NOAH DUGUID, individually and on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. FACEBOOK, INC., Defendant-Appellee, and UNITED STATES OF AMERICA, Intervenor-Appellee.
No. 17-15320
United States Court of Appeals, Ninth Circuit
June 13, 2019
D.C. No. 3:15-cv-00985-JST. Appeal from the United States District Court for the Northern District of California. Jon S. Tigar, District Judge, Presiding. Argued and Submitted March 11, 2019 San Francisco, California.
OPINION
Before: J. Clifford Wallace, Eugene E. Siler,* and M. Margaret McKeown, Circuit Judges.
Opinion by Judge McKeown
SUMMARY**
Telephone Consumer Protection Act
The panel reversed the district court‘s dismissal for failure to state a claim of an action under the Telephone Consumer Protection Act.
The panel held that the plaintiff adequately alleged that defendant Facebook, Inc., placed calls using an automated telephone dialing system, defined as “equipment which has the capacity-(1) to store numbers to be called or (2) to produce numbers to be called, using a random or sequential number generator-and to dial such numbers automatically.”
Joining the Fourth Circuit, the panel held that a 2015 amendment to the Act, excepting calls “made solely to collect a debt owed to or guaranteed by the United States,” was content-based and incompatible with the First Amendment. The panel severed from the Act this “debt-collection exception” as an unconstitutional restriction on speech.
COUNSEL
Sergei Lemberg (argued), Lemberg Law LLC, Wilton, Connecticut, for Plaintiff-Appellant.
Andrew B. Clubok (argued), Susan E. Engel, Samir Deger-Sen, Latham & Watkins LLP, Washington, D.C.; Elizabeth L. Deeley, Latham & Watkins LLP, San Francisco, California; for Defendant-Appellee.
Lindsey Powell (argued), Michael S. Raab, Mark B. Stern, Attorneys, Appellate Staff, Civil Division; Alex G. Tse, United States Attorney; Joseph H. Hunt, Assistant Attorney General; United States Department of Justice, Washington, D.C.; for Intervenor-Appellee.
Shay Dvoretzky and Vivek Suri, Jones Day, Washington, D.C.; Steven P. Lehotsky, United States Chamber Litigation Center, Washington, D.C.; for Amicus Curiae Chamber of Commerce of the United States of America.
McKEOWN, Circuit Judge:
Almost thirty years ago, in the age of fax machines and dial-up internet, Congress took aim at unsolicited robocalls by enacting the Telephone Consumer Protection Act of 1991 (“TCPA“),
Noah Duguid claims that Facebook used an ATDS to alert users, as a security precaution, when their account was accessed from an unrecognized device or browser. For unknown reasons, Duguid received the messages despite not being a Facebook customer or user and never consenting to such alerts. His repeated attempts to terminate the alerts were unsuccessful.
Facebook challenges the adequacy of Duguid‘s TCPA allegations and, alternatively, claims that the statute violates the First Amendment. We conclude that Duguid‘s allegations are sufficient to withstand Facebook‘s motion to dismiss under
As to the constitutional question, we join the Fourth Circuit and hold that a 2015 amendment to the TCPA, which excepts calls “made solely to collect a debt owed to or guaranteed by the United States,” is content-based and incompatible with the First Amendment. Am. Ass‘n of Political Consultants, Inc. v. FCC, 923 F.3d 159 (4th Cir. 2019) (hereinafter, AAPC). But rather than toss out the entire TCPA-a longstanding and otherwise constitutional guardian of consumer privacy-we sever the newly appended “debt-collection exception” as an unconstitutional restriction on speech.
BACKGROUND
I. The Telephone Consumer Protection Act
In what was thought to be telemarketing‘s heyday, Congress enacted the TCPA to “protect the privacy interests of residential telephone subscribers by placing restrictions on unsolicited, automated telephone calls.” S. Rep. No. 102-178, at 1 (1991). With certain exceptions, the TCPA bans calls (including text messages) placed using an ATDS.
Since its enactment, the definition of an ATDS has remained the same: “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.”
