion to Exclude the Expert Report of Jeffrey Hansen [54], and the Parties' Cross-Motions for Partial Summary Judgment [52, 56]. The motions are fully briefed and the Court will decide these motions without a hearing pursuant to Eastern District of Michigan Local Rule 7.1(f)(2). For the reasons detailed below, the Court will GRANT Ocwen's Motion to Exclude the Expert Repоrt of Jeffrey Hansen [54]. The Court will GRANT Ocwen's Motion for Partial Summary Judgment as to Keyes's TCPA claims [56], and will DENY Keyes's Motion for Partial Summary Judgment regarding her TCPA claims [52]. Because no federal claims will survive Ocwen's motion for partial summary judgment, the Court will decline to exercise supplemental jurisdiction over Keyes's remaining state law claims.
II. Background
Keyes asserts that Ocwen called her at least 2,781 times between May 2013 and December 2016. See Dkt. No. 52, p. 5 (Pg. ID 762). She contends that Ocwen was attempting to collect on allegedly overdue
It "calls telephone numbers from a stored list." Dkt. No. 80, p. 5 (Pg. ID 4946). That list is first stored on a database called Realservicing, and Realservicing maintains borrower's contact information, including their phone numbers. Dkt. No. 56, p. 20 (Pg. ID 1044). The parties disagree about whether the Realservicing database is loaded onto the Aspect System, or whether it is separate from the system. All agree, however, that the Aspect System can only call numbers stоred in the Realservicing database.
III. Legal Standard
First, on a motion to exclude, a party offering an expert's opinion bears the burden of establishing the admissibility of that opinion by a preponderance of the evidence. Nelson v. Tenn. Gas Pipeline Co. ,
A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the casе.
The Daubert court established considerations for determining whether an expert witness's testimony is reliable. Daubert v. Merrell Dow Pharms., Inc. ,
These considerations are neither definitive nor exhaustive, and may not be relevant to the assessment in a particular case. Kumho Tire ,
"But 'rejection of expert testimony is the exception, rather than the rule[.]' " In re Scrap Metal ,
As for the cross-motions for partial summary judgment, Federal Rule of Civil Procedure 56(a) provides that "[a] court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." A court must view the facts, and draw reasonable inferences from the facts, in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc. ,
IV. Discussion
Ocwen argues that the Court should exclude the report of expert Jeffrey Hansen. See Dkt. No. 54. The Court agrees. Therefore, the Court will not consider Hansen's report in resolving the cross-motions for partial summary judgment.
Additionally, the Court will grant Ocwen's motion for partial summary judgment as to the TCPA claims and will thеrefore deny Keyes's motion for partial summary judgment on her TCPA claims. Dkt. Nos. 52, 56. Based on that holding, only Keyes's state law claims are left in this case. The Court will decline to exercise supplemental jurisdiction over these state law claims, however.
The Court will first analyze Ocwen's motion to exclude and will then turn to the merits of this action.
Ocwen makes two arguments for why the Court should exclude Hansen's report. It first claims that Hansen's report lacks the proper factual basis required by Federal Rule of Evidence 702(b). Second, it claims that Hansen's statemеnts of law and methodology are not reliable as required by Federal Rule of Evidence 702(c). Both of these arguments have merit, and thus, the Court will grant Ocwen's motion to exclude Hansen's report.
1. Hansen's Report Lacks a Proper Factual Basis.
Ocwen's first argues that Hansen's report lacks a proper factual basis because he has merely reviewed manuals and run tests on his computer, and he has not inspected the actual Aspect System which Ocwen uses to make calls. Dkt. No. 54, p. 10 (Pg. ID 963). The Court agrees, as a wealth of authority supports Ocwen's position.
Ocwen persuasively references two cases where courts excluded expert testimony because experts did not test the software in question, and a third case where a court excluded Hansen's report because his report would not have assisted a jury in reaching a verdict. Id. at pp. 10-11 (Pg. ID 963-64). First, in Legg v. Voice Media Grp., Inc. , No. 13-62044-CIV,
Third, Ocwen notes that another court excluded Hansen's report because the report would not have been useful to a jury. See Dominguez v. Yahoo!, Inc. , No. 13-1887,
Likewise, several Sixth Circuit cases emphasize the importance of testability under Daubert .
Here, there is no indication that Hansen has ever tested or inspected an Aspect system, let alone the Aspect System which Ocwen used to call Keyes. Keyes asserts, however, that Hansen has "analyzed thе Aspect UIP predictive dialer in other matters numerous times over the last 10 years."
But Keyes's reliance on those cases is misplaced. Hansen did not inspect or test Ocwen's Aspect System in those matters. Dkt. No. 81, p. 5 (Pg. ID 5068). In Mashiri , Hansen reviewed an amended declaration and an FCC order, as well as discovery responses and manuals. Dkt. No. 81-1, p. 4 (Pg. ID 5078). And he reviewed general documents, manuals, and deposition records in Snyder . Dkt. No. 81-2, p. 5 (Pg. ID 5108-09).
