State v. Universal Elections, Inc.

• Decision Date: 29 July 2013
• Docket Number: No. 12–1791.,12–1791.
• Citation: 729 F.3d 370
• Parties: State of MARYLAND, Office of the Attorney General, Plaintiff–Appellee, United States of America, Intervenor/Plaintiff–Appellee, v. UNIVERSAL ELECTIONS, INCORPORATED; Julius Henson, Defendants–Appellants, and Rhonda Russell, Defendant.
• Court: U.S. Court of Appeals — Fourth Circuit

729 F.3d 370

State of MARYLAND, Office of the Attorney General, Plaintiff–Appellee,

United States of America, Intervenor/Plaintiff–Appellee,

v.UNIVERSAL ELECTIONS, INCORPORATED; Julius Henson, Defendants–Appellants,andRhonda Russell, Defendant.

No. 12–1791.

United States Court of Appeals,Fourth Circuit.

Argued: May 15, 2013.

Decided: July 29, 2013.

ARGUED:Edward Smith, Jr., Law Office of Edward Smith, Jr., Baltimore, Maryland, for Appellants. William D. Gruhn, Office of the Attorney General of Maryland, Baltimore, Maryland; Lindsey Powell, United States Department of Justice, Washington, D.C., for Appellees. ON BRIEF:Douglas F. Gansler, Attorney General, Philip D. Ziperman, Assistant Attorney General, Office of the Attorney General of Maryland, Baltimore, Maryland, for Appellee State of Maryland. Rod J. Rosenstein, United States Attorney, Stuart F. Delery, Acting Assistant Attorney General, Mark B. Stern, Mark R. Freeman, United States Department of Justice, Washington, D.C., for the United States.

Before KING and AGEE, Circuit Judges, and DAVID C. NORTON, United States District Judge for the District of South Carolina, sitting by designation.

Affirmed by published opinion. Judge NORTON wrote the opinion, in which Judge KING and Judge AGEE joined.

NORTON, District Judge:

Political consultant Julius Henson and his company, Universal Elections, Inc., appeal the district court's grant of summary judgment to the State of Maryland (“the State”) on its claim that Henson and Universal Elections violated the Telephone Consumer Protection Act, 47 U.S.C. § 227 (2010) (“the TCPA” or “the Act”). For the reasons set forth below, we affirm the district court's decision in all respects.

I.

Though the district court ably summarized the facts in its summary judgment order, we briefly restate them here. Three months before the 2010 Maryland gubernatorial election, the political campaign of Republican candidate Robert L. Ehrlich, Jr. hired Henson and Universal Elections to assist with the campaign's efforts. J.A. 487.¹

On Election Day, November 2, 2010, Henson and Universal Elections employee Rhonda Russell composed and prepared a pre-recorded telephone call, also known as a “robocall,” as part of their work for the Ehrlich campaign. Id. That pre-recorded telephone call (“the election night robocall”) stated, in its entirety:

Hello. I'm calling to let everyone know that Governor O'Malley and President Obama have been successful. Our goals have been met. The polls were correct and we took it back. We're okay. Relax. Everything is fine. The only thing left is to watch it on TV tonight. Congratulations and thank you.

J.A. 487–88. The election night robocall neither identified the Ehrlich campaign as the sponsor of the message nor included the campaign's phone number. J.A. 488.

Henson dictated the contents of the election night robocall to Russell and directed Russell to omit an authority line that would have identified the Ehrlich campaign as the source of the message. J.A. 488. Russell recorded the message and uploaded it, along with two lists containing the phone numbers for Maryland Democratic voters, to the website of a Pennsylvania-based automatic dialing service called Robodial.org, LLC. Id. After sending test messages to Henson and to Ehrlich staffers, Russell authorized Robodial.org to deliver the election night robocall to the phone numbers included on the uploaded lists. Id. Robodial.org sent the election night robocall to more than 112,000 Maryland Democratic voters through an account maintained by Universal Elections. J.A. 487–88.

Of the roughly 112,000 calls that were placed, 69,497 voters received the entire message. J.A. 488. Another 16,976 recipients received part of the message. Id. The remaining calls failed or went unanswered. Id.

On November 10, 2010, the State filed a civil lawsuit against Henson, Russell, and Universal Elections for violations of the TCPA. J.A. 10. Specifically, the State alleged that the defendants had violated the Act by failing to identify the Ehrlich campaign as the sponsor of the election night robocall. J.A. 14.

On December 15, 2010, Henson, Russell, and Universal Elections moved to dismiss the State's complaint. J.A. 16; Supp.App. 1–15. In a supplemental motion to dismiss filed on December 28, 2010, they argued that the TCPA and its implementing regulations were unconstitutional. Supp.App. 45–51. After defendants asserted a First Amendment defense in their supplemental motion to dismiss, the United States intervened in this case to defend the constitutionality of the TCPA. J.A. 43–45. On May 25, 2011, the district court denied defendants' motion to dismiss, holding that the TCPA is a content-neutral speech regulation that survives intermediate constitutionalscrutiny, and finding defendants' other arguments unavailing. J.A. 96–108.

