Source: https://casetext.com/case/doohan-v-ctb-invrs-llc
Timestamp: 2020-07-11 04:31:58
Document Index: 34289825

Matched Legal Cases: ['§ 227', '§ 227', '§ 227', '§ 153', '§ 153', '§ 153', '§ 18']

Doohan v. CTB Inv'rs, LLC, Case No. 4:19-cv-00111-NKL | Casetext Search + Citator
Doohan v. CTB Inv'rs, LLC
Full title:ANDY DOOHAN, individually and on behalf of all others similarly situated…
Case No. 4:19-cv-00111-NKL (W.D. Mo. Dec. 3, 2019)
Case No. 4:19-cv-00111-NKL
ANDY DOOHAN, individually and on behalf of all others similarly situated, Plaintiff, v. CTB INVESTORS, LLC d/b/a PBR BIG SKY COWBOY BAR, THE CORDISH COMPANIES, INC., ENTERTAINMENT CONSULTING INTERNATIONAL, LLC, Defendants.
Before the Court is Defendants' motion to dismiss Plaintiff's first amended class action Complaint alleging violations of the Telephone Consumer Protection Act. Doc. 33. Defendants CTB Investors, LLC d/b/a PBR Big Sky Cowboy Bar, Entertainment Consulting International, LLC, and the Cordish Companies, Inc., assert Plaintiff's claims should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(2) and (6), for lack of personal jurisdiction and failure to state a claim. For the reasons discussed below, Defendants' motion to dismiss is denied. Plaintiff's motions for leave to file supplemental authority, Doc. 55 and Doc. 58, are denied as moot.
Also pending before the Court is a separate motion to dismiss Plaintiff's original Complaint filed by Defendant CTB Investors, LLC d/b/a PBR Big Sky Cowboy Bar on March 8, 2019. Doc. 15. On March 22, 2019, Plaintiff filed his first amended Complaint. Doc. 20. An amended Complaint generally renders moot a pending motion to dismiss the original Complaint. See Avery v. Boyd Bros. Transp., No. 13-00579-CV-W-BP, 2013 WL 11326558, at *1 (W.D. Mo. Aug. 21, 2013) (denying motion to dismiss original complaint as moot because amended complaint "superseded and displaced [the] original complaint"). Therefore, the motion to dismiss by CTB Investors, LLC d/b/a PBR Big Sky Cowboy Bar, Doc. 15, is denied as moot.
Defendants are CTB Investors, LLC d/b/a PBR Big Sky Cowboy Bar ("PBR"), a limited liability company with its principal place of business in Kansas City, Missouri; the Cordish Companies, Inc. ("Cordish"), a Maryland corporation with its principal place of business in Maryland; and Entertainment Consulting International, LLC ("ECI"), a Maryland limited-liability company with its principal place of business in Maryland. PBR is a drinking establishment located within the Kansas City Live! entertainment block of the Kansas City Power & Light District, which is a retail, entertainment, office, and residential district located in downtown Kansas City, Missouri. Plaintiff alleges that Cordish and ECI effectuate and oversee all, or substantially all, of the marketing decisions of PBR and other venues, and that in that capacity Defendants have caused promotional text messages and calls to be made to Plaintiff using the ATDS systems SendSmart and Txt Live! without consent.
Defendants ECI, Cordish, and PBR together file a motion to dismiss. Defendants ECI and Cordish move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. All Defendants move to dismiss pursuant to Rule 12(b)(6) for failure to state a claim, asserting that the statute upon which Plaintiff's claims rely contain unconstitutional provisions that are not severable. Specifically, Defendants assert that by exempting calls made pursuant to a federal government debt from the definition of ATDS, by exempting government speakers from ATDS prohibitions, and by exempting non-profits from the definition of telephone solicitation and from prohibitions on certain calls made for telemarketing purposes, the TCPA places content-based restrictions on free speech that cannot survive strict scrutiny and are therefore in violation of the First Amendment and Equal Protection. Moreover, they argue the statutory definition of "ATDS" is unconstitutionally vague in violation of the Fifth Amendment Due Process Clause.
Defendants Cordish and ECI move to dismiss the first amended Complaint, arguing the Court lacks personal jurisdiction over them as non-resident entities. In response, Plaintiff asserts that both ECI and Cordish have the requisite minimum contacts with Missouri to make personal jurisdiction proper, and that in the alternative, PBR's contacts with Missouri can be imputed to them through an alter-ego or agency theory.
Because the Court finds that Plaintiff has made a prima facie showing that both ECI and Cordish have sufficient contacts to warrant specific personal jurisdiction, it will not address the parties' alternative arguments for and against imputing PBR's contacts onto the other Defendants on an agency or alter-ego theory at this stage.
In Plaintiff's first amended Complaint, he implies that Defendants may also be subject to general jurisdiction, because "Defendants' affiliations with the state of Missouri are so continuous and systematic as to render them at home in this District, because Defendants' regular and systematic corporate decision-making is made in Kansas City, Missouri." Doc. 20, ¶ 10. In their motion to dismiss, Defendants argue ECI and Cordish are not subject to general jurisdiction, and Plaintiff does not contest this in his response. Therefore, the Court will treat Plaintiff's argument as one for specific rather than general jurisdiction.
