FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`
`
`No. 22-15352
`
`D.C. No.
`2:21-cv-01202-
`RFB-BNW
`
`
`OPINION
`
`
`
`
`
`AARGON AGENCY, INC., Nevada
`corporation; ALLIED COLLECTION
`SERVICES, INC., a Nevada
`corporation; ASSETCARE, LLC, a
`Texas limited liability company;
`CAPIO PARTNERS, LLC, a Texas
`limited liability company; CF
`MEDICAL, LLC, a Nevada limited
`liability company; CLARK COUNTY
`COLLECTION SERVICE, LLC, a
`Nevada limited-liability company;
`COLLECTION SERVICE OF
`NEVADA, a Nevada corporation;
`NEVADA COLLECTORS
`ASSOCIATION, a Nevada non-profit
`corporation; PLUSFOUR, INC., a
`Nevada corporation; RM GALICIA,
`INC., doing business as Progressive
`Management, LLC; THE LAW
`OFFICES OF MITCHELL D.
`BLUHM & ASSOCIATES, LLC, a
`Georgia limited liability company,
`
`
`
` v.
`
`
`
`
`Plaintiffs-Appellants,
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`
`
`No. 22-15352
`
`D.C. No.
`2:21-cv-01202-
`RFB-BNW
`
`
`OPINION
`
`
`
`
`
`AARGON AGENCY, INC., Nevada
`corporation; ALLIED COLLECTION
`SERVICES, INC., a Nevada
`corporation; ASSETCARE, LLC, a
`Texas limited liability company;
`CAPIO PARTNERS, LLC, a Texas
`limited liability company; CF
`MEDICAL, LLC, a Nevada limited
`liability company; CLARK COUNTY
`COLLECTION SERVICE, LLC, a
`Nevada limited-liability company;
`COLLECTION SERVICE OF
`NEVADA, a Nevada corporation;
`NEVADA COLLECTORS
`ASSOCIATION, a Nevada non-profit
`corporation; PLUSFOUR, INC., a
`Nevada corporation; RM GALICIA,
`INC., doing business as Progressive
`Management, LLC; THE LAW
`OFFICES OF MITCHELL D.
`BLUHM & ASSOCIATES, LLC, a
`Georgia limited liability company,
`
`
`
` v.
`
`
`
`
`Plaintiffs-Appellants,
`
`
`
`2
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`SANDY O'LAUGHLIN, in her
`capacity as Commissioner of State Of
`Nevada Department Of Business And
`Industry Financial Institutions
`Division,
`
`
`
` Defendant-Appellee.
`
`
`
`
`
`
`
`
`
`Appeal from the United States District Court
`for the District of Nevada
`Richard F. Boulware II, District Judge, Presiding
`
`Argued and Submitted September 2, 2022
`San Francisco, California
`
`Filed June 15, 2023
`
`Before: William A. Fletcher, Jay S. Bybee, and Lawrence
`VanDyke, Circuit Judges.
`
`Opinion by Judge W. Fletcher;
`Dissent by Judge VanDyke
`
`
`
`
`
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`3
`
`SUMMARY**
`
`Consumer Rights
`
`The panel affirmed the district court’s order denying
`preliminary injunctive relief to entities engaged in consumer
`debt collection in their action asserting a facial challenge to
`Nevada Senate Bill 248 (“S.B. 248”), which requires debt
`collectors to provide written notification to debtors 60 days
`before taking any action to collect a medical debt.
`
`Plaintiffs alleged that S.B. 248 is unconstitutionally
`vague, constitutes a prior restraint in violation of the First
`Amendment, and is preempted by the Fair Credit Reporting
`Act (“FCRA”) and the Fair Debt Collection Practices Act
`(“FDCPA”).
`
`The panel affirmed the district court on the grounds that
`plaintiffs failed to show a likelihood of success on the merits
`of their claims. The panel first rejected plaintiffs’ claim that
`the term “action to collect a medical debt” in S.B. 248 was
`unconstitutionally vague, noting that the implementing
`regulations set forth examples of actions that do, and do not,
`constitute actions to collect a medical debt.
