This week, the Court addresses the Wiretap Act and whether the Energy Policy and Conservation Act preempts Berkeley's natural-gas-infrastructure ban.
Read the full blog post.
This week, the Court addresses the Wiretap Act and whether the Energy Policy and Conservation Act preempts Berkeley's natural-gas-infrastructure ban.
The Court holds that the Noerr-Pennington doctrine does not preclude liability for Wiretap Act violations that illegally obtained evidence for use in custody proceedings in state court.
The panel: Chief Judge Murguia and Judges Parker (2d Cir.) and Lee, with Judge Parker writing the opinion.
Key highlight: "Jones and Abid's right to petition in a case with no public significance does not grant Jones immunity from the penalties prescribed by Congress for those who violate the Wiretap Act. Once they were in state court, Jones and Abid were not at liberty to set their own rules. Jones was free to file and argue the custody motion—i.e., to petition—but he was not free to support that motion with illegal evidence. In other words, because Jones had no petitioning 'right' to use the transcripts in the first place, requiring him to face the consequences specified by Congress for those who violated the law is not a cognizable 'burden' on any conduct he was lawfully entitled to participate in." (Citations omitted.)
Background: In the midst of a bitter custody dispute, defendant Sean Abid surreptitiously recorded conversations between his ex-wife, plaintiff Lyudmyla Pyankovska, and the estranged couple's child by putting a recording device in their child's backpack. Abid then edited transcripts of the conversations and gave them to his lawyer, defendant John Jones. Jones submitted the transcripts to the state court hearing the custody dispute between Abid and Pyankovska. The state court allowed a court-appointed psychologist to rely on the transcripts and, after considering the psychologist's testimony and other evidence, granted Abid primary physical custody. Abid subsequently uploaded the transcripts to Facebook.
Pyankovska sued Abid and Jones in federal court alleging violations of the Federal Wiretap Act, its Nevada analogue, and various other state common law claims. The district court granted Jones's motion to dismiss on the basis that his conduct was protected by the Noerr-Pennington doctrine. It allowed the claims against Abid to proceed and entered default judgment against him on all claims when he provided inaccurate discovery responses. The district court awarded Pyankovska $10,000 in statutory damages under the Wiretap Act. Pyankovska moved to amend the judgment on the grounds that the district court should have also awarded punitives and litigation costs under the Wiretap Act as well as damages for her common law claims. The district court denied her motion.
Result: The Ninth Circuit reversed.
It held that Jones had violated the Wiretap Act, which "prohibits the intentional interception, disclosure, or use of any oral communication without the consent of at least one party to the conversation." Dismissal was therefore appropriate only if Jones's conduct was "excused by some exculpatory doctrine." The Court held that none of the three doctrines Jones invoked applied.
First, Jones argued "that because Abid had consent to make the recordings under the vicarious-consent doctrine, [Jones] did not 'have reason to know' that the recordings were illegal." Although the vicarious-consent doctrine was not part of Nevada or Ninth Circuit law, other jurisdictions had held "that a parent who has physical custody of a child may consent to the recording of conversations on behalf of minor children, so long as the recording parent believes that doing so is in the best interest of the child." The doctrine did not apply here because the recordings were made in Pyankovska's home and car, at times when Abid did not have physical custody over their child.
Second, Jones argued that under Bartnicki v. Vopper, 532 U.S. 514 (2001), posting the transcripts was protected by the First Amendment. Bartnicki established a First Amendment exception to the Wiretap Act, recognizing that in some cases "privacy concerns give way when balanced against the interest in publishing matters of public importance." Id. at 534. Bartnicki was inapplicable because "[w]hile the conversations [Abid recorded] may have been important within the family-court context . . . they were matters of no public importance."
Third, Jones argued that the district court correctly dismissed the claims against him under the Noerr-Pennington doctrine. That doctrine protects the First Amendment right to petition the government for redress of grievances. It is "among other things, a rule of statutory construction that requires courts to ask whether the statute at issue may be construed to avoid burdening conduct protected by the First Amendment." The Ninth Circuit applies a three-step test to determine whether the doctrine applies. It "asks: (1) whether the lawsuit imposes a burden on petitioning rights, (2) whether the alleged activities constitute protected petitioning activity, . . . and (3) whether the statute at issue may be construed to avoid that burden." (Internal quotation marks and alterations omitted.)
