Can’t Win For Losing: Supreme Court Strikes Down Only TCPA’s Debt-Collection Exception

Fox Rothschild LLP

Fox Rothschild LLP

Handing challengers a win but not their sought-after remedy, a fragmented U.S. Supreme Court refused to strike down the Telephone Consumer Protection Act (TCPA), a federal law that broadly prohibits so-called “robocalls,” opting instead to invalidate only a portion of the law on First Amendment grounds while allowing the rest to remain in effect.

In its July 6, 2020 decision in Barr v. American Ass’n of Political Consultants, the Court struck down only the TCPA’s debt-collection exception, finding that it could be severed from the statute without ending the law’s ban on the use of automatic telephone dialing systems (ATDS) to make robocalls and text messages to cell phones.

The TCPA was enacted by Congress in 1991 to combat the perceived “scourge” of unwanted robocalls to consumers. It generally prohibits either calls or text messages to cell phones without the prior express consent of the recipient and carries the threat of monetary penalties of up to $1,500 for each wrongful call or text.

In 2015, Congress added an exception to the prohibition for calls or texts “made solely to collect a debt owed to or guaranteed by the United States” such as delinquent mortgages or student loans.

In a closely watched decision, a group of political and nonprofit organizations challenged this exception on First Amendment grounds, alleging that it impermissibly favored one type of speech over others and could not withstand “strict scrutiny.” The Fourth Circuit Court of Appeals agreed with the challengers, yet held that the appropriate remedy was to sever the debt-collection exception rather than throw out the TCPA completely.

The Supreme Court has now rejected the position of the challengers and numerous business groups that the TCPA itself is constitutionally invalid and adopted the reasoning of the Fourth Circuit. Despite numerous partial concurrences and dissents, six of the nine members of the Court agreed that the debt-collection exception impermissibly favored debt-collection speech over political and other types of speech, while seven agreed that the appropriate remedy was to sever the debt-collection exception from the rest of the TCPA, allowing its broad restrictions against unwanted calls and texts to continue.

Although the opinion by Justice Brett Kavanaugh announcing the judgment of the Court includes extensive discussions of both First Amendment and severability jurisprudence, it is easy to see that the Court’s decision was driven by practical realities as much as legal niceties. Indeed, as the beginning of the opinion recognizes: “Americans passionately disagree about many things. But they are largely united in their disdain for robocalls.”

The decision in Barr likely puts to rest any further wholesale challenges to the validity of the TCPA, although major battles such as what constitutes an ATDS continue to be fought. The ultimate irony is that the groups challenging the debt-collection exception were correct in arguing that it offended the First Amendment, but only ended up with more, not less, restriction on speech. Thus, it continues to be incumbent upon Congress to make any meaningful reforms to the TCPA.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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