Supreme Court Strikes Down Government-debt Exception to TCPA Ban on Autodialed and Prerecorded Calls to Cell Phones
The U.S. Supreme Court issued its ruling in Barr v. American Association of Political Consultants, Inc., affirming the U.S. Court of Appeals for the 4th Circuit's holding that the "government-debt" exception to the Telephone Consumer Protection Act's (TCPA) prohibition on autodialed and prerecorded calls to cell phones violates the First Amendment and should be severed from the statute. The decision affirms the return of the TCPA's autodialed call ban to its pre-2015 state, before Congress added the government-debt exception as part of that year's Bipartisan Budget Act.
Enacted in 1991 as primarily a consumer-privacy statute, and implemented by regulations issued by the Federal Communications Commission (FCC), the TCPA protects against telephonic intrusions. The Act and its implementing rules principally regulate two areas – the use of automatic telephone dialing systems (ATDS) and placement of telemarketing and telephone solicitation calls (though it also governs unsolicited fax ads).
Among other things, the statute and the FCC's rules contain essentially identical bans against initiating or making "any call (other than … for emergency purposes or … with the prior express consent of the called party) using an automatic telephone dialing system or an artificial or prerecorded voice … to any telephone number assigned to a … cellular telephone service … or other radio common carrier service, or any service for which the called party is charged for the call." For these purposes, text messages are "calls" under the TCPA.
Over time, the FCC adopted different rules for determining whether there is "prior express consent" based on whether an autodialed and/or prerecorded call is for marketing or non-marketing purposes. It also has created various exceptions or allowances, such as for autodialed/prerecorded calls made for debt collection generally, for healthcare or exigent financial services purposes, and for text-message opt-out confirmations, among others. The statute and rules also have similar restrictions and requirements for prerecorded calls to residential lines, though the FCC has exempted certain calls, including those made for noncommercial purposes and those for commercial purposes that do not involve marketing.
As part of the Bipartisan Budget Act of 2015, Congress amended the TCPA to exempt from the prohibition on autodialed/prerecorded calls those calls made for the purpose of collecting debts owed to or guaranteed by the federal government. The FCC in turn adopted regulations implementing this exemption.
In 2016, AAPC and three other groups that regularly engage in political activities, including calling consumers' cell phones to discuss candidates and issues, solicit donations, conduct polls, and get out the vote, challenged the TCPA's automated dialing provisions in federal district court in North Carolina, contending that the government-debt exemption violates the First Amendment by transforming the statute into a content-based regulation of speech. (Plaintiffs also originally targeted certain FCC-created exceptions and allowances, but abandoned the claims after the government asserted they were barred by the Hobbs Act, a federal statute under which FCC rules and decisions can be challenged only within a limited period after they are finally adopted, on direct appeal to a federal court of appeals.)
The district court agreed the statute was content-based, and thus subject to strict scrutiny, but held it withstood First Amendment review by being narrowly tailored so as to not subvert the privacy interests furthered by the TCPA's ban on autodialed/prerecorded calls. The district court also found that less restrictive alternatives, such as time-of-day limitations, caller ID disclosure, and/or do-not-call rules (all of which are found in FCC telemarketing regulations) would not further TCPA privacy interests, or were otherwise implausible. It thus held the statute passed constitutional muster.
On appeal in April 2019, the 4th Circuit reversed, finding that the government-debt exception was a content-based restriction on speech that failed to survive strict scrutiny. But unlike the district court, the 4th Circuit held that, even accepting that the law targets compelling governmental interests in protecting personal and residential privacy, the statute as amended was fatally under-inclusive.
Unlike exceptions for calls made with prior consent or for emergency purposes, which the court viewed as consistent with or at least not undermining privacy goals, the 4th Circuit determined unwanted calls to collect government-held or -guaranteed debts are disruptive and invasive of personal privacy. As such, it held the government-debt exemption created an unconstitutional content-based restriction on speech in violation of the First Amendment.
