TR Daily Supreme Court Invalidates Robocall Government-Debt Exemption
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Monday, July 6, 2020

Supreme Court Invalidates Robocall Government-Debt Exemption

The Supreme Court today invalidated an exemption to the Telephone Consumer Protection Act of 1991 that allows robocalls to be made to cellphones without calling parties’ consent to collect debts owed to or guaranteed by the federal government. But it rejected a call from an association of political consultants and other groups to overturn the prohibition on robocalls made without calling parties’ consent.

The opinion in “Barr v. American Association of Political Consultants et. al” (case no. 19-631) upheld a ruling last year by the U.S. Court of Appeals for the Fourth Circuit (Richmond) that said that the huge number of loans that are guaranteed by the federal government means that the exemption does not pass a requirement that content-based restrictions on speech be “narrowly tailored.” However, the appeals court said that the robocall prohibition could stand by severing the content-based exemption for government debt-collection calls (TR Daily, April 24, 2019).

The Supreme Court held an oral argument in the case in May (TR Daily, May 6).

The TCPA was adopted in 1991. In 2015, Congress amended it to permit robocalls to be made without the consent of parties being called to collect debts owed to or guaranteed by the federal government, such as calls to collect student loans and mortgage debts.

While the Justice Department challenged the Fourth Circuit’s ruling that the government-debt exception violates the First Amendment, the AAPC and other groups argued that the appeals court’s remedy of severing the government-debt exception from the rest of the statute was the wrong approach, and that the entire robocalling restriction should be invalidated.

An opinion written by Justice Brett M. Kavanaugh that was joined by Chief Justice John G. Roberts Jr. and Justices Clarence Thomas (regarding parts I and II) and Samuel A. Alito Jr., noted, “Six Members of the Court today conclude that Congress has impermissibly favored debt-collection speech over political and other speech, in violation of the First Amendment. See infra, at 6–9; post, at 1–2 (SOTOMAYOR [Sonia], J., concurring in judgment); post, at 1, 3 (GORSUCH [Neil M.], J., concurring in judgment in part and dissenting in part).

“Applying traditional severability principles, seven Members of the Court conclude that the entire 1991 robocall restriction should not be invalidated, but rather that the 2015 government-debt exception must be invalidated and severed from the remainder of the statute. See infra, at 10–25; post, at 2 (SOTOMAYOR, J., concurring in judgment); post, at 11–12 (BREYER [Stephen], J., concurring in judgment with respect to severability and dissenting in part). As a result, plaintiffs still may not make political robocalls to cell phones, but their speech is now treated equally with debt-collection speech. The judgment of the U.S. Court of Appeals for the Fourth Circuit is affirmed,” Justice Kavanaugh added.

“In short, the robocall restriction with the government-debt exception is content-based,” Justice Kavanaugh said in his opinion. “Under the Court’s precedents, a ‘law that is content based’ is ‘subject to strict scrutiny.’ … The Government concedes that it cannot satisfy strict scrutiny to justify the government-debt exception. We agree. The Government’s stated justification for the government-debt exception is collecting government debt. Although collecting government debt is no doubt a worthy goal, the Government concedes that it has not sufficiently justified the differentiation between government-debt collection speech and other important categories of robocall speech, such as political speech, charitable fundraising, issue advocacy, commercial advertising, and the like.”

But the opinion disagreed with the AAPC and other parties that the entire 1991 restriction should be ruled unconstitutional.

“Plaintiffs correctly point out that the Government’s asserted interest for the 1991 robocall restriction is consumer privacy. But according to plaintiffs, Congress’s willingness to enact the government-debt exception in 2015 betrays a newfound lack of genuine congressional concern for consumer privacy,” the opinion noted. “Plaintiffs’ argument is not without force, but we ultimately disagree with it. It is true that the Court has recognized that exceptions to a speech restriction ‘may diminish the credibility of the government’s rationale for restricting speech in the first place.’ … But here, Congress’s addition of the government-debt exception in 2015 does not cause us to doubt the credibility of Congress’s continuing interest in protecting consumer privacy.”

