Downing v. Globe Direct LLC

United States Court of Appeals
For the First Circuit

No. 11-2075

MATTHEW K. DOWNING,

Plaintiff, Appellant,

v.

GLOBE DIRECT LLC,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Joseph L. Tauro, U.S. District Judge]

Before

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

Ian J. McLoughlin, with whom Edward F. Haber, Norman M.
Monhait, Rosenthal, Monhait & Goddess, PA, and Shapiro Haber & Urmy
LLP were on brief, for appellant.
Joel A. Mintzer, with whom Stephen M. Ferguson, George
Freeman, New York Times Company, Lisa Anne Furnald, Andrea K. Naef,
Chad Michael Shandler, Richards, Layton & Finger, PA, and Robins,
Kaplan, Miller & Ciresi were on brief, for appellee.

June 4, 2012

*
The Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
 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

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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

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serve as the contractor for the registration renewal program.1 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.

1
Massachusetts had previously entered into a substantially
similar contract with Imagitas, Inc. Imagitas was also sued for
alleged violations of the DPPA based on its participation in
Massachusetts's program, as well as similar programs in Florida,
Minnesota, Missouri, New York, and Ohio; all the suits were
consolidated into a multidistrict litigation case. The district
court first decided that the Florida scheme did not violate the
DPPA, In re Imagitas, Inc., Drivers' Privacy Protection Act Litig.
(Imagitas I), Nos. 3:07-md-2-J-32HTS & 3:06-cv-690-J-32HTS, 2008 WL
977333 (M.D. Fla. Apr. 9, 2008), and that decision was affirmed by
the Eleventh Circuit, Rine v. Imagitas, Inc., 590 F. 3d 1215 (11th
Cir. 2009). The plaintiffs voluntarily dismissed the cases
involving Minnesota and New York, and the district court found that
Imagitas did not violate the DPPA as a result of its contracts with
Massachusetts, Missouri, or Ohio. In re Imagitas, Inc., Drivers'
Privacy Protection Act Litig. (Imagitas II), Nos.
3:07–md–2–J–32JRK, 3:07–cv–389–J–32HTS, 3:07–cv–390–J–32HTS,
3:07–cv–391–J–32HTS, 3:07–cv–392–J–32HTS, 3:07–cv–393–J–32HTS,
3:07–cv–394–J–32HTS, 3:07–cv–395–J–32HTS, 2011 WL 6934127 (M.D.
Fla. Dec. 30, 2011).

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 On September 18, 2009, Downing filed a putative class

action complaint2 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

person3 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 . . . ,"

2
Downing initially filed his complaint in the United States
District Court for the District of Delaware. Globe Direct filed a
motion to transfer the case to the District of Massachusetts, which
was granted on June 18, 2010; the case was transferred on July 6,
2010.
3
The DPPA explicitly excludes states and state agencies from
its definition of a "person." See 18 U.S.C. § 2725(2).

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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.4

4
On November 15, 2010, Downing cross-moved for judgment on
the pleadings, arguing that Globe Direct's conduct violated the
DPPA, and briefly addressed Globe Direct's Rule 19 arguments. The

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 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, Jiménez v. Rodríguez-Pagán,

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

district court denied the cross-motion as it pertained to Rule 19
and abstained from ruling on the portion of the cross-motion that
related to the merits. Downing v. Globe Direct LLC, 806 F. Supp.
2d 461, 470 (D. Mass. 2011).

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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.5 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. Pérez-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

5
We note that the question of whether a suit must be
dismissed due to the absence of an indispensable party is one of
equity, not one that calls into question our subject matter
jurisdiction. See Lincoln Prop. Co. v. Roche, 546 U.S. 81, 90
(2005) ("Rule 19 . . . address[es] party joinder, not federal-court
subject-matter jurisdiction."); 7 Charles Alan Wright, Arthur R.
Miller & Mary Kay Kane, Federal Practice and Procedure § 1611 (3d
ed. 2001 & Supp. 2012).

