Stoutt v. Travis Credit Union

• Court: District Court, E.D. California
• Decided: January 12, 2021
• Docket: 2:20-cv-01280
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 SHAWNTEL STOUTT, No. 2:20-cv-01280 WBS AC 13 Plaintiff, 14 v. ORDER RE DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS 15 TRAVIS CREDIT UNION, 16 Defendant. 17 18 ----oo0oo---- 19 In this putative class action, plaintiff Shawntel 20 Stoutt claims that defendant Travis Credit Union violated 21 § 227(b)(1)(A)(iii) of the Telephone Consumer Protection Act of 22 1991 (“TCPA”), which prohibits the use of an automatic telephone 23 dialing system (“ATDS”) to call cell phones. See 47 U.S.C. 24 § 227(b)(1)(A)(iii). Plaintiff alleges that defendant used an 25 ATDS to call her cell phone number at least 18 times between 26 January 24, 2019, and February 26, 2020. (See Compl. ¶¶ 20-32 27 (Docket No. 1).) Defendant has filed a motion for judgment on 28 the pleadings, arguing that the court lacks subject matter 1 jurisdiction over plaintiff’s claim following the Supreme Court’s 2 ruling in Barr v. American Ass’n of Political Consultants, Inc., 3 140 S. Ct. 2335 (2020) (hereinafter AAPC). 4 I. Legal Standard 5 A. Judgment on the Pleadings 6 After the pleadings are closed, any party may move for 7 judgment on the pleadings pursuant to Federal Rule of Civil 8 Procedure 12(c). A motion brought under Rule 12(c) is 9 “functionally identical” to one brought pursuant to Rule 12(b), 10 and “the same standard of review applicable to a Rule 12(b) 11 motion applies to its Rule 12(c) analog.” Dworkin v. Hustler 12 Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). “[I]f a 13 party raises an issue as to the court’s subject matter 14 jurisdiction on a motion for a judgment on the pleadings, the 15 district judge will treat the motion as if it had been brought 16 under Rule 12(b)(1).” San Luis Unit Food Producers v. United 17 States, 772 F. Supp. 2d 1210, 1218 (E.D. Cal. 2011) (Wanger, J.) 18 (citing 5C Charles Alan Wright & Arthur R. Miller, Federal 19 Practice and Procedure § 1367 (3d ed. 2004); Rutenschroer v. 20 Starr Seigle Commc’ns, Inc., 484 F. Supp. 2d 1144, 1147–48 (D. 21 Haw. 2006)), aff’d, 709 F.3d 798 (9th Cir. 2013). 22 B. Subject Matter Jurisdiction 23 Federal Rule of Civil Procedure 12(b)(1) provides for 24 dismissal of an action for “lack of jurisdiction over the subject 25 matter.” Federal courts are “courts of limited jurisdiction” and 26 “possess only that power authorized by Constitution and statute.” 27 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 28 (1994). “The Constitution limits Article III federal courts’ 1 jurisdiction to deciding ‘cases’ and ‘controversies.’” Oklevueha 2 Native Am. Church of Haw., Inc. v. Holder, 676 F.3d 829, 835 (9th 3 Cir. 2012) (quoting U.S. Const. art. III, § 2). The court’s 4 “role is neither to issue advisory opinions nor to declare rights 5 in hypothetical cases, but to adjudicate live cases or 6 controversies consistent with the powers granted the judiciary.” 7 Thomas v. Anchorage Equal Rights Comm’n, 220 F.3d 1134, 1138 (9th 8 Cir. 2000) (en banc). The burden of establishing subject matter 9 jurisdiction lies with the party asserting jurisdiction, and 10 courts presume a lack of jurisdiction until the party proves 11 otherwise. See Kokkonen, 511 U.S. at 377; Chandler v. State Farm 12 Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). 13 II. Discussion 14 Defendant argues that the court lacks subject matter 15 jurisdiction over plaintiff’s claim because it is premised on a 16 statute that was unconstitutional and ineffective at the time of 17 defendant’s alleged phone calls. (See Def.’s Mot. for Judgment 18 on the Pleadings (“Def.’s Mot.”) at 5-10 (Docket No. 12).) 19 Plaintiff responds that the TCPA was effective, at least as to 20 defendant’s activities, during the relevant period. (See Pl.’s 21 Opp’n at 9-11 (Docket No. 17).) 22 Congress enacted the TCPA in 1991. AAPC, 140 S. Ct. at 23 2344. “In plain English, the TCPA prohibit[s] almost all 24 robocalls to cell phones.” Id. But in November 2015, Congress 25 amended the TCPA to allow robocalls made to collect government 26 debt (the “government debt exception”):

27 (b) Restrictions on use of automated telephone equipment 28 1 (1) Prohibitions

