The Supreme Court generally upheld the constitutionality of the Telephone Consumer Protection Act (TCPA) in Barr v. American Association of Political Consultants, Dkt. No. 19-631, issued on July 6, 2020. Multiple stakeholders have been pressing on constitutionality of the TCPA, including advocates against “nuisance” robocalls, service providers weary of uncertain class action liability, and free speech advocates wanting less regulation. The Supreme Court determined that only an exception to the TCPA permitting automated government debt collector calls was an unconstitutional restriction on free speech. To remedy this violation, the Court rejected requests to find the entirety of the TCPA statute unconstitutional and instead affirmed the Fourth Circuit’s approach of severing of the offending exception from the statute.
The Supreme Court’s concerns about the governmental debt exception, however, could point to a vulnerability in other privacy statutes, such as the California Consumer Privacy Act, which exempts non-profits. Going forward, privacy advocates will need to be particularly mindful of free speech concerns as privacy legislation grows.
The TCPA, enacted in 1991, prohibits making calls using an automated or pre-recorded voice or an “automatic telephone dialing system (ATDS)” to any telephone number assigned to a cellular telephone service, among other things. The statute provides a private right of action, along with statutory damages of $500 per alleged violation (i.e., each offending call or text) or $1,500 for each willful or knowing violation. With the potential for significant monetary judgments or settlements, plaintiffs’ attorneys frequently assert TCPA violations in class action litigation.
In 2015, Congress amended the TCPA to add an exception that permitted debt collectors to make automated calls to cell phones of borrowers of loans held by the Federal government. In 2016, four plaintiffs including the American Association of Political Consultants, Inc. (AAPC) filed suit, asserting that the government debt exception violated the free speech clause of the First Amendment because it rendered the TCPA’s bar on ATDS calls to be a content-based restriction that did not pass strict scrutiny. The plaintiffs sought to invalidate the TCPA by arguing that it unconstitutionally favored the content of speech by government debt collectors over political and other speech and that, as a result, the entire TCPA should be invalidated because the exception was not severable from the remainder of the TCPA. Although the district court rejected the plaintiffs’ arguments on summary judgment, the Fourth Circuit vacated the lower court’s decision, severed the government debt collection exception as unconstitutional and remanded for further proceedings. The US government appealed to the Supreme Court.
The Court was presented with two key issues: (1) whether the government-debt exception to the TCPA’s automated-call restriction violates the First Amendment, and (2) whether the proper remedy for any constitutional violation was to sever the exception from the remainder of the statute or invalidate the statute in its entirety.
Constitutionality of the Exception:
Justices Kavanaugh, Roberts, Thomas and Alito found that the 2015 government debt exception violated the First Amendment as a content-based restriction that “favors speech made for the purpose of collecting government debt over political and other speech,” and that failed to pass strict scrutiny. Justice Sotomayor reached the same conclusion, but applied intermediate scrutiny. The US government had argued that the exception was content-neutral, because (1) it focused on restrictions against speakers rather than content, (2) it was directed to economic activity (debt collection), and (3) it was a permissible incidental burden upon speech. These arguments were rejected in both Justice Kavanaugh’s opinion and Justice Sotomayor’s concurrence.
As Justice Kavanaugh noted, a law that “‘on its face’ draws distinctions based on the message a speaker conveys” is content based. Regarding the first issue, Justice Kavanaugh noted that “laws favoring some speakers over others demand strict scrutiny when the legislature’s speaker preferences reflects a content preference.” Regarding the second issue, he explained that under Sorrell v. IMS Health Inc., 564 U. S. 552, 563–564 (2011), even laws singling out “pharmaceutical marketing” (e.g., an economic activity) was content-based. Regarding the third issue, he noted that the exception could not be an “incidental burden” when it was directed to certain content and aimed at particular speakers.” He dismissed concerns that affirming the unconstitutionality of the exception would lead to a slippery slope for other laws because the issue was limited to robocalls to cell phones.
Severance as a Remedy:
Justice Kavanaugh then addressed whether the entire TCPA legislation was rendered unconstitutional by the 2015 amendment. The plaintiffs had argued that the 2015 government-debt exception undermined the Government’s interest in consumer privacy, and therefore left the TCPA’s restriction on a manner of free speech (robocalls) without a supporting government interest. Accordingly, the plaintiffs argued that the TCPA’s robocall restriction was unjustified under any level of scrutiny. In dismissing this argument, Justice Kavanaugh noted that the government debt exception was but a narrow portion of the overall TCPA legislation that otherwise was not “littered with exceptions.” Justice Kavanaugh further noted that the TCPA continues to serve a purpose by proscribing “tens of millions of would-be robocalls” that would otherwise be made to cell phones.
Given the ubiquity of TCPA lawsuits, it seems likely that courts will continue to face numerous interpretive challenges in applying the TCPA going forward. Ropes & Gray will continue to monitor TCPA litigation developments.