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convinced that the registration renewal program and Globe Direct's

participation therein falls under the government function exception

to the DPPA's general rule of nondisclosure, see 18 U.S.C.

§ 2721(b)(1), and that Globe Direct therefore is not liable under

the statute.

Downing concedes that if advertising were not a component

of the program, the DPPA would allow Massachusetts to contract with

a third party to send out its registration renewal notices, and to

provide that third party with statutorily protected personal

information, because sending out renewal notices is clearly a

government function. The only question is whether the integration

of advertising takes the registration renewal notice program

outside of scope of the (b)(1) exception.6

Downing argues that because of the advertising inserted

into the renewal notice mailings, a different exception, that under

subsection (b)(12), fits more closely to this set of facts and that

therefore subsection (b)(1) does not apply. The (b)(12) exception

allows for the use of statutorily protected personal information

for "bulk distribution for surveys, marketing or solicitations,"

but only "if the State has obtained the express consent of the

person to whom such personal information pertains." Id.

6
Subsection (b)(1) allows for the use of personal information
by a state agency or a private entity acting on its behalf. See 18
U.S.C. § 2721(b)(1). Downing does not dispute that Globe Direct is
acting on Massachusetts's behalf.

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§ 2721(b)(12). Downing alleges, and we take as true here, that he

did not consent to receive solicitations. Relying on the canon of

statutory construction that the specific controls over the general,

see HCSC-Laundry v. United States, 450 U.S. 1, 6 (1981), Downing

argues that Globe Direct has violated the DPPA's general rule

against disclosure by failing to meet the requirements of

subsection (b)(12). This argument is off the mark, however, as we

do not find that (b)(12) is more specific than (b)(1); each

subsection merely governs different, although sometimes

overlapping, circumstances. See Rine v. Imagitas, Inc., 590 F.3d

1215, 1225-26 (11th Cir. 2009) (finding HCSC-Laundry inapplicable

under like circumstances because "[s]ubsection (b)(1) applies to a

situation not addressed by subsection (b)(12) and vice versa"); see

also Conn. Nat'l Bank v. Germain, 503 U.S. 249, 253 (1992)

(allowing overlapping statutory provisions to be effective so long

as there was no "positive repugnancy" between them).

The structure of the DPPA supports the idea that one

permissible use does not define or control another. Each

"permissible use" under subsection (b) is a specific carve-out from

liability. Once a person's activities are deemed to fall within

one of the carve-outs, subsection (a)'s general rule of

nondisclosure no longer applies. See 18 U.S.C. § 2721(a)(1) ("A

State department of motor vehicles . . . shall not knowingly

disclose . . . personal information . . . except as provided in

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subsection (b). . . ."). Each "permissible use" under subsection

(b) is like a key to unlock a door through which a person may go to

escape DPPA liability. So long as Globe Direct may unlock the

(b)(1) door, the fact that they may or may not possess the key to

the (b)(12) door is irrelevant to our inquiry.

But we still must answer the question of whether the

program is permissible under subsection (b)(1).7 Downing argues

that the registration renewal program encompasses two distinct

functions: registration renewal, which he concedes falls under

subsection (b)(1) as a government function, and a separate

advertising function, which he argues is not permissible. Downing

urges us to follow the Third Circuit's finding in Pichler v. UNITE,

542 F.3d 380 (3d Cir. 2008), cert. denied, 129 S. Ct. 1662 (2009),

that "[t]he [DPPA] contains no language that would excuse an

impermissible use merely because it was executed in conjunction

with a permissible purpose," id. at 395. We are not persuaded,

however, that the advertising component of the program renders

Globe Direct liable.

7
We note that the government function exception has been
interpreted quite broadly. See, e.g., McQuirter v. City of
Montgomery, Ala., No. 2:07-CV-234-MEF, 2008 WL 401360, at *6 (M.D.
Ala. Feb. 12, 2008) (holding that release by a police department of
a suspect's driver's license photograph to media outlets was
permissible under (b)(1) due to serving law enforcement functions
including "appri[sing] the public of risks created by dangerous
suspects at large" and acting as a deterrent to criminal activity).

