Applies to: Case No. 3:07-cv-389-J-32HTS Case No. 3:07-cv-390-J-32HTS Case No. 3:07-cv-391-J-32HTS Case No. 3:07-cv-392-J-32HTS Case No. 3:07-cv-393-J-32HTS Case No. 3:07-cv-394-J-32HTS Case No. 3:07-cv-395-J-32HTS
Drivers in several states filed lawsuits against defendant Imagitas, Inc. and state officials alleging the defendants violated the federal Drivers' Privacy Protection Act of 1994, 18 U.S.C. §§2721-25 ("DPPA"), when they used state vehicle registration records to send unsolicited commercial advertisements to the drivers in their registration renewal envelopes. The MDL Panel consolidated the lawsuits before the undersigned and, by agreement of the parties, the case of Rine v. Imagitas, Inc., Case No. 3:06-cv-690-J-32HTS, was handled first while the remaining cases against Imagitas were stayed. The Court entered summary judgment in favor of Imagitas and against Rine and the Eleventh Circuit affirmed that decision. See Rine v. Imagitas, Inc., 590 F.3d 1215 (11th Cir. 2009). During the pendency of this litigation, the cases against the state officials were resolved by agreement*fn1 and the cases that remain are against Imagitas only. Imagitas has now moved for judgment on the pleadings as to these remaining cases (brought by drivers in Massachusetts, Missouri, Ohio, Minnesota, and New York), arguing that the Eleventh Circuit's decision in Rine compels this Court to reach the same result in the remaining cases. Judgment on the pleadings under Rule 12(c) is appropriate "[i]f upon reviewing the pleadings it is clear that the plaintiff would not be entitled to relief under any set of facts that could be proved consistent with the allegations." CompuCredit Holdings Corps. v. Akanthos Capital Mgmt, LLC, 661 F.3d 1312, 1314 (11th Cir. 2011) (quoting Horsley v. Rivera, 292 F.3d 695, 700 (11th Cir. 2002)). Plaintiffs have agreed that two of these cases- - Kracum v. Imagitas, Inc., Case No. 3:07-cv-391-J-32HTS (the Minnesota case) and Leven v. Imagitas, Inc., Case No. 3:07-cv-393-J-32HTS (the New York case)- - are due to be dismissed. Thus, the only remaining decision is whether judgment is due to be granted in Imagitas' favor in the cases brought by drivers in Massachusetts, Missouri, and Ohio.*fn2 Based on the Eleventh Circuit's decision in Rine, this Court finds that the answer is yes.*fn3
I. The Eleventh Circuit's Rine decision
The history of this litigation and the pertinent background facts are fully recounted in the Eleventh Circuit's Rine decision and in this Court's underlying Order on summary judgment and are therefore not repeated here. See Rine, 590 F.3d at 1217-22; In re: Imagitas, Inc., 3:07-md-2-J-32JRK, Doc. 104 at pp. 1-8. In Rine, the Eleventh Circuit ruled that Imagitas' DriverSource program did not violate the DPPA because it fell within the (b)(1) exception to the statute's general prohibition against disclosure. That exception permits disclosure of personal information by a state department of motor vehicles "[f]or use by any government agency" or "any private person or entity acting on behalf of a Federal, State, or local agency in carrying out its functions." 18 U.S.C. § 2721(b)(1) (emphasis supplied).
Thus, the Eleventh Circuit considered whether Imagitas' DriverSource program, and specifically, the aspect of the program that involved the inclusion of commercial advertising in motor vehicle registration renewal envelopes, was "carrying out a function" of the Florida Department of Highway Safety and Motor Vehicles ("DHSMV"). Rine, 590 F.3d at 1223. In addressing this question, the Eleventh Circuit explained that while an agency "function" is not defined by the DPPA, its definition is a matter of federal law, and the Court therefore looked to the term's common meaning to conclude that a "function" is "the action for which a person or thing is specially fitted, used or responsible or for which a thing exists; the activity appropriate to the nature or position of person or thing." Id. (citing Webster's Third New International Dictionary 920 (3d ed. 1966)). The Court determined it would therefore "defer to Florida as to the proper activities of the DHSMV." Id. The Court then looked at various statutes in Florida as well as the contract between the Florida DHSMV and Imagitas to find that "[f]unding public programs through commercial advertising is a legitimate agency function within Florida." Id.
The Court next considered whether this legitimate agency function was nonetheless preempted by the DPPA but determined that it was not because the statute permits exceptions to the prohibition against disclosure and, provided the agency function "fit" the exception, the DriverSource program would not run afoul of the DPPA if Imagitas acted on behalf of the agency. Id. at 1224.