Two court rulings during this appeal have shifted the TCPA playing field. First, in ACA International v. Federal Communications Commission, 885 F.3d 687 (D.C. Cir. 2018), the D.C. Circuit overturned aspects of several Federal Communications Commission (“FCC“) rulings construing the ATDS definition. Shortly thereafter, in Marks v. Crunch San Diego, LLC, 904 F.3d 1041, 1049-50 (9th Cir. 2018),
II. Duguid‘s Allegations1
Duguid is not a Facebook customer and has never consented to Facebook contacting his cell phone. Nonetheless, beginning in approximately January 2014, Facebook began sending Duguid sporadic text messages. The messages alerted Duguid that an unrecognized browser was attempting to access his (nonexistent) Facebook account. Each message followed a common template: “Your Facebook account was accessed [by/from] <browser> at <time>. Log in for more info.”
Flummoxed, and unable to “log in for more info,” Duguid responded to the messages by typing “Off” and “All off.” Facebook immediately assured Duguid that “Facebook texts are now off,” but the messages kept coming. Duguid also requested via email that Facebook stop sending him messages, but he received similar, automated email responses that failed to resolve the issue. The text messages continued until at least October 2014.
Duguid sued Facebook for violating the TCPA, alleging that Facebook sent the text messages using an ATDS. Specifically, he alleges that Facebook established the automated login notification process as an extra security feature whenever a Facebook account is accessed from a new device. According to Duguid, Facebook maintained a database of phone numbers and-using a template and coding that automatically supplied the browser information and time of access-programmed its equipment to send automated messages to those numbers each time a new device accessed the associated account. Somehow, Facebook acquired Duguid‘s number and (as it did with the numbers provided by its users) stored and sent automated messages to that number.
Duguid sued on behalf of two putative classes: people who received a message from Facebook without providing Facebook their cell phone number; and people who notified Facebook that they did not wish to receive messages but later received at least one message. Each putative class reaches back four years from April 22, 2016, when Duguid filed the amended complaint. Duguid seeks statutory damages for each message, plus declaratory relief and an injunction prohibiting similar TCPA violations in the future.
The district court concluded that Duguid inadequately alleged that Facebook sent its messages using an ATDS-a prerequisite for TCPA liability. After providing leave to amend, the district court dismissed the amended complaint with prejudice.
ANALYSIS
Faithful to our unflagging duty to assess constitutional standing, we hold that Duguid adequately alleges a concrete injury in fact. See Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1042-43 (9th Cir. 2017) (citing Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016)).
Facebook invites us to avoid the First Amendment challenge by affirming on the ground that Duguid inadequately alleges a TCPA violation. According to Facebook, the equipment Duguid characterizes in the amended complaint is not an ATDS. We conclude that Marks forecloses that position.
By definition, an ATDS must have the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator.”
Duguid‘s nonconclusory allegations plausibly suggest that Facebook‘s equipment falls within this definition. He alleges that Facebook maintains a database of phone numbers and explains how Facebook programs its equipment to automatically generate messages to those stored numbers. The amended complaint explains in detail how Facebook automates even the aspects of the messages that appear personalized. Those factual allegations, accepted as true and construed in the light most favorable to Duguid, sufficiently plead that Facebook sent Duguid messages using “equipment which has the capacity ... to store numbers to be called ... and to dial such numbers.”3 Id.
Facebook responds that Marks cannot possibly mean what it says, lest the TCPA be understood to cover ubiquitous devices and commonplace consumer communications. In particular, Facebook cautions, such an expansive reading of Marks would capture smartphones because they can store numbers and, using built-in automated response technology, dial those numbers automatically. And if smartphones are ATDSs, then using them to place a call-even without using the automated dialing functionality-violates the TCPA. See In re Rules & Regulations Implementing the Telephone Consumer Protection Act of 1991, 30 FCC Rcd. 7961, 7975 ¶ 19 n.70 (July 10, 2015); ACA Int‘l, 885 F.3d at 704. “It cannot be the case,” the D.C. Circuit has remarked, “that every uninvited communication from a smartphone infringes federal law, and that nearly every American is a TCPA-violator-in-waiting, if not a violator-in-fact.” ACA Int‘l, 885 F.3d at 698.
