Victory Processing, LLC v. Fox

• Decision Date: 09 February 2018
• Docket Number: CV 17–27–H–CCL
• Citation: 307 F.Supp.3d 1109
• Parties: VICTORY PROCESSING, LLC, and Dave Dishaw, Plaintiffs, v. Tim FOX, in his official capacity as Attorney General for the State of Montana, Defendant.
• Court: U.S. District Court — District of Montana

307 F.Supp.3d 1109

VICTORY PROCESSING, LLC, and Dave Dishaw, Plaintiffs,

v.Tim FOX, in his official capacity as Attorney General for the State of Montana, Defendant.

CV 17–27–H–CCL

United States District Court, D. Montana, Helena Division.

Signed February 9, 2018

James Edward Brown, The James Brown Law Office, PLLC, Helena, MT, Blake E. Johnson, Pro Hac Vice, Bruning Law Group, Lincoln, NE, for Plaintiffs.

Dale M. Schowengerdt, Patrick M. Risken, Montana Attorney General, Helena, MT, for Defendant.

ORDER

CHARLES C. LOVELL, SENIOR UNITED STATES DISTRICT JUDGE

Before the Court are cross-motions for summary judgment filed by the parties. Having examined the entire record, the Court is prepared to rule.

I. BACKGROUND

This is a declaratory judgment action claiming violation of Plaintiffs' civil rights, 42 U.S.C. § 1983, by alleging a deprivation of Plaintiffs' right to free speech guaranteed by the First and Fourteenth Amendments of the U.S. Constitution. (ECF No. 1, Compl. ¶ 1.)

Plaintiff VPLLC is a limited liability company organized in 2012 in the State of Michigan, with offices in Grand Rapids, Michigan. (ECF No. 1, Compl. ¶ 1.) Plaintiff Dishaw is the managing member of VPLLC. (ECF No. 27, Dishaw Aff. ¶ 3.) Dishaw states that VPLLC "engages in political consulting and conducts data gathering and dissemination projects regarding political campaigns, election races, ballot initiatives ... throughout the United States, primarily through the use of automated telephone calls." (ECF No. 27, Dishaw Aff. ¶ 5.)

Plaintiffs VPLLC and Dishaw assert that a Montana statute, Mont. Code Ann. § 45–8–216, enacted in 1991, deprives them of the ability to convey political messages to Montana voters. The statute provides that

(1) A person may not use an automated telephone system, device, or facsimile machine for the selection and dialing of telephone numbers and playing of recorded messages if a message is completed to the dialed number for the purpose of:

(a) offering goods or services for sale;

(b) conveying information on goods or services in soliciting sales or purchases;

(c) soliciting information;

(d) gathering data or statistics; or

(e) promoting a political campaign or any use related to a political campaign.

(2) This section does not prohibit the use of an automated telephone system, device, or facsimile machine described under subsection (1) for purposes of informing purchasers of the receipt, availability for delivery, delay in delivery, or other pertinent information on the status of any purchased goods or services, of responding to an inquiry initiated by any person, or of providing any other pertinent information when there is a preexisting business relationship. This section does not prohibit the use of an automated telephone system or device if the permission of the called party is obtained by a live operator before the recorded message is delivered.

Mont. Code Ann. § 45–8–216 (2017).

II. LEGAL STANDARD

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "A party asserting that a fact cannot be or is genuinely disputed must support that assertion by ... citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits, or declarations, stipulations ... admissions, interrogatory answers, or other materials," or by "showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(A), (B).

The summary judgment movant bears the initial burden as to the elements of the causes of action about which there are no genuine issues of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the non-movant to establish the existence of a material fact. Id. The non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts" by "com[ing] forward with ‘specific facts showing that there is a genuine issue for trial.’ " Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e) (1963) (amended 2010) ). A disputed fact raises a genuine issue for trial if it would permit a reasonable jury to return a verdict for the non-movant. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court must construe disputed facts in the light most favorable to the non-moving party. Ellison v. Robertson , 357 F.3d 1072, 1075 (9th Cir. 2004). However, bare assertions standing alone are insufficient to create material facts. Liberty Lobby , 477 U.S. at 247–48, 106 S.Ct. 2505. If the burden shifts, the non-moving party must produce "significant probative evidence," and "may not rely merely on the unsupported or conclusory allegations of [his] pleadings." Coverdell v. Dep't of Soc. & Health Servs. , 834 F.2d 758, 769 (9th Cir. 1987).