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 We do not think there is a discrete separation between

the advertising component of the program and the undisputedly

legitimate government function of sending out registration renewal

notices. According to the RFR, in addition to assisting the RMV

"in carrying out its registration renewal functions," the program's

stated goals included "reduc[ing] RMV costs" as well as

"potentially generat[ing] revenues to the Registry to further

defray costs or help fund other RMV programs"; the RFR elaborated

that the means of achieving these goals would be through

advertising inserts.

This situation is unlike that in Pichler, where the

primary (and impermissible) purpose of collecting the statutorily

protected personal information was union organizing, which the

court found the union had "attempt[ed] to mask . . . behind the

veil of a [permissible and severable] litigation purpose." Id. at

396. Here, the advertising function is inextricably linked to the

proper government functions of registration renewal and increasing

the availability of funds for RMV programs. We think that the

integration of the advertising into the structure of the program

renders that advertising a part of the government function exempted

from the statute's reach under subsection (b)(1).

We are not alone in this line of analysis. Post-Pichler,

both the Fourth and Eleventh Circuits have declined to impose DPPA

liability where solicitation or advertising was part and parcel of

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a permissible use of statutorily protected information. See

Maracich v. Spears, 675 F.3d 281, 293-94 (4th Cir. 2012)

("[B]ecause the solicitation was entirely consistent with state

law, was integral to, and was, indeed, inextricably intertwined

with the [defendants'] permissible use of the Buyers' personal

information pursuant to the litigation exception, the Buyers' claim

fails as a matter of law."); Rine, 590 F.3d at 1223 (holding, in a

factual situation similar this case, that "[f]unding public

programs through commercial advertising is a legitimate agency

function"); see also In re Imagitas, Inc., Drivers' Privacy

Protection Act Litig. (Imagitas II), Nos. 3:07–md–2–J–32JRK,

3:07–cv–389–J–32HTS, 3:07–cv–390–J–32HTS, 3:07–cv–391–J–32HTS,

3:07–cv–392–J–32HTS, 3:07–cv–393–J–32HTS, 3:07–cv–394–J–32HTS,

3:07–cv–395–J–32HTS, 2011 WL 6934127, at *3-4 (M.D. Fla. Dec. 30,

2011) (upholding both a previous iteration of the Massachusetts

registration renewal notice program under subsection (b)(1) because

it was a legitimate government function "to offset costs through

commercial advertising," as well as upholding similar programs in

Missouri and Ohio); cf. Statement of Interest of the United States

at 16-19, In re Imagitas, Inc., Drivers' Privacy Protection Act

Litig. (Imagitas I), Nos. 3:07-md-2-J-32HTS & 3:06-cv-690-J-32HTS,

2008 WL 977333 (M.D. Fla. Apr. 9, 2008) (laying out the

government's interpretation that raising revenue through

advertising, where statutorily protected personal information is

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not disclosed to the advertiser, is a legitimate government

function under subsection (b)(1)).

Massachusetts law leaves ample room for the RMV to create

and engage in the program as a proper agency function under

subsection (b)(1). See Rine, 590 F.3d at 1223-24 (examining

whether a similar program was consistent with Florida law);

Imagitas II, 2011 WL 6934127, at *3-4 (examining whether similar

programs in Massachusetts, Missouri, and Ohio were consistent with

state law). Massachusetts law allows the Commonwealth to enter

into service contracts for purposes "needed by the various

executive and administrative departments and for other activities

of the commonwealth," see Mass. Gen. Laws ch. 30, §§ 51-52, the

process through which Massachusetts and Globe Direct entered into

their contract. Additionally, Massachusetts law explicitly allows

for the use of advertising to raise revenue in analogous

transportation contexts. See Mass. Gen. Laws ch. 81, § 7C

(permitting advertisements on state highway property where revenue

is credited to the state highway fund); Mass. Gen. Laws ch. 161A,

§ 3(n) (permitting advertisements in Massachusetts Bay

Transportation Association facilities). As there is no conflict

with state law, we are content to agree with the other courts that

have addressed nearly identical factual situations, and hold that

Massachusetts's program is a legitimate government function of the

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RMV that is covered by subsection (b)(1). See Rine, 590 F.3d at

1223-24; Imagitas II, 2011 WL 6934127, at *3-4.

