Wilcox v. Swapp et al

Filing 21

ORDER Denying 15 Defendants' Motion to Dismiss for Failure to State a Claim. Signed by Judge Rosanna Malouf Peterson. (PL, Case Administrator)

FILED IN THE
U.S. DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

Dec 21, 2017

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SEAN F. MCAVOY, CLERK

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF WASHINGTON

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JADE WILCOX on behalf of herself
and all others similarly situation,

NO: 2:17-CV-275-RMP

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Plaintiff,
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v.

ORDER DENYING DEFENDANTS’
MOTION TO DISMISS FOR
FAILURE TO STATE A CLAIM

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JAMES CRAIG SWAPP,
individually; and SWAPP LAW,
PLLC, doing business as Craig
Swapp and Associates,
Defendants.

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BEFORE THE COURT is Defendants’ Motion to Dismiss Class Action

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Complaint for failure to state a claim upon which relief may be granted, ECF No.

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15. A hearing took place on December 20, 2017. Robert Barton and Thomas

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Jarrard appeared on behalf of Plaintiff Jade Wilcox. Barbara Duffy and Ryan

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McBride appeared on behalf of Defendants James Swapp and Swapp Law, PLLC

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(collectively, “Defendants”). The Court has reviewed the pleadings, heard the

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parties’ arguments, and is fully informed.
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO
STATE A CLAIM ~ 1

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BACKGROUND

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Plaintiff Jade Wilcox brought this putative class action lawsuit against

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Defendants alleging that Defendants violated the Driver’s Privacy Protection Act

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(DPPA), 18 U.S.C. §§ 2721-2725, by purchasing accident reports from the

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Washington State Patrol (“WSP”) and using the information in the accident reports

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to solicit legal business. ECF No. 1.

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The DPPA protects the “disclosure of personal information contained in the

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records of state motor vehicle departments (DMVs).” Maracich v. Spears, 133

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S.Ct. 2191, 2195 (2013). The DPPA accomplishes this goal by regulating the

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“[s]tates’ ability to disclose a driver’s personal information without the driver’s

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consent.” Reno v. Condon, 528 U.S. 141, 144 (2000). The DPPA makes it

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“unlawful for any person knowingly to obtain or disclose personal information,

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from a motor vehicle record,” for a use not encompassed by one of the enumerated

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exceptions. 18 U.S.C. § 2722(a). Any person who “knowingly obtains, discloses

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or uses personal information, from a motor vehicle record, for a purpose not

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permitted under this chapter shall be liable to the individual to whom the

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information pertains.” 18 U.S.C. § 2724(a).

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The DPPA “sets forth the three elements giving rise to liability, i.e., that a

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defendant (1) knowingly obtained, disclosed, or used personal information, (2)

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from a motor vehicle record, (3) for a purpose not permitted.” Howard v. Criminal

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Info. Servs., Inc., 654 F.3d 887, 890-91 (9th Cir. 2011) (quoting Thomas v. George,
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO
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Hartz, Lundeen, Fulmer, Johnstone, King and Stevens, P.A., 525 F.3d 1107, 1111

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(11th Cir. 2008)). The burden of proving these elements is on the plaintiff. Id.

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The Court has subject matter jurisdiction over this matter pursuant to 28

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U.S.C. § 1331 as a civil action arising under the laws of the United States because

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Plaintiff Wilcox alleges violations of the Driver’s Privacy Protection Act (DPPA),

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18 U.S.C. §§ 2721-2725.

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DISCUSSION
Legal Standard for Rule 12(b)(6) Motion to Dismiss

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The Federal Rules of Civil Procedure allow for the dismissal of a complaint

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where the plaintiff fails to state a claim upon which relief can be granted. Fed. R.

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Civ. P. 12(b)(6). A motion to dismiss brought pursuant to this rule “tests the legal

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sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In

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reviewing the sufficiency of a complaint, a court accepts all well-pleaded

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allegations as true and construes those allegations in the light most favorable to the

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non-moving party. Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir.

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2010) (citing Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031-

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32 (9th Cir. 2008)).

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To withstand dismissal, a complaint must contain “enough facts to state a

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claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S.

