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Matthew K. Downing v. Globe Direct LLC

June 4, 2012



The opinion of the court was delivered by: Stahl, Circuit Judge.

Before Boudin, Circuit Judge, Souter, Associate Justice,*fn1 and Stahl, Circuit Judge.

In this putative class action brought by Matthew K. Downing alleging that Globe Direct LLC violated the Driver's Privacy Protection Act (DPPA), 18 U.S.C. §§ 2721-25, the district court granted Globe Direct's motion on the pleadings based on Downing's failure to join the Commonwealth of Massachusetts, which the court found to be an indispensable party. Even if we were to assume that the district court abused its discretion in so finding, we affirm because we see no violation of the DPPA by Globe Direct.

I. Facts & Background

On March 3, 2008, the Commonwealth of Massachusetts's Registry of Motor Vehicles (RMV) issued a "Request for Response" (RFR) for its "Registration Renewal Notice Program" (the program). The RFR sought proposals from outside contractors to perform the service of printing and sending to Massachusetts drivers their motor vehicle registration renewal notices along with advertisements. The stated goals of the program included assisting the RMV "in carrying out its registration renewal functions," "reduc[ing] RMV costs," and "potentially generat[ing] revenues to the Registry to further defray costs or help fund other RMV programs." The RFR elaborated that the program "w[ould] be funded by the solicitation and sale of commercial advertising by the Contractor for insertion into the Registry's Registration Renewal Notice mailing," and that "[a]dvertising revenues must be sufficient to cover all motor vehicle registration renewal tasks that the Contractor will perform." The RFR stated that "[t]he Contractor sh[ould] devote commercially reasonable efforts to generate additional revenues that potentially would enable the Registry to participate in the economic success of the program." Massachusetts retained the right to approve all advertising materials included in the mailings. The RFR also noted that information that the RMV would provide to the contractor, including "name, address, date of birth, [and] license number" was "generally exempt from public disclosure" due to the DPPA and its Massachusetts analog, Mass. Gen. Laws ch. 4, § 7, cl. 26(n), and thus the contractor would need to "safeguard[] [the information] from unlawful public disclosure."

On April 29, 2008, Globe Direct, a wholly-owned subsidiary of the New York Times Company, submitted a bid in response to the RFR. The bid stated that Globe Direct "underst[ood] and accept[ed] the entire RFR," and its proposal largely mirrored the language and structure of the RFR. Globe Direct, presumably responding to the RFR's stated goal of raising revenue for the RMV, proposed to contribute 25% of its net margin to the RMV. Massachusetts accepted Globe Direct's bid, and on August 12, 2008, the parties signed a contract, of which the RFR was considered a part and pursuant to which Globe Direct was to serve as the contractor for the registration renewal program.*fn2 The contract specified that Massachusetts would continue to exercise ownership over all personal data turned over, and that a violation of the DPPA or the equivalent Massachusetts privacy law would cause the contract to terminate.

Globe Direct began performing its contract duties in January 2009. In May 2009, Downing, the owner of a 1998 Toyota who had provided his name and address to the RMV, received a registration renewal notice sent by Globe Direct. The notice also included advertisements from Bath Fitter, Jiffy Lube, NTB, and AAA. Downing had never given his consent to the RMV to provide his personal information to third parties for purposes of solicitation or marketing.

On September 18, 2009, Downing filed a putative class action complaint*fn3 on behalf of himself and other drivers who, without providing consent, had received advertisements from Globe Direct in addition to their registration renewal notices. See 18 U.S.C. § 2724 (providing a private right of action against a person*fn4 who violates the DPPA). Downing alleged that, by obtaining the names and addresses that Massachusetts car owners had provided to the RMV, and using that information to send out advertisements without the car owners' consent, Globe Direct had violated the DPPA. Downing sought as relief both a declaration that the contract between Massachusetts and Globe Direct violated the DPPA as well as a permanent injunction preventing Globe Direct from performing under the contract.

The DPPA lays out a general rule prohibiting disclosure of drivers' "personal information," id. § 2721(a)(1), which is defined by the statute as "information that identifies an individual, including an individual's photograph, social security number, driver identification number, name, address . . . , telephone number, and medical or disability information . . . ," id. § 2725(3). However, the DPPA provides fourteen "[p]ermissible uses" for which drivers' personal information may be disclosed. Id. §§ 2721(b)(1)-(14). Disclosure is permissible "[f]or use by any government agency . . . in carrying out its functions, or any private person or entity acting on behalf of a Federal, State, or local agency in carrying out its functions." Id. § 2721(b)(1). Disclosure is also permissible "[f]or bulk distribution for surveys, marketing or solicitations if the State has obtained the express consent of the person to whom such personal information pertains." Id. § 2721(b)(12). Downing alleges that Globe Direct's use of DPPA-protected personal information to send advertisements to Downing and those similarly situated constituted a DPPA violation because none of the "permissible uses" was applicable.

On February 2, 2010, Globe Direct answered the complaint, asserting various affirmative defenses, including qualified and sovereign immunity, and argued that Downing's claims were barred because Massachusetts was a necessary and indispensable party and that Downing's claims failed because Globe Direct's use of personal information was permitted by the DPPA pursuant to the government function exception. See id. § 2721(b)(1). On October 8, 2010, Globe Direct filed a motion for judgment on the pleadings, elaborating on the arguments listed in its answer.*fn5

On August 25, 2011, the district court granted Globe Direct's motion on the pleadings, reaching only the issue of joinder. Downing v. Globe Direct LLC, 806 F. Supp. 2d 461, 470 (D. Mass. 2011). The district court first determined that Massachusetts was a necessary party under Federal Rule of Civil Procedure 19(a) due to its interests in its contract with Globe Direct, which would be "impaired as a practical matter" by its absence from the litigation. Id. at 467 (internal quotation marks omitted). However, the district court determined that it was not feasible to join Massachusetts because it (along with its agency, the RMV) enjoys Eleventh Amendment sovereign immunity, which Congress did not abrogate through the DPPA. Id. at 467-68. Finally, the district court found, after balancing the factors laid out in Federal Rule of Civil Procedure 19(b), that Massachusetts was an indispensable party, and therefore that the case had to be dismissed. Id. at 468-70. Downing timely appealed to this court.

II. Discussion

We would normally review a district court's Rule 19 determination for abuse of discretion, Jimenez v. Rodriguez-Pagan, 597 F.3d 18, 24 (1st Cir. 2010), but here, we can short-circuit the district court's analysis. Even were we to find an abuse of discretion on the joinder issue, which we need not do, we approve of the district court's result because we see no violation of the DPPA. Though the district court did not reach the substantive DPPA claim, because the parties fully briefed the issue before the district court, we have discretion to resolve that issue.*fn6 See Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1, 16 (1st Cir. 1999); N.H. Motor Tranp. Ass'n v. Flynn, 751 F.2d 43, 52 (1st Cir. 1984).

The district court granted judgment on the pleadings for Globe Direct under Federal Rule of Civil Procedure 12(c). We treat a motion for judgment on the pleadings much like a Rule 12(b)(6) motion to dismiss. Perez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 29 (1st Cir. 2008). To survive Globe Direct's motion, Downing's complaint must allege "'enough facts to state a claim to relief that is plausible on its face.'" Elena v. Municipality of San Juan, 677 F.3d 1, 3 (1st Cir. 2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Even taking all the complaint's well-pled allegations as true and viewing all other facts in a light most favorable to Downing, see id., we are convinced that the registration renewal program and Globe Direct's participation ...

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