Hensley v. City of Charlotte

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

CIVIL ACTION NO. 3:20-CV-00482-KDB-DSC

JOHNATHAN S. HENSLEY,

Plaintiff,

v. ORDER

CITY OF CHARLOTTE,

Defendant.

THIS MATTER is before the Court on Defendant City of Charlotte’s (“City”) Motion to

Dismiss Plaintiff’s Complaint and Motion for Judgment on the Pleadings (Doc. No. 32) and

Motion to Strike (Doc. No. 40). The Court has carefully considered these motions and the parties’

memoranda in support and in opposition and finds that Plaintiff has not plausibly alleged in the

relevant pleadings that he was the victim of a wrongful disclosure of his personal information by the

City in violation of the Driver’s Privacy Protection Act (“DPPA,”). Thus, the Court will GRANT the

City’s motion for judgment on the pleadings. In light of that ruling, the Court need not and does

not reach the City’s jurisdictional challenge to Plaintiff’s Complaint in its motion to dismiss or its

motion to strike and will accordingly DENY those motions without prejudice or as moot.

I. LEGAL STANDARD

Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed—but

early enough not to delay trial—a party may move for judgment on the pleadings.” Burbach Broad.

Co. of Del. v. Elkins Radio Corp., 278 F.3d 401, 405–06 (4th Cir. 2002). A motion for judgment

on the pleadings is governed by the standard applicable to a motion to dismiss under Rule 12(b)(6).

See id. at 405; Shipp v. Goldade, No. 5:19-CV-00085-KDB-DCK, 2020 WL 1429248, at *1

(W.D.N.C. Mar. 19, 2020). A Rule 12(b)(6) motion to dismiss for “failure to state a claim upon

which relief can be granted” tests whether the complaint is legally and factually sufficient. See

Fed. R. Civ. P. 12(b)(6); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007); Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 2010),

aff'd, 566 U.S. 30 (2012). A court need not accept a complaint's “legal conclusions, elements of a

cause of action, and bare assertions devoid of further factual enhancement.” Nemet Chevrolet, Ltd.

v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009). The court, however, “accepts all

well-pled facts as true and construes these facts in the light most favorable to the plaintiff in

weighing the legal sufficiency of the complaint.” Id. Construing the facts in this manner, a

complaint must contain “sufficient factual matter, accepted as true, to state a claim to relief that is

plausible on its face.” Id. Thus, a motion to dismiss under Rule 12(b)(6) determines only whether

a claim is stated; “it does not resolve contests surrounding the facts, the merits of a claim, or the

applicability of defenses.” Republican Party v. Martin, 980 F.2d 943, 952 (4th Cir. 1992).

In analyzing a Rule 12 motion, a court may consider “documents incorporated into the

complaint by reference and matters of which a court may take judicial notice.” See Tellabs, Inc. v.

Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). In particular, when considering a Rule

12(c) motion, “a court may consider official public records, documents central to plaintiff's claim,

and documents sufficiently referred to in the complaint ... so long as the authenticity of these

documents is not disputed.” Chapman v. Asbury Auto. Grp., Inc., No. 3:13 cv 679, 2016 WL

4706931, at *1, 2016 U.S. Dist. LEXIS 121043, at *3 (E.D. Va. Sept. 7, 2016) (quoting Witthohn

v. Fed. Ins. Co., 164 F. App'x 395, 396-97 (4th Cir. 2006)).

A motion to dismiss based on Federal Rule of Civil Procedure 12(b)(1) addresses whether

the court has subject-matter jurisdiction to hear the dispute, see Fed. R. Civ. P. 12(b)(1), and

Plaintiff bears the burden of proving that subject matter jurisdiction exists. Evans v. B. F. Perkins

Co., 166 F.3d 642, 647 (4th Cir. 1999). “[F]ederal courts are courts of limited jurisdiction,

constrained to exercise only the authority conferred by Article III of the Constitution and

affirmatively granted by federal statute.” In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir.

1998) (quotation omitted); see Gunn v. Minton, 568 U.S. 251, 256 (2013); Kokkonen v. Guardian

Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). There is no presumption that a federal court has

subject-matter jurisdiction. See Pinkley, Inc. v. City of Frederick, 191 F.3d 394, 399 (4th Cir.

1999).

II. FACTS AND PROCEDURAL HISTORY

Defendant City of Charlotte is a North Carolina municipal corporation, chartered by the

General Assembly of North Carolina, organized and operating under the laws of North Carolina.

