June 25, 2020 - This Week at the Ninth

This Week at The Ninth: IMDB, Article III, and the Mailbox Rule

This week, the first of the decisions on which we focus has garnered the most public attention.  That’s little surprise: the Ninth Circuit’s decision striking down a California statute prohibiting the publication of age-related information involves an attention-grabbing trifecta of issues—the First Amendment, a well-known website, and celebrities.  But the Court decided other important cases this week, each with its own points of interest.  Below, we also discuss the Ninth Circuit’s decision holding that the lost time value of money is a concrete injury that supports standing (featuring Article III, $3.76 in interest, and a possible circuit split), along with the Court’s decision holding that a one-day missed deadline was a jurisdictional defect precluding review (involving the perhaps less-heralded trifecta of the Tax Court, medical marijuana dispensaries, and the mailbox rule). 

IMDB.COM INC. v. BECCERA 
The Court holds that a California statute prohibiting specific categories of websites from publishing the ages of entertainment industry professionals is an unconstitutional content-based restriction of speech.

Panel:  Judges Rawlinson, Bennett, and Bade, with Judge Bade writing the opinion

Key Highlight:  “Unlawful age discrimination has no place in the entertainment industry, or any other industry.  But not all statutory means of ending such discrimination are constitutional.  Here, we address content-based restrictions on speech and hold that AB 1687 is facially unconstitutional because it does not survive First Amendment scrutiny.”

Background:  To combat age discrimination in the entertainment industry, California passed AB 1687, which restricts certain online entertainment employment service providers from publishing age information in online profiles.  IMDb sued to prevent enforcement of the statute, which would otherwise require IMDb to remove age information both from its private IMDbPro service (which serves as Hollywood’s version of LinkedIn) and from its public IMDb.com database of information about movies, television, and video games. 

Result:  The Ninth Circuit affirmed the district court’s grant of a permanent injunction prohibiting AB 1687’s enforcement.  The Court held that the statute on its face restricted speech based on content because it prohibits dissemination of just one type of speech:  “date of birth or age information.”  The Court also concluded that strict scrutiny applied to that content-based restriction.  The Court rejected the argument that the lower standard for commercial speech should apply, explaining that the statute restricts public profiles on IMDb.com and those profiles’ “content is encyclopedic, not transactional.” And because there is “a high bar for cordoning off new types of speech for diminished protection,” the Court refused to recognize “age information” as a new category of speech to which a lower standard of scrutiny should apply.

Applying strict scrutiny, the Court held that, although California has a compelling interest in reducing age discrimination, AB 1687 was neither the least restrictive means nor narrowly tailored to accomplish that goal.  The State failed to point to “any evidence demonstrating that less restrictive measures would not be effective.”  And, the Court continued, because the statute “appears designed to reach only IMDb,” it was underinclusive, as “it fails to reach several potential sources of age information and protects only” some industry professionals.  Having reached that conclusion, the Court then also held that the district court did not abuse its discretion in denying discovery requests that sought information demonstrating the statute reduces age discrimination.  As the Court explained:  “[I]t does not matter that AB 1687 would accomplish what it sets out to do.  An unconstitutional statute that could achieve positive societal results is nonetheless unconstitutional.” 

VAN v. LLR INC.
The Court holds that the temporary loss of money is itself a concrete injury that will support Article III standing.

Panel:  Judges Christen, Watford, and Bade, in a per curiam opinion. 

Key Highlight:  “Van suffered a cognizable and concrete injury: the loss of a significant amount of money (over $500) for a substantial amount of time (months with respect to some purchases, over a year with respect to others). This injury is not too trifling to support standing.” 

Background:  Defendant LLR had charged plaintiff Katie Van sales tax for a purchase that was not, in fact, subject to sales tax.  Following a related lawsuit, LLR refunded Van and other customers the sales tax they had overpaid—which, in Van’s case, was $531.25.  LLR did not pay interest.  Van then brought a putative class action lawsuit, alleging that LLR had not fully compensated its customers for their losses.  The district court dismissed for lack of Article III standing, reasoning that the amount of interest Van would be owed—$3.76—was “too little to support Article III standing.”