The Court then looked at whether Imagitas acted "on behalf of" the Florida DHSMV in implementing the DriverSource program. Because that phrase was not defined by the DPPA, the Eleventh Circuit again turned to the common meaning and found that "on behalf of" meant "as the agent of" or "as representative of." Id. at 1224-25 (citing Bryan A. Garner, A Dictionary of Modern Legal Usage 83 (1987)). The Eleventh Circuit found that Imagitas did act "on behalf of" the Florida DHSMV because a Florida statute (Fl. St. § 283.58) authorized state agencies to enter into contracts with private vendors to publish or produce public information materials financed by advertising and the Florida DHSMV and Imagitas had entered into just such a contract. Id. at 1225.
Finally, the Eleventh Circuit rejected plaintiffs' argument that a different subsection of the DPPA (§ 2721(b)(12)) more specifically addressed the conduct here and thus had to be complied with instead. The Court found that the (b)(1) subsection was a separate and independent exception not altered by (b)(12) and compliance with the (b)(1) terms was therefore sufficient to satisfy the statute. Id. at 1225-26.
In sum, the Eleventh Circuit considered four questions to determine whether Imagitas violated the DPPA. First, was the DriverSource program, which involves funding a public program through commercial advertising, a legitimate agency function within Florida? Second, was this function preempted by the DPPA? Third, was Imagitas acting on behalf of the Florida DHSMV in carrying out a legitimate agency function? And fourth, did a different DPPA subsection ((b)(12)) have to be complied with instead? The Eleventh Circuit's answers to the second and fourth questions would hold true for any activity that meets the terms of one of the DPPA statutory exceptions to the prohibition against disclosure and this Court therefore has no occasion to revisit those questions here. See Murphy v. Federal Deposit Insurance Corp., 208 F.3d 959, 965-66 (11th Cir. 2000) (agreeing with Second, Eighth, Ninth and D.C. Circuits that because federal law is supposed to be unitary, a transferee district court should apply the law of the Supreme Court and its own circuit to issues of federal law).
Therefore, Imagitas' motion for judgment on the pleadings depends on the answers to the first and third questions: Is funding a public program through commercial advertising a legitimate agency function within Massachusetts? Within Missouri? Within Ohio? And was Imagitas acting on behalf of a state agency in Massachusetts? In Missouri? In Ohio? The answers require review of each state's statutes and their respective agency contracts with Imagitas.*fn4 In making those inquiries, however, the Court is mindful of the Eleventh Circuit's binding pronouncement that "[t]here is nothing in the federal [DPPA] statute that prevents states from including advertisements in [their motor vehicle registration] renewal notices and the same statute specifically allows states to operate through private contractors." Rine, 590 F.3d at 1226.
II. Massachusetts Kendron v. Imagitas, Case No. 3:07-cv-389-J-32HTS and Mathias v. Imagitas, Case No. 3:07-cv-390-J-32HTS
Like Florida, Massachusetts has statutes that support a finding that "[f]unding public programs through commercial advertising is a legitimate agency function." Rine, 590 F.3d at 1223. For example, Massachusetts permits commercial advertising in its highway rest stops with the income credited to the highway fund. See Mass. Gen. Laws ch. 81, §7C. Advertising is also sold in Massachusetts Bay Transportation Authority facilities. See Mass. Gen. Laws ch. 161A, §3(n). Additionally, Massachusetts law permits the Massachusetts Operational Services Division to enter into contracts with third parties on behalf of the Massachusetts Registry of Motor Vehicles and any other executive department for all the goods and services the registry and other departments need. See Mass. Gen. Laws ch. 30, §§51-52. The contract entered into with Imagitas was a Commonwealth of Massachusetts standard form contract, issued by the Massachusetts Operational Services Division and incorporating the Request for Response. See Doc. 166-1 at p. 84. The Request for Response, issued by the Commonwealth of Massachusetts Registry of Motor Vehicles, solicited proposals for bids "to assist [the Registry] in carrying out its registration renewal functions" including "reduc[ing] [Registry] costs and potentially generat[ing] revenues to the Registry to further defray costs or help fund other [Registry] programs." Doc. 166-1 at p.9. The Request for Response explained that the program "would 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." Id.
Upon review of the contract between Massachusetts and Imagitas, and deferring to Massachusetts, which has demonstrated in similar circumstances that it finds it appropriate for its state agencies to offset costs through commercial advertising, the Court finds that in Massachusetts, like in Florida, Imagitas was "acting on behalf of" a state agency in carrying out legitimate functions appropriately delegated to that agency. ...