See Doc. 1, ¶ 2. The Charlotte-Mecklenburg Police Department (“CMPD”) is a component of the

City. Id., ¶ 3. North Carolina law enforcement officers, including CMPD officers, are required to

document reportable vehicle crashes on a standard form promulgated by the North Carolina

Department of Motor Vehicles (“NCDMV”) known as a DMV-349. Id., ¶ 27. When a DMV-349

has been completed by a N.C. law enforcement officer, it typically contains the following personal

information about the drivers involved in the accident: name, date of birth, gender, residence

address, and NCDMV driver’s license number. Id., ¶¶ 13 – 17, 43.

Plaintiff Johnathan Hensley was involved in a motorcycle accident in Charlotte, North

Carolina on November 22, 2017. The resulting DMV-349 prepared by the responding CMPD

officer (the “Accident Report”) contained Mr. Hensley’s personal information including his

address, showing a nine-digit zip code; his date of birth; his North Carolina driver’s license

number; and his telephone number. Id., ¶ 71. Hensley alleges that he did not provide his driver’s

license number or nine-digit zip code to the investigating CMPD officer, id., ¶ 70, so he contends

that the officer necessarily obtained this information from NCDMV records.

Beginning in 2007 (or earlier), the City has placed one or more unredacted copies of each

DMV-349 “recently received” on the front desk of its records division so that the forms are

available to the public. Doc. 1, ¶¶ 45 – 46. Plaintiff alleges that the City is aware that multiple

people come to the Records Division each business day to review DMV-349 reports, including for

marketing purposes. Id., ¶ 49. However, the City does not maintain any log or record identifying

which accident reports have been looked at, the persons or entities that have reviewed any accident

reports or the purpose for which any report was reviewed. Id., ¶¶ 59, 63.

Also, the City contracted with PoliceReports US (“PRUS”), a company that was later

purchased by LexisNexis Claims Solutions (“LexisNexis”), to make DMV-349s available to the

public on a LexisNexis website for viewing or to download. Id., ¶ 50-51. Pursuant to that contract,

DMV- 349s were made available by the City to PRUS/LexisNexis “subject to the obligations of

federal law.” See Gaston v. LexisNexis Risk Sols., Inc., 483 F.Supp.3d 318, 348 (W.D.N.C. 2020).

Plaintiff contends that the City made copies of his Accident Report containing his personal

information available to the public at both the CMPD records division and through the LexisNexis

website in violation of the DPPA. Id., ¶¶ 78-81. Beyond the allegation that the Accident Report

was “available to the public,” the Complaint does not allege that a member of the public who

viewed Hensley’s Accident Report at the records division solicited Plaintiff. Id., ¶ 80. Rather, the

Complaint specifically alleges that “through [the City’s] contract with PRUS/LexisNexis and the

Website … Plaintiff’s name, address and driver’s license number [was unlawfully disclosed] to

one or more internet users who obtained the name to use in targeted direct mail solicitation.” Id.,

¶¶ 82, 128.

Based on this alleged disclosure, Plaintiff filed this action on September 1, 2020 seeking

liquidated damages and injunctive relief under the DPPA for himself and a putative class1, 2 of

others who Plaintiff claims were similarly wronged. Id., ¶¶ 104, 116-117. After Defendant filed

its Answer on October 27, 2020, Doc. No. 15, Plaintiff filed a Motion for Preliminary Injunction,

Doc. No. 16, which the Court denied on December 1, 2020. Doc. 23. In the course of that briefing,

it was revealed that the City is “no longer making DMV- 349 accident reports containing DPPA

protected personal information available to the public.” See Doc. 20 at 9-10; Doc. 20-1.

III. DISCUSSION

The City argues that judgment should be entered in its favor or this action should be

dismissed on several grounds, including that 1) Plaintiff does not allege and cannot show he

received any solicitation following his traffic accident based upon an unlawful release of DPPA

protected information by the City; 2) as a subordinate division of the State, the City is not a

“person” and thus is not subject to a private cause of action under the DPPA; and 3) Plaintiff lacks

1 Plaintiff has not yet moved to certify a class in this case. While the Court would (if this case were

allowed to continue) carefully and independently consider any motion seeking class certification,

the Court notes that even if the putative class members could be “ascertained” given the absence

of any record of whose accident reports may have been disclosed in person, the lack of such

information would make a showing of commonality and typicality challenging. Also, in a recently

concluded matter raising similar claims under the DPPA, the Court refused to certify a money

damages class because, in considering “the likely difficulties in managing a class action,” Fed. R.