III. DISCUSSION

A. STANDING.

Article III of the U.S. Constitution states the "case or controversy" requirement for subject matter jurisdiction. Allen v. Wright , 468 U.S. 737, 750, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). Plaintiffs' unverified Complaint asserts a First Amendment pre-enforcement challenge against Montana's robocalling statute. Defendants challenge Plaintiffs' standing to present this claim because the claim rests on the legal rights and interests of others, and parties ordinarily do not enforce the constitutional rights of others. In order to demonstrate third-party standing, Plaintiffs must show that they have (1) suffered an injury in fact, (2) have a close relation to the third party, and (3) the third party is hindered from protecting his or her own interests. Wasson v. Sonoma County Junior College , 203 F.3d 659, 663 (9th Cir. 2000) (citing Powers v. Ohio , 499 U.S. 400, 111 S.Ct. 1364, 113 L.Ed.2d 411 (1991) ). Plaintiffs seem to meet the first two prongs of this test in that Plaintiffs may lose business and profits in Montana if they cannot send fully-automated political campaign robocalls to Montana residences (and can be fined if they do), and there is a contractual relationship between Plaintiffs and their political campaign customers. The Court does not see any hindrance, however, to the third party's ability to litigate this question directly, and Plaintiffs' refusal to divulge the name of any potential customer (on grounds of confidentiality) causes the Court to wonder somewhat about the nature and extent of such customer interest, if any. On the other hand, an obvious hindrance to obtaining customers willing to be named in a suit would be the Montana statute's prohibition itself.

Because of concerns regarding the "chilling effect of sweeping restrictions" on speech, the Supreme Court has endorsed pre-enforcement actions. Ariz. Right to Life Political Action Comm. v. Bayless , 320 F.3d 1002, 1006 (9th Cir. 2003). "It is sufficient for standing purposes that the plaintiff intends to engage in ‘a course of conduct arguably affected with a constitutional interest’ and that there is a credible threat that the challenged provision will be invoked against the plaintiff." Italian Colors Restaurant v. Becerra , 878 F.3d 1165 (9th Cir. 2018) (citing LSO, Ltd. v. Stroh , 205 F.3d 1146, 1154–55 (9th Cir. 2000) ). The Court should consider "(1) the likelihood that the law will be enforced against the plaintiff, (2) whether the plaintiff has shown, ‘with some degree of concrete detail,’ that she intends to violate the challenged law; and (3) whether the law even applies to the plaintiff." Italian Colors Restaurant , 878 F.3d at 1172 (citing Lopez v. Candaele , 630 F.3d 775, 786 (9th Cir. 2010) ).

Clearly, Montana's robocalling statute applies to Plaintiffs' stated intent to send political campaign robocalls to Montana households. Plaintiffs were incorporated in Michigan in 2012 and claim to have been engaged in selling robocall services outside of Montana. Plaintiff claims to have had potential Montana clients decide against hiring Victory Processing because Montana's robocalling statute stands in the way. Defendants point out that Plaintiff Dishaw's affidavit is devoid of facts relating to time, date, or specific instances of conduct as to either Plaintiff's intent to violate the law or as to Defendants' intent to enforce the law. It is troubling that Plaintiffs refused to divulge any information during discovery that would have supported their alleged intention and opportunity to violate the law. Plaintiffs' refusal to divulge the names of any potential customers (on grounds of confidentiality) provides only a thin basis for standing, but the Court believes the law applies to Plaintiff's proposed robocalls, that the law arguably affects a constitutional interest, that Plaintiffs have shown an intention to violate Montana's robocalling law, and that it is likely Montana would enforce its law against Plaintiffs if Plaintiffs were to register, for example, with the State to conduct robocalling in Montana. See infra n. 1. Furthermore, self-censorship may suffice to state a sufficient injury "even without an actual prosecution." Italian Colors Restaurant , 878 F.3d at 1173 (quoting Virginia v. Am. Booksellers Ass'n , 484 U.S. 383, 393, 108 S.Ct. 636, 98 L.Ed.2d 782 (1988) ). When a threatened enforcement implicates First Amendment rights, "the [standing] inquiry tilts dramatically toward a finding of standing." LSO , 205 F.3d at 1155. The Court finds that it is reasonable for Plaintiffs to modify their behavior to avoid violating this statute and to avoid a credible threat of its enforcement. Therefore, the Court concludes that Plaintiffs have established standing to proceed with their Complaint.

B. CAPACITY TO SUE UNDER MONTANA LAW.

Defendants argue that Montana's...