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Duguid v. Facebook, Inc.

United States Court of Appeals, Ninth Circuit

June 13, 2019

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.

          Argued and Submitted March 11, 2019 San Francisco, California

          Appeal from the United States District Court for the Northern District of California, No. 3:15-cv-00985-JST Jon S. Tigar, District Judge, Presiding

          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.

          Before: J. Clifford Wallace, Eugene E. Siler, [*] and M. Margaret McKeown, Circuit Judges.

         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.

          OPINION

          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"), 47 U.S.C. § 227. In the decades since, the TCPA has weathered the digital revolution with few amendments. With important exceptions, the TCPA forbids calls placed using an automated telephone dialing system ("ATDS"), commonly referred to as an autodialer.

         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 Federal Rule of Civil Procedure 12(b)(6).

         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. 47 U.S.C. § 227(b)(1); see Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009) ("[A] text message is a 'call' within the TCPA.").

         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." 47 U.S.C. § 227(a)(1). In contrast, the scope of the prohibition section has evolved. In 2014, when Duguid received messages from Facebook, the statute excepted two types of calls: those "made for emergency purposes" and those "made with the prior express consent of the called party." Id. § 227(b)(1)(A) (2010). Effective November 2, 2015, Congress added a third exception for calls "made solely to collect a debt owed to or guaranteed by the United States." Bipartisan Budget Act of 2015, Pub. L. No. 114-74, § 301(a)(1)(A), 129 Stat. 584, 588; 47 U.S.C. § 227(b)(1)(A)(iii). It is this "debt-collection exception" that Facebook contends is unconstitutional.

         Two court rulings during this appeal have shifted the TCPA playing field. First, in ACA International v. Federal Communications Commission, the D.C. Circuit overturned aspects of several Federal Communications Commission ("FCC") rulings construing the ATDS definition. 885 F.3d 687 (D.C. Cir. 2018). Shortly thereafter, in Marks v. Crunch San Diego, LLC, we construed ACA International to wipe the definitional slate clean, so we "beg[an] anew to consider the definition of ATDS under the TCPA." 904 F.3d 1041, 1049-50 (9th Cir. 2018). To clarify any ambiguity, we rearticulated the definition of an ATDS: "equipment which has the capacity-(1) to store numbers to be called or (2) to produce ...


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