Civ. P. 23(b)(3)(D), the Court took into account Defendants’ right to challenge whether individual

class members would be entitled to a statutory damages award. The same consideration would

appear to be applicable here, if not more so. See Gaston, 483 F.Supp.3d at 345. Finally, certification

of an “injunction” class, which was permitted in Gaston, would not likely be applicable in this

case because the City admittedly no longer engages in the conduct that is the subject of the

Complaint.

2 Plaintiff is also a member of the Federal Rule of Civil Procedure 23(b)(2) injunctive relief class

and subclass certified by this Court in Gaston so he cannot, to the extent applicable here, pursue a

class action or seek relief which has been released by the court approved settlement in that action.

See Doc. 1, ¶¶ 67 – 77; Doc. No. 17, p. 6.

Article III standing thereby depriving the Court of subject matter jurisdiction. Because the

Court agrees with the City that the pleadings do not plausibly allege a viable DPPA claim, it need

not rely on or decide the remaining arguments.

As discussed above, in ruling on a motion for judgment on the pleadings the Court must

limit its consideration to the pleadings and attached exhibits, relevant facts obtained from the

public record, and exhibits to the motion that are “integral to the complaint and authentic.” See

Massey v. Ojaniit, 759 F.3d 343, 347 (4th Cir. 2014). Allegations and proffered evidence outside

those bounds should not be considered. See Riley v. Cephas, No. 7:20-CV-00046-M, 2020 WL

2441416, at *6 (E.D.N.C. May 12, 2020) (Elaboration that is not made in Plaintiff's complaint, but

rather appears in a response in opposition to Defendants' motion to dismiss, must be disregarded

by the Court since a Rule [12(c)] motion challenges the sufficiency of the pleadings only). Thus,

in ruling on the City’s Rule 12(c) motion, the Court will limit its review accordingly.

In the Complaint, Plaintiff alleges that the City made his accident report available to the

public in two ways – through the PRUS/Lexis website and “on the counter” at the CMPD records

office. The Court has previously ruled in Gaston that the City and CMPD did not violate the DPPA

by knowingly disclosing DPPA protected personal information to PRUS/LexisNexis because the

contract between the City and PRUS/LexisNexis required that PRUS/LexisNexis use the

information “subject to the obligations of federal law.” (emphasis in original). See Gaston, 483 F.

Supp.3d at 348.3 Therefore, Plaintiff’s allegations that he received marketing solicitations from

law firms as a result of the improper disclosure of his personal information on the

3 The contracts referenced by Plaintiff in this case are the same contracts that were at issue in

Gaston, see Doc. 17, p. 2, footnote 2, and the Court may take judicial notice of its prior ruling. See

Andrews v. Daw, 201 F.3d 521, 524 (4th Cir. 2000) (a court may take judicial notice of facts from

a prior judicial proceeding when there is no dispute as to their accuracy).

PRUS/LexisNexis website does not plausibly state a DPPA claim against the City. And, with

respect to the potential disclosure of Plaintiff’s accident report from the CMPD counter, there is

admittedly no record of which accident reports were viewed by any member of the public nor has

Plaintiff specifically alleged – in the relevant pleadings4 - that he received a solicitation as a result

of the disclosure of DPPA protected personal information from that physical location rather than

the PRUS/LexisNexis website. So, Plaintiff has failed to plausibly plead a DPPA violation against

the City, and the City is entitled to judgment in its favor on the pleadings.

Having determined that the City is entitled to judgment on the pleadings based on the

failure to plausibly allege a viable DPPA claim, the Court need not decide if the City is a “person”

that may be found liable under the DPPA. While the Court ruled in Gaston that the City was not a

“person” under 18 U.S.C. §§ 2725(2) because in North Carolina a subordinate division of the state

like a city administrative unit is considered a state agency (which is exempted from the definition),

see Gaston, 483 F.Supp.3d at 348, that issue was not directly before the Court in Gaston. Although

the Court continues to question whether there is a compelling basis either in the text of the statute

4 To be sure, Plaintiff makes this allegation in its legal memorandum in opposition to the City’s

motion, Doc. No. 37, but the cited paragraphs of the Complaint do not support this allegation and

the declarations attached to Plaintiff’s Supplemental Memorandum, Doc. No. 38, may not be

considered in ruling on a motion for judgment on the pleadings. (Also, the Court notes that the

declarations are speculative and internally inconsistent in describing how the law firm solicitation

might have come to Plaintiff. The alleged source, Digital Solutions, says that it gathers reports “in

a variety of ways” and it is only its President’s “best recollection” in July 2021 that from September