Result:  The Ninth Circuit reversed.   As it explained, the district court’s reasoning (which LLR did not directly defend) was refuted by a number of Supreme Court and other decisions, which had made clear that “a loss of even a small amount of money is ordinarily an ‘injury.’”  The Court then rejected LLR’s alternative contentions that Van’s loss of the “time value” of her money was too speculative to satisfy Article III’s injury requirement.  Relying on decisions from the Seventh, Eleventh, and D.C. Circuits, along with the “firmly established principle that tort victims should be compensated for loss of use of money,” the Ninth Circuit held that the “temporary loss of use of one’s money” is a sufficiently concrete injury to satisfy Article III.  The Court further concluded that plaintiffs can adequately allege such concrete injuries even without specifying exactly what they would have done with the money during the time they were deprived of it.  On this last point, the Ninth Circuit “respectfully declined to follow” the Eleventh Circuit’s precedent to the extent that it was to the contrary.  

ORGANIC CANNABIS FOUNDATION, LLC v. COMMISSIONER OF INTERNAL REVENUE
The Court holds that Tax Court petitions were untimely because they were delivered a day late and using a delivery service not specifically approved by the IRS.

Panel:  Judges Bybee, N. R. Smith, and Collins, with Judge Collins writing the opinion.

Key Highlight:  “This unhappy case presents a cautionary tale about the need for lawyers to ensure that they have done exactly what is statutorily required to invoke a court’s jurisdiction.”

Background:  The IRS issued notices of deficiency to two corporations that operate medical marijuana dispensaries.  The corporations’ law firm prepared petitions for redetermination to be filed with the Tax Court.  A secretary at the law firm selected the “FedEx First Overnight” delivery option, and the petitions were dropped off at FedEx the day before they were due.  But on the morning of the due date, the FedEx driver could not deliver the petitions to the Tax Court—apparently due to construction, some sort of police action, or another similar (but unspecified) problem.  Thus, the petitions were delivered the day after they were due.  The Tax Court dismissed the petitions for lack of jurisdiction, concluding that they had not been timely received.

Result:  The Ninth Circuit affirmed.  It first rejected the taxpayers’ argument that the Tax Court was “inaccessible” on the due date, which would have extended the filing deadline under the Tax Court’s rules.  Despite FedEx’s unsuccessful delivery attempt earlier in the day, the Court reasoned, there was no evidence that FedEx could not have accessed the Tax Court clerk’s office later that day.  Next, it rejected the taxpayers’ contention that the petitions were timely under the IRS’s mailbox rule, which provides that documents are deemed filed when deposited with a “designated delivery service.”   The Court concluded that the relevant statutory provision requires each service offered by a private courier to be separately designated by the IRS.  And at the time of the delivery at issue, the IRS’s formal list of designated delivery services included “FedEx Priority Overnight” and “FedEx Standard Overnight” but not “FedEx First Overnight.”  (That service was added to the list just two weeks after the delivery).

The Court further determined that the statutory deadline for redetermination petitions is jurisdictional and thus not subject to equitable exceptions such as equitable tolling and waiver.  The Court noted that controlling Ninth Circuit precedent so held, and it rejected the taxpayers’ argument that recent Supreme Court jurisprudence undermined that precedent. 

Finally, the Court rejected the taxpayers’ contention that the tax deficiency notices were invalid because the IRS misaddressed the envelopes by omitting the taxpayers’ P.O. Box numbers.  The Court took judicial notice of the fact that each nine-digit ZIP code number—which was included in the tax deficiency notices—corresponds to a specific P.O. Box.  Therefore, the Court concluded, the IRS’s use of the ZIP code alone was sufficient.

