ACA Connects – America's Commc'ns Ass'n v. Frey

• Decision Date: 07 July 2020
• Docket Number: Case No. 1:20-cv-00055-LEW
• Parties: ACA CONNECTS – AMERICA'S COMMUNICATIONS ASSOCIATION; CTIA – the Wireless Association ; NCTA – the Internet & Television Association; and U.S. Telecom – the Broadband Association, Plaintiffs, v. Aaron FREY, in his official capacity as Attorney General of the State of Maine, Defendant.
• Court: U.S. District Court — District of Maine

471 F.Supp.3d 318

ACA CONNECTS – AMERICA'S COMMUNICATIONS ASSOCIATION; CTIA – the Wireless Association ; NCTA – the Internet & Television Association; and U.S. Telecom – the Broadband Association, Plaintiffs,

v.Aaron FREY, in his official capacity as Attorney General of the State of Maine, Defendant.

Case No. 1:20-cv-00055-LEW

United States District Court, D. Maine.

Signed July 7, 2020

Jeffrey A. Lamken, Pro Hac Vice, MoloLamken LLP, Washington, DC, Joshua A. Randlett, Rudman & Winchell, Bangor, ME, for Plaintiff ACA Connects - America's Communications Association.

Alex Atticus Parkinson, Pro Hac Vice, Collin R. White, Pro Hac Vice, Kellogg, Hansen, Todd, Figel & Frederick PLLC, Scott H. Angstreich, Pro Hac Vice, Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, Washington, DC, Joshua A. Randlett, Rudman & Winchell, Bangor, ME, for Plaintiffs Ctia - The Wireless Association, Ustelecom - The Broadband Association.

Denis Nicholas Harper, Pro Hac Vice, Helgi C. Walker, Pro Hac Vice, Jacob T. Spencer, Pro Hac Vice, Sarah Akhtar, Pro Hac Vice, Gibson, Dunn & Crutcher LLP, Washington, DC, Joshua A. Randlett, Rudman & Winchell, Bangor, ME, Sarah E. Erickson, Pro Hac Vice, Gibson Dunn, Denver, CO, for Plaintiff NCTA - The Internet & Television Association.

Christopher C. Taub, Jason Anton, Paul E. Suitter, Office of the Maine Attorney General, Augusta, ME, for Defendant.

ORDER ON CROSS MOTIONS FOR JUDGMENT ON THE PLEADINGS

Lance E. Walker, UNITED STATES DISTRICT JUDGE Plaintiffs ACA Connects – America's Communications Association, CTIA – The Wireless Association, NCTA – The Internet & Television Association, and U.S. Telecom – The Broadband Association, several trade associations whose members include Internet Service Providers ("ISPs") in the State of Maine, have filed a Motion for Judgment on the Pleadings (ECF No. 25), asking for final judgment to be entered on all five counts of their Complaint. They seek declaratory and injunctive relief against an allegedly unconstitutional Maine state statute on the grounds that it violates the First and Fourteenth Amendments, is unconstitutionally void for vagueness, and is preempted by federal law. Defendant Aaron Frey filed a Cross Motion for Judgment on the Pleadings (ECF No. 30) seeking judgment on Plaintiffs’ preemption claims. For the reasons that follow, I DENY Plaintiffs’ Motion for Judgment on the Pleadings and GRANT Defendant's Cross Motion for Judgment on the Pleadings.

BACKGROUND

Because the record is as yet little-developed, I will only briefly recite the facts giving rise to this lawsuit, and these motions. On June 6, 2019, Maine enacted L.D. 946, an Act to Protect the Privacy of Online Customer Information (the "Privacy Statute"), a consumer privacy law that took effect on July 1, 2020. The statute prohibits Maine providers of broadband Internet access service from using, disclosing, selling or permitting access to customer's personal information unless the customer expressly consents to that use, disclosure, sale or access, subject to certain exceptions. 35-A M.R.S. §§ 9301(2), (3)(A). The statute further restricts the use of "information the provider collects pertaining to a customer that is not customer personal information," if a customer opts out. Id. § 9301(3)(C). Under the privacy regime ISPs cannot refuse to serve a customer, charge a customer a penalty or offer a customer a discount if the customer does not consent to the use of personal information. The provisions of the bill apply to providers operating within the State when providing broadband Internet access service to customers that are billed for service received in the State and are physically located in the State. Plaintiffs filed suit to prevent this law from going into effect, and now seek final judgment based only on the pleadings. The Defendant cross-moved for judgment on Plaintiffs’ claims that the state law is preempted.

DISCUSSION

Rule 12(c) allows a party to move for judgment on the pleadings at any time "[a]fter the pleadings are closed—but early enough not to delay trial." Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings pursuant to Rule 12(c) is "ordinarily accorded much the same treatment" as a Rule 12(b)(6) motion. Aponte-Torres v. Univ. of P.R. , 445 F.3d 50, 54 (1st Cir. 2006). To survive a motion for judgment on the pleadings, therefore, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Because a motion for judgment on the pleadings "calls for an assessment of the merits of the case at an embryonic stage," I "view the facts contained in the pleadings in the light most favorable to the nonmovant and draw all reasonable inferences" in their favor. Pérez-Acevedo v. Rivero-Cubano , 520 F.3d 26, 29 (1st Cir. 2008) (citation omitted).