`
`Addressing the First Amendment claim that S.B. 248
`impermissibly burdens plaintiffs’ speech, the panel held
`that: S.B. 248 regulates commercial speech and therefore is
`not subject to strict scrutiny; communications to collect a
`medical debt “concerned lawful activity” and were not
`“inherently misleading;” Nevada’s asserted interest in
`
`
`** This summary constitutes no part of the opinion of the court. It has
`been prepared by court staff for the convenience of the reader.
`
`
`
`4
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`protecting medical debtors in Nevada from financial ruin in
`the wake of the Covid-19 pandemic was substantial; S.B.
`248 directly advanced the government interest asserted; and
`S.B. 248 was not a more extensive regulation than necessary
`to serve the State’s interest.
`
`The panel next rejected plaintiffs’ argument that the
`FCRA, which regulates the creation and the use of consumer
`reports by consumer reporting agencies for certain specific
`purposes, expressly preempts S.B. 248 under 15 U.S.C. §
`1681t(b)(1)(F) because that provision broadly preempts any
`state law “relating” to the duties of persons or debt collection
`agencies who furnish information to credit reporting
`agencies. The panel declined to read § 1681t(b)(1)(F) this
`broadly, determining rather that its presumptive effect was
`limited by the specific reporting requirements imposed by 15
`U.S.C. § 1681s-2. The panel concluded that S.B. 248’s 60-
`day notification period in no way interferes with the
`reporting obligations as spelled out in § 1681s-2. The panel
`further held that S.B. 248 was not impliedly preempted by
`the FCRA because it does not interfere with debt collectors’
`responsibilities to furnish fair and accurate information to
`credit reporting agencies.
`
`The panel also rejected plaintiffs’ contention that the
`FDCPA, whose purpose is to “protect vulnerable and
`unsophisticated debtors from abuse, harassment, and
`deceptive collection practices” impliedly preempts S.B. 248
`because S.B. 248 prohibits debt collectors from sending
`debtors required notifications pertaining to debt collection,
`as set forth in 15 U.S.C. §§ 1692e and 1692g. The panel
`stated that the notification contemplated in § 7 of S.B. 248 is
`not an attempt to collect a debt. Instead, S.B. 248 provides
`consumers with the protection of a 60-day notification
`period before any action is taken to collect a medical debt,
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`5
`
`while the requirements of FDCPA’s § 1692e and § 1692g
`apply once debt collectors attempt to collect a debt. The
`panel determined that S.B. 248 removes no protection under
`the FDCPA, but rather, protects consumers for an additional
`period of 60 days. The state law provides more protection
`than the FDCPA provides standing alone. For that reason, it
`is not inconsistent with the FDCPA.
`
`the
`Dissenting, Judge VanDyke disagreed with
`majority’s conclusion that plaintiffs were unlikely to
`succeed
`on
`the merits
`of
`their
`preemption
`claims. Addressing the FDCPA, Judge VanDyke stated that
`two provisions in S.B. 248 were inconsistent with the
`FDCPA and as such were preempted. First, a debt collector
`cannot both comply with timely providing the FDCPA’s
`required notices in its initial communication with a debtor
`while also complying with S.B. 248’s 60-day prohibition
`against debt collectors taking any action to collect a
`debt. Second, because S.B. 248 obligates debt collectors to
`include confusing information in communications to a
`debtor, it requires debt collectors to violate the FDCPA’s
`prohibition against using confusing or misleading
`representations in their communications with debtors.
`
`the FCRA preemption claim, Judge
`Addressing
`VanDyke stated that the FCRA expressly preempts the
`entirety of S.B. 248 because the text of the FCRA explicitly
`manifests Congress’s intent to displace state laws regulating
`how debt collectors report credit information to reporting
`agencies. S.B. 248 further undermines Congress’s purposes
`in enacting the FCRA by decreasing the accuracy of credit
`reporting and thus is impliedly preempted.
`
`Finally, with respect to the remaining factors for a
`preliminary
`injunction, Judge VanDyke would have
`
`
`
`6
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`concluded that Aargon Agency will suffer irreparable harm
`absent a preliminary injunction, and that the balance of
`equities and the public interest weigh in favor of enjoining
`S.B. 248.