As an initial matter, Plaintiff has made a prima facie showing that ECI's and Cordish's alleged conduct giving rise to Plaintiff's cause of action falls within the Missouri long-arm statute. Plaintiff has alleged Defendants "transact significant amounts of business within this District," Doc. 20, ¶ 8, and provided evidence that ECI and Cordish maintain offices and officers or employees in Kansas City, and that ECI is registered as a foreign limited liability corporation with the state of Missouri and has executed an operating agreement with PBR to provide marketing services. See Doc. 49, pp. 4-9. Plaintiff has further alleged that all Defendants, including Cordish and ECI, and/or their agents, utilized SendSmart and Txt Live! to send unconsented text messages in Missouri to advertise the services of PBR to the putative class using an ATDS, giving rise to this cause of action. See Doc. 20, ¶¶ 48-60. These allegations sufficiently state a claim of a tortious act that has produced in-state consequences under the TCPA.
Plaintiff asserts that "if jurisdiction comports with Due Process requirements—as here—then it is also proper under Missouri's long-arm statute." Doc. 49, p. 3. However, the Eighth Circuit has made clear that Missouri courts intend the state long-arm statute and Due Process inquiries to be distinct. See Dairy Farmers of Am., Inc. v. Bassett & Walker Int'l, Inc., 702 F.3d 472, 475 (8th Cir. 2012) (finding that "[w]hile [Missouri's] long-arm statute extends jurisdiction to the limits of the Due Process Clause, it does so only for acts within its enumerated categories . . . True, courts have often treated the statutory and constitutional inquiries together . . . The inquiries, however, are separate.")
Defendants argue that ECI lacks sufficient minimum contacts with Missouri and thus should not be subject to personal jurisdiction here because none of the alleged conduct took place in Missouri as ECI is headquartered in Maryland, no ECI employee directly engaged in sending the text messages at issue, and ECI directs its consulting services to venues across the country, not specifically toward Missouri. Therefore, ECI has not aimed its conduct into the forum state. Plaintiff responds that personal jurisdiction over ECI is proper because ECI was heavily involved in developing, instituting, and overseeing the data collection and text message campaigns carried out by PBR and other Kansas City Power & Light venues, including coordinating the SendSmart and Txt Live! programs and providing materials for data collection. Further, ECI is registered to do business in Missouri as a foreign limited liability corporation and has employees living and working out of Kansas City in concert with Kansas City Power & Light district venues, including PBR.
Defendants also argue that Plaintiff "asserts no allegations that allow the Court to evaluate [ECI's and Cordish's] contacts with the forum related to this action," and "this failure alone is sufficient to conclude the Court lacks specific jurisdiction over [ECI and Cordish]." Doc. 34, p. 7. Given the Court's discussion herein of each of Plaintiff's allegations that permit the Court to evaluate personal jurisdiction over ECI and Cordish, this argument is rejected. The authorities cited by Defendants do not persuade the Court otherwise. See, e.g., Goans Acquisition, Inc., v. Merchant Solutions, LLC, et al., No. 12-00539-cv-S-JTM, 2012 WL 4957628 (E.D. Mo. Oct. 16, 2012) (finding it could not exercise personal jurisdiction where the Plaintiff relied exclusively on the Complaint's allegations in opposing a motion to dismiss, and the complaint "contain[ed] no allegations specifically naming" two Defendants and "offer[ed] no specific information about" those Defendants); Nexgen HBM, Inc. v. Listreports, Inc., No. 16-cv-3143-SRN/FLN, 2017 WL 4040808 (D. Minn. Sept. 12, 2017) (after finding that the plaintiff "fail[ed] to distinguish between each Defendant's conduct," continuing with the personal jurisdiction analysis by parsing out the allegations and evidence against each individual defendant).
As to the nature, quality, and quantity of ECI's contacts with Missouri, Plaintiff has demonstrated a number of contacts between ECI and the state. He points to ECI's registration as a foreign limited liability company with Missouri; ECI employees who operate out of Kansas City and participated in the coordination of the SendSmart and Txt Live! programs with Kanas City Power & Light venues; ECI President Reed Cordish's appointment of an ECI employee as a non-managing member of PBR and other venues in the Kansas City Live! block of the Power & Light district who also participated in the coordination of marketing programs; testimony from a Kansas City Live! employee that she communicated with ECI employees as frequently as "daily" regarding marketing programs; testimony from a Kansas City Power & Light employee that he worked with two ECI employees to develop Txt Live!, and reported directly to an ECI Senior Vice President; the operating agreement between ECI and PBR stating the agreement was "negotiated, executed, delivered, and intended to be performed" in the Western District of Missouri, as the location of PBR; ECI's contract with a Kansas City software developer to create the Txt Live! program; testimony that the data cards venues used to collect contact information were provided to venues by ECI; and finally, a variety of emails between ECI employees, Kansas City Power & Light employees, and employees of individual venues including PBR, communicating policies with respect to marketing and implementation of the alleged ATDS systems at issue. See Doc. 49, pp. 4-9. These contacts demonstrate that ECI was in consistent communication with Kansas City Power & Light venues in order to develop, implement, and coordinate the SendSmart and Txt Live! systems, including having employees working from Kansas City and the President of ECI Reed Cordish signing off on the marketing programs being implemented. Doc. 49, pp. 6-7. These contacts are not random or fortuitous but purposeful and directed at the Missouri venues here, including PBR.