Downing makes much of the fact that the Supreme Court has

approved of the DPPA as a means to "regulate[] the universe of

entities that participate as suppliers to the market for motor

vehicle information," Reno v. Condon, 528 U.S. 141, 151 (2000),

and asserts that this necessitates a finding that Globe Direct is

liable under the statute. But we think that cuts against his

argument. Under this scheme, there is no sale of any statutorily

protected personal information, and neither Massachusetts nor Globe

Direct supplies the market with such information.8 The only

disclosure of personal information is one that Downing concedes is

appropriate: from Massachusetts to its contractor, Globe Direct, so

that Globe Direct can send out the registration renewal notices.

Globe Direct, at Massachusetts's behest, then seeks out advertisers

and encloses their materials with the renewal notices, but never

discloses any personal information to those advertisers. Though it

is perhaps contrary to the "'spirit' of the DPPA" to include

advertising inserts,9 Imagitas I, 2008 WL 977333, at *15, there is

8
This is in contrast to situations where a state might sell
drivers' personal information in bulk to direct marketers, which
was one of Congress's concerns when passing the DPPA. See Reno,
528 U.S. at 143-44 (citing legislative history).
9
While limiting the access of direct marketers to drivers'
personal information was one motivation behind the DPPA, see, e.g.,
139 Cong. Rec. S15,764 (daily ed. Nov. 16, 1993) (statement of Sen.
John Warner) (noting that one purpose of the statute was to protect

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no improper disclosure or use of statutorily protected personal

information. Congress explicitly included an exception to the

DPPA's general rule of nondisclosure for government functions,

including those performed by contractors for state agencies, and

Massachusetts was careful to limit the disclosure and use of the

personal information that the statute protects. The fact that no

one other than the RMV and its contractor, Globe Direct, ever

possesses the personal information, combined with the integrated

goals of the program, including mailing the renewal notices as well

as cutting the costs of and raising revenue for RMV programs,

leaves us convinced that the program is a permissible government

function under subsection (b)(1). And because the program is a

permissible means for the use of personal information, Globe Direct

cannot be liable. See 18 U.S.C. § 2724(a) ("A person who . . .

uses personal information, from a motor vehicle record, for a

individuals from the sale of personal information for profit by
state agencies to marketers), the main purpose of the statute was
to prevent incidences of stalking and violence enabled by access to
personal information that is stored by motor vehicle registries,
see, e.g., Protecting Driver Privacy: Hearing on H.R. 3365, the
Driver's Privacy Protection Act of 1993, Before the Subcomm. on
Civil and Const. Rights of the H. Comm. on the Judiciary, 103d
Cong. (1994) (statement of Rep. James P. Moran); 140 Cong. Rec.
H2,526-27 (daily ed. Apr. 20, 1994) (statement of Rep. Porter Goss)
(noting that the bill was in response to the murder of an actress
by a stalker and that "the intent of the bill is simple and
straightforward: We want to stop stalkers from obtaining the name
and address of their pray before another tragedy occurs"); 139
Cong. Rec. S15,762-63 (daily ed. Nov. 16, 1993) (statement of Sen.
Orrin Hatch) (opposing the bill because the crime bill "already
does much to combat stalking.").

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purpose not permitted . . . shall be liable . . . .) (emphasis

added).

III. Conclusion

Because we agree that judgment for Globe Direct is

proper, as Downing cannot state a claim under the DPPA, we affirm

the ruling of the district court.

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