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544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual

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ORDER DENYING DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO
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content that allows the court to draw the reasonable inference that the defendant is

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liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

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While specific legal theories need not be pleaded, the pleadings must put the

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opposing party on notice of the claim. Fontana v. Haskin, 262 F.3d 871, 877 (9th

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Cir. 2001) (citing Conley v. Gibson, 355 U.S. 41, 47 (1957)).

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A plaintiff is not required to establish a probability of success on the merits;

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however, he or she must demonstrate “more than a sheer possibility that a

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defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S.

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at 556). “[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to

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relief’ requires more than labels and conclusions, and a formulaic recitation of the

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elements of a cause of action will not do.” Twombly, 550 U.S. at 555.

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Ms. Wilcox alleges that Defendants violated the DPPA when they purchased

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collision report information from the WSP for the purpose of sending marketing

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materials. ECF No. 1 at 2. Ms. Wilcox alleges that Defendants purchased DPPA-

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protected collision report information and that they did so knowingly. Id.

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Defendants argue that Ms. Wilcox’s complaint contains conclusory

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statements and factual allegations insufficient to survive a motion to dismiss.

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Defendants argue that Ms. Wilcox must make specific factual allegations that the

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information in the two accident reports that have been introduced originated with

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Washington’s Department of Licensing (DOL). Defendants also argue that Ms.

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Wilcox’s allegations regarding the process by which the WSP prepares and gathers
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO
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collision report are legal conclusions rather than factual allegations because the

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allegations reference the Court’s order granting a temporary restraining order in

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Wilcox v. Batiste, No. 17-cv-00122-RMP. See ECF No. 1, ¶¶ 4.9, 4.10. Finally,

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Defendants argue that Ms. Wilcox has failed to allege facts sufficient for the Court

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to infer that Defendants knew that information in the WSP collision reports came

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from the DOL.

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Ms. Wilcox contends that she has set forth sufficient facts to establish a legal

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claim that survives the standard for a dismissal pursuant to Rule 12(b)(6). She

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argues that to prevail in their motion, Defendants must show that the complaint

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lacks plausible factual allegations. She contends that she has alleged that the two

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WSP collision reports at issue utilized personal information “obtained from the

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DMV’s motor vehicle records.” ECF No. 1, ¶¶ 4.25, 4.27. Ms. Wilcox contends

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that the fact that there are other possible sources for that information is irrelevant

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for the purposes of this motion to dismiss. Ms. Wilcox also argues that she has

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alleged sufficient facts for the Court to infer that Defendants had knowledge that

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the information they purchased was protected by the DPPA.

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Ms. Wilcox alleges that Defendants possessed the knowledge required for

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establishing liability under the DPPA. ECF No. 1 at 14-15. She alleges four

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reasons to support her claim that Defendants knew that they were obtaining

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personal information in violation the DPPA when they purchased WSP collision

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reports. Id.
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First, she alleges that Defendants purchased over 10,000 WSP collision

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reports, and that Defendants claim to practice law in the area of automobile

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accidents in Washington State and should be expected to have a working

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understanding of how Washington State collision reports are created. Id. at 14-15.

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Second, Ms. Wilcox alleges that Defendants knew, or should have known, that in

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2013 the United States Supreme Court held that legal solicitation and marketing

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were not a permissible purpose under the DPPA. Id. at 14; see Maracich, 133

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S.Ct. at 2195. Third, Ms. Wilcox alleges that a 2016 Washington State Bar

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Association complaint against Defendants put Defendants on notice that the

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practice of obtaining such information for marketing purposes was being

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challenged. Id. at 14-15. And, fourth, Ms. Wilcox alleges that Defendants had

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notice that using driver’s license information to contact accident victims violated

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the DPPA, when Defendants were featured in a July 21, 2016, Inlander article. Id.

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at 15.