As to the third factor, Plaintiff has also demonstrated a direct relationship between the contacts and the cause of action here. ECI executed an operating agreement with PBR in which it agreed to "provide web-based and paid advertising and marketing services [for PBR]". Doc. 49, p. 11. Plaintiff alleges that "[a]mong the suite of services that ECI coordinates and directs for all Cordish bars and restaurants, including PBR, is the ability to mass text message potential customers." Doc. 20, ¶ 43. Plaintiff also provides evidence that ECI was an account holder of SendSmart and the coordinator of Txt Live!, the two systems Plaintiff contends were used to send the messages at issue here. Doc. 49, pp. 6-7. The evidence Plaintiff cites indicates that ECI manages the website that venue employees use to upload consumer cell phone numbers and create text message campaigns, and that ECI developed and enforced the policies and procedures for executing text messaging campaigns and collecting lists of consumers' names and phone numbers for use in campaigns for Kansas City Power & Light venues, including PBR. Doc. 20, ¶¶ 44-46; Doc. 49, pp. 6-8. These are the campaigns that Plaintiff alleges he was contacted through. Though Defendants present an affidavit stating it was ECI's policy to not send text messages, Doc. 34-3, that ECI employees did not themselves send the text messages is not determinative of personal jurisdiction. Due process only requires the cause of action to arise out of or relate to a defendant's contacts with the forum state. Johnson, 614 F.3d at 795. Plaintiff's claim that he received text messages from PBR as part of mass text message campaigns directly relates to ECI's development and coordination of PBR's text message campaigns. Thus, the first three factors of the jurisdictional inquiry weigh in favor of the Court's exercise of specific personal jurisdiction over ECI.
As to the final two factors, Plaintiff has provided evidence that Defendants sent over thirty-thousand text messages to phones with Missouri area codes, some of which belong to class members. Doc. 49, p. 9. Missouri "obviously has an interest in providing a forum for [its] resident[s] . . ." K-V Pharm. Co., 648 F.3d at 595; see also Frank v. Gold's Gym of N. Augusta, No. CV 18-447(DSD/KMM), 2018 WL 3158822, at *3 (D. Minn. June 28, 2018) (finding it "generally true" that a forum state "has an interest in providing a forum for its citizens harmed by violations of the TCPA"). Plaintiff also contends the venue is convenient for all other parties because PBR, evidence, witnesses, ECI employees, and the bulk of the putative class are located in Missouri. Defendants do not argue otherwise. Therefore, these two factors support Plaintiff's prima facie showing.
Plaintiff's uncontroverted allegations in conjunction with the evidence offered establish a prima facie showing that ECI has sufficient minimum contacts with Missouri. All five factors weigh in Plaintiff's favor, and Defendants' evidence does not diminish this showing. ECI purposefully directed its activities at Missouri when it registered to do business in Missouri, installed employees in Missouri, and substantially involved itself with developing and implementing, through consistent and prolonged communication with PBR and other Missouri venues, the alleged text message system at issue. ECI's contacts with Missouri are such that ECI "should reasonably anticipate being haled into court" here. Burger King Corp., 471 U.S. at 747. At this stage of the proceedings, Plaintiff has satisfied the "minimal" burden of making a prima facie showing that personal jurisdiction exists as to ECI. ECI's motion to dismiss for lack of personal jurisdiction is denied.
In their motion to dismiss, Defendants argue Cordish does not have sufficient minimum contacts with Missouri, because none of the alleged conduct took place in Missouri, Cordish does not have any employees and therefore could not have been engaged in sending text messages, and Cordish does not own any property but rather is a passive company with a "trade name [that] is often used to describe real estate developments located around the country". Doc. 34, p. 8. Plaintiff argues personal jurisdiction over Cordish is proper, because not only did they participate in the oversight, development, and use of the ATDS as well as creation of the data collection policy used to promote Missouri venues to Missouri customers, but Cordish also has a physical presence in the state through its executives, office, and ownership interests located here.
