The TCPA Lives to See Another Day as the Supreme Court Severs the Government-Debt Exception

Business Litigation Update

Date: July 08, 2020

Introduction

On July 6, 2020, the U.S. Supreme Court issued a decision in Barr v. American Association of Political Consultants concerning the constitutionality of the Telephone Consumer Protection Act (TCPA), which generally restricts robocalls to cell phones. In 2015, Congress added an exception to the TCPA that allowed the government to make robocalls when collecting its debts (the ‘government‑debt exception’). In Barr, the Supreme Court held that the government-debt exception was an unconstitutional content-based restriction on speech that violated the First Amendment. However, rather than striking down the entire TCPA (as many industry participants had hoped), the Court cured the constitutional violation by severing the government-debt collection exception from the TCPA, leaving the statute (and the litigation boom that it has created) intact.

Factual Background

The plaintiffs in Barr sought to make political robocalls to members of the public in violation of the TCPA. As a result, the plaintiffs filed suit against the U.S. attorney general and the Federal Communications Commission in the U.S. District Court for the Eastern District of North Carolina, claiming the government-debt exception constituted a content-based restriction on speech in violation of the First Amendment. The plaintiffs asked the Court to invalidate not just the government-debt exception but the entire TCPA. The district court held that the government-debt exception was a content-based restriction that triggered strict scrutiny but concluded that it survived strict scrutiny because the government had a compelling interest in collecting its debt.

On appeal, the U.S. Court of Appeals for the Fourth Circuit held that the government-debt exception could not withstand strict scrutiny, but “cured” the constitutional violation by severing the government-debt exception from the TCPA.

The Plurality Decision

Justice Kavanaugh, writing for a plurality in which Chief Justice Roberts and Justices Alito and Thomas joined, announced that six members of the Court concluded that by permitting robocalls for government debt collection, Congress had impermissibly favored government debt‑collection speech over other speech in violation of the First Amendment. The Plurality Decision began by finding that the government-debt exception was a content-based restriction warranting strict scrutiny. It reasoned that the statute drew distinctions based on the message speakers conveyed, because a robocall stating “Please pay your government debt” was legal but a robocall stating “Please donate to our political campaign” was not. The Plurality Decision then found that the government-debt exception could not survive strict scrutiny because even the government conceded that there was insufficient justification to differentiate between government debt collection and other important categories of speech.

Nonetheless, like the Fourth Circuit, the Plurality Decision concluded that the government-debt exception was severable from the TCPA. It first reasoned that the 1934 Communications Act, upon which the TCPA is based, contained an express severability clause stating that Congress intended that any violative provision be severed. Further, even if the severability clause did not apply to the TCPA, the Plurality Decision noted that where a statute lacks guidance on severability, courts have historically presumed that unconstitutional provisions in a statute can be severed to leave the remainder of the law intact. Given that the TCPA operated constitutionally and independently for decades before the addition of the government-debt exception, the Plurality Decision found that the government-debt exception was severable, striking the exception but preserving the remaining provisions of the TCPA.

Justice Sotomayor’s Concurring Opinion

Justice Sotomayor concurred with the outcome of the plurality’s decision but disagreed with the use of strict scrutiny. In Justice Sotomayor’s view, strict scrutiny did not apply to all content-based distinctions, and in this case, the Court should have applied intermediate scrutiny because the government-debt exception was a regulation of commercial speech. That said, because the government‑debt exception could not even survive intermediate scrutiny—as the government could have employed far less restrictive means to further its interest in collecting debts—Justice Sotomayor agreed with the plurality that the government-debt exception violated the First Amendment and should be severed.

Justice Breyer’s Opinion Concurring in Part and Dissenting in Part

Justice Breyer, with whom Justices Ginsburg and Kagan joined, concluded that because that the government-debt exception restricted commercial speech, intermediate scrutiny should have applied, and that the government‑debt exception passed muster because it was narrowly tailored to achieve the goal of protecting the public’s finances. Nonetheless, Justices Breyer, Ginsburg, and Kagan agreed that the government-debt exception was severable and agreed that the remainder of the TCPA should survive.

Justice Gorsuch’s Opinion Concurring in Part and Dissenting in Part

Justice Gorsuch, with whom Justice Thomas joined, agreed that the government-debt exception violates the First Amendment, but wrote in dissent concluding that the Court should have afforded equal protection under the First Amendment by striking down the TCPA in its entirety.

Conclusion

Although companies can no longer use an automatic telephone dialing system (ATDS) to collect government debts without the prior express consent of the called party, the decision in Barr left the remainder of the TCPA intact. Other TCPA cases challenging the constitutionality of different provisions of the TCPA (such as the definition of an ATDS) are making their way through the courts. Unless and until the Supreme Court accepts those cases and issues a decision, companies should ensure that they have the requisite prior express consent of the called party when using an ATDS to place calls or send text messages.

FOR MORE INFORMATION

For more information, please contact:

Scott A. King
937.443.6560
Scott.King@ThompsonHine.com

Jessica E. Salisbury-Copper
937.443.6854
Jessica.Salisbury-Copper@ThompsonHine.com

Richard A. Freshwater
216.566.5764
Richard.Freshwater@ThompsonHine.com

Doori Song
216.566.5648
Doori.Song@ThompsonHine.com

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