THIS WEEK AT THE NINTH: IMDB, ARTICLE III, AND THE MAILBOX RULE

This week, the first of the decisions on which we focus has garnered far and away the most public attention.  That’s little surprise, as the Ninth Circuit’s decision striking down a California statute prohibiting the publication of age-related information involves an attention-grabbing trifecta of issues—the First Amendment, a well-known website, and celebrities.  But the Court decided other important cases, each with its own points of interest.  Below, we also discuss the Ninth Circuit’s decision holding that the lost time value of money is a concrete injury that supports standing (featuring Article III, $3.76 in interest, and a possible circuit split), along with the Court’s decision holding that a one-day missed deadline was a jurisdictional defect precluding review (involving the perhaps less-heralded trifecta of the Tax Court, medical marijuana dispensaries, and the mailbox rule).

 

IMDB.COM INC. v. BECCERA

The Court holds that a California statute prohibiting specific categories of websites from publishing the ages of entertainment industry professionals is an unconstitutional content-based restriction of speech.

Panel:  Judges Rawlinson, Bennett, and Bade, with Judge Bade writing the opinion

Key Highlight:  “Unlawful age discrimination has no place in the entertainment industry, or any other industry.  But not all statutory means of ending such discrimination are constitutional.  Here, we address content-based restrictions on speech and hold that AB 1687 is facially unconstitutional because it does not survive First Amendment scrutiny.”

Background:  To combat age discrimination in the entertainment industry, California passed AB 1687, which restricts certain online entertainment employment service providers from publishing age information in online profiles.  IMDb sued to prevent enforcement of the statute, which would otherwise require IMDb to remove age information both from its private IMDbPro service (which serves as Hollywood’s version of LinkedIn) and from its public IMDb.com database of information about movies, television, and video games. 

Result:  The Ninth Circuit affirmed the district court’s grant of a permanent injunction prohibiting AB 1687’s enforcement.  The Court held that the statute on its face restricted speech based on content because it prohibits dissemination of just one type of speech:  “date of birth or age information.”  The Court also concluded that strict scrutiny applied to that content-based restriction.  The Court rejected the argument that the lower standard for commercial speech should apply, explaining that the statute restricts public profiles on IMDb.com and those profiles’ “content is encyclopedic, not transactional.” And because there is “a high bar for cordoning off new types of speech for diminished protection,” the Court refused to recognize “age information” as a new category of speech to which a lower standard of scrutiny should apply. 

Applying strict scrutiny, the Court held that, although California has a compelling interest in reducing age discrimination, AB 1687 was neither the least restrictive means nor narrowly tailored to accomplish that goal.  The State failed to point to “any evidence demonstrating that less restrictive measures would not be effective.”  And, the Court continued, because the statute “appears designed to reach only IMDb,” it was underinclusive, as “it fails to reach several potential sources of age information and protects only” some industry professionals.  Having reached that conclusion, the Court then also held that the district court did not abuse its discretion in denying discovery requests that sought information demonstrating the statute reduces age discrimination.  As the Court explained:  “[I[t does not matter that AB 1687 would accomplish what it sets out to do.  An unconstitutional statute that could achieve positive societal results is nonetheless unconstitutional.”

 

VAN v. LLR INC.

The Court holds that the temporary loss of money is itself a concrete injury that will support Article III standing.

Panel:  Judges Christen, Watford, and Bade, in a per curiam opinion.

Key Highlight:  Van suffered a cognizable and concrete injury: the loss of a significant amount of money (over $500) for a substantial amount of time (months with respect to some purchases, over a year with respect to others). This injury is not too trifling to support standing.”

Background:  Defendant LLR had charged plaintiff Katie Van sales tax for a purchase that was not, in fact, subject to sales tax.  Following a related lawsuit, LLR refunded Van and other customers the sales tax they had overpaid—which, in Van’s case, was $531.25.  LLR did not pay interest.  Van then brought a putative class action lawsuit, alleging that LLR had not fully compensated its customers for their losses.  The district court dismissed for lack of Article III standing, reasoning that the amount of interest Van would be owed—$3.76—was “too little to support Article III standing.”   