The only evidence Defendants provide to counter Plaintiff's allegations with respect to Cordish is the affidavit by Robert Fowler who is an attorney for CTR Management, Inc., a Maryland corporation that provides real estate development services, including to properties associated with Cordish. In relevant part, the Fowler affidavit states Cordish "is a passive company that does not have any employees and does not own any property, including in the state of Missouri," and that rather, "Cordish functions primarily as a trade name often used to describe real estate developments around the country, which are each owned by a separate and distinct legal entity." Doc. 34-2. At this stage, the Court must take Plaintiff's allegations as true to the extent they are uncontroverted by Defendants' affidavits. Cantrell, 789 F. Supp. at 308-09. However, Plaintiff does not rely solely on allegations to support his contention that Cordish operates out of Kansas City and owns and manages businesses there; rather, he rests these allegations on Cordish's own statements asserting those facts. See Doc. 20, ¶¶ 38-39; Doc. 49, pp. 5-6. In addition, Defendants' contention that "Cordish has no employees and therefore no individual could possibly be engaged in sending text messages," Doc. 34, p. 7, is countered to some degree by Plaintiff's showing that Cordish does have individuals working on its behalf in some capacity, including Cordish's website listing Reed Cordish as a Cordish principal and Nick Benjamin as a Cordish executive, as well as individuals using an email address with the @cordish.com domain. At this stage, the Court is required to resolve these factual conflicts in Plaintiff's favor.
Turning to the minimum contacts analysis, with respect to the nature, quality, and quantity of Cordish's contacts with Missouri, Plaintiff has demonstrated a variety of contacts. Plaintiff produced evidence that Cordish claims to own and manage several developments in Missouri, including the Kansas City Power & Light District, citing to Cordish's website stating that it "owns and manages virtually every business it has created," as well as other Cordish statements claiming the Power & Light District as a "Development[] Owned and Managed," Doc. 20, ¶ 38-39, and listing Kansas City Live, LLC, which is a part of the Power & Light District, and Defendant CTB Investors, LLC, as its "subsidiaries." Id. at ¶ 11. Cordish's website also states that Cordish has a Kansas City office out of which it manages the Kansas City Live! entertainment block, and that Cordish has an executive operating out of Kansas City. Doc. 49, p. 5-6. Plaintiff points to multiple individuals with an email address utilizing the @cordish.com domain name who are also in prominent positions at ECI or Kansas City Power & Light, and who are in daily contact with an employee of Kansas City Power & Light about marketing strategies for local venues. Doc. 49, p. 6. Plaintiff further alleges Cordish and ECI have exclusive and complete control over PBR's operation, including its marketing and promotion, Doc. 20, ¶ 14, and that Cordish uses its self-proclaimed asset Txt Live! to provide mobile marketing services to PBR and other venues, Doc. 20, ¶ 43. These services include the ability to mass text message potential customers. Id.
Plaintiff's showing concerning Cordish's relationship with ECI is also relevant. Though the Court does not impute ECI's contacts onto Cordish, the nature of Plaintiff's allegations about Cordish's organization indicate that "the parties' relationships with each other may be significant in evaluating their ties to the forum." Rush, 444 U.S. at 332. Though Plaintiff acknowledges ECI is a separate entity, he alleges ECI was created by Cordish and functions "part and parcel of Cordish itself. Cordish uses [ECI], along with numerous holding corporations or 'subsidiary entities,' such as Kansas City Live, LLC, to develop, implement, manage, and operate multiple entertainment district (and dozens of bars and restaurants within those districts) across the country, including PBR." Doc. 20, ¶ 41. A principal of Cordish, Reed Cordish, is also the President of ECI and has overseen the development of the Txt Live! policies and software that PBR used. Doc. 49, pp. 6-7. This assortment of contacts indicates that there are Cordish executives or affiliates working closely with, and even as a part of, both ECI and Kansas City Power & Light, and exercising control over the development and implementation of the messaging system and campaigns, all in the service of the entities Cordish claims to own and manage.
It is true that generally, "telephone calls, written communications, and . . . wire-transfers to and from a forum state do not create sufficient contacts to comport with due process such that" a court can properly exercise personal jurisdiction over a foreign defendant. Eagle Tech. v. Expander Ams., Inc., 783 F.3d 1131, 1137 (8th Cir. 2015). However, Plaintiff has presented evidence of more than just calls, written communications, or wire-transfers. Rather, the evidence presented indicates Cordish may have a physical presence in Kansas City through its executive and office, and may own and manage Kansas City Power & Light and Kansas City Live!, the entertainment district that houses PBR. Taken together, Cordish's contacts permit the first two factors to weigh in favor of finding personal jurisdiction is proper over Cordish. Cf. Austad Co. v. Pennie & Edmonds, 823 F.2d 223, 226 (8th Cir. 1987) (holding personal jurisdiction was not proper over Defendant and finding of particular significance that defendant law firm "does not maintain an office in South Dakota nor do any of its attorneys reside there or maintain a license to practice law there," "never advertised or solicited business in South Dakota," and "did not actively seek out [the South Dakota plaintiff] as a client").
