In late September, the United States District Court for the Eastern District of Louisiana issued a first of its kind ruling regarding the Telephone Consumer Privacy Act (“TCPA”). The court held that TCPA provision, 47 U.S.C. § 227(b)(1)(A)(iii) – which prohibits calls (and messages) made using an Automatic Telephone Dialing Systems (“ATDS”)to any cellular telephone number – is unenforceable retroactively for the 5-year period between November 2015, when Congress amended the TCPA to include an exemption for government-debt, until July 2020 when the U.S. Supreme Court ruled the government-debt exception was unconstitutional.
In July the Supreme Court held in Barr v. American Association of Political Consultants (“AAPC”) that Congress impermissibly favored government-debt collection speech over political and other speech, in violation of the First Amendment, and thus must invalidate the government-debt collection exception of the TCPA, and sever it from the remainder of the statute. Despite the potential that the Court would address the constitutionality of the TCPA in its entirety, the Court left untouched the TCPA’s general restriction on calls made with an “automatic telephone dialing system” (“ATDS”).
In response to the Supreme Court’s ruling, the federal court in Louisiana emphasized that,
“Congress’s 2015 enactment of the government-debt exception rendered § 227(b)(1)(A)(iii) an unconstitutional content-based restriction on speech. In the years preceding Congress’s addition of the exception, § 227(b)(1)(A)(iii) did not discriminate on the content of robocalls, and was, as the Supreme Court has observed, a constitutional time-place-manner restriction on speech. Likewise, now that [American Association of Political Consultants] has done away with the offending exception, § 227(b)(1)(A)(iii) figures to remain good law in the years to come. However, in the years in which § 227(b)(1)(A)(iii) permitted robocalls of one category of content (government-debt collection) while prohibiting robocalls of all other categories of content, the entirety of the provision was, indeed, unconstitutional.
This groundbreaking Louisiana decision has already started a trend in court analysis of the issue. Only weeks later, a federal district court in Ohio issued a similar ruling granting defendant’s motion to dismiss in Lindenbaum v. Realgy Inc., in light of the retroactive impact of AAPC.
“The plaintiffs in AAPC sought the right to speak going forward on the grounds that the statute, as written, is an unconstitutional content-based restriction. The Supreme Court denied that relief, but offered a remedy in the form of eliminating the content based restriction. But, in our case, severance of the content-based restriction does not offer a “remedy” to correct past harm. Here, defendants do not seek the right to speak, having already done so. They seek the right to be free from punishment for speaking during a time when an unconstitutional content-based restriction existed. A forward-looking fix offers no remedy for this past wrong.
As many currently active TCPA cases involve calls/texts/faxes sent between November 2015 and July 2020, these rulings have the potential to have an immediate and significant impact on TCPA class action litigation. The rulings’ impact is heightened by the fact the courts dismissed each plaintiff’s claims on grounds that the court lacked subject matter jurisdiction as “federal courts lack authority to enforce unconstitutional laws.” A subject matter jurisdiction dismissal is available in all phases of litigation, and cannot be waived, increasing the number of cases that could potentially be impacted by the court’s ruling.
Notably, the Louisiana court acknowledged the likelihood of a circuit split arising from its ruling, but placed culpability for this on the Supreme Court’s decision in AAPC that lacked a “clear majority” – Justice Kavanaugh authored a plurality decision. “The court’s failure to unite behind a sufficiently agreeable rationale does a disservice to litigants and lower courts…Here, it has led the parties to wildly dissimilar understandings of AAPC’s legal effect — all in the utmost good faith and preparation. In the future, it may engender a circuit split which confronts the court anew.”
2020 has been an important year for TCPA developments, and 2021 is likely to be much of the same. Organizations are advised to review and update their telemarketing and/or automatic dialing practices to ensure TCPA compliance.