2017 to the end of the year it accessed crash reports from CMPD by gathering hard copies from

the department. Significantly, however, Digital Solutions does not say that it provided actual

accident reports to clients, but instead says that it takes information from the reports which it puts

into an excel spreadsheet format that is its product. See Doc. No. 38-1. The Farrin law firm

declaration in turn denies that it received any spreadsheets from Digital Solutions but instead

claims that it prepared its own internal spreadsheets from actual accident reports. See Doc. No. 38-

2 at ¶ 6. Finally, Plaintiff alleges that he received a copy of his accident report from the law firm

(although it is not attached to his declaration) so ultimately it is unclear if the law firm in fact had

Plaintiff’s accident report or where it came from.)

or its purpose to treat liability for the improper disclosure of the same accident report differently

based on whether it is disclosed by the North Carolina DMV or another agency of the State down

the street such as the City of Charlotte, there is no guiding authority in this circuit and the weight

of authority outside the circuit holds that a city can be a “person” under the DPPA (albeit in cases

in which the issue was either conceded or arose in the context of vicarious rather than direct

municipal liability, which was not found). See, e.g., Truesdell v. Thomas, 889 F.3d 719, 724 (11th

Cir. 2018), Orduno v. Pietrzak, No. CV 14-1393 ADM/DTS, 2017 WL 4354686 (D. Minn. Sept.

29, 2017); Potocnik v. Carlson, No. 13-CV-2093 (PJS/HB), 2016 WL 3919950 (D. Minn. July 15,

2016); Schierts v. City of Brookfield, 868 F. Supp. 2d 818 (E.D. Wis. 2012). Therefore, the Court

will not rely here on its dicta in Gaston nor decide whether the City is a “person” who is potentially

liable in a civil action under the DPPA.

Finally, the Court need not and does not reach the City’s jurisdictional challenge to the

Complaint. The City’s grounds for its position that Plaintiff lacks Article III standing under Lujan

v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992) – that he has not established an injury in fact,

traceable to challenged conduct of the City, that is likely to be redressed by a favorable judicial

decision – is in many ways similar to its argument in support of its motion for judgment on the

pleadings. However, the evidence which the Court may properly consider in ruling on the Rule

12(b)(1) motion is different and might include the evidentiary declarations related to the Farrin

law firm discussed above. See Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 506

– 07 (4th Cir. 2015) (“When a defendant challenges subject matter jurisdiction via a Rule 12(b)(1)

motion to dismiss, the district court may regard the pleadings as mere evidence on the issue and

may consider evidence outside the pleadings without converting the proceeding to one for

summary judgment). Accordingly, having determined that Plaintiff is not entitled to proceed based

on the inadequacy of the pleadings, the Court declines to decide if the City’s jurisdictional

challenge should be resolved facially or factually and if factually whether the equivocal

declarations discussed above are sufficient to establish Plaintiff’s standing to pursue this action.5

5 Plaintiff’s, or perhaps more accurately his counsel’s, continued ardor for the claims being pursued

in this action is puzzling. Beyond the unlikelihood that a class could be properly certified as

discussed above, there is no need for injunctive relief in light of the injunction order entered in

Gaston and the fact that the City no longer makes accident reports available in person. And, even

if the case was permitted to go forward, it is unlikely that the City could be held liable for money

damages based on the well-established law that qualified immunity protects municipalities and

government officials performing discretionary functions “from liability for civil damages insofar

as their conduct does not violate clearly established statutory or constitutional rights of which a

reasonable person would have known.” Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982); Gaston,

483 F. Supp. 3d at 348. Indeed, it appears to be undisputed that until Gaston the City made NC

DMV-349 accident reports available to the public as public records pursuant to the N.C. Public

Records Act, N.C.G.S. § 20-166.1(i) pursuant to a specific 2005 opinion of the North Carolina

Attorney General which instructed the City to do so. In sum, while the Court will of course conduct

future proceedings, if any, in this action carefully and impartially and with due regard to the

arguments of the parties, it appears that there are substantial hurdles to any meaningful recovery

for the Plaintiff on his claims.

IV. ORDER

NOW THEREFORE IT IS ORDERED THAT:

1. The City’s Motion for Judgment on the Pleadings (Doc. No. 32) is GRANTED;

2. The City’s Motion to Dismiss (Doc. No. 32) is DENIED without prejudice;

3. The City’s Motion to Strike (Doc. No. 40) is DENIED as moot; and

4. The Clerk is directed to close this matter in accordance with this Order, mooting

the Parties’ pending motion to extend certain scheduling order deadlines (Doc. No.

42).

SO ORDERED ADJUDGED AND DECREED.

Signed: August 4, 2021

Kenneth D. Bell ey,

United States District Judge il of

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