`
`
`
`
`COUNSEL
`
`Patrick J. Reilly (argued), Brownstein Hyatt Farber Schreck
`LLP, Las Vegas, Nevada; James K. Schultz, Sessions Israel
`& Shartle LLC, San Diego, California; David Israel,
`Sessions Fishman Nathan & Israel LLC, Metairie,
`Louisiana; for Plaintiffs-Appellants.
`
`Kiel Ireland (argued), Deputy Attorney General; Office of
`the Nevada Attorney General; Carson City, Nevada; Akke
`Levin, Deputy Attorney General; Steven Shevorski, Chief
`Litigation Counsel; Aaron D. Ford, Attorney General of
`Nevada; Office of the Nevada Attorney General; Las Vegas,
`Nevada; for Defendant-Appellee.
`
`Rusty Graf, Black & LoBello, Las Vegas, Nevada; James
`Wadhams, Black & Wadhams PLLC, Las Vegas, Nevada,
`for Amicus Curiae Nevada Hospital Association.
`
`
`
`
`
`
`
`
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`7
`
`OPINION
`
`
`W. FLETCHER, Circuit Judge:
`
`In June 2021, Nevada enacted Senate Bill 248 (“S.B.
`248”), Act of June 2, 2021, ch. 291, 2021 Nev. Stat. 1668, in
`response to the COVID-19 pandemic. S.B. 248 requires debt
`collectors to provide written notification to debtors 60 days
`before taking any action to collect a medical debt. Plaintiffs
`are entities engaged in consumer debt collection. They filed
`suit in district court against defendant, Commissioner of the
`Financial Institutions Division of Nevada’s Department of
`Business and Industry, bringing a facial challenge to the law.
`They moved for a temporary restraining order and a
`preliminary
`injunction, contending
`that S.B. 248
`is
`unconstitutionally vague, violates the First Amendment, and
`is preempted by both the federal Fair Credit Reporting Act
`(“FCRA”) and the Fair Debt Collection Practices Act
`(“FDCPA”).
`
`The district court denied plaintiffs’ motion for a
`temporary restraining order and a preliminary injunction.
`Plaintiffs timely appealed the denial of the preliminary
`injunction. We have jurisdiction under 28 U.S.C. § 1291 and
`we affirm.
`
`I. Background
`
`Plaintiffs-appellants Aargon Agency, Inc. and others
`(“plaintiffs”)
`are
`corporations
`and
`limited-liability
`companies that engage in the collection of consumer debt
`(including medical debt) and in credit reporting. Plaintiffs
`generally work on a contingency basis, getting paid only if
`they succeed in collecting debt. Defendant-appellee Sandy
`O’Laughlin
`(“defendant”
`or
`“Commissioner”)
`is
`
`
`
`8
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`Commissioner of the Financial Institutions Division of
`Nevada’s Department of Business and Industry.
`
`Nevada enacted S.B. 248 in response to the COVID-19
`pandemic. See Minutes of the Sen. Comm. on Com. and
`Lab.: Hearing on S.B. 247 and 248, 2021 Leg., 81st Sess. 11
`(Nev. Mar. 2021) [hereinafter Minutes]. The governor
`signed the bill into law on June 2, 2021, and it went into
`effect on July 1, 2021.
`
`S.B. 248 amends Chapter 649 of the Nevada Revised
`Statutes, which governs debt collection agencies. S.B. 248
`§ 1 (Nev. 2021). Section 7 of S.B. 248 requires debt
`collection agencies to send a written notification to medical
`debtors 60 days before taking any action to collect a medical
`debt. It provides:
`
`Not less than 60 days before taking any action
`to collect a medical debt, a collection agency
`shall send by registered or certified mail to
`the medical debtor written notification that
`sets forth:
`
`(a) The name of the medical facility,
`provider of health care or provider of
`emergency medical services
`that
`provided the goods or services for
`which the medical debt is owed;
`
`(b) The date on which those goods or
`services were provided; and
`
`(c) The principal amount of the medical
`debt.
`
`Id. § 7(1). The notification must provide the name of the
`collection agency and must inform the debtor that, as
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`9
`
`applicable, either the “medical debt has been assigned to the
`collection agency for collection” or that the “collection
`agency has otherwise obtained the medical debt for
`collection.” Id. § 7(2).
