On July 6, the United States Supreme Court issued its decision in Barr v. American Association of Political Consultants, Inc.. The Court considered whether a 2015 amendment to the Telephone Consumer Protection Act (“TCPA”) that created an exemption for debt collection calls relating to debts owed to, or guaranteed by, the federal government ran afoul the First Amendment. The American Association of Political Consultants, Inc. (“AAPC”) wished to make political calls to cell phones, just as the collectors of federal government debt are allowed to. The AAPC challenged the 2015 amendment’s constitutionality, claiming that it violated the First Amendment because it content-based and did not satisfy the strict scrutiny standard. The Fourth Circuit Court of Appeals agreed that the exemption unconstitutional but declined to strike down the entire TCPA as unconstitutional. The Fourth Circuit instead elected to sever the constitutionally offensive amendment and permit the balance of the TCPA to stand. The Supreme Court appeal considered two discrete questions: (1) whether the 2015 exemption for debt collection calls relating to government-backed debt was constitutional; and (2) if not, then what was the proper remedy to address the constitutional violation.
The TCPA prohibits, among other things, automated calls using an automatic telephone dialing system (“ATDS”) or using artificial or pre-recorded voice messages to cell phones. Plaintiffs’ lawyers around the country have used the TCPA to generate multimillion-dollar settlements since TCPA litigation came into fashion almost 20 years ago. From the defense bar perspective, the TCPA is alchemy in the legal sense—it turns dial tones into gold. One can imagine that the plaintiffs’ bar collectively gasped when the Supreme Court granted certiorari in Barr. This meant that the TCPA, the proverbial “golden goose” of the plaintiffs’ bar, was in jeopardy of being struck down as unconstitutional, or was at least at risk of being construed so narrowly as to eliminate the “bet the company” type of litigation defendants in these class actions face.
The grant of certiorari led many to expect that the Supreme Court might offer guidance on how to apply the provisions relating to application of the ATDS prohibitions. Such guidance could have given way to a common sense approach to TCPA enforcement and avoid ensnaring those businesses engaging in legitimate communications with their customers.
But it was not to be. Barr held that the 2015 exemption violated the First Amendment. So now all debt collection calls—whether relating to government backed debt or not—must comply with TCPA requirements. But the Court was silent as to how the ATDS provisions in the TCPA were to be construed and applied to conform with First Amendment principles. Also unknown is whether the ruling applies retroactively. Post Barr, practitioners face the same uncertain position as they did before with respect to the ATDS construction and application. The only difference is that now more actors are subject to the TCPA’s restrictions and must bring themselves into compliance. To the extent any guidance will be available, it will have to come from the FCC.
The intriguing essence of Barr is more about what it does not say about the TCPA as opposed to what it does say. Indeed, a cynic would opine that the Court used the TCPA as a foil to embark on a novel approach to First Amendment jurisprudence. After concluding that the 2015 exemption was unconstitutional because it was content-based and did not survive the strict scrutiny standard, the Court tackled the question of a proper remedy to implement. Seeking the freedom to make politically oriented calls, the AAPC argued for invalidation of the TCPA as a whole on the ground that the exception “undermines the credibility” of the Government’s interest in consumer privacy that animated the TCPA itself.
However, the Court held that the 2015 amendment did not undermine the consumer privacy interest that the TCPA seeks to uphold. Consequently, the Court preferred “surgical severance” of the amendment over “wholesale destruction” of the TCPA. As Justice Gorsuch’s dissent observed, severing the exemption merely subjects calls relating to government-backed debt to the very same TCPA restrictions from which the AAPC sought liberation. In other words, Barr used the First Amendment to ban even more speech implementing an equal protection approach. Justice Gorsuch’s dissent noted the inherent problem with this analysis:
Nor does the analogy to [the] equal protection doctrine solve the problem. That doctrine promises equality of treatment, whatever that treatment may be. The First Amendment isn’t so neutral. It pushes, always, in one direction: against governmental restrictions on speech. Yet, somehow in the name of vindicating the First Amendment, our remedial course today leads to the unlikely result that not a single person will be allowed to speak more freely and, instead, more speech will be banned.
It bears repeating—Barr is not a TCPA case in the true sense. It is instead a case that carves out on an entirely new approach to considering First Amendment challenges and concludes that imposition of the same restrictions on speech on everyone resolves the question. The result then the hollowest of victories—the challenging party succeeds but receives no relief at all. This begs the question posited by the dissent: “What is the point of fighting this long battle, through many years and all the way to the Supreme Court, if the prize for winning is no relief at all?”
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