The Court held that Jones's arguments failed at step one. Pyankovska's lawsuit did not "impose[] an unconstitutional 'burden' on" Jones's advocacy in the custody litigation, since Abid had won. And using the transcripts as evidence was not a "protected petitioning activity." "Federal and state rules limit in enumerable ways what litigants can say and do." One such restriction is the Wiretap Act's prohibition on using illegally recorded conversations in court. Since Jones had no right to use the transcripts as evidence, liability under the Wiretap Act could not impermissibly burden any right to petition he enjoyed under the First Amendment. Although this conclusion made it unnecessary for the Court to analyze steps two and three, it emphasized that the plain language and legislative history of the Wiretap Act made it clear that the Act prohibited Jones's conduct.
The Court also held that the district court had abused its discretion in awarding Pyankovska only $10,000 in statutory damages against Abid. The Wiretap Act provides that a prevailing plaintiff may obtain the greatest of (1) actual damages, (2) $100 a day for each day of violation, or (3) $10,000. The district court had found that Pyankovska's actual damages were less than $10,000 but failed to consider whether $100 for each day Abid had violated the Act would be a larger damages award. It had also failed to address whether Pyankovska was separately entitled to punitive damages, costs, fees, and damages for her common law claims.
The Court holds that the Energy Policy and Conservation Act preempts Berkeley's ordinance prohibiting natural gas infrastructure in newly constructed buildings in the city.
The panel: Judges O'Scannlain, Bumatay, and Baker (ITC), with Judge Bumatay writing the opinion, and Judges O'Scannlain and Baker writing concurrences.
Key highlight: "Put simply, by enacting EPCA, Congress ensured that States and localities could not prevent consumers from using covered products in their homes, kitchens, and businesses. So EPCA preemption extends to regulations that address the products themselves and the on-site infrastructure for their use of natural gas."
Background: Berkeley's City Council adopted an ordinance that prohibits natural gas infrastructure in newly constructed buildings in the city. The ordinance aimed to eliminate obsolete natural gas infrastructure and associated greenhouse gas emissions in new buildings where all-electric infrastructure can be most practicably integrated. The California Restaurant Association sued, claiming that the Energy Policy and Conservation Act preempts the ordinance. The district court dismissed the EPCA claim because the ordinance does not facially regulate or mandate any particular type of product or appliance.
Result: The Ninth Circuit reversed. The Court first held that the California Restaurant Association had Article III associational standing because it alleged that its members would open or relocate a restaurant in a new building in Berkeley but for the city's ban on natural gas. On the merits, the Court held that the EPCA does preempt the city's natural gas ordinance. The EPCA provides that once a federal energy conservation standard becomes effective for a covered product, "no State regulation concerning the energy efficiency, energy use, or water use of such covered product shall be effective with respect to such product," unless the regulation meets one of several categories not relevant here. The EPCA defines "energy use" as "the quantity of energy directly consumed by a consumer product at point of use." The Court reasoned that this provision preempts Berkeley's ordinance because a regulation that prohibits consumers from using appliances necessarily impacts the "quantity of energy directly consumed by [the appliance] at point of use" and Berkley's regulation prohibits the installation of necessary natural gas infrastructure on premises where covered natural gas appliances are used. The Court also reasoned that States and localities cannot skit the text of broad preemption provisions by doing indirectly what Congress says they cannot do directly. Because the EPCA would not doubt preempt an ordinance that directly prohibits the use of covered natural gas appliances in new buildings, Berkley cannot evade that preemption by moving up one step in the energy chain and banning natural gas piping within those buildings.
O'Scannlain, J., concurring: Judge O'Scannlain agreed that the EPCA preempts Berkeley's ordinance but only because he believed that Ninth Circuit precedent bound him to hold that the presumption against preemption does not apply to the express-preemption provision at issue.
Baker, J., concurring: Judge Baker concurred to express reservations about the California Restaurant Association's standing and to explain why Berkeley's ordinance invades the core area preempted by the EPCA. On association standing, Judge Baker expressed skepticism because the association's allegations did not identify a specific member who would be injured by the ordinance, but concluded that standing was satisfied because it was relatively clear that at least one of the association's members will be harmed by the challenged ordinance and the city does not need to know the identity of that member to understand and respond to the association's complaint. On the merits, Judge Baker opined that despite its broad language, the EPCA's preemption clause is unlikely to reach a host of state and local regulations that incidentally impact the quantity of natural gas directly consumed by a covered product at point of use. For example, he opined that states and local governments are likely free to impose carbon taxes designed to discourage consumption of natural gas. But Berkeley's ordinance did not have only a tenuous, remote, or peripheral connection to the subject matter preempted by EPCA. Instead, Judge Baker opined, it cut to the heart of what Congress sought to prevent, which was state and local manipulation of building codes for new construction to regulate the natural gas consumption of covered products when gas service is otherwise available to premises where such products are used.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© Morrison & Foerster LLP. All rights reserved