As a textual anchor for narrowing Marks, Facebook points to the statutory requirement (repeated in Marks) that an ATDS store numbers “to be called.”
We cannot square this construction with Marks or the TCPA. Marks‘s gloss on the statutory text provides no basis to exclude equipment that stores numbers “to be called” only reflexively. Indeed, the statute suggests otherwise: “to be called” need not be the only purpose for storing numbers-the equipment need only have the “capacity” to store numbers to be called.
Importantly, rejecting the active-reflexive distinction does not render “to be called” superfluous. Phone numbers are frequently stored for purposes other than “to be called“: shops and restaurants store numbers to identify customers in their loyalty programs; electronic phonebooks store numbers for public access; data mining companies store and sell numbers; and software for customer relations management stores numbers to help businesses manage their clientele. So “to be called” has meaning without inferring a silent distinction between active and reflexive calls.
Finally, Facebook‘s argument that any ATDS definition should avoid implicating smartphones provides no reason to adopt the proposed active-reflexive distinction. Even if Facebook‘s premise has merit, the quintessential purpose for which smartphone users store numbers is “to be called” proactively. In other words, excluding equipment that stores numbers “to be called” only reflexively would not avoid capturing smartphones.
Our reading supports the TCPA‘s animating purpose-protecting privacy by restricting unsolicited, automated telephone calls. See S. Rep. 102-178, at 1. The messages Duguid received were automated, unsolicited, and unwanted. We are unpersuaded by Facebook‘s strained reading of Marks and the TCPA.
Facebook advances a separate argument that it was entitled to dismissal on the pleadings because the TCPA excepts “call[s] made for emergency purposes.”
Finally, it bears reiterating that we are considering the amended complaint at the Rule 12(b)(6) dismissal stage. Thus, we review the sufficiency of the allegations, not their accuracy or the intricate workings of Facebook‘s equipment, algorithms, or notification system. Developing those factual details remains for the parties and the district court on remand.
II. First Amendment
As a threshold matter, we confirm that Facebook has standing to challenge
A. The Post-Amendment TCPA Is Content-Based
Turning to the merits, we first evaluate whether the TCPA is content-neutral and subject to intermediate scrutiny or content-based and subject to strict scrutiny. We have repeatedly affirmed that the pre-amendment TCPA was content-neutral and consistent with the First Amendment. Gomez v. Campbell-Ewald Co., 768 F.3d 871, 876 (9th Cir. 2014), aff‘d, 136 S. Ct. 663 (2016); Moser v. Fed. Commc‘ns Comm‘n, 46 F.3d 970, 975 (9th Cir. 1995). The statute satisfied intermediate scrutiny because it was narrowly tailored to advance the “government‘s significant interest in residential privacy” and left open “ample alternative channels of communication.” Moser, 46 F.3d at 974; see also Gomez, 768 F.3d at 876-77 (recognizing that the government‘s interest in privacy extends beyond the household, and rejecting the argument that the statute is inadequately tailored insofar as it applies to text messages).
The debt-collection exception, which adds a purposive element, changes the framework. The TCPA now favors speech “solely to collect a debt owed to or guaranteed by the United States.”
The government‘s argument that the debt-collection exception is relationship-based as opposed to content-based is foreclosed by Reed. The “crucial first step in the content-neutrality analysis” is “determining whether the law is content neutral on its face.” Reed, 135 S. Ct. at 2228. If it is not, the law “is subject to strict scrutiny regardless of the government‘s benign motive, content-neutral justification, or lack of ‘animus toward the ideas contained’ in the regulated speech.” Id. (quoting Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 429 (1993)). For that reason, we “consider[] whether a law is content neutral on its face before turning to the law‘s justification or purpose.” Id.