2 It shall be unlawful for any person within the United States, or any person outside the United 3 States if the recipient is within the United States-- 4 (A) to make any call (other than a call made 5 for emergency purposes or made with the prior express consent of the called party) using 6 any automatic telephone dialing system or an artificial or prerecorded voice-- 7 * * * 8 (iii) to any telephone number assigned to 9 a paging service, cellular telephone service, specialized mobile radio 10 service, or other radio common carrier service, or any service for which the 11 called party is charged for the call, unless such call is made solely to 12 collect a debt owed to or guaranteed by the United States; 13 47 U.S.C. § 227(b)(1)(A)(iii) (emphasis added). 14 In AAPC, the Supreme Court addressed the 15 constitutionality of the TCPA. See 140 S. Ct. at 2335. There, a 16 group of political and nonprofit organizations sought a 17 declaratory judgment that the government-debt exception 18 unconstitutionally favored debt-collection speech over political 19 and other speech in violation of the First Amendment. See id. at 20 2343. The case made its way to the Supreme Court, and in a 21 fractured decision,1 six Justices agreed that, in adding the 22

23 1 Justice Kavanaugh announced the judgment of the Court in a plurality opinion, which Chief Justice Roberts and Justice 24 Alito joined in whole, and which Justice Thomas joined in part. See AAPC, 140 S. Ct. at 2343–56. Justice Sotomayor concurred in 25 the judgment. See id. at 2356–57. Justice Breyer, joined by Justices Ginsburg and Kagan, concurred in the judgment with 26 respect to severability, but dissented as to the plurality’s 27 application of strict scrutiny to § 227(b)(1)(A)(iii)’s content- based distinction. See id. at 2357–63. Lastly, Justice Gorsuch 28 issued an opinion in which he concurred in the judgment in part 1 government-debt exception to the statute in 2015, Congress had 2 impermissibly favored debt-collection speech over political and 3 other speech in violation of the First Amendment. See id. at 4 2343. Seven Justices agreed that the proper remedy for this 5 constitutional infirmity was to invalidate and sever the 6 government debt exception, leaving the rest of the TCPA intact. 7 See id. 8 The issue here is whether the Supreme Court’s decision 9 in AAPC forecloses federal courts from asserting subject matter 10 jurisdiction over alleged violations of the TCPA committed while 11 the government-debt exception was affixed to the face of the 12 statute--that is, between November 2015 and July 6, 2020. 13 Defendant urges this court to interpret AAPC as an adjudication 14 that the entirety of § 227(b)(1)(A)(iii) was unconstitutional and 15 void until the Supreme Court severed the offending government- 16 debt exception to preserve the rest of the law. See Creasy v. 17 Charter Commc’ns, Inc., Civil Action No. 20-1199, 2020 WL 18 5761117, at *6 (E.D. La. Sep. 28, 2020); (“the entirety of the 19 pre-severance version of § 227(b)(1)(A)(iii) is void because it 20 itself was repugnant to the Constitution before the Supreme Court 21 restored it to constitutional health in AAPC” (quoting Seila Law 22 LLC v. CFPB, 140 S. Ct. 2183, 2208, (2020)). 23 Because federal courts lack jurisdiction over claims 24 based upon unconstitutional statutes, see Ex Parte Siebold, 100 25 U.S. 371, 377 (1879) (“if the laws are unconstitutional and void, 26 the Circuit Court acquired no jurisdiction of the causes”), 27 and dissented on yet other grounds, and which Justice Thomas 28 joined in part. See id. at 2363–67. 1 defendant argues that this court lacks subject matter 2 jurisdiction even over claims based on alleged violations of the 3 TCPAs’ general prohibition on robocalls that were committed while 4 the government-debt exception was appended to the law. (See 5 Def.’s Mot. at 3-4.) 6 Three out-of-circuit district courts have effectively 7 adopted defendant’s argument, holding that AAPC divests federal 8 courts of jurisdiction over TCPA claims concerning robocalls made 9 between November 2015 and the date of AAPC’s issuance, even when 10 those robocalls were not made for the purposes of collecting 11 government debt. See Creasy, 2020 WL 5761117; Lindenbaum v. 12 Realgy, LLC, No. 1:19 CV 2862, 2020 WL 6361915 (N.D. Ohio Oct. 13 29, 2020); Hussain v. Sullivan Buick-Cadillac-GMC Truck, Inc., 14 No. 5:20-cv-38-Oc-30PRL, 2020 WL 7346536 (M.D. Fla. Dec. 11, 15 2020). 