`
`Section 7.5 permits a collection agency to accept a
`voluntary payment from the debtor, so long as certain
`conditions are met. An agency may accept voluntary
`payment only if the medical debtor initiates contact with the
`agency. Id. § 7.5(1)(a). To accept voluntary payment, the
`agency must disclose to the debtor that “payment is not
`demanded or due,” and that the “medical debt will not be
`reported to any credit reporting agency during the 60-day
`notification period specified in [§ 7(1)].” Id. § 7.5(1)(b).
`“No action by a medical debtor to initiate contact with a
`collection agency may be construed to allow the collection
`agency to take action to collect the medical debt before the
`expiration of the 60-day notification period . . . .” Id.
`§ 7.5(2).
`
`After briefing to this court but before oral argument,
`defendant promulgated regulations implementing S.B. 248.
`See Nev. Admin. Code R055-21 (adopted March 23, 2022;
`filed June 13, 2022). The regulations define “action to
`collect a medical debt” for purposes of § 7 and § 7.5 of S.B.
`248 as “any attempt by a collection agency or its manager,
`agents or employees to collect a medical debt from a medical
`debtor.” Id. § 3(1). The regulations provide six examples of
`actions that are, and four examples that are not, “action[s] to
`collect a medical debt.” Examples of actions to collect a
`medical debt are “[p]lacing telephone calls to the medical
`debtor”; “[s]ending letters and notices, other than a 60-day
`notification, to the medical debtor”; “[c]ontacting the
`medical debtor by any electronic means”; “[r]eporting the
`medical debt to any credit reporting agency”; [d]emanding
`
`
`
`10
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`payment of the medical debt”; and “[c]ommencing any civil
`action against the medical debtor.” Id. Examples of actions
`that are not actions to collect a medical debt are “[a]ny action
`initiated by a medical debtor”; [t]he provision to a medical
`debtor of clarification relating to the content of a 60-day
`notification by a collection agency or its manager, agents or
`employees if the contact is initiated by the medical debtor”;
`“[s]ending verification of a medical debt to the medical
`debtor if requested by the medical debtor”; and “[s]ending a
`receipt to a medical debtor for a voluntary payment.” Id.
`
`After S.B. 248 became law but before it went into effect,
`plaintiffs filed suit in the district court. Plaintiffs argued,
`inter alia, that S.B. 248 is unconstitutionally vague,
`constitutes a prior restraint in violation of the First
`Amendment, and is preempted by the FCRA and the
`FDCPA. Plaintiffs requested prospective injunctive relief,
`including a temporary restraining order and a preliminary
`injunction.
`
`The district court denied plaintiffs’ motion for a
`temporary restraining order and a preliminary injunction,
`holding that plaintiffs are unlikely to succeed on the merits
`of their claims.
`
`Plaintiffs timely appealed the denial of their motion for
`a preliminary injunction.
`
`II. Standard of Review
`
`We review a denial of a preliminary injunction for abuse
`of discretion. CTIA - The Wireless Ass’n v. City of Berkeley,
`928 F.3d 832, 838 (9th Cir. 2019). “An abuse of discretion
`occurs when the district court based its ruling on an
`erroneous view of the law or on a clearly erroneous
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`11
`
`assessment of the evidence.” Id. (quoting Friends of the
`Wild Swan v. Weber, 767 F.3d 936, 942 (9th Cir. 2014)).
`
`III. Discussion
`
`“A plaintiff seeking a preliminary injunction must
`establish [1] that he is likely to succeed on the merits, [2]
`that he is likely to suffer irreparable harm in the absence of
`preliminary relief, [3] that the balance of equities tips in his
`favor, and [4] that an injunction is in the public interest.”
`Winter v. NRDC, Inc., 555 U.S. 7, 20 (2008) (brackets
`added). We use a “sliding scale” approach according to
`which “a stronger showing of one element may offset a
`weaker showing of another.” All. for the Wild Rockies v.
`Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). For example,
`“a preliminary injunction could issue where the likelihood of
`success is such that serious questions going to the merits
`were raised and the balance of hardships tips sharply in
`[plaintiff’s] favor.” Id. (alteration in original) (internal
`quotation marks omitted).