It is obvious from the text that the debt-collection exception‘s applicability turns entirely on the content of the communication-i.e., whether it is “solely to collect a debt owed to or guaranteed by the United States.”
Our sister circuits’ post-Reed decisions are consistent with our reading. There is, of course, the Fourth Circuit‘s decision in AAPC, decided shortly after argument in our case, in which the court reached the same conclusion regarding the debt-collection provision. 923 F.3d at 161 (“[W]e agree with the Plaintiffs that the debt-collection exemption contravenes the Free Speech Clause. In agreement with the Government, however, we are satisfied to sever the flawed exemption from the automated call ban.“). Earlier, the Fourth Circuit also deemed content-based South Carolina‘s TCPA analogue because the statute applies only to robocalls “of a political nature” or made “for the purpose of making an unsolicited consumer telephone call.” Cahaly v. Larosa, 796 F.3d 399, 402 (4th Cir. 2015) (quoting S.C. Code § 16-17-446(A)). “Applying Reed‘s first step,” the Fourth Circuit reasoned, “South Carolina‘s anti-robocall statute is content based because it makes content distinctions on its face.” Id. at 405. The Eighth Circuit likewise deemed content-based an exception to Minnesota‘s TCPA analogue for messages sent to solicit voluntary donations. Gresham v. Swanson, 866 F.3d 853, 854-55 (8th Cir. 2017) (citing
By contrast, the Seventh Circuit upheld Indiana‘s TCPA analogue, which exempted calls for “(1) Messages from school districts to students, parents, or employees[;] (2) Messages to subscribers with whom the caller has a current business or personal relationship[; and] (3) Messages advising employees of work schedules.” Patriotic Veterans, Inc. v. Zoeller, 845 F.3d 303, 304 (7th Cir.) (quoting
The text of the TCPA makes clear that the availability of the exception depends exclusively on the purpose and content of the call. The relationship between caller and recipient, though not coincidental, does not bear on the exception‘s applicability. Reed forbids us from imputing motives or sensibilities to Congress where, as here, its plain language is clear, and clearly content-based. 135 S. Ct. at 2228.
B. The Post-Amendment TCPA Fails Strict Scrutiny
Because it is content-based, the TCPA‘s debt-collection provision is “presumptively unconstitutional and may be justified only if the government proves that [it is] narrowly tailored to serve compelling state interests.”4 Reed,
135 S. Ct. at 2226. More specifically, the government (and Duguid, who adopts the government‘s constitutional arguments) must demonstrate that the TCPA‘s “differentiation between [robocalls to collect a debt owed to or guaranteed by the United States] and other types of [robocalls] ... furthers a compelling government interest and is narrowly tailored to that end.” Id. at 2231. Importantly, we focus our analysis on the content-based differentiation-the debt-collection exception-not on the TCPA overall. See id. at 2231-32; AAPC, 923 F.3d at 167 (“[I]n order to survive strict scrutiny, the Government must show that the debt-collection exemption has been narrowly tailored to further a compelling governmental interest.” (emphasis added)).
The government seriously advocates only one interest: “the protection of personal and residential privacy.” This articulation is a head-scratcher, because robocalls to collect government debt are just as invasive of privacy rights as robocalls placed for other purposes. On that point, congressional findings corroborate common sense (not to mention practical experience): “Evidence compiled by the Congress indicates that residential telephone subscribers consider automated or prerecorded telephone calls, regardless of the content or the initiator of the message, to be a nuisance and an invasion of privacy.” Telephone Consumer Protection Act of 1991, Pub. L. No. 102-243, § 2(10), 105 Stat. 2394, 2394 (emphasis added). Permitting callers to collect government debt thus hinders-not furthers-the government‘s asserted interest. Because it “subverts the privacy protections underlying the” TCPA and “deviates from the purpose of the automated call ban,” the debt-collection exception is fatally underinclusive. AAPC, 923 F.3d at 168.