16 On the other side of the ledger, the two district 17 courts in this circuit that have addressed the question have 18 effectively held the opposite--that the TCPA remains enforceable, 19 at least against non-government debt collectors, as to calls made 20 between November 2015 and July 6, 2020. See Shen v. Tricolor 21 Cal. Auto Grp., LLC, No. CV 20-7419 PA (AGRx), 2020 WL 7705888 22 (C.D. Cal. Dec. 17, 2020); Trujillo v. Free Energy Sav. Co., LLC, 23 No. 5:19-cv-0272-MCS-SP, 2020 U.S. Dist. LEXIS 239730 (C.D. Cal. 24 Dec. 21, 2020). 25 Several other district courts in this circuit have 26 assumed that the constitutionally inoffensive portion of the 27 statute remains viable as to these calls. See, e.g., Canady v. 28 Bridgecrest Acceptance Corp., No. CV-19-04738-PHX-DWL, 2020 WL 1 5249263, at *5 (D. Ariz. Sep. 3, 2020) ("Although [AAPC] struck 2 down a part of the TCPA not at issue in this case, the bulk of 3 the TCPA lives on."); Komaiko v. Baker Techs., Inc., No. 19-cv- 4 03795-DMR, 2020 WL 5104041, at *5 (N.D. Cal. Aug. 11, 2020) 5 ("[T]he [Supreme] Court severed the government-debt exception 6 from the remainder of the statute, leaving the call restriction 7 otherwise intact. Because the government-debt exception is not 8 at issue in this case, the decision in [AAPC] does not impact 9 Plaintiffs’ claims."). One out-of-circuit district court, citing 10 other courts’ assumption that the statute remains enforceable, 11 concluded that it had jurisdiction over such claims. Abramson v. 12 Fed. Ins. Co., No. 8:10-cv-2523-T-60AAS, 2020 WL 7318953, at *3-4 13 (M.D. Fla. Dec. 11, 2020) (collecting cases). 14 Central to the parties’ arguments is a footnote in 15 Justice Kavanaugh’s plurality opinion:

16 As the Government acknowledges, although our decision means the end of the government- 17 debt exception, no one should be penalized or held liable for making robocalls to 18 collect government debt after the effective date of the 2015 government-debt exception 19 and before the entry of final judgment by the District Court on remand in this case, 20 or such date that the lower courts determine is appropriate. On the other side of the 21 ledger, our decision today does not negate the liability of parties who made robocalls 22 covered by the robocall restriction. 23 AAPC, 140 S. Ct. at 2355 n.12 (citation omitted). 24 Because this footnote was only joined by Chief Justice 25 Roberts and Justice Alito, it is non-binding dicta. See id. at 26 2342. However, this court agrees with the other district courts 27 in this circuit that have addressed this issue that Justice 28 Kavanaugh’s statement is ultimately persuasive--in other words, 1 that AAPC “does not negate the liability of parties who made 2 robocalls covered by the robocall restriction.” See Shen, 2020 3 WL 7705888, at *4 (“Because Justices Sotomayor, Breyer, Ginsburg, 4 and Kagan joined in the judgment on severability, they did not 5 expressly join the portion of Justice Kavanaugh’s opinion 6 containing footnote 12. As such, Justice Kavanaugh’s resolution 7 of the issue may not be binding on this Court, but it is 8 persuasive.”); Trujillo, 2020 U.S. Dist. LEXIS 239730, at *6. 9 This conclusion follows from the fact that the Supreme 10 Court specifically declined to strike down the TCPA’s entire 11 robocall ban, as requested by the AAPC plaintiffs. AAPC, 140 S. 12 Ct. at 2343 (“the entire 1991 robocall restriction should not be 13 invalidated” (emphasis added)). Instead, seven Justices 14 concluded that “the 2015 government-debt exception must be 15 invalidated and severed from the remainder of the statute.” See 16 id. at 2343. By severing and invalidating only the government- 17 debt exception, “rather than razing whole statutes or Acts of 18 Congress,” the Court ensured that the TCPA’s original robocall 19 ban would remain in effect, including as to calls placed between 20 2015 and 2020. See id. 21 Contrary to defendant’s assertions, judicial severance 22 of a specific statutory provision does not act as a declaration 23 that the entire statute was void and unenforceable up until the 24 date of the court’s opinion. One of the central premises 25 underlying the Supreme Court’s decision to sever the government- 26 debt exception was that “the remainder of the law is capable of 27 functioning independently and thus would be fully operative as 28 law.” AAPC, 140 S. Ct. at 2353. 