Cunningham v. Gen. Dynamics Info. Tech., Inc.

• Decision Date: 24 April 2018
• Docket Number: No. 17-1592,17-1592
• Citation: 888 F.3d 640
• Parties: Craig CUNNINGHAM, on behalf of himself and all others similarly situated, Plaintiff–Appellant, v. GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

888 F.3d 640

Craig CUNNINGHAM, on behalf of himself and all others similarly situated, Plaintiff–Appellant,

v.GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC., Defendant–Appellee.

No. 17-1592

United States Court of Appeals, Fourth Circuit.

Argued: January 24, 2018

Decided: April 24, 2018

ARGUED: Aytan Yehoshua Bellin, BELLIN & ASSOCIATES LLC, White Plains, New York, for Appellant. James P. Rouhandeh, DAVIS, POLK & WARDWELL, LLP, New York, New York, for Appellee. ON BRIEF: Roger Furman, Los Angeles, California, for Appellant. Neil H. MacBride, Washington, D.C., Paul S. Mishkin, DAVIS POLK & WARDWELL LLP, New York, New York; Attison L. Barnes, III, Stephen J. Obermeier, WILEY REIN LLP, Washington, D.C., for Appellee.

Before TRAXLER and FLOYD, Circuit Judges, and SHEDD, Senior Circuit Judge.

Affirmed by published opinion. Judge Floyd wrote the opinion in which Judge Traxler and Senior Judge Shedd joined.

FLOYD, Circuit Judge:

Greg Cunningham alleges that he received an autodialed, prerecorded phone call from General Dynamics Information Technology, Inc. ("GDIT") advertising the commercial availability of health insurance, without having given his prior express consent, in violation of the Telephone Consumer Protection Act ("TCPA"). The district court granted GDIT's motion to dismiss for lack of subject matter jurisdiction on the ground that GDIT is immune from suit under the Yearsley doctrine, which immunizes government contractors from suit when the government authorized the contractor's actions and the government validly conferred that authorization. Yearsley v. W. A. Ross Constr. Co. , 309 U.S. 18, 20–21, 60 S.Ct. 413, 84 L.Ed. 554 (1940).

On appeal, Cunningham argues that the district court erred in conferring Yearsley immunity and consequently dismissing the suit for three distinct reasons. First, he asserts that the Yearsley doctrine does not apply as a matter of law to federal claims. Next, he asserts that GDIT fails to qualify for Yearsley immunity both because the government did not authorize its actions and because the authorization was not validly conferred. Finally, he asserts that even if Yearsley immunity applies, Yearsley is a merits defense from liability rather than a jurisdictional immunity. We find these arguments unpersuasive, and now affirm the district court's dismissal for lack of subject matter jurisdiction.

I.

A.

Pursuant to the doctrine of sovereign immunity, the United States is immune from private civil actions absent an express waiver. Kerns v. United States , 585 F.3d 187, 193–94 (4th Cir. 2009) (citing United States v. Sherwood , 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941) ). Under the concept of derivative sovereign immunity, stemming from the Supreme Court's decision in Yearsley , 309 U.S. at 20–21, 60 S.Ct. 413, agents of the sovereign are also sometimes protected from liability for carrying out the sovereign's will. In re KBR, Inc., Burn Pit Litig. , 744 F.3d 326, 341–42 (4th Cir. 2014) (internal quotation marks omitted) (interpreting Yearsley as recognizing that private employees should receive immunity from suit when they perform the same functions as government employees). This immunity derives from " ‘the government's unquestioned need to delegate governmental functions,’ " and the acknowledgement that "[i]mposing liability on private agents of the government would directly impede the significant governmental interest in the completion of its work." Butters v. Vance Int'l, Inc. , 225 F.3d 462, 466 (4th Cir. 2000) (quoting Mangold v. Analytic Servs. , Inc. , 77 F.3d 1442, 1448 (4th Cir. 1996) ). "[U]nder Yearsley , a government contractor is not subject to suit if (1) the government authorized the contractor's actions and (2) the government ‘validly conferred’ that authorization, meaning it acted within its constitutional power." In re KBR , 744 F.3d at 342 (citing Yearsley , 309 U.S. at 20–21, 60 S.Ct. 413 ).

B.

On appeal, we review whether the district court erred in conferring Yearsley immunity on GDIT's phone call to Cunningham.¹ As relevant here, the Affordable Care Act ("ACA") directs the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services ("CMS") to establish a system to keep applicants informed about their eligibility for enrollment in a qualified health plan. See 42 U.S.C. § 18083(a), (b)(2), (e). CMS maintains the HealthCare.gov website, through which individuals may enroll for health coverage under the ACA using an online application. The online application requires visitors to provide their name and phone number, and accept CMS's privacy policy by affirmatively clicking an "Accept" box acknowledging, inter alia , that CMS may use the phone number provided to contact them with more information.