The opinion also said that “the text of the Communications Act’s severability clause requires that the Court sever the 2015 government-debt exception from the remainder of the statute. And even if the text of the severability clause did not apply here, the presumption of severability would require that the Court sever the 2015 government-debt exception from the remainder of the statute.”

In Justice Sotomayor’s concurring opinion, she said that she agreed “with much of the partial dissent’s explanation that strict scrutiny should not apply to all content-based distinctions. Cf. post, at 5–9 (BREYER, J., concurring in judgment with respect to severability and dissenting in part). In my view, however, the government-debt exception in 47 U. S. C. §227(b) still fails intermediate scrutiny because it is not ‘narrowly tailored to serve a significant governmental interest.’ … Even under intermediate scrutiny, the Government has not explained how a debt-collection robocall about a government-backed debt is any less intrusive or could be any less harassing than a debt-collection robocall about a privately backed debt. As the Fourth Circuit noted, the government-debt exception is seriously underinclusive because it permits ‘many of the intrusive calls that the automated call ban was enacted to prohibit.’ … The Government could have employed far less restrictive means to further its interest in collecting debt, such as ‘secur[ing] consent from the debtors to make debt-collection calls’ or ‘plac[ing] the calls itself.’”

In his opinion concurring with respect to severability and dissenting in part, Justice Breyer, who was joined by Justices Elena Kagan and Ruth Bader Ginsburg, said that he “would find that the government-debt exception does not violate the First Amendment. A majority of the Court, however, has concluded the contrary. It must thus decide whether that provision is severable from the rest of the statute. As to that question, I agree with JUSTICE KAVANAUGH’s conclusion that the provision is severable. Accordingly, I respectfully concur in the judgment with respect to severability and dissent in part.”

He said that he recognizes “that the underlying cell phone robocall restriction primarily concerns a means of communication. And that fact, as I discuss below, triggers some heightened scrutiny, reflected in an intermediate scrutiny standard. Strict scrutiny and its strong presumption of unconstitutionality, however, have no place here.”

In concurring in part and dissenting in part in the court’s judgment, Justice Gorsuch (who was joined by Justice Thomas concerning Part II), said, “In my view, the TCPA’s rule against cellphone robocalls is a content-based restriction that fails strict scrutiny. The statute is content-based because it allows speech on a subject the government favors (collecting its debts) while banning speech on other disfavored subjects (including political matters). Cf. ante, at 9–11 (opinion of BREYER, J.) (mistakenly characterizing the content discrimination as ‘not about’ political activities). The statute fails strict scrutiny because the government offers no compelling justification for its prohibition against the plaintiffs’ political speech. In fact, the government does not dispute that, if strict scrutiny applies, its law must fall.”

In Part II, Justice Gorsuch said, “With a First Amendment violation proven, the question turns to remedy. Because the challenged robocall ban unconstitutionally infringes on their speech, I would hold that the plaintiffs are entitled to an injunction preventing its enforcement against them. This is the traditional remedy for proven violations of legal rights likely to work irreparable injury in the future. Preventing the law’s enforcement against the plaintiffs would fully address their injury. And going this far, but no further, would avoid ‘short circuit[ing] the democratic process’ by interfering with the work of Congress any more than necessary.”

In response to today’s decision, Alana Joyce, executive director of the AAPC, said, “AAPC members help candidates and organizations effectively exercise their First Amendment right to free speech, the foundation of fair elections and citizen engagement in the legislative process. We are grateful that the Supreme Court recognized the importance of the First Amendment and the harms imposed by content-based restrictions on speech but are disappointed that the Court did not rule in favor of the AAPC entirely. There remain open questions about what the TCPA means and how it applies to those who engage in First Amendment-protected policy and political discussions. We hope the Court grants review to resolve those issues in the pending Facebook case, addressing the proper interpretation of the TCPA’s auto dialer definition. AAPC is committed to vigorously supporting our members’ ability to deliver high quality, powerful services, through education, collaboration, and legal action where necessary.”