1 Holding the entire robocall ban to be ineffective as to 2 calls made between 2015 and 2020 would improperly construe AAPC 3 as having invalidated the entirety of § 227(b)(1)(A)(iii), rather 4 than just the government-debt exception, and thus would undermine 5 the Court’s central purpose in severing the statute. See Shen, 6 2020 WL 7705888, at *4. But see Creasy, 2020 WL 5761117, at *6 7 (“the entirety of the pre-severance version of 8 § 227(b)(1)(A)(iii) is void because it itself was repugnant to 9 the Constitution before the Supreme Court restored it to 10 constitutional health in AAPC”). Supreme Court precedent 11 dictates that, in cases like this, “where Congress added an 12 unconstitutional amendment to a prior law,” the court must treat 13 “the original, pre-amendment statute as the ‘valid expression of 14 legislative intent.’” AAPC, 140 S. Ct. at 2353 (quoting Frost v. 15 Corp. Comm’n of Okla., 278 U.S. 515, 526-27 (1929)); see also 16 Eberle v. Michigan, 232 U.S. 700, 704-05 (1914) (holding that 17 amendments to general ban on liquor sales that exempted 18 manufacturers of homemade wine and cider were “mere nullities” 19 which could not affect the validity of the law as a whole through 20 their subsequent adoption). 21 Defendant cites to Grayned v. City of Rockford, 408 22 U.S. 104 (1972), to argue that “courts must consider the facial 23 constitutionality of the ordinance in effect when [the defendant] 24 was arrested and convicted.” Grayned, 408 U.S. at 107 n.3. In 25 Grayned, the Supreme Court reversed a conviction based on an 26 anti-picketing ordinance that the Court held violated the Equal 27 Protection clause of the Fourteenth Amendment. See id., 408 U.S. 28 at 107 (citing Police Dep’t of Chicago v. Mosley, 408 U.S. 92 1 (1972)). Though the state legislature had amended the ordinance 2 after the defendant’s conviction, the Court held that the 3 conviction must be vacated because the statute in place at the 4 time had made an impermissible distinction between labor 5 picketing and other types of peaceful picketing. See id. 6 Defendant’s reliance on Grayned is misplaced. Because 7 the Court did not have occasion to sever the offending portion 8 from the remainder of the statute (as the state legislature had 9 already amended it), Grayned says nothing about how courts should 10 treat alleged violations of law that occurred during a period of 11 unconstitutionality resulting from addition of an 12 unconstitutional statutory exception that has since been severed 13 and invalidated. See AAPC, 140 S. Ct. at 2353; United States v. 14 Jackson, 390 U.S. 570, 586 (1968) (holding that defendant could 15 still be prosecuted under 1932 Kidnapping Act, despite the fact 16 that a 1934 amendment adding the death penalty as an available 17 punishment in certain instances rendered the Act unconstitutional 18 for a period of time in which the defendant’s violations 19 occurred). In fact, defendant does not cite to a single case in 20 which a court has determined a statute to be ineffective, in 21 whole or in part, where the statute suffered a finite period of 22 constitutional infirmity bookended by periods of validity.2 23 2 Defendant further argues that enforcing 24 § 227(b)(1)(A)(iii) as to calls made between 2015 and 2020 would create ex post facto liability and due process issues for 25 government-debt collectors. (Def.’s Reply at 8-9 (Docket No. 18).) While the court acknowledges the potential due process 26 implications of enforcing the robocall ban against government- 27 debt collectors for calls made while the government-debt exception was on the books, see Lindenbaum, 2020 WL 6361915, at 28 *7 (acknowledging due process concerns), the court need not--and ene nnn □□□ en en I NO I EE OE IE ED eee

1 In short, defendant’s view of severability has no 2 foundation in law. Because the Supreme Court has invalidated and 3 severed the government-debt exception from the remainder of 4 $ (1) (A) (i131), the exception did not affect the remainder 5 of the statute and the statute remains enforceable, at least 6 against non-government debt collectors, as to calls made between 7 November 2015 and July 6, 2020. See Frost, 278 U.S. at 526-27; 8 | Eberle, 232 U.S. at 704-05. The court may therefore adjudicate 9 | plaintiff’s TCPA claim against defendant concerning the calls 10 | alleged in plaintiff’s complaint. 11 IT IS THEREFORE ORDERED that defendant’s Motion for 12 Judgment on the Pleadings (Docket No. 12) be, and the same hereby 13 is, DENIED. od ble ak. (LA. 14 Dated: January 12, 2021 □□□□□□□□□□□□□□□□□□□□□□□□□ 15 UNITED STATES DISTRICT JUDGE 16 17 18 19 20 21 22 23 24 25 26 does not--decide in this Order whether government-debt collectors 27 are subject to liability for calls made between 2015 and 2020. Defendant is not a government-debt collector. The due process 28 question should properly be resolved in a different case. 11