`
`A. Likelihood of Success
`
`On appeal, plaintiffs make three arguments directed to
`the merits. They argue that S.B. 248 is unconstitutionally
`vague; that S.B. 248 violates the First Amendment; and that
`the FCRA and the FDCPA preempt S.B. 248. We agree with
`the district court that none of these arguments is likely to
`succeed. We address each in turn.
`
`1. Vagueness
`
`Plaintiffs argue that S.B. 248 is unconstitutionally vague
`because it fails to define the term “any action to collect a
`medical debt” contained in § 7(1), and thereby allows for
`arbitrary enforcement by the State. Plaintiffs argue that debt
`collectors are “left to guess” whether they are allowed, for
`
`
`
`12
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`example, to verify an incoming caller’s identity, to answer a
`debtor’s questions about their debt, or to assist with
`processing insurance claims.
`
`“A law is unconstitutionally vague if it fails to provide a
`reasonable opportunity to know what conduct is prohibited,
`or is so indefinite as to allow arbitrary and discriminatory
`enforcement.” Hum. Life of Wash. Inc. v. Brumsickle, 624
`F.3d 990, 1019 (9th Cir. 2010) (quoting Tucson Woman’s
`Clinic v. Eden, 379 F.3d 531, 555 (9th Cir. 2004)).
`“Nevertheless, perfect clarity is not required even when a
`law regulates protected speech” because “we can never
`expect mathematical certainty from our language.” Id. (first
`quoting Cal. Tchrs. Ass’n v. State Bd. of Educ., 271 F.3d
`1141, 1150 (9th Cir. 2001); then quoting Grayned v. City of
`Rockford, 408 U.S. 104, 110 (1972)). “When a statute
`clearly implicates free speech rights, it will survive a facial
`challenge so long as it is clear what the statute proscribes in
`the vast majority of
`its
`intended
`applications.”
`Humanitarian L. Project v. U.S. Treasury Dep’t, 578 F.3d
`1133, 1146 (9th Cir. 2009) (internal quotation marks
`omitted). An economic regulation “is subject to a less strict
`vagueness test,” both because “its subject matter is often
`more narrow, and because businesses, which face economic
`demands to plan behavior carefully, can be expected to
`consult relevant legislation in advance of action.” Vill. of
`Hoffman Ests. v. Flipside, Hoffman Ests., Inc., 455 U.S. 489,
`498 (1982) (footnotes omitted).
`
`The district court concluded, even without the assistance
`of the regulations quoted above, that the term “action to
`collect a medical debt” is not unconstitutionally vague. If
`there were any doubt about the correctness of the district
`court’s holding, that doubt was removed when the defendant
`adopted the regulations, quoted above, giving examples of
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`13
`
`actions that do, and do not, constitute actions to collect a
`medical debt.
`
`2. First Amendment
`
`Plaintiffs argue that S.B. 248 impermissibly burdens
`their speech in violation of the First Amendment. They first
`argue
`that debt-collection communications are not
`commercial speech and that S.B. 248 is therefore subject to
`strict scrutiny. They then argue that even if debt-collection
`communications are commercial speech, the district court
`erred in its commercial speech analysis. We disagree with
`both arguments.
`
`We may dispose of plaintiffs’ first argument quickly.
`Commercial speech is “usually defined as speech that does
`no more than propose a commercial transaction.” United
`States v. United Foods, Inc., 533 U.S. 405, 409 (2001). This
`definition is just a “starting point,” and courts “try to give
`effect to a common-sense distinction between commercial
`speech and other varieties of speech.” Ariix, LLC v.
`NutriSearch Corp., 985 F.3d 1107, 1115 (9th Cir. 2021)
`(internal quotation marks omitted). We agree with the
`district court that S.B. 248 regulates commercial speech.
`When debt collection agencies communicate with a debtor
`in an attempt to collect medical debt, the communication
`proposes a commercial transaction in which the debtor
`would pay, in whole or in part, a past-due medical debt.