John Richer, a partner at the law firm of Hall Estill who advises companies on TCPA compliance, called the ruling “disappointing.”

“For the countless businesses in America that are routinely sued under the TCPA by unscrupulous plaintiff’s lawyers for using text messaging that incorporates commercial speech which, like political speech, is also protected by the First Amendment, the Supreme Court’s ruling today in Barr v. American Association of Political Consultants is disappointing, but not surprising,” Mr. Richer said. “The Court followed settled severability principles in allowing the remaining provisions of the TCPA apart from the governing-debt exception that the Court struck down to survive. It remains to be seen if the Court will at some future point entertain a direct challenge to the remaining provisions of the TCPA as a whole or if a legislative solution is the best approach to rid business and commerce from this overly burdensome and intrusive law that hurts the economy and consumers alike.”

Archis Parasharami, a litigation partner at Mayer Brown LLP, said, “After the argument in May, it seemed pretty clear that a majority of the Supreme Court was not prepared to invalidate the TCPA across the board due to the later-enacted government debt-collection exception. But the Court’s work in assessing this statute is not done. The courts of appeals are deeply divided over what counts as an autodialer within the meaning of the TCPA. That question is one of the central issues in assessing whether a business might be liable for making calls or sending text messages to cell phones. There is little doubt that the Court will have to step in to resolve the conflict—hopefully sooner rather than later.”

But FCC Chairman Ajit Pai welcomed today’s ruling.

“The Telephone Consumer Protection Act has long shielded Americans from unwanted robocalls, but the Obama Administration in 2015 snuck in a carve-out for federal debt collectors. I opposed that decision because, as I said at the time, the federal government should not bestow ‘regulatory largesse upon favored industries such as federal debt collectors,’ and I called on Congress to reverse course,” Mr. Pai said. “Thanks to the Supreme Court, that carve-out is no more. Today, the Court found that the last Administration’s attempt to create a special exemption for favored debt collectors was not only bad policy but unconstitutional. I am glad to hear that Americans, who are sick and tired of unwanted robocalls, will now get the relief from federal-debt-collector robocalls they have long deserved.”

“Robocalls are OUT OF CONTROL. But today the Supreme Court issued a decision upholding the original Telephone Consumer Protection Act, a law designed to protect us from junk calls. Now let's do something radical. Let's use it to finally stop these calls and the scams behind them,” tweeted FCC Commissioner Jessica Rosenworcel.

Sens. Ed Markey (D., Mass.), an author of the TCPA, and Rep. Anna G. Eshoo (D., Calif.) also were pleased.

“The Court’s decision followed commonsense principles: Americans don’t want to be harassed by robocalls, and Congress has the authority to stop abusive calls,” the lawmakers said. “The case for the TCPA has only become clearer since it became law nearly thirty years ago, and members of Congress on both sides of the aisle continue to recognize that blocking these invasive calls is a national priority. Today’s decision preserves the TCPA’s ability to protect Americans from countless unwanted robocalls every year, every day, and indeed every hour and minute.

“The Court rightly found that government debt collectors aren’t entitled to a special exception to the TCPA’s ban on robocalling,” the lawmakers added. “Everyone should be held to the same standard, which is something we sought to accomplish when we introduced the HANGUP Act. We applaud the Court’s decision to side with American consumers, protect our right to privacy from these abusive calls, deter countless scams that target our most vulnerable populations, and ensure that our phones will remain usable.”

George Slover, senior policy counsel for Consumer Reports, said, “On policy as well as legal grounds, this is exactly the right result. Congress never should have allowed that exemption for debt collection robocalls in the first place. The Supreme Court has rightly eliminated this loophole in the TCPA that could subject consumers to millions of unwanted calls, and we thank the thousands of consumers who sent messages to Congress opposing it.”

Nick Ludlum, CTIA’s senior vice president and chief communications officer, said, “We applaud the Supreme Court for protecting consumers from robocalls. Whether through voice, text or email, it’s critical to protect consumers from unwanted messages and maintain the integrity of communication platforms for Americans.” —Paul Kirby, [email protected]

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