Defendants contend that the contacts Plaintiff has demonstrated are "irrelevant" because "none of these purported contacts evidence any involvement by [ECI and Cordish] with the text messages allegedly sent to Plaintiff." Doc. 51, p. 5. However, the "arise out of or relate to" standard is not so strict. In Myers, the Eighth Circuit found an Illinois casino's advertisements targeting customers in Missouri were sufficiently related to a tort action arising from injuries incurred after Plaintiff visited the casino, because although the "injuries did not arise out of Casino Queen's advertising activities in a strict proximate cause sense, his injuries are nonetheless related to Casino Queen's advertising activities because he was injured after responding to the solicitation." Myers, 689 F.3d at 913. Plaintiff's assertion that Cordish, through and in concert with ECI and PBR, developed and executed a mass text messaging system to target PBR customers and expand their customer base "relates to" Plaintiff's cause of action claiming he and the putative class received a mass text message from PBR using that same system. Plaintiff provides emails between ECI, PBR, individuals with @cordish.com email addresses, Reed Cordish, and other Kansas City Power & Light employees and venues communicating detailed use policies and engaging in regular oversight of venues' use of the Send Smart and Txt Live! systems over the course of the four-year class period. These contacts relate to Plaintiff's cause of action here. The third factor weighs in favor of finding personal jurisdiction.
As to the final two factors, Plaintiff has demonstrated Defendants sent over thirty-thousand messages to phones with Missouri area codes, some of which belong to class members. Doc. 49, p. 9. Missouri "obviously has an interest in providing a forum for [its] resident[s] . . ." K-V Pharm. Co., 648 F.3d at 595. Further, because Plaintiff has presented evidence that Defendant has an officer and an office in Missouri, as well as evidence that Defendant owns and manages multiple properties in Missouri, there is no reason to believe the maintenance of the action in Missouri would be unduly burdensome to Cordish, and Defendants do not assert it would be inconvenient. Plaintiff also notes that the venue is convenient for all other parties, because PBR, evidence, witnesses, and the bulk of the putative class are located in Missouri. Therefore, these two factors support Plaintiff's prima facie showing.
In relevant part, the TCPA as modified by Congress' 2015 amendment provides that it shall be unlawful for any person to make a call using an ATDS "to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call, unless such call is made solely to collect a debt owed to or guaranteed by the United States." 47 U.S.C. § 227(b)(1)(A)(iii). Defendants argue that "[o]n their face, the ATDS restrictions discriminate based on a call's content . . . i.e., a caller may use an ATDS to collect a government debt, but not, for example, to inform someone about a beneficial service, or . . . communicate with a customer." Doc. 34, p. 11. Defendants contend that these content-based restrictions are subject to strict scrutiny, that they fail strict scrutiny, and that they are not severable from the remainder of the statute.
Analogizing to an Eighth Circuit decision reviewing a state analogue of the TCPA, the Government argues that the government-debt exemption is content-neutral, because it is based "principally on the relationship between the two parties—namely the relationship between the government and a debtor." Doc. 53, p. 9. In Van Bergen, the Eighth Circuit reviewed the Minnesota statute regulating the use of automatic dialing-announcing devices to determine whether the statute's three exemptions violated the First Amendment. Van Bergen v. State of Minn., 59 F.3d 1541 (8th Cir. 1995). The three exemptions at issue were "messages to subscribers with whom the caller has a current business or social relationship; messages from schools for parents, students, or employees; and messages to employees advising them of work schedules." Id. at 1550. The Eighth Circuit found that each of these exemptions were content-neutral, because they "exempt certain groups from the restrictions, not on the basis of the content of their message, but on the basis of their relationship with the subscriber." Id. A key detail was that each of the relationships identified in the exemptions involved an established business, social, or educational relationship, and the exemptions "merely identify groups of subscribers that perforce already have consent to contact the subscriber, and who do not have to go through the formality of obtaining additional specific consent to satisfy the statute." Id. at 1551.
The Government advances the governmental interest of "residential privacy." The Government also states in a footnote that "because the TCPA prevents robocalls made to private places beside the home (e.g., hospitals churches, and workplaces), it also advances interest beyond residential privacy." Doc. 53, p. 11, n. 9 (emphasis in original). The Government does not explain what those interests are or how they are furthered by the government-debt exception.
The government-debt exception is also not narrowly tailored to achieve its interest in privacy. "A statute is narrowly tailored if it targets and eliminates no more than the exact source of the 'evil' it seeks to remedy." Frisby v. Schultz, 487 U.S. 474, 485 (1988). The Government first focuses its argument on the ATDS restriction as a whole, asserting "[t]he autodialer restriction's prohibition on unwanted robocalls is narrowly tailored because it restricts a limited method of communication—the use of certain technologies in placing calls—and only without the consent of the called party, making it closely drawn to the unwanted intrusions it aims to prevent." Doc. 53, p. 12. However, this analysis does not incorporate the government-debt exception at issue here. See Duguid, 926 F.3d at 1155 (". . . [T]he government would have us focus our analysis on the TCPA writ large rather than the debt-collection exception. It argues that the post-amendment statute, viewed holistically, remains narrowly tailored to protect personal and household privacy. This gloss-over approach is at odds with Reed, which directs that the tailoring inquiry focus on the content-based differentiation—here, the debt-collection exception.").