`
`Plaintiffs’ second argument requires a little more
`analysis. Because S.B. 248 regulates commercial speech, we
`analyze it under the four-part test of Central Hudson Gas &
`Electric Corp. v. Public Service Commission of New York,
`447 U.S. 557, 566 (1980). See Retail Digit. Network, LLC
`v. Prieto, 861 F.3d 839, 841 (9th Cir. 2017) (reaffirming that
`
`
`
`14
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`we apply the Central Hudson test to restrictions on
`commercial speech). Central Hudson provides:
`
`At the outset, we must determine whether the
`expression
`is protected by
`the First
`Amendment. For commercial speech to
`come within that provision, it at least must
`concern
`lawful activity and not be
`misleading. Next, we ask whether the
`asserted governmental interest is substantial.
`If both inquiries yield positive answers, we
`must determine whether
`the regulation
`directly advances the governmental interest
`asserted, and whether it is not more extensive
`than is necessary to serve that interest.
`
`447 U.S. at 566. We take the four parts in turn.
`
`First, plaintiffs’ speech comes within the protection of
`the First Amendment because communications to collect a
`medical debt “concern lawful activity” and are not
`“inherently misleading.” See Am. Acad. of Pain Mgmt. v.
`Joseph, 353 F.3d 1099, 1106–07 (9th Cir. 2004) (explaining
`that while “inherently misleading” speech receives no First
`Amendment protection, regulations that target “potentially
`misleading” speech must satisfy the remaining Central
`Hudson factors).
`
`Second, Nevada’s asserted interest is “substantial.” S.B.
`248 seeks to protect medical debtors in Nevada from
`financial ruin in the wake of the COVID-19 pandemic.
`Minutes at 12, 15. During the pandemic, an unusually high
`number of Nevadans needed medical care, and many
`Nevadans lost employer-sponsored health insurance. Id. at
`11. Roughly twenty percent of Nevadans had medical debt
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`15
`
`that had gone to collection agencies, id., and an increased
`number of Nevadans had filed for bankruptcy, id. at 15.
`
`Third, S.B. 248 “directly advances the governmental
`interest asserted.” The 60-day notification period required
`by § 7 provides time for debtors to communicate with
`medical providers and insurance companies, allowing
`debtors to verify whether the debt actually exists and to seek
`available financial assistance before collection attempts
`begin. Minutes at 16.
`
`For the first time on appeal, Plaintiffs argue that S.B. 248
`fails to directly advance the state’s interest because it is
`constitutionally underinclusive. See Metro Lights, LLC v.
`City of Los Angeles, 551 F.3d 898, 904–05 (9th Cir. 2009).
`Relying on Greater New Orleans Broadcasting Ass’n v.
`United States, 527 U.S. 173 (1999), plaintiffs argue that S.B.
`248 is unconstitutional because it restricts debt-collection
`speech by debt collection agencies but not by medical
`providers.
`
`that
`that plaintiffs have not forfeited
`Assuming
`argument, see One Indus., LLC v. Jim O’Neal Distrib., Inc.,
`578 F.3d 1154, 1158 (9th Cir. 2009), it is in any event
`unpersuasive. We explained in Metro Lights:
`
`unconstitutionally
`are
`[R]egulations
`underinclusive when they contain exceptions
`that bar one source of a given harm while
`specifically exempting another in at least two
`situations. First, if the exception ensures that
`the [regulation] will fail to achieve [its] end,
`it does not materially advance its aim. This
`is the lesson of Greater New Orleans: self-
`defeating speech restrictions will violate the
`
`
`
`16
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`First Amendment. Second, exceptions that
`make distinctions among different kinds of
`speech must relate
`to
`the
`interest
`the
`government seeks to advance.
`
`551 F.3d at 906 (alteration in original) (citations and internal
`quotation marks omitted).
`
`Neither of the situations we described in Metro Lights is
`present here. S.B. 248 is not “self-defeating.” Id. Rather,
`as evident from the face of S.B. 248, the law provides useful
`breathing room to a class of debtors who sorely need it. Nor
`is the distinction between medical debt collection agencies
`and medical providers unrelated to the governmental
`interest. Collection agencies seek payment of debts for
`which medical providers have already unsuccessfully sought
`payment. Once a medical provider passes debt on to a
`collector, collection costs and fees can drastically multiply
`the amount owed, forcing some debtors into bankruptcy.