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At oral argument, counsel for Ms. Wilcox argued that Defendants have made

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five errors in their argument for dismissal. First, Ms. Wilcox argues that

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Defendants have confused the standard for granting a dismissal pursuant to Rule

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12(b)(6) with an inapplicable higher standard. The standard for deciding a Rule

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12(b)(6) motion is whether the plaintiff has alleged “enough facts to state a claim

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to relief that is plausible on its face.” Twombly, 550 U.S. at 570. Defendants

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appear to argue that the Court should make findings as to whether the accident
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO
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reports are created as Ms. Wilcox alleges. See ECF Nos. 15 and 19 and oral

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argument. In consideration of a motion to dismiss, the Court declines to make

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factual or legal findings beyond determining the sufficiency of the allegations in

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deciding this motion for dismissal.

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Second, Ms. Wilcox argues that Defendants mislabel factual allegations as

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conclusory. A complaint based upon conclusory allegations will not survive a

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motion to dismiss. See Twombly, 550 U.S. at 555. However, the Court finds that

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Defendants have confused the concept of conclusory allegations with the accuracy

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of allegations. Ms. Wilcox does not need to prove the accuracy of her allegations

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at this stage of the proceedings. She only needs to allege sufficient facts to support

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that a claim to relief is plausible. Whether or not Ms. Wilcox’s factual allegations,

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such as how DOL is involved in the production of accident reports, prove accurate

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at trial, the Court finds that Ms. Wilcox has made sufficient factual, rather than

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conclusory, allegations to support her claims.

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Third, Ms. Wilcox argues that Defendants rely on extraneous documents to

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contradict the factual allegations in Ms. Wilcox’s Complaint. On a motion to

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dismiss pursuant to Rule 12(b)(6), neither the parties nor the Court considers the

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probability of success on the merits. See Iqbal, 556 U.S. at 678 (citing Twombly,

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550 U.S. at 556). Thus, as discussed previously, at this stage in the litigation the

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Court will not consider Defendants’ arguments regarding the merits of Ms.

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Wilcox’s claims in making its Rule 12(b)(6) finding.
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO
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Fourth, Ms. Wilcox argues that Defendants draw inferences from allegations

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that Ms. Wilcox has not made regarding whether Ms. Wilcox personally provided

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her private information to the officer who prepared the WSP collision report. The

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Court concludes that Defendants are attempting to argue the probability of success

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on the merits of the case by raising these inferences, rather than challenging the

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sufficiency of Ms. Wilcox’s factual allegations, which is the appropriate standard

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at the motion to dismiss level.

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Fifth, Ms. Wilcox argues that Defendants combine Ms. Wilcox’s factual
allegations and draw legal inferences relating to the interpretation of “motor

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vehicle records” and whether any information that Ms. Wilcox may have provided

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personally is dispositive of her claims. Again, the Court finds that Defendants’

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arguments relate to the probability of success on the merits of the case, which is an

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issue appropriately raised at the summary judgment or trial level, rather than the

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sufficiency of Ms. Wilcox’s factual allegations, which is the issue before the Court

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at this stage.

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In deciding a Rule 12(b)(6) motion to dismiss, the Court accepts all well-

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pleaded allegations as true and construes those allegations in the light most

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favorable to the non-moving party. Taking Ms. Wilcox’s factual allegations that

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Defendants knowingly purchased DPPA-protected information as true and the

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allegation that the collision reports are populated, in part, or in whole, with data

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collected by the DOL, the Court finds that Ms. Wilcox’s Complaint alleges
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO
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sufficient factual content for the court to draw the reasonable inference that the

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defendant is liable for the misconduct alleged. See Ashcroft v. Iqbal, 556 U.S. 662,

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678 (2009). Therefore, the Court denies Defendants’ motion to dismiss for failure

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to state a claim upon which relief can be granted.

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Class Action Dismissal

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At oral argument, Ms. Wilcox argued, and Defendants conceded, that any

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action to dismiss the putative class action is untimely. Defendants must wait until

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Ms. Wilcox files a motion for class certification to pursue dismissal of the class.

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Accordingly, IT IS HEREBY ORDERED that Defendants’ Motion to

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Dismiss Class Action Complaint for Failure to State a Claim, ECF No. 15, is

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DENIED.

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The District Court Clerk is directed to enter this Order and provide copies to
counsel.
DATED December 21, 2017.

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s/ Rosanna Malouf Peterson
ROSANNA MALOUF PETERSON
United States District Judge

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ORDER DENYING DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO
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