Contrasting the privacy implications of the TCPA‘s longstanding consent and emergency exceptions highlights this tailoring defect. Robocalls placed pursuant to consent “are less intrusive than other automated calls” because “consent generally diminishes any expectation of privacy.” Id. at 169. So too are emergency robocalls, because they are infrequent, “protect[] the safety and welfare of Americans,” and serve the public interest. Id. at 170. By contrast, an unconsented, non-emergency robocall thoroughly invades personal and residential privacy, whether it is placed to collect government debt or for some other purpose. The universe of otherwise illegal calls that the debt-collection exception permits-which one senator estimated to be in the tens of millions-has an outsized, detrimental impact on residential and personal privacy. See In re Rules & Regulations Implementing the Telephone Consumer Protection Act of 1991, 31 F.C.C. Rcd. 9074, 9078 ¶ 9 & n.36 (Aug. 11, 2016). This incongruency underscores that the exception impedes, rather than furthers, the statute‘s purpose.
To evade this largely self-evident conclusion, the government would have us focus our analysis on the TCPA writ large rather than the debt-collection exception. It argues that the post-amendment statute, viewed holistically, remains narrowly tailored to protect personal and household privacy. This gloss-over approach is at odds with Reed, which directs that the tailoring inquiry focus on the content-based differentiation-here, the debt-collection exception. See 135 S. Ct. at 2231-32; see also AAPC, 923 F.3d at 167.
The government‘s expanded lens also fails in its objective. The post-amendment TCPA is underinclusive, in that it excepts automated calls placed pursuant to the debt-collection exception, which are-all else being equal-every bit as invasive of residential and personal privacy as any other automated call. See Pub. L. No. 102-243, § 2(10), 105 Stat. at 2394. It is also
The government halfheartedly suggests an alternative interest: protecting the public fisc.5 We credit this argument for candor: debt collection is unescapably the exception‘s main purpose-hence its inefficacy in protecting privacy. See Williams-Yulee v. Fla. Bar, 135 S. Ct. 1656, 1668 (2015) (“[U]nderinclusiveness can raise doubts about whether the government is in fact pursuing the interest it invokes . . . .” (internal quotation marks and citation omitted)). But even assuming that protecting the public fisc is a compelling interest, the debt-collection exception is not the least restrictive means to achieve it. For one, Congress could protect the public fisc in a content-neutral way by phrasing
the exception in terms of the relationship rather than content. See Reed, 135 S. Ct. at 2232 (noting the “ample content-neutral options” available to serve the same government interest). The government could also obtain consent from its debtors or place the calls itself. See AAPC, 923 F.3d at 169 n.10 (noting these possibilities); Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 672 (2016), as revised (Feb. 9, 2016) (“The United States and its agencies, it is undisputed, are not subject to the TCPA‘s prohibitions because no statute lifts their immunity.“).
We hold that the debt-collection exception is content-based and insufficiently tailored to advance the government‘s interests in protecting privacy or the public fisc.
C. The Debt-Collection Exception Is Severable
Though incompatible with the First Amendment, the debt-collection exception is severable from the TCPA. See AAPC, 923 F.3d at 171. Congressional intent is the touchstone of severability analysis. See Regan v. Time, Inc., 468 U.S. 641, 653 (1984). Congress simplifies our inquiry when, as here, it speaks directly to severability: “If any provision of this chapter [containing the TCPA] . . . is held invalid, the remainder ... shall not be affected thereby.”
History reaffirms what Congress said. The TCPA has been “fully operative” for more than two decades. Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 509 (2010). Then, with little fanfare, Congress appended the comparatively
Excising the debt-collection exception preserves the fundamental purpose of the TCPA and leaves us with the same content-neutral TCPA that we upheld-in a manner consistent with Reed-in Moser and Gomez.
CONCLUSION
Duguid adequately alleges Facebook utilized an ATDS, and the additional elements of a TCPA claim are not at issue in this appeal. We reject Facebook‘s challenge that the TCPA as a whole is facially unconstitutional, but we sever the debt-collection exception as violative of the First Amendment. We reverse the dismissal of Duguid‘s amended complaint and remand for further proceedings.
REVERSED AND REMANDED.