On May 11, 2011, shortly before the district court denied defendants' motion to dismiss, Henson, Russell, and Universal Elections moved to stay the proceedings pending the resolution of related state criminal investigations. J.A. 92–93. The district court determined that the motion to stay would not affect its ruling on the motion to dismiss, and addressed the motion to stay after denying the motion to dismiss. J.A. 95, 148. On July 7, 2011, the court denied the motion to stay, noting that:

Other than unfounded attacks on the motives of the Attorney General, the defendants have not explained why a blanket stay of this action is warranted by the existence of a partially parallel criminal indictment brought by the State Prosecutor.... The motion to stay as filed is overbroad and is Denied.

J.A. 148 (emphasis and capitalization in original).

On March 15, 2012, the State moved for summary judgment. Supp.App. 52–75. Defendants did not oppose the State's motion for summary judgment, and the district court granted the unopposed motion on May 29, 2012. J.A. 487–94. The court explained that the record unambiguously supported a finding that defendants had violated the TCPA:

Universal Elections, by and through both Russell and Henson, drafted and sent a message that failed to include the disclosure information required by [the TCPA]. As Russell's testimony makes clear, both she and Henson were directly and personally involved in the creation of the offending message.... [T]he documentary evidence in the record and the deposition testimony of Russell and Ehrlich staffers establish without any doubt that Henson discussed plans to suppress the votes of African–American Democrats, recorded the plan in the strategy memo sent to the Ehrlich campaign, and ultimately dictated and authorized the offending message. Thus, both Henson and Russell, in addition to Universal Elections, may be held jointly and severally liable for any damages this court may award under the TCPA.

J.A. 490. The district court entered judgment on behalf of the State in the amount of $10,000 against Russell, and in the amount of $1,000,000 against Henson and Universal Elections.

Henson and Universal Elections timely filed a notice of appeal on June 22, 2012. We have jurisdiction under 28 U.S.C. § 1291.

II.

We review de novo the constitutionality of a federal statute and its implementing regulations, United States v. Sun, 278 F.3d 302, 308–09 (4th Cir.2002); the denial of a motion to dismiss, Brockington v. Boykins, 637 F.3d 503, 505 (4th Cir.2011); and the grant of an unopposed motion for summary judgment, Henry v. Purnell, 652 F.3d 524, 531 (4th Cir.2011). The grant or denial of a request to stay proceedings calls for an exercise of the district court's judgment “to balance the various factors relevant to the expeditious and comprehensive disposition of the causes of action on the court's docket.” United States v. Ga. Pac. Corp., 562 F.2d 294, 296 (4th Cir.1977). As such, we review the denial of a motion to stay under an abuse-of-discretion standard. Id. at 297;Chase Brexton Health Servs., Inc. v. Maryland, 411 F.3d 457, 464 (4th Cir.2005).

III.

Henson and Universal Elections raise four issues on appeal. ² Appellants assert that the district court erred by: (1) finding that the TCPA is not unconstitutional when applied to political robocalls; (2) denying defendants' motion to dismiss; (3) denying defendants' motion to stay proceedings pending the resolution of a related state court criminal case; and (4) granting summary judgment in favor of the State. We address these arguments in turn.

A.

With regard to the constitutionality of the TCPA, appellants appear to argue that § 227(d) “violates the First Amendment because it is a content-based burden on political speech” that cannot withstand strict scrutiny. Appellants' Br. 12 n. 6. When evaluating whether a regulation violates the First Amendment, “the most exacting scrutiny” is applied to regulations “that suppress, disadvantage, or impose differential burdens upon speech because of its content.” Turner Broad. Sys., Inc. v. F.C.C., 512 U.S. 622, 642, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994). “In contrast, regulations that are unrelated to the content of speech are subject to an intermediate level of scrutiny, because in most cases they pose a less substantial risk of excising certain ideas or viewpoints from the public dialogue.” Id. (citing Clark v. Cmty. for Creative Non–Violence, 468 U.S. 288, 293, 104 S.Ct. 3065, 82 L.Ed.2d 221 (1984)). “[L]aws that confer benefits or impose burdens on speech without reference to the ideas or views expressed are in most instances content neutral.” Id. at 643, 114 S.Ct. 2445.

The TCPA and its implementing regulations require that automated, prerecorded messages identify the entity sponsoring the phone call and provide that entity's telephone number. 47 U.S.C. § 227(d)(1), (3)(A); 47 C.F.R. § 64.1200(b) (2008). This identity disclosure requirement applies regardless of the content of the message that is relayed to the recipient. § 227(d)'s requirements do not place any greater restriction on a particular group...