Result:  The Ninth Circuit reversed.   As it explained, the district court’s reasoning (which LLR did not directly defend) was refuted by a number of Supreme Court and other decisions, which had made clear that “a loss of even a small amount of money is ordinarily an ‘injury.’”  The Court then rejected LLR’s alternative contentions that Van’s loss of the “time value” of her money was too speculative too satisfy Article III’s injury requirement.  Relying on decisions from the Seventh, Eleventh, and D.C. Circuits, along with the “firmly established principle that tort victims should be compensated for loss of use of money,” the Ninth Circuit held that the “temporary loss of use of one’s money” is a sufficiently concrete injury to satisfy Article III.  The Court further concluded that plaintiffs can adequately allege such concrete injuries even without specifying exactly what they would have done with the money during the time they were deprived of it.  On this last point, the Ninth Circuit “respectfully declined to follow” the Eleventh Circuit’s precedent to the extent that it was to the contrary.    

 

ORGANIC CANNABIS FOUNDATION, LLC v. COMMISSIONER OF INTERNAL REVENUE

The Court holds that Tax Court petitions were untimely because they were delivered a day late and using a delivery service not specifically approved by the IRS.

Panel:  Judges Bybee, N. Randy Smith, and Collins, with Judge Collins writing the opinion.

Key Highlight:  “This unhappy case presents a cautionary tale about the need for lawyers to ensure that they have done exactly what is statutorily required to invoke a court’s jurisdiction.”

Background:  The IRS issued notices of deficiency to two corporations that operate medical marijuana dispensaries.  The corporations’ law firm prepared petitions for redetermination to be filed with the Tax Court.  A secretary at the law firm selected the “FedEx First Overnight” delivery option, and the petitions were dropped off at FedEx the day before they were due.  But on the morning of the due date, the FedEx driver could not deliver the petitions to the Tax Court—apparently due to construction, some sort of police action, or another similar (but unspecified) problem.  Thus, the petitions were delivered the day after they were due.  The Tax Court dismissed the petitions for lack of jurisdiction, concluding that they had not been timely received.

Result:  The Ninth Circuit affirmed.  It first rejected the taxpayers’ argument that the Tax Court was “inaccessible” on the due date, which would have extended the filing deadline under the Tax Court’s rules.  Despite FedEx’s unsuccessful delivery attempt earlier in the day, the Court reasoned, there was no evidence that FedEx could not have accessed the Tax Court clerk’s office later that day.  Next, it rejected the taxpayers’ contention that the petitions were timely under the IRS’s mailbox rule, which provides that documents are deemed filed when deposited with a “designated delivery service.”   The Court concluded that the relevant statutory provision requires each service offered by a private courier to be separately designated by the IRS.  And at the time of the delivery at issue, the IRS’s formal list of designated delivery services included “FedEx Priority Overnight” and “FedEx Standard Overnight” but not “FedEx First Overnight.”  (That service was added to the list just two weeks after the delivery).

The Court further determined that the statutory deadline for redetermination petitions is jurisdictional and thus not subject to equitable exceptions such as equitable tolling and waiver.  The Court noted that controlling Ninth Circuit precedent so held, and it rejected the taxpayers’ argument that recent Supreme Court jurisprudence undermined that precedent. 

Finally, the Court rejected the taxpayers’ contention that the tax deficiency notices were invalid because the IRS misaddressed the envelopes by omitting the taxpayers’ P.O. Box numbers.  The Court took judicial notice of the fact that each nine-digit ZIP code number—which were included in the tax deficiency notices—corresponds to a specific P.O. Box.  Therefore, the Court concluded, the IRS’s use of the ZIP code alone was sufficient.