Facebook may be liable for errant account security alerts, 9th Circuit rules

The 9th U.S. Circuit Court of Appeals sent Facebook Inc. an unwanted message Thursday, ruling that notwithstanding an impermissible recent amendment, the Telephone Consumer Protection Act remains constitutional and may be invoked by plaintiffs claiming the technology titan delivered them spam text alerts.

The act generally protects individuals from receiving unsolicited phone calls or text messages disseminated by automated systems. In an opinion by Judge Margaret McKeown, the panel accepted Facebook's argument that an exception made in 2015 for communications seeking to recover U.S. debt was a content-based speech restriction that failed heightened judicial scrutiny.

But she rejected Facebook's contention that the late, flawed amendment renders unconstitutional the broader statute Congress enacted in 1991.

"The TCPA has weathered the digital revolution with few amendments," McKeown wrote. "[R]ather than toss out the entire TCPA -- a longstanding and otherwise constitutional guardian of consumer privacy -- we sever the newly appended 'debt-collection exception' as an unconstitutional restriction on speech.'"

The decision allows past the dismissal stage the claim of Noah Duguid, who despite not being a Facebook customer claims he received "sporadic" text messages from the social media company in 2014 purportedly alerting him that unrecognized users were attempting to access his account.

Daguid followed prompts that promised to halt future messages but, he alleges, the spamming continued. On behalf of a putative class of similarly affected Facebook avoiders, Daguid sought statutory damages and an injunction blocking future solicitations.

Along with its constitutional argument, Facebook claimed the equipment it used to contact Daguid wasn't the sort of preprogrammed dialing device the federal law regulates.

Andrew B. Clubok, a partner with Latham & Watkins LLP who argued on behalf of the company, also distinguished the professed salutary purpose behind the messages -- aimed, he said, at protecting account security -- from the mass, robotic telemarketing that prompted the law.

"Even these reasonable security-enhancing measures have now become part of the wave of litigation under the TCPA," Clubok wrote in Facebook's opening brief. "This is nothing close to the scheme Congress envisioned."

McKeown seemed potentially sympathetic during argument, challenging Daguid's counsel, Sergei Lemberg, managing attorney at Lemberg Law LLC, on whether this suit wasn't an instance of "no good deed going unpunished." Duguid v. Facebook, 2019 DJDAR 5120 (9th Cir. June 13, 2019).

But the panel concluded Facebook's automated system fell within the act's scope.

"The messages Daguid received were automated, unsolicited, and unwanted," the opinion read. "Our reading supports the TCPA's animating purpose -- protecting privacy by restricting unsolicited, automated telephone calls."

The court's constitutional conclusion -- that the U.S. debt collection exception must be severed from the TCPA and struck as an impermissible content-based speech regulation -- matches a similar holding from the 4th Circuit. The 8th Circuit likewise struck a similar state law from Minnesota.

The case remains in its early stages1 and will return to the Northern District of California for further proceedings.