To carry out their statutorily mandated obligations under the ACA, CMS awarded a contract to Vangent, Inc., which subsequently merged into GDIT, for contact center operations support for CMS programs, including the HealthCare.gov website. Under the contract, GDIT was required to make phone calls from January 1, 2015, through May 16, 2016, to inform individuals about their ability to buy health insurance through the health insurance exchanges created by the ACA. In accordance with this instruction, CMS authorized GDIT to use an autodialer to make the calls, provided a script for each call, and provided a list of phone numbers for each call. Section 17 of the CMS-GDIT contract also required GDIT to "maintain a corporate compliance program" that included "[a]n internal monitoring and auditing function to help ensure compliance with statutes [and] regulations," and "[a]n enforcement and disciplinary process to address violations of applicable statutes [and] regulations ...." J.A. 731–32.

On December 1, 2015, pursuant to the ACA's statutory mandate, CMS sent GDIT approximately 2.65 million telephone numbers and directed GDIT to call each of those numbers over the next five days in accordance with their contract. The numbers were divided into seven lists specifying the exact day that GDIT was to call each number and which of the scripts CMS provided that GDIT was to use for each call. One of CMS's lists directed GDIT to call Cunningham's cell phone and approximately 680,000 other numbers the next day, December 2, 2015. GDIT made the autodialed, prerecorded call to Cunningham's cell phone on December 2, 2015. When Cunningham did not pick up, the prerecorded message left the following approximately 30–second voicemail message:

Hello! This is an important message from HealthCare.gov. The deadline to enroll in a 2016 health insurance plan is coming soon. You may be able to qualify for financial help to make health insurance more affordable. With financial help, most people can find plans for $75 or less per month. Visit HealthCare.gov today to see how much you can save. If you have questions, you can call the Health Insurance Marketplace to talk to a trained enrollment specialist at 1-800-318-2596. That's 1-800-318-2596. We are available 24 hours a day and the call is free. Don't forget—the deadline to enroll is Tuesday, December 15th. If you've already taken action and have 2016 health coverage, please ignore this message. Thank You! Goodbye.

J.A. 28. This message was identical to the script CMS provided GDIT.

Cunningham alleges that he received this autodialed, prerecorded phone call from GDIT advertising the commercial availability of health insurance without having given his prior consent, in violation of the TCPA.² As relevant here, the TCPA prohibits any person, absent the prior express consent of the recipient, from "mak[ing] any call ... using any automatic telephone dialing system ... to a paging service [or] cellular telephone service ...." Telephone Consumer Protection Act, 47 U.S.C. § 227(b)(1)(A)(3). The TCPA also authorizes a private right of action for conduct violating the Act. § 227(b)(3). However, "[t]he United States and its agencies, it is undisputed, are not subject to the TCPA's prohibitions because no statute lifts their immunity." Campbell–Ewald Co. v. Gomez , ––– U.S. ––––, 136 S.Ct. 663, 672, 193 L.Ed.2d 571 (2016). Thus, GDIT would also be immune from liability for making this phone call if derivative sovereign immunity applies.

Cunningham commenced this putative class action suit against GDIT on May 16, 2016, seeking damages and injunctive relief as authorized under the TCPA. See 47 U.S.C. § 227(b)(1)(A)(iii), (b)(1)(B), (b)(3). GDIT moved to dismiss for lack of subject matter jurisdiction on the ground that GDIT is immune from suit under the Yearsley doctrine.³ See Fed. R. Civ. P. 12(b)(1). On October 18, 2016, the district court issued an interim order concluding that GDIT was entitled to Yearsley immunity, and granted limited jurisdictional discovery for Cunningham to contest this determination. The district court issued this order, in part, because it concluded that CMS had "authorized and instructed GDIT to do exactly what it did." J.A. 259. Discovery lasted 75 days and included six subpoenas, four Touhy requests, numerous document requests, six depositions of GDIT and CMS employees, and supplemental briefing on the issue. On May 1, 2017, the district court granted GDIT's motion to dismiss for lack of subject matter jurisdiction on the ground that GDIT was immune from suit under the Yearsley doctrine. This appeal followed.

II.

In reviewing a district court's order dismissing an action for lack of subject matter jurisdiction, this Court reviews conclusions of law de novo and findings of fact for clear error. Velasco v. Gov't of Indon. , 370 F.3d 392, 398 (4th Cir. 2004). To conclude that a district court's factual finding is clearly erroneous, the reviewing court must be "left with the definite and firm conviction that a mistake has been committed." HSBC Bank USA v. F & M Bank N. Va. , 246 F.3d 335, 338 (4th Cir. 2001) (quoting Anderson v. City of Bessemer City , 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985) ).

III.

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