The Government next asserts that the government-debt exception is "limited by the fact that such calls would only be made to those who owe a debt to the federal government." Doc. 53, p. 13 (quoting Brickman v. Facebook, Inc., 230 F. Supp. 3d 1036, 1047 (N.D. Cal. 2017)). However, the terms of the government-debt exemption are not so limited. The exemption states that the ATDS restriction does not apply to calls "made solely to collect a debt owed to or guaranteed by the United States." 47 U.S.C. § 227(b)(1)(A)(iii). It does not require these calls to be made only to the debtors themselves. Presumably the calls could be made to any relevant person so long as the purpose of the call was to collect a government debt. Moreover, the statistics reviewed by other courts ruling on the government-debt exception draw into question how limited of an exception this is given the substantial number of people owing debt to the federal government. See, e.g., AAPC, 923 F.3d at 168 ("An FCC report [] revealed that more than 41 million borrowers owed over one trillion dollars in federal student loans. Notably, student loan debt . . . is but one category of debt that is guaranteed by or owed to the federal government").
Lastly, the Government argues the government-debt exception is limited because it "may also be cabined by the TCPA's express grant of authority to the FCC to 'restrict or limit the number and duration of calls made . . . to collect a debt owed to or guaranteed by the United States." Doc. 53, p. 13 (quoting 47 U.S.C. § 227(b)(2)(H)). That the FCC may in the future further tailor the applicability of the government-debt exception does not make the current content-based statute narrowly tailored. The language in the statute is permissive, ("In implementing the requirements of [subsection (b)], the Commission may restrict or limit the number and duration of calls made . . . to collect a debt owed to or guaranteed by the United States," 47 U.S.C. (b)(2)(H)), and the mere possibility of future narrow tailoring by the FCC does not provide a sufficient basis to conclude the statute on its face is narrowly tailored.
Plaintiff and the Government contend the government-debt exception is severable, relying largely on the recent Fourth Circuit and Ninth Circuit decisions finding the government-debt exemption fails strict scrutiny but is nevertheless severable. Duguid, 926 F.3d at 1149; AAPC, 923 F.3d at 171. The Government adds that both the severability provision and the TCPA's more than two decades of operation prior to the government-debt exception indicates the exception is severable. Defendants respond that the Duguid and AAPC courts relied on a dated severability clause, and that the legislative history of the TCPA and the timing of the government-debt exception amendment indicate "Congress intended the restrictions to work in tandem with the government-debt exemption, and thus it cannot be severed." Doc. 54, p. 8. Defendants further assert that the proper remedy is to strike down the entire ATDS restriction, not enlarge their scope, in the interest of avoiding penalizing more speech to cure the defect.
The Defendants also argue that "Plaintiff is requesting that the constitutionally-repaired version of the TCPA be applied retroactively to Defendants' conduct. This violates principles of retroactivity." Doc. 51, p. 2. Generally retroactivity is implicated when a "new provision attaches new legal consequences to events complete before its enactment." Landgraf v. USI Film Prod., 511 U.S. 244, 269 (1994). "Elementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and to conform their conduct accordingly." Id. at 265. Severance of the government-debt collection provision does not attach "new legal consequences" to Defendants' alleged activity. The exact TCPA provisions that Plaintiff has alleged Defendants' activities violated remain the same. Further, the class period alleged here began before the government debt exception was enacted. Therefore, the Defendants' retroactivity concerns are unfounded.
Having severed the government-debt exception, the Court considers Defendants' remaining arguments with respect to the ATDS restrictions. Defendants contend that the fact that the statute does not include government entities within the definition of "person" and the FCC's subsequent ruling that "government agents communicating 'authorized' messages are also exempt" indicates a "content-based preference for government messages, regardless of the speaker's identity and independently triggers strict scrutiny." Doc. 34, p. 12.
As an initial matter, although the Supreme Court has held the federal government and its agencies are not subject to the TCPA provisions, see Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016), as revised (Feb. 9, 2016), it is not clear that the Defendants are correct in their assertion that the statute excludes all government entities from the definition of a person. The language of § 153(39) provides that the term 'person' includes an individual, partnership, association, joint-stock company, trust or corporation, but the text itself does not strictly limit 'person' to those terms. When used in a statutory definition, "the word 'includes' . . . 'is usually a term of enlargement, and not of limitation.'" Pattison Sand Co., LLC v. Fed. Mine Safety & Health Review Comm'n, 688 F.3d 507, 513 (8th Cir. 2012) (quoting Burgess v. United States, 553 U.S. 124, 131 n.3 (2008)). See also Greenley v. Laborers' Int'l Union of N. Am., 271 F. Supp. 3d 1128, 1141-42 (D. Minn. 2017) (quoting In re Union Pac. R.R. Emp't Practices Litig., 479 F.3d 936, 946 (8th Cir. 2007)) (concluding that "the TCPA's definition of 'person' prefaces its list with the word 'includes.' This term 'suggests Congress was being illustrative rather than exclusive with the list following the phrase'"). Moreover, the majority of the almost sixty other definitions listed in § 153 use the phrasing "means" rather than "includes," suggesting that if Congress had wanted the terms listed in the definition of 'person' to be a limitation, it would have phrased it accordingly. See, e.g., 47 U.S.C. § 153(42) ("The term 'radio station' or 'station' means a station equipped to engage in radio communication or radio transmission of energy").