Hansen's reрort lacks an adequate factual basis because, like the experts whose testimony was excluded in the cases noted above, Hansen has not tested the relevant equipment. Indeed, in drafting his report, Hansen simply reviewed documents and manuals regarding (1) predictive dialers and automatic telephone dialing systems ("ATDSs"), and (2) the Aspect System generally. Dkt. No. 54-1, p. 1 (Pg. ID 979). As such, Hansen did not test his theory regarding how Ocwen places calls through Aspect, as required by Daubert . And his involvement and analysis of an Aspect system in other litigations does not establish that testability exists here. See Marshall v. CBE Grp., Inc. ,
No evidence in the record indicates that Hansen has tested or inspected the Aspect System which Ocwen called Keyes from, or that Hansen has reviewed any patents which detail the specifications for how Ocwen uses the Aspect System to make calls. Compare Strauss v. CBE Grp., Inc. , No. 15-62026-CIV,
2. Hansen's Improper Statements of Law and Methodology
Ocwen's second key argument is that Hansen's statements of law and methodology are improper. Dkt. No. 54, p. 12 (Pg. ID 965). According to Ocwen, Hansen relied on vacated FCC orders when he concluded that Ocwen's Aspect System is an ATDS.
Ocwen is correct that Hansen's statements of law are improper; however, they are improper not because they inaccurately state the law, but because expert witnesses are not permitted to make legal conclusions. United States v. Melcher ,
In sum, Hansen failed to test his expert theory by inspecting or testing the Aspect System with the specifications used by Ocwen. His testimony, then, is based on insufficient facts or data. Hansen's report also wrongly includes statements and conclusions of law. Therefore, the Court will grant Ocwen's Motion to Exclude the Report of Jeffrey Hansen. Dkt. No. 54.
B. Parties' Cross-Motions for Partial Summary Judgment [52, 56]
Ocwen will succeed on its motion for partial summary judgment as to Keyes's TCPA claims. The Court will accordingly deny Keyes's motion for partial summary judgment as to her TCPA claims. Keyes is also not entitled to summary judgment on her MRCPA claims, as the Court will not exercise supplemental jurisdiction over those claims.
1. TCPA Claims (Counts I and II)
The TCPA defines an ATDS as "equipment which has the capacity-(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers."
a) Applicable Legal Standard
The capacity and functions of an ATDS were the subject of a 2015 FCC ruling, in which the Commission attempted to clarify previous declarations regarding these definitions. In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 ,
And in ACA International , the D.C. Circuit set aside the Commission's declarations regarding the capacity and functions of an ATDS. The court determined that those declarations gave conflicting advice and, in other respects, exacerbated confusion emanating from earlier FCC orders. For example, in the
The D.C. Circuit also set aside the Commission's rulings regarding the functions an autodialer must be able to perform, namely its interpretation of whether a device needed to be able to generate and call random or sequential numbers to constitute an ATDS. See
Turning to Keyes's reading of ACA International , she first argues that ACAInternational has no impact on 2003, 2008, and 2012 advice from the Commission regarding the capacity and functions of an ATDS discussed in FCC Orders because that advice was not timely challenged. See In re Rulеs and Regulations Implementing the Telephone Consumer Protection Act of 1991 ,
Both of these arguments are unavailing. First, Keyes's timeliness argument is unconvincing because the D.C. Circuit Court of Appeals explicitly rejected it in ACA International . The court determined that "[w]hile the Commission's [2015] ruling purports to reaffirm the prior orders, that does not shield the agency's pertinent pronouncements from rеview. The agency's prior rulings left significant uncertainty about the precise functions an autodialer must have the capacity to perform."
Second, ACA International is binding on this Court in so far as it vacated the Commission's interpretations regarding the capacity and functions of an autodialer. That is, because of ACA International , this Court need not defer to the Commission's understanding of the capacity
b) Merits of Keyes's TCPA Claims
Turning now to the substance of Keyes's TCPA claims, the Court must reach back to the statutory language of an ATDS. See also King ,
(1) Capacity of the Aspect System
As to the capacity a device must have to constitute an ATDS, the Second and Third Circuits have сoncluded that the statutory language mandates the following examination: "how much is required to enable the device to function as an autodialer: does it require the simple flipping of a switch, or does it require essentially a top-to-bottom reconstruction of the equipment?" ACA Int'l ,
Here, Ocwen has demonstrated as a matter of law that the Aspect System which it used to call Keyes requires more than a flip of the switch to qualify as an autodialer. Indeed, to modify the Aspect System, Ocwen would need to alter the system's source code, and it does not have access to that code.