But rather than completely striking down the TCPA's autodialer/prerecorded-call restriction, the appellate court severed the more recently enacted government-debt exception from the rest of the TCPA, leaving intact the automated call restrictions and the TCPA's applicability to callers like AAPC. The government then petitioned the U.S. Supreme Court to review the 4th Circuit's finding that the government-debt exception was unconstitutional, and AAPC supported grant of the petition, contending that merely striking down the exception was insufficient to remedy the TCPA's constitutional defects. The Court accepted the case, and heard it in May among the initial wave of first-ever oral arguments to be held remotely and live-streamed due to the coronavirus.
The Supreme Court affirmed the 4th Circuit's judgment through a plurality decision in which six Justices concluded Congress impermissibly favored speech for government debt-collection over political and other speech in violation of the First Amendment, with seven Justices agreeing that, rather than invalidating the entire automated call restriction, the unconstitutional exception should be severed from the remainder of the statute. Justice Kavanaugh announced the judgment of the Court, in a plurality decision on the constitutional issue, which the Chief Justice and Justices Alito and Thomas joined.
Justice Kavanaugh's opinion readily found that the government-debt exception is content-based and subject to strict First Amendment scrutiny under reasoning fitting "comfortably within existing First Amendment precedent," including the Court's 2015 decision in Reed v. Town of Gilbert. Rejecting the government's assertion that the government-debt exception draws constitutionally permissible distinctions based on speaker or economic activity, rather than on call content, the plurality decision explained that:
[T]he legality of a robocall turns on whether it is "made solely to collect a debt owed to or guaranteed by the United States." 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.
With Justice Gorsuch's partial concurrence also finding the government-debt exception content-based and subject to strict scrutiny, and the government conceding that, if strict scrutiny applied, the exception violated the First Amendment, the provision's constitutional fate was sealed. Justice Sotomayor's partial concurrence, which disagreed that the government-debt exception was subject to strict scrutiny, but opined that it could not survive even intermediate scrutiny, only added to this. Justice Breyer, joined by Justices Kagan and Ginsburg, dissented as to the exception's constitutionality, and suggested the Court should not reflexively apply its rules for determining whether laws regulate based on content and thus must face strict scrutiny.
The Court then turned to the somewhat trickier issue of whether to invalidate the TCPA's entire autodialed call ban, or to instead invalidate and sever only the government-debt exception. Justice Kavanaugh's opinion addressed the historical precedents and analytical grounds for severance, ultimately drawing the votes of seven Justices, with only Justice Gorsuch issuing a partial dissent, with which Justice Thomas agreed, concluding that severance was not the appropriate resolution.
The majority in favor of severance rejected as a basis for invalidating the entirety of the TCPA's autodialed call ban AAPC's assertion that the government's interest for imposing the ban—consumer privacy—was undermined by Congress's willingness to permit robocalls to collect government-backed debt. Consumer privacy was still important, the Court explained, given the otherwise broad robocall restrictions that Congress had retained.
Moreover, the Court held, anything more than severance of the government-debt exception would run counter to "the Court's presumption of severability," because: (i) the larger Communication Act of 1934, of which the TCPA is a part, contains a severability clause; and (ii) the remaining autodialer call restrictions could function independent of the government-debt exception, just as it had from 1991 until the government debt-exception's addition in 2015.
Justice Gorsuch's partial dissent on the remedy issue favored an injunction preventing enforcement of the TCPA against the AAPC plaintiffs instead of severance, "but no further." In Justice Gorsuch's view, Congress's basis for originally implementing the autodialed call ban in 1991—consumer privacy—was no longer as sound as it was in 1991, as cell phone users no longer pay on a per-call basis, the industry has implemented numerous call blocking and call screening tools, and Congress itself moved to undermine consumer privacy by permitting government-debt robocalls.
With the Supreme Court's ruling, the state of affairs remains the same as it was under the 4th Circuit's year-old decision, and effectively returns the TCPA's automated call restriction to its pre-2015 existence without the allowance for autodialed or prerecorded calls to collect government-held or -guaranteed debts without prior express consent.