Further, the Government argues that the Government is permitted to subject its own speech to differing requirements and it has "never been thought to raise First Amendment concerns." Doc. 53, p. 8. "The Free Speech Clause restricts government regulation of private speech; it does not regulate government speech. A government entity has the right to speak for itself. It is entitled to say what it wishes, and to select the views it wants to express." Pleasant Grove City, Utah v. Summum, 555 U.S. 460 (2009) (internal citations and quotations omitted). See also Walker v. Texas Div., Sons of Confederate Veterans, Inc., 135 S. Ct. 2239, 2246 (2015) ("[A]s a general matter, when the government speaks it is entitled to promote a program, to espouse a policy, or to take a position. In doing so, it represents its citizens and it carries out its duties on their behalf.") Even assuming the TCPA does not apply to government entities, the fact that Congress chose not to include a restriction on government's speech is consistent with this principle. See also Mejia, 2017 WL 3278926, at *15 (holding that "the mere absence of liability for government speakers [under the TCPA] does not raise a First Amendment problem," relying in part on sovereign immunity grounds). The Government has justified the alleged exemption without reference to the content of the speech.
Finally, the restrictions leave open ample alternative channels for communication. The Government contends, "should Defendants wish to contact prospective customers, they may use an autodialer to do so after obtaining the person's consent, or may contact the person without using an autodialer." Doc. 53, p. 12. These alternative channels for communication are sufficient. See Moser v. F.C.C., 46 F.3d 970, 975 (9th Cir. 1995) ("The restrictions in the [TCPA] leave open many alternative channels of communication, including the use of taped messages introduced by live speakers or taped messages to which consumers have consented, as well as all live solicitation calls. That some companies prefer the cost and efficiency of automated telemarketing does not prevent Congress from restricting the practice.").
Defendants also challenge the TCPA's exemption of non-profits from its definition of "telephone solicitation," as incorporated in the national-do-not-call registry provision, and from the prohibition on calls placed for telemarketing purposes. Defendants assert that "[b]ecause the statutory and regulatory definitions of 'telephone solicitation' exempt non-profit organizations, the NDNCR provisions contain speaker-based exemptions" that should be subject to strict scrutiny. Doc. 34, p. 2.
Defendants assert that the "Section 227(c)(5) of the TCPA imposes liability for placing more than one 'telephone solicitation' in a twelve-month period to a number on the NDNCR." Doc. 34, p. 2. It is unclear whether the TCPA standing alone imposes such a restriction on speech by defining "telephone solicitation" without a corresponding prohibition and by providing a private right of action for violation of the regulations, but not the statute. However, to the extent that the statute's definition of telephone solicitation, directives to the FCC to implement regulations concerning telephone solicitations, and private right of action imposing liability for violations of the regulations may evince a preference for certain speech, the Court finds it to be constitutional.
Defendants contend that the nonprofit exemption is nevertheless subject to strict scrutiny because it cannot be justified without reference to the content of the speech. They assert that "[f]or-profit and non-profit entities are distinguished by law and, by definition, pursue differing objectives. That the content of the communications or the viewpoints they advocate for would differ is apparent." Doc. 54, p. 11. However, when confronted with a similar argument in Turner Broadcasting System, Inc., v. F.C.C., the Supreme Court rejected the argument that a regulation that differentially regulated broadcast and cable programming was content-based because "the preference for broadcast stations automatically entails content requirements." Turner Broad. Sys., Inc. v. F.C.C., 512 U.S. 622, 649 (1994) (emphasis in original) (internal quotations omitted). The Supreme Court found that even though the external regulation of broadcast programming versus cable programming meant the content between the two inevitably differed, "it does not follow that Congress mandated cable carriage of broadcast television stations as a means of ensuring that particular programs will be shown, or not shown, on cable systems." Id. at 649-50.
First, the definition of telephone solicitation does not solely pertain to unlawful or misleading activity, therefore the regulated speech is protected by the First Amendment. Second, the Eighth Circuit has conclusively held that "[r]esidential privacy is a significant government interest." Van Bergen v. State of Minn., 59 F.3d 1541, 1554 (8th Cir. 1995) (upholding a state analogue of the TCPA as a content-neutral time, place, or manner restriction); Fraternal Order of Police, N.D. State Lodge v. Stenehjem, 431 F.3d 591, 597 (8th Cir. 2005) ("[R]esidential privacy is a significant government interest, particularly when telemarketing calls are flourishing, and becoming a recurring nuisance by virtue of their quantity" (internal quotations omitted)).
