Colorado District Court Holds Retroactive Application of Supreme Court’s TCPA Severance Violates Ex Post Facto Clause and Due Process

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Joining the growing ranks of numerous district court opinions analyzing the effect of the Supreme Court’s 2020 severance of the Telephone Consumer Protection Act’s (TCPA) government-debt exception, a district court in Colorado has reasoned that the severance operates retroactively, while also recognizing the severe constitutional problems raised by that conclusion. The result is a holding that essentially says the severance both is and is not retroactive.

In July 2020, the Supreme Court held that a 2015 amendment to the TCPA’s robocall restriction exempting calls made to collect government-backed debts transformed the provision into an unconstitutional content-based speech restriction. Barr v. American Association of Political Consultants, Inc., 140 S. Ct. 2335, 2347 (2020) (AAPC) (In short, the robocall restriction with the government-debt exception is content-based.). Instead of striking the entire robocall restriction from the books, however, a plurality of the Court elected to sever the government-debt exception from the rest of the statute, thus broadening the restriction to once again encompass practically all robocalls and eliminate the exemption for government-debt calls. In doing so, the Court did not rule on whether the severance would (or could) operate retroactively to affect liability for calls made between 2015 and 2020 because the plaintiffs in AAPC sought only prospective relief. In footnote dicta joined by only two other justices, Justice Kavanaugh suggested paradoxically that the severance both is and isn’t retroactive: Government-debt callers should not be held liable for calls made prior to the severance, but nongovernment-debt callers can be held liable for calls made during that same period. Id. at 2355 n.12. Justice Gorsuch, in partial dissent, noted this suggestion would perpetuate the same unconstitutional content-based discrimination for 2015-2020 calls that the severance was supposed to cure in the first place. Id. at 2366. Since the question of retroactivity was not at issue in the case, however, no binding answer was given.

Since AAPC, several district courts have weighed in on whether the severance operates retroactively, reaching varied conclusions. Compare Creasy v. Charter Comm’cns, Inc., 489 F. Supp. 3d 499 (E.D. La. 2020) (holding the severance can only cure the statute’s unconstitutionality prospectively), with Shen v. Tricolor Cal. Auto Grp., LLC, No. 20-cv-7419 (C.D. Cal. Dec. 17, 2020) (holding the severance is retroactive). Nearly all of these decisions, however, have focused on whether the unconstitutional version of the statute in place between 2015 and 2020 can be enforced against nongovernment-debt calls made during that time. The only case to take up the question of whether the severance operates retroactively to render illegal government-debt calls made during a time when they were expressly permitted by the statute shockingly came to the conclusion that (1) the severance was retroactive, (2) government-debt callers can be liable for calls made while the exception allowing them was still on the books, and (3) this does not violate due process. Franklin v. Navient, Inc., No. 1:17-cv-1640, 2021 U.S. Dist. LEXIS 74265 (D. De. April 19, 2021).

Onto this scene enters Mehaffey v. Navient Solutions, LLC, 19-cv-00197, 2021 U.S. Dist. LEXIS 113384 (D. Colo. June 17, 2021), which also examined the question of the severance’s effect on government-debt collection calls made while the law permitted such calls. The court first concluded, after brief analysis, that the severance operates retroactively. The court’s conclusion on this point was based on its reasoning that “because the [Supreme] Court found the government debt exception unconstitutional, it is as if that exception had never existed at all” — despite clear language in AAPC’s holding that the entire robocall provision was unconstitutional while the government-debt exception was in force, and not merely the exception. Id. at *8–9. But see AAPC, 140 S. Ct. at 2347.

Once the court accepted the argument that the severance renders the government-debt exception alone null and void from the start, it ran into a difficult problem: whether to apply the TCPA’s severe penalties to a defendant who made calls expressly permitted by law at the time they were made. Unlike the Delaware District Court in Franklin, which found that the same defendant could be liable for government-debt calls made prior to AAPC and which largely discarded due process concerns because the defendant did not develop the argument, the Mehaffey court took a much closer look at whether the retroactive application of the TCPA’s severe statutory penalties against callers who were permitted to make calls at the time they made them raises its own constitutional problems. After extensive analysis, the court concluded that the TCPA’s statutory damages provisions — both the treble damages available for willful violations and the $500 per violation available for negligent violations — are punitive in nature, and thus retroactive application would violate the Constitution’s ex post facto clause. Mehaffey, 2021 U.S. Dist. LEXIS 113384 at *11–14. Accordingly, the court held that the defendant could not be held liable for robocalls made while those calls were permitted by law.

The disparate reasoning and results reached in Mehaffey and Franklin exemplify the confusion that has sprung up regarding the retroactive effect of the AAPC severance. One thing is clear: Mehaffey‘s holding, which concludes both that the severance is retroactive and yet that it cannot be applied retroactively against government-debt callers, further highlights why retroactive application of the AAPC severance only perpetuates the underlying First Amendment problem of exempting some calls and penalizing others based on their content alone. Mehaffey underscores the critical warning of Justice Gorsuch’s AAPC dissent: “A holding that shields only government-debt collection callers from past liability under an admittedly unconstitutional law would wind up endorsing the very same kind of content discrimination we say we are seeking to eliminate.” AAPC, 140 S. Ct. at 2366.

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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