`Minutes at 11, 13. Additionally, compared to medical
`providers, collection agencies have different incentives and
`employ different collection techniques. Collection agencies
`are often paid on a contingency basis, compete with one
`another based on how effective they are at obtaining
`recovery, and possess resources and expertise that medical
`providers lack. 85 Fed. Reg. 76735 (Nov. 30, 2020). In
`light of these differences, the State is justified in providing
`greater protection from the actions of collection agencies
`than from those of medical providers.
`
`Fourth, S.B. 248 is not a more extensive regulation than
`necessary to serve the State’s interest. “The fourth part of
`the [Central Hudson]
`test complements
`the direct-
`advancement inquiry of the third, asking whether the speech
`restriction is not more extensive than necessary to serve the
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`17
`
`interests that support it.” Greater New Orleans, 527 U.S. at
`188. This part of the test requires “a fit between the
`legislature’s ends and the means chosen to accomplish those
`ends—a fit that is not necessarily perfect, but reasonable;
`that represents not necessarily the single best disposition but
`one whose scope is in proportion to the interest served.” Bd.
`of Trs. of State Univ. of N.Y. v. Fox, 492 U.S. 469, 480 (1989)
`(internal citations and quotation marks omitted). The
`restriction need not be the “least restrictive means” of
`achieving the desired objective. Id.
`
`The fit between Nevada’s goal and the means to
`accomplish that goal is reasonable and proportionate. S.B.
`248 does not completely ban commercial speech by debt
`collection agencies. Instead, it prohibits speech constituting
`an “action to collect a medical debt,” and only within a 60-
`day notification period. This allows medical debtors time to
`do such things as ascertain whether the debt is actually owed
`or is owed in the amount claimed, contact relevant insurance
`carriers, or take other actions.
`
`3. Preemption
`
`Plaintiffs argue that S.B. 248 is preempted by two federal
`laws—the Fair Credit Reporting Act, and the Fair Debt
`Collection Practices Act.
`
`“The Supremacy Clause provides the constitutional
`foundation for federal authority to preempt state law.”
`Beaver v. Tarsadia Hotels, 816 F.3d 1170, 1178 (9th Cir.
`2016) (citing U.S. Const. art. VI, cl. 2; Kurns v. R.R. Friction
`Prods. Corp., 565 U.S. 625, 630 (2012)). “Preemption of
`state law, by operation of the Supremacy Clause, can occur
`in one of several ways: express, field, or conflict
`preemption.” Id. at 1178 (citing Kurns, 565 U.S. at 630–31).
`Express preemption occurs “when the text of a federal
`
`
`
`18
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`statute explicitly manifests Congress’s intent to displace
`state law.” Ass’n des Éleveurs de Canards et d’Oies du
`Quebec v. Bonta, 33 F.4th 1107, 1114 (9th Cir. 2022)
`(quoting Valle del Sol Inc. v. Whiting, 732 F.3d 1006, 1022
`(9th Cir. 2013)). Federal law may also impliedly preempt
`state law through either field or conflict preemption. Ass’n
`des Éleveurs, 33 F.4th at 1114. Conflict preemption,
`potentially relevant here, occurs when “compliance with
`both federal and state regulations is a physical impossibility”
`or when the state law “stands as an obstacle to the
`accomplishment and execution of the full purposes and
`objectives of Congress.” Arizona v. United States, 567 U.S.
`387, 399 (2012) (first quoting Florida Lime & Avocado
`Growers, Inc. v. Paul, 373 U.S. 132, 142–43 (1963); then
`quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).
`
`“When addressing questions of express or implied pre-
`emption, we begin our analysis with the assumption that the
`historic police powers of the States [are] not to be superseded
`by the Federal Act unless that was the clear and manifest
`purpose of Congress.” Altria Group, Inc. v. Good, 555 U.S.
`70, 77 (2008) (alteration in original) (internal quotation
`marks omitted). “[T]he purpose of Congress is the ultimate
`touchstone” of any preemption analysis. Medtronic, Inc. v.
`Lohr, 518 U.S. 470, 485 (1996).
`
`a. Fair Credit Reporting Act
`
`The Fair Credit Reporting Act (“FCRA”) “regulates the
`creation and the use of consumer report[s] by consumer
`reporting agenc[ies] for certain specified purposes, including
`credit transactions, insurance, licensing, consumer-initiated
`business transactions, and employment.” Spokeo, Inc. v.
