Keeping Tabs on the Ninth Circuit
June 04, 2020 - This Week at the Ninth

This Week at The Ninth: The TCPA, Preemption, and Copyright Registration

This Week at The Ninth: The TCPA, Preemption, and Copyright Registration

This week, we focus on decisions interpreting the dreaded TCPA to authorize an 11-year-old boy’s substantial recovery against the bank that had mistakenly auto-dialed him, reading the Clean Air Act to allow certain state-law claims related to Volkswagen’s alleged tampering with emission control devices, and construing the Copyright Act to permit a challenge to an infringement plaintiff’s underlying copyright registration.

The Ninth Circuit upholds a bank’s liability under the Telephone Consumer Protection Act (TCPA) for mistakenly making automated calls to an 11-year-old boy who had acquired the cellphone number of the bank’s customer. 

Panel:  Judges Gould, Morgan, and Bress, with Judge Bress writing the opinion.

Key Highlight:  “Credit One’s intent to call a customer who had consented to its calls does not exempt Credit One from liability under the TCPA when it calls someone else who did not consent.”

Background:  Attempting to collect past-due payments from a customer, Credit One made 189 automated calls to a cellphone number.  That number had, however, been reassigned from the bank’s customer and was now being used by an 11-year-old boy.  This 11-year-old sued Credit One for violating the TCPA, which prohibits making automated calls to anyone who has not consented.  A jury awarded nearly $95,000 in statutory damages.

Result:  The Ninth Circuit affirmed.  It first rejected the argument that Credit One could invoke the TCPA’s “consent” exception because the customer it intended to call had consented to automated calls.   Joining the Seventh and Eleventh Circuits, the Ninth Circuit held that, under the plain language of the TCPA, only the “called party[’s]” consent is relevant.  Here, the intended customer was not the “party” that Credit One had actually “called.” 

The Court also rejected Credit One’s alternative argument that it had not used the sort of “[a]utomatic telephone dialing system” prohibited by the TCPA because the device could not dial random or sequential numbers.  As the bank acknowledged, this contention was foreclosed by a prior Ninth Circuit decision, which held it suffices if the device “stores telephone numbers to be called.”  While there was now a 3-2 Circuit split on the question (with the Ninth Circuit on the lesser end of that split), the panel was bound by Ninth Circuit precedent. 

The Court holds that the Clean Air Act (CAA) does not preempt state-law claims related to Volkswagen’s alleged tampering with emission control systems in vehicles that have already been sold.

Panel:  Judges Tallman, Ikuta, and N. R. Smith, with Judge Ikuta writing the opinion.

Key Highlight:  “We are mindful that our conclusion may result in staggering liability for Volkswagen. But . . . we may not strain our application of the Supreme Court’s preemption doctrine, or our interpretation of statutory language, to avoid this outcome.”

Background:  After it was determined that it had been installing “defeat devices” that enabled its vehicles to evade emissions standards, Volkswagen settled with the EPA for $20 billion.  Two counties (from Utah and Florida) brought claims against Volkswagen based on its alleged violation of state and local laws prohibiting tampering with emissions-control systems.  The district court dismissed their claims, holding that the CAA preempted them.

Result:  The Court affirmed in part and reversed in part.  The CAA expressly preempts state and local laws regulating emissions from “new motor vehicles.”  42 U.S.C. §7543(a). This provision, the Court held, preempted the counties’ claims to the extent that they sought to impose their state and local anti-tampering rules on vehicles that had not yet been sold.  As the Court explained, because these rules “relate to the emission control system of a vehicle,” they constitute emissions “standards” within the meaning of the CAA’s preemption provision.

But the plaintiff counties had also alleged that Volkswagen had violated these state and local rules by installing and modifying devices in vehicles that had already been sold.  Section 7543(a), the Court held, clearly did not apply to such claims.  Nor, the Court concluded, did anything else in the CAA impliedly preempt the application of state and local anti-tampering rules to post-sale conduct. The Court emphasized that the CAA’s savings clause expressly recognized States’ continued right to regulate “the use, operation, or movement of registered or licensed motor vehicles,” (42 U.S.C. § 7543(d)), that Congress was likely aware of such state laws at the time it enacted the CAA, and that the EPA’s ability to enforce federal anti-tampering rules would not be impeded.  The Court rejected Volkswagen’s arguments that the state and local rules would stand as an “obstacle” to the CAA provisions requiring manufactures to ensure compliance with certain emissions standards post-sale and authorizing the EPA to impose civil penalties for tampering.  As the Court explained, nothing in these provisions demonstrated “a clear and manifest purpose of Congress[] to give the EPA exclusive authority over large-scale, post-sale tampering by manufacturers.”

The Court holds that an applicant’s grouping of a number of designs in a single copyright registration application may preclude a subsequent copyright-infringement action if the designs were sold separately.

Panel:  Judges Bea, Bade, and McCalla (W.D. Tenn), with Judge Bea writing the opinion.

Key Highlight:  “[W]e hold that a collection of works does not qualify as a ‘single unit of publication’ unless all individual works of the collection were first published as a singular, bundled unit. Therefore, it is an inaccuracy for a registrant like Unicolors to register a collection of works . . . as a single-unit publication when the works were not initially published as a singular, bundled collection.”

Background:  Unicolors brought a copyright infringement action against H&M, alleging that H&M had been selling garments containing a design remarkably similar to one Unicolors previously registered with the U.S. Copyright Office.  That design had been one of 31 separate designs that Unicolors applied for copyright registration in a “single-unit” registration (the use of which, among other things, reduced the registration fees it was required to pay).  A jury found in Unicolors’ favor, and the district court entered judgment.

Result:  The Ninth Circuit reversed.  Valid copyright registration, the Court observed, is a prerequisite to a plaintiff’s copyright-infringement action.  And if the plaintiff has secured a registration certificate by “knowingly” including inaccurate information that led the Copyright Office to approve a registration it otherwise would have denied, that registration is invalid. 

Here, the Court held, the district court had made two errors in rejecting H&M’s argument that Unicolors “knowingly” submitted such an inaccurate application.  First, the district court had required evidence that Unicolors “intended to defraud” the Copyright Office. Although the Court acknowledged that prior Ninth Circuit precedent might have provided support for the district court’s view, the Court had subsequently clarified that no such fraudulent intent was required.  Second, the district court had concluded Unicolors’ copyright registration contained no inaccuracies.  But the Ninth Circuit held that where, as here, the applicant had sought a “single unit” registration, the applicant must have “first published the collection of works in a singular collection.”  The various designs for which Unicolors had sought protection were not, however, published in a “singular collection,” but instead “were initially made available only to individual, exclusive customers.”  And, the Court continued, because Unicolors was aware of that fact, it had “knowingly” included inaccurate information in its application.  The Court thus reversed and remanded to the district court, directing it to submit an inquiry to the Copyright Office as to whether it would have denied Unicolors’ application had it known of this inaccuracy.