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SCOTUS Strikes Down Debt Exemption, Upholds TCPA as a Whole

A statue in front of the United States Supreme Court

Mon, 07/06/2020 - 11:37

This is the way Barr v. AAPC ends
This is the way Barr v. AAPC ends
This is the way Barr v. AAPC ends
Not with a bang but with a whimper.

After all the legal wrangling and parsing of oral arguments, the Supreme Court handed down a decision today in a case that had the potential of invalidating the Telephone Consumer Protection Act (TCPA) as a whole. Instead, the Court opted to affirm the Fourth Circuit's ruling and sever the unconstitutional exemption on government-backed debt rather than ruling the entire TCPA to be unconstitutional.

As a refresher on the case, let’s begin with the fact that the TCPA, as originally enacted in 1991, contained two statutory exemptions to its ban on autodialed calls: one for calls made for “emergency purposes” and one for calls made with “the prior express consent of the called party.” In 2015, Congress added a third exemption for calls “made solely to collect a debt owed to or guaranteed by the United States.”

In May 2016, the American Association of Political Consultants (AAPC), a group representing political and polling organizations, filed suit (American Association of Political Consultants, Inc., et al v. FCC) against the Federal Communications Commission (FCC) over this new exemption. The AAPC challenged it on First Amendment grounds, alleging that it creates a content-based restriction on speech.

The plaintiffs argued, because content-based laws must satisfy the strict scrutiny test of the First Amendment, that the TCPA ban on the use of automatic telephone dialing systems (ATDS) to make phone calls to cellphones without prior consent was an unlawful content-based restriction on free speech. They reasoned that the debt collection exemption created a rule that unconstitutionally favored a select group.

In April 2019, the case came before the Fourth Circuit on appeal. The court ruled that the debt-collection exemption does not pass strict scrutiny and, therefore, violates the First Amendment because it caused the statute to unconstitutionally discriminate against other forms of speech which did not enjoy the same exemption. However, rather than invalidating the statute as a whole, Instead, the Court severed “the flawed exemption” from the TCPA, holding that the TCPA had operated successfully for 24 years without the exemption

The case reached the Supreme Court as William P. Barr, Attornery General, et al. v. American Association of Political Consultants, Inc., et al. Oral arguments were heard—ironically, over the phone, due to the coronavirus pandemic—in May of this year. Expert analysts observed that it was hard to gauge how the Court would rule based on the comments and questions of the justices during those arguments. However, in retrospect, two themes would foreshadow the eventual ruling: a general consensus among the justices that the debt exemption would not stand strict scrutiny and an overall affinity for the TCPA as a popular and effective law.

Perhaps reflecting the muddled oral arguments, the specifics of the decision are somewhat jumbled. With six of the other justices either joining or concurring, as a whole or in part, Justice Brett Kavanuagh writes, “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.” It is interesting to note that Justices Breyer, Kagan, and Ginsburg did not even find the debt exemption to be unconstitutional but still concurred with the opinion regarding severability. Justices Gorsuch and Thomas were the only members of the court to oppose severing the debt exemption.

So the eventual result is that the TCPA survives and the debt exemption doesn’t—essentially, everything remains as it has since the Fourth Circuit’s ruling last April. One can argue for or against this as a good or correct ruling, but the practical consequence is a strong affirmation of the status quo.