Defendants also claim the TCPA violates the Equal Protection Clause, arguing Plaintiff cannot show the "differential treatment" of different types of speech survives equal protection scrutiny, because "[t]he Equal Protection Clause requires that statutes affecting First Amendment interests be narrowly tailored to their legitimate objectives" and "for the same reasons stated above, the restrictions are not narrowly tailored to their intended interest." Doc. 34, p. 14. Because Defendants do not advance any new arguments with respect to the alleged equal protection violation and the Court has fully addressed their First Amendment claims above, it need not decide the issue. "'It is generally unnecessary to analyze laws which burden the exercise of First Amendment rights by a class of persons under the equal protection guarantee, because the substantive guarantees of the Amendment serve as the strongest protection against the limitation of these rights.'" Hill v. City of Scranton, 411 F.3d 118, 126 (3d Cir. 2005) (quoting Ronald Rotunda & John Nowak, 3 Treatise on Constitutional Law: Substance and Procedure § 18.40, at 796 (3d ed.1999)) (holding that because Plaintiffs' "First Amendment and Equal Protection claims are functionally identical [] it would be redundant to treat them separately . . . We will examine the [plaintiffs'] First Amendment retaliation claim directly rather than as a component of their derivative equal protection claim"); see also Sherbert v. Verner, 374 U.S. 398, 409 (1963) (finding that after holding the plaintiff's First and Fourteenth Amendment guarantee of free exercise of religion had been violated by a state's denial of unemployment benefits, it need not consider whether the state's action had also deprived her of equal protection).
Lastly, Defendants assert that the TCPA ATDS provisions are unconstitutionally vague because the ATDS definition "fail[s] to give a person of ordinary intelligence adequate notice of what constitutes an ATDS." Doc. 34, p. 15. The Government responds that Defendants' claim "amounts to a complaint that the TCPA does not precisely identify all devices that qualify as an ATDS," which should fail because the TCPA "uses words of common understanding" that courts have been able to apply with standard statutory interpretation, including for the eleven years after the statute was enacted but before any regulations elaborating on the ATDS definition were adopted. Doc. 53, p. 15.
To demonstrate the statute's vagueness, Defendants rely in part on a D.C. Circuit decision finding the FCC's interpretation of what constitutes an ATDS to be overbroad, asserting this "underscores the lack of clarity concerning conduct that is—and is not—unlawful." Doc. 51, p. 3. In 2018 the D.C. Circuit reviewed and struck down the FCC's most recent interpretation of ATDS, finding the FCC's ruling, which seemingly would include all smartphones as autodialers, was an "unreasonably, and impermissibly, expansive one" that in "describing the functions a device must perform to qualify as an autodialer, fails to satisfy the requirement of reasoned decisionmaking." ACA Int'l v. F.C.C., 885 F.3d 687, 700, 703 (D.C. Cir. 2018). The case did not raise the issue of whether the statute was unconstitutionally vague, and therefore the D.C. Circuit's determination that the FCC's overbroad rulings that have since been struck down left the public in a "significant fog of uncertainty" is not determinative.
Defendants also point to the fact that after ACA International, courts have come to different conclusions about the scope of what constitutes an ATDS, "further demonstrating that the ATDS restrictions are void for vagueness." Doc. 51, p. 3. However, "[a]lthough there may be issues of interpretation regarding the meaning of a statute, that in itself does not give rise to a finding of unconstitutional vagueness." Farkas v. Miller, 151 F.3d 900, 906 (8th Cir. 1998). "A statute is not necessarily void for vagueness simply because it may be ambiguous or open to two constructions." Williams v. Brewer, 442 F.2d 657, 660 (8th Cir. 1971). See also Henry v. Radius Glob. Sols., LLC, 357 F. Supp. 3d 446, 459 (E.D. Pa. 2019) ("Mere disagreement amongst courts over the interpretation of a statute does not render the statute unconstitutionally vague."). Courts after ACA International have been able to apply standard tools of statutory interpretation to come to and apply a workable definition of an ATDS. That courts have come to different conclusions in their interpretations does not render the statute unconstitutionally vague. See, e.g., Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018); Dominguez on Behalf of Himself v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018); Thompson-Harbach v. USAA Fed. Sav. Bank, 359 F. Supp. 3d 606 (N.D. Iowa 2019). Here, whatever ambiguity the ATDS definition may exhibit, it does not rise to the level of unconstitutional vagueness.
Defendants further argue that "as applied here . . . nothing in the statute's language indicated that it applied broadly to a web-based platform that could not send text messages without human intervention at every phase of the process." Doc. 34, p. 15. However, as the Plaintiff notes, "[t]he systems described in the Complaint dial numbers from a stored list—precisely what is prohibited by statute and something years of case law and regulation should have put Defendants on notice of." Doc. 49, p. 15. Further, Plaintiff's first amended Complaint alleges that the text messages at issue are sent without human intervention. See Doc. 20, ¶ 52. Accepting Plaintiff's factual allegations as true as the Court must at this stage, Zink v. Lombardi, 783 F.3d 1089, 1098 (8th Cir. 2015), the ATDS definition is not unconstitutionally vague as applied to the system alleged here. See Wilson, 2019 WL 4735483, at *8 (rejecting an identical vagueness challenge to the ATDS definition because "[t]he statute prohibits calls made by software with the capacity to store or produce telephone numbers to be called, using a random or sequential number generator. Plaintiff alleges that Txt Live! is such a device in the complaint. Accordingly, the TCPA's definition of an ATDS is not unconstitutionally vague."). Defendants' motion to dismiss on vagueness grounds is denied.