On a Rule 12(c) motion, unlike a Rule 12(b) motion, I consider the pleadings as a whole, including the answer. See Aponte-Torres , 445 F.3d at 54-55. "Like Rule 12(b)(6), Rule 12(c) does not allow for any resolution of contested facts; rather, a court may enter judgment on the pleadings only if the uncontested and properly considered facts conclusively establish the movant's entitlement to a favorable judgment." Id. at 54. Therefore, because it is so early in the litigation, I will not consider any facts the parties dispute; for example, I will not credit any allegations in the complaint denied in the answer. See Santiago v. Bloise , 741 F. Supp. 2d 357, 360 (D. Mass. 2010).

The list of uncontested facts in this case is not particularly long. Apart from admitting the identity of the parties, the jurisdiction of this Court, and the correctness of certain citations, Defendant denies the bulk of the allegations in Plaintiffs’ Complaint. The factual record before me on these motions is therefore quite limited, confined mostly to the face of the Privacy Statute. The parties have not requested that I take judicial notice of any facts outside the Complaint, and I, therefore, consider their arguments only on this limited record.

A. PREEMPTION

The parties cross-move for judgment on the pleadings on Plaintiffs’ preemption claims (Counts Three, Four, and Five¹ ) and agree the record is ripe to decide the issue. The doctrine of preemption flows from the Supremacy Clause, which provides that "the Laws of the United States" (as well as treaties and the Constitution itself) "shall be the supreme Law of the Land ... any Thing in the Constitution or Laws of any state to the Contrary notwithstanding." Art. VI, cl. 2. Consequently, Congress may preempt, i.e. , invalidate, a state law through federal legislation. It may do so not only by express language in a statute, but also by implication. See Sprietsma v. Mercury Marine , 537 U.S. 51, 64, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002).

Plaintiffs allege the Privacy Statute impliedly conflicts with federal law, and is thus an unconstitutional exercise of the state's power. Conflict preemption exists where "compliance with both state and federal law is impossible," or where, as Plaintiffs argue here, "the state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress."

Oneok, Inc. v. Learjet, Inc. , 575 U.S. 373, 377, 135 S.Ct. 1591, 191 L.Ed.2d 511 (2015) (internal citation omitted).

Plaintiffs believe Maine's Privacy Statute conflicts with two areas of federal law. In Count Three, Plaintiffs argue that the Statute conflicts with Congress's Joint Resolution to overturn the Federal Communications Commission's (FCC's) 2016 ISP Privacy Order pursuant to the Congressional Review Act. Plaintiffs contend the Statute "undermines the federal objectives that Congress sought to promote" through the Resolution." Complaint, ¶ 86. Count Four further alleges that the Statute conflicts with the FCC's Restoring Internet Freedom Order (RIF Order), in which the FCC determined that the best way to protect consumers’ privacy interests is to pair mandatory privacy disclosures, RIF Order ¶ 223, with FTC enforcement of those disclosures, id. ¶ 244. Plaintiffs maintain "[t]he Statute conflicts with the FCC's determination about the best way to protect consumers’ privacy interests" because the Statute "re-impos[es] the ISP Privacy Order's ‘highly prescriptive privacy regulations for broadband Internet access service.’ " Complaint ¶¶ 90-91 (quoting RIF Order ¶ 158).

In his Cross Motion for Judgment on the Pleadings, which incorporates the arguments presented in Defendant's Opposition to Plaintiffs’ Motion for Judgment on the Pleadings (ECF No. 28), Defendant Frey counters that the Privacy Statute regulates a space Congress explicitly left open, and any conflict is a figment of Plaintiffs’ imaginative pleading. (Opposition at 14-20.)

1. The ISP Privacy Order

In 2017, Congress passed and the President signed a Joint Resolution vacating the FCC's ISP Privacy Order pursuant to the Congressional Review Act (CRA). Joint Resolution, Pub. L. No. 115-22, 131 Stat. 88 (2017) ("Joint Resolution"). Because the Joint Resolution passed through the bicameralism and presentment process, it carries the full force and preemptive effect of federal law. See INS v. Chadha , 462 U.S. 919, 951, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983). However, this particular Joint Resolution has little effect. An expression of congressional disapproval under the CRA simply makes it "as though such rule had never taken effect," 5 U.S.C. § 801, returning to the status quo ante. Here, the Joint Resolution "disapproved" of the FCC's ISP Privacy Order, bringing back into force rules the ISP Privacy Order had itself repealed. See Protecting the Privacy of Customers of Broadband and Other Telecommunications Service, Order, 32 FCC Rcd 5442 (2017). This "disapproval" of an individual FCC order neither creates a broad federal policy nor speaks to what states might do in the ISP Privacy Order's absence. After the...