This case is therefore similar to Herrick v. GoDaddy.com LLC ,
What is more, Keyes's counter-argument only confirms this conclusion. The Aspect System operates on Linux and Windows, and that fact is the sole basis for her claim that the system has the capacity to function as an ATDS. Dkt. No. 80, p. 26 (Pg. ID 4967). But, the logical extension of Keyes's assertion is that every device operating on Linux or Windows has the capacity to be an autodialer. This far-reaching сontention is nearly identical to the key corollary rejected in ACA International : that the Commission's definition of "present capacity" was unlawful because it would capture smartphones that, through simply downloading an app, would gain the necessary functions of an ATDS. See Dominguez ,
(2) Functions of the Aspect System
Ocwen will prevail here on yet another basis: the Aspect Systеm does not possess the functions necessary to be an ATDS. The Aspect System dials from a set list, but that is not the same as dialing numbers using a random or sequential number generator. And FCC advice was unclear as to whether generating random or sequential numbers and dialing them was a necessary function of an ATDS. See ACA Int'l ,
[s]o which is it: does a device qualify as an ATDS only if it can generate random or sequential numbers to be dialed, or can it so qualify even if it lacks that capacity? ... It might be permissible for the Commission to adopt either interpretation. But the Commission cannot, consistent with reasoned decisionmaking, espouse both competing interpretations in the same order.5
The better reading of the Act, this Court will conclude, is that devices must be able to generate random or sequential numbers to be dialed to qualify as an ATDS. This approach tracks the statutory language.
All agree that the Aspect System dials numbers from a set list. The parties further agree that the system does not produce or store numbers using a random or sequential number generator, and call those numbers. See Dkt. No. 80, pp. 5, 24 (Pg. ID 4946, 4965); see also Dkt. No. 56, p. 20 (Pg. ID 1044). And, as described above, Oсwen does not have the capacity to effect this change in the Aspect System. Thus, the Aspect System-as Keyes has described it-is not an ATDS because it lacks the necessary functionality.
Finally, Keyes vigorously maintains that the Aspect System has the required functions of an ATDS and relies on Espejo v. Santander Consumer USA, Inc. , Case Nos.
Second, although the Espejo court concluded that the Aspect system there was an ATDS, it did so applying the now-vacated FCC guidance. Id. at *4-5. Notably, it determined that thе Aspect system in that case was an ATDS "regardless of whether the numbers called are randomly or sequentially generated or come from calling lists." Id. at *4 (internal quotation marks omitted) (emphasis omitted) (quoting 2012 Order at 15932 n.5 ). ACA International , however, directly set aside that conclusion, noting that the Commission's conflicting guidance on that subject "falls short of reasoned decisionmaking in 'offer[ing] no meaningful guidance' to affected parties in material respects on whether their equipment is subject to the statute's autodialer restrictions."
And this Court has reasoned that a dеvice must be able to call and generate numbers randomly or sequentially to qualify as an ATDS. Put another way, simply calling from a set list is not enough for equipment to constitute an autodialer. Accordingly, Keyes's reliance on Espejo is misplaced.
Based on the foregoing, the Aspect System is not an ATDS as a matter of law. Ocwen, then, will prevail on its motion for partial summary judgment. Because the Court concludes that no reasonable person could find that the Aspect System is an ATDS, Ocwen is entitled to summary judgment on Keyes's TCPA claims, Counts I and II.
C. MRCPA Claims
As Keyes's TCPA claims will not survive Ocwen's motion for partial summary judgment, no federal claims remain in this litigation. Consequently, the Court will decline to exercise supplemental jurisdiction over the MRCPA claims. See
V. Conclusion
In this Opinion and Order, the Court was charged with resolving three motions. First, Ocwen moved to exclude the expert report of Jeffrey Hansen. Dkt. No. 54. Second and third, both parties filed motions for partial summary judgment. Dkt. Nos. 52, 56. In light of the foregoing, the Court will GRANT Ocwen's Motion to Exclude the Expert Report of Jeffrey Hansen [54]. The Court will also GRANT Ocwen's Motion for Partial Summary Judgment regarding the TCPA claims [56] and DENY Keyes's Motion for Partial Summary Judgment as to those claims [52]. Because the above holdings eliminate all the federal claims in this action, the Court will decline to exercise supplemental jurisdiction over the remaining state claims.
IT IS SO ORDERED.
Notes
The other three factors enumerated in Daubert are not relevant here.
Hansen's report reflects that he has "analyzed" the Aspect system in the past, and Keyes's reply states that Hansen has "reviewed" the system in the past. Dkt. No. 54-1, p. 12 (Pg. ID 980); Dkt. No. 74, p. 10 (Pg. ID 1594). But those contentions do not indicate that he has personally inspected the Aspect System in question here.
Ocwen offers examples of Hansen's inconsistent use of terminology, including his use of the terms: "a predictive dialer, a type of automatic telephone dialing system;" "a predictive dialer or [device that] otherwise has the characteristics of an 'automatic telephone dialing system' (ATDS);" "autodialers only need to store or produce numbers and call them to be an ATDS." See Dkt. No. 54, p. 12 (Pg. ID 965).
To be sure, the Court is not bound by any interpretation of the TCPA adopted by the D.C. Circuit after it invalidated the Commission's declarations. See, e.g. , King v. Time Warner Cable Inc. ,
Relying on Reyes v. BCA Fin. Servs., Inc. , Keyes contends that ACA International does not affect FCC guidance from 2003 determining that predictive dialers are ATDSs regardless of whether they can generate and dial random or sequential numbers.
This holding means that there is no occasion for the Court to examine whether a genuine dispute of material fact exists regarding whether Keyes revoked consent under the TCPA.