Leckler v. Cashcall, Inc., 07-04002 (N.D.Ca. 11/21/08)

We, here at the CAFA Law Blog, search high and low to bring you, our loyal readers, cases that will help you understand the intricacies of the Class Action Fairness Act.

Warning: This case is not one of them.

In Leckler, the plaintiff filed a class action against Cashcall, Inc. challenging Cashcall’s collection activities. Most of you probably don’t recognize Cashcall at first glance, I know I sure didn’t, but it’s amazing what Google can teach you in a few short minutes. Click here to learn about Cashcall (and Gary Coleman) on youtube. (If this is not a reason why you should not let your child be a TV star, what else is?)

Did you catch that fine print at the end? That’s right, 99.25% APR!!!!! But Ms. Leckler wasn’t concerned about paying back nearly $10,000 for a $2,500 loan*, she was more concerned about those pesky collections people calling her cell phone!

Ms. Leckler’s lawsuit was based on activities by Cashcall including its use of prerecorded messages and an autodialer to place calls to cell phone numbers. 

One of the narrow issues for determination on summary judgment was whether Cashcall violated the Telecommunications Consumer Protection Act (“TCPA” in case you could not figure it out) by engaging in these challenged activities. In determining whether these actions were a violation of the TCPA, the trial court considered a ruling from the Federal Communications Commission (“FCC”- we CAFA analysts love our acronyms). The FCC ruling stated that autodialed and prerecorded message calls to wireless numbers were not a violation of the TCPA when the called party provides the number to a creditor in connection with an existing debt. 

But considering that ruling was all they did, the Court held that the ruling was “manifestly contrary” to the plain language of the TCPA and granted partial summary judgment to the plaintiffs. 

Not to be outdone…and because they had run out of commercial ideas for Gary Coleman to film….Cashcall moved the Court to certify an order for interlocutory appeal to the Ninth Circuit on the same issue about borrowers providing creditors with their cell phone numbers. Then Cashcall also moved to vacate the court’s order on the FCC ruling because federal courts of appeal have exclusive jurisdiction over final FCC orders and moved to dismiss the plaintiff’s complaint for lack of subject matter jurisdiction. 

The plaintiffs opposed the motion to dismiss but agreed with the defendants that the court had no jurisdiction to rule on the FCC order, so the plaintiffs then filed a motion for leave to file an amended complaint.

The Court agreed with the parties that it had been without jurisdiction to review the FCC order based on the Hobbs Act, which gives the federal courts of appeal exclusive jurisdiction over all final orders of the FCC. The Court went on to explain the scope of the Hobbs Act and why the declaratory ruling about cell phones was a final order. 

But you’re thinking, I thought this blog was about CAFA…and Gary Coleman…WE WANT CAFA!!!

I’m getting there. The next issue for the court to determine was whether the case should be dismissed for lack of subject matter jurisdiction because the court had no jurisdiction over the FCC ruling. Cashcall cited to case law for the proposition that a case must be dismissed when a district court makes a finding that it lacks jurisdiction under the Hobbs Act. And the judge said “WHAT’CHU TALKIN’ BOUT, CASHCALL??? I GOT CAFA.” (maybe that’s what prompted THIS Gary Coleman ad (click here). 

And it’s true, the Court’s jurisdiction under CAFA had nothing to do with the Hobbs Act because the plaintiff’s complaint asserted diversity jurisdiction under CAFA. They were seeking damages in excess of $5 million and the national class would result in at last one class member from another state, so the basis for jurisdiction had not changed. Thanks to CAFA, the motion to dismiss for lack of subject matter jurisdiction was denied. 

So, who wants to see another Gary Coleman ad? Click here.

* Don’t believe me? Check this out.