Duguid v. Facebook, Inc.

• Decision Date: 13 June 2019
• Docket Number: No. 17-15320,17-15320
• Citation: 926 F.3d 1146
• Parties: 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.
• Court: U.S. Court of Appeals — Ninth Circuit

926 F.3d 1146

Noah DUGUID, individually and on behalf of himself and all others similarly situated, Plaintiff-Appellant,

v. FACEBOOK, INC., Defendant-Appellee,andUnited States of America, Intervenor-Appellee.

No. 17-15320

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 11, 2019 San Francisco, California

Filed June 13, 2019

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.

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 numbers to be called, using a random or sequential number generator—and to dial such numbers automatically." Id. at 1053. That definition governs this appeal.

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 , ––– U.S. ––––, 136 S. Ct. 1540, 194 L.Ed.2d 635 (2016) ).

I. Sufficiency of the Allegations

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." 47 U.S.C. § 227(a)(1)(A). In Marks , we clarified that the adverbial phrase "using a random or sequential number generator" modifies only the verb "to produce," and not the preceding verb, "to store." 904 F.3d at 1052. In other words, an ATDS need not be able to use a random or sequential generator to store numbers—it suffices to merely have the capacity to "store numbers to be called" and "to dial such numbers automatically."² Id. at 1053.

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...