`Robins, 578 U.S. 330, 334–35 (2016) (alterations in original)
`(internal quotation marks omitted). Plaintiffs argue that the
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`19
`
`FCRA expressly preempts S.B. 248 under 15 U.S.C.
`§ 1681t(b)(1)(F) to the extent that S.B. 248 prohibits a debt
`collector from reporting medical debt until 60 days after
`providing a notification pursuant to § 7. S.B. 248 §
`7.5(1)(b)(2). Plaintiffs argue further that the FCRA
`impliedly preempts S.B. 248, because the state law presents
`an obstacle to the accomplishment of the FCRA’s purpose.
`
`(1) Express Preemption
`
`Plaintiffs contend that S.B. 248 is expressly preempted
`because it is inconsistent with 15 U.S.C. § 1681t(b)(1)(F).
`We disagree.
`
`Section 1681t addresses the FCRA’s “[r]elation to State
`laws.” 15 U.S.C. § 1681t; see Gorman v. Wolpoff &
`Abramson, LLP, 584 F.3d 1147, 1166 (9th Cir. 2009). The
`statute provides that, in general:
`
`Except as provided in subsections (b) and (c),
`this subchapter does not annul, alter, affect or
`exempt any person subject to the provisions
`of this subchapter from complying with the
`laws of any State with respect to the
`collection, distribution, or use of any
`information on consumers . . . except to the
`extent that those laws are inconsistent with
`any provision of this subchapter, and then
`only to the extent of the inconsistency.
`
`15 U.S.C. § 1681t(a).
`
`Congress added § 1681t(b) to the FCRA so as to “avoid
`a patchwork system of conflicting regulations.” Ross v.
`F.D.I.C., 625 F.3d 808, 813 (4th Cir. 2010) (internal
`quotation marks and citation omitted).
` Section
`
`
`
`20
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`1681t(b)(1)(F), upon which plaintiffs rely, provides in
`relevant part: “No requirement or prohibition may be
`imposed under the laws of any State . . . with respect to any
`subject matter regulated under . . . section 1681s-2 of this
`title, relating to the responsibilities of persons who furnish
`information to consumer reporting agencies . . . .” In turn,
`§ 1681s-2 imposes specific duties and responsibility on
`“furnishers,” including on debt collection agencies, which
`furnish information to credit reporting agencies (“CRAs”).
`Id. § 1681s-2. Section 1681s-2(a) requires that furnishers
`provide accurate information to CRAs by, for example: (1)
`refraining from reporting inaccurate information when
`furnishers have knowledge of errors or have received notice
`and confirmation of errors; (2) correcting and updating the
`CRAs if previously provided information is incomplete or
`inaccurate; (3) if the information furnished is disputed by the
`consumer, informing CRAs that such information is
`disputed; (4) providing notice to CRAs of voluntarily closed
`accounts; and (5) within 90 days after furnishing information
`to CRAs about delinquent accounts, notifying CRAs of the
`date of delinquency. Id. §§ 1681s-2(a)(1)-(5). Section
`1681s-2(b) requires furnishers, upon notice of consumer
`dispute of furnished information, to conduct an investigation
`and report results of the investigation to the CRA.
`
`that § 1681t(b)(1)(F) broadly
`Plaintiffs contend
`preempts any state law “relating to” a furnisher’s duties. We
`decline to read § 1681t(b)(1)(F) this broadly. The Supreme
`Court has told us that the use of the phrase “with respect to”
`“massively limits the scope of preemption” to only those
`state laws that “concern” the phrase’s referents. See Dan’s
`City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 261 (2013)
`(interpreting
`the Federal Aviation Administration
`Authorization Act’s preemption provision).
` Section
`
`
`
`
`
`AARGON AGENCY, INC. V. O’LAUGHLIN
`
`
`
`21
`
`1681t(b)(1)(F) limits its preemptive effect to state laws “with
`respect to any subject matter regulated under . . . section
`1681s-2,” making clear that its preemptive effect is limited
`by the requirements imposed by § 1681s-2.
`
`We therefore agree with the Second Circuit that
`Ҥ 1681t(b)(1)(F) does not preempt state law claims against
`a defendant who happens to be a furnisher of information to
`a consumer reporting agency within the
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
