SCOTUS Strikes Again! The Supreme Court Upholds the TCPA but Severs the Debt-Collection Exemption

TCPA Connect

“Americans passionately disagree about many things. But they are largely united in their disdain for robocalls.” The opening sentence of the Supreme Court’s much-anticipated Barr v. American Association of Political Consultants, Inc. decision made clear that the Telephone Consumer Protection Act’s automated calling provisions—the most popular litigation vehicle for TCPA plaintiffs and their lawyers—would not bring about the act’s demise. The high court could not ignore the consequences of declaring the entire automated calling provision unconstitutional when “tens of millions of consumers [] would be bombarded every day with nonstop robocalls.”

In a 6-3 opinion, delivered by Justice Kavanaugh, the Supreme Court affirmed the Fourth Circuit’s ruling in Barr and held that the government-debt carve-out from the TCPA’s broad robocall restriction, added to the statute in 2015, violates the First Amendment but can be severed from the rest of the TCPA, leaving the automated calling provision intact and the same as before Congress’ 2015 amendment.

The government-debt exception at issue allowed robocalls made solely to collect a debt owed to or guaranteed by the United States. In considering the first question on whether the exception was content-based, the Supreme Court held that the exception was and thus applied a strict scrutiny standard of review. “A robocall that says, ‘Please pay your government debt’ is legal. A robocall that says, ‘Please donate to our political campaign’ is illegal. That is about as content-based as it gets.”

The Supreme Court held (and the government had conceded) that the exception did not pass strict scrutiny review because the collection of federal debt was not sufficiently justified, although this was “no doubt a worthy goal.” In so holding, the justices expanded the TCPA’s breadth to encompass more categories of speech, although they noted in a footnote that the robocall restriction does not apply to the federal government itself.

Rather than axing the entire automated calling provision of the statute, the Supreme Court found “the relatively narrow exception to the broad robocall restriction” severable from the remainder of the statute as it was “only a slice of the overall robocall landscape.” The Court relied on the historical presumption of severability and the Communications Act (which the TCPA amended in 1991 by adding the robocall restriction). That act contains an express severability clause that “squarely covers” the unconstitutional debt exception and requires severance, held the Court. The Supreme Court concluded that the automated calling provision of the TCPA can function in the absence of the unconstitutional exception and would be “fully operative as a law.” “Indeed, the remainder of the robocall restriction did function independently and fully operate as a law for 20-plus years before the government-debt exception was added in 2015.”

Notably, the Supreme Court identified an additional severability “wrinkle” due to its determination that this case is a First Amendment “equal-treatment case” because the violation at issue is “unequal treatment” (i.e., the statute unequally favors debt collection robocalls and discriminates against political and other robocalls). This determination further favored severance, held the Court, because the burdens of the statute would be extended to those previously exempted (restrictions on robocalls for debt collectors) rather than nullified for all (no restrictions on robocalls for anyone).

The opinion also rejected plaintiffs’ argument for why the entire statute is unconstitutional, namely that the exception “undermines the credibility” of Congress’ interest in protecting consumer privacy and that if Congress no longer has such a genuine interest, then the restriction is no longer justified under any level of scrutiny. The Court noted that the argument was “not without force” but ultimately rejected it, holding that Congress has demonstrated its continued interest by retaining a “very broad restriction on robocalls” that “proscribes tens of millions of would-be robocalls that would otherwise occur every day [Emphasis added.]”

Callers relying on the government-debt exception will not face liability for making calls without consent from enactment of the 2015 amendment to entry of final judgment by the district court on remand (or such date as the lower courts determine).

Our Takeaway: The Supreme Court was motivated by what it deemed a nationwide “disdain” for robocalls and a “crystal clear” opinion “that robocalls must be restricted.” The opinion also made clear that the decision “does not negate the liability of parties who made robocalls covered by the robocall restriction [Emphasis added.]”

This means that it is status quo for most TCPA defendants, except those who were relying on the government-debt exception to make calls without consent under the TCPA. TCPA plaintiffs and their lawyers will continue to litigate and file lawsuits alleging automated calls without consent, and TCPA defendants will continue to fight against overly broad interpretations, misapplications of the law and the rampant abuse that marks the TCPA. Some TCPA plaintiffs’ lawyers have predicted an uptick in TCPA litigation. Now is a good time for companies to revisit their compliance with the TCPA, particularly as it pertains to automated calls to mobile phones.

The decision is available here.

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