The United States Supreme Court has agreed to consider a challenge to the constitutionality of the Telephone Consumer Protection Act (TCPA). On Friday, January 10, 2020, the Supreme Court issued orders from the justices’ conference, which included an order for oral argument in Barr v. American Association of Political Consultants – a case involving a challenge to the TCPA’s special exemptions. In April, the Fourth Circuit struck down a provision of the TCPA that exempted government-backed debts from the statute’s prohibition on automated calls to cellular telephones. In its decision, the Fourth Circuit reasoned that the content-based restriction was unconstitutional. Now, the Supreme Court will chime in on the issue, which represents just one issue in a long line of TCPA questions headed to Washington.
The TCPA, in existence since 1991, regulates calls to telephones using an automatic telephone dialing system or an artificial or prerecorded voice. Historically, the TCPA has included two exclusions: one for calls made with the called party’s prior express consent and a second for calls made for emergency purposes. In 2015, Congress enacted a third exemption for calls “made solely to collect a debt owed to or guaranteed by the United States.”
The District Court’s Decision
In May 2016, a group of plaintiffs, including the American Association of Political Consultants, the Democratic Party of Oregon, Public Policy Polling, the Washington State Democratic Central Committee, and the Tea Party Forward PAC filed suit in the Eastern District of North Carolina to challenge the third exemption as a content-based restriction on speech that does not satisfy strict scrutiny. The plaintiffs contended that the debt collection exemption created a regime that unconstitutionally favored a select group and turned on the call’s content, in violation of the Constitution. For its part, the federal government contended that the exemption is not based on the content of the call, but on the existence of a special economic relationship with the federal government. Both the plaintiffs and the government filed motions for summary judgment. The District Court found in favor of the government, concluding that the exemption, though content-based, was Constitutional because it passed strict scrutiny.
The Fourth Circuit’s Reversal
The Fourth Circuit reversed. The panel first agreed with the District Court’s conclusion that the exemption was content-based, finding that “the relationship between the federal government and the debtor is only relevant to the subject matter of the call. In other words, the debt collection exemption applies to a phone call made to the debtor because the call is about the debt, not because of any relationship between the federal government and the debtor.” But the Fourth Circuit disagreed with the District Court on whether the exemption survived strict scrutiny for two reasons: First, the Fourth Circuit found that the exemption authorized “the intrusive calls that the [TCPA] was enacted to prohibit,” thereby subverting any privacy protections. Second, the exemption deviated “from the purpose of the automated call ban,” meaning that it was “an outlier among the other statutory exemptions.”
The court, however, stopped short of invalidating the TCPA entirely. Instead, it severed the federal government debt collection exemption, holding that the TCPA could still constitute a meaningful statute in the absence of this exemption. The Court reasoned that the TCPA operated successfully for 24 years without the exemption, which suggested that severing the exemption was a better outcome than a wholesale invalidation of the statute.
The government asked the Supreme Court to weigh in, filing a petition for a writ of certiorari on November 14, 2019. After reviewing the petition and the briefs, the justices voted to consider the constitutionality of the TCPA during their private conference on January 10, 2020. Oral argument has not yet been scheduled but will likely occur in April 2020.
Duguid v. Facebook
Although the Supreme Court’s decision to hear the Barr appeal is newsworthy in itself, it is not the only TCPA case that may be considered by the Supreme Court this term. On the heels of the Fourth Circuit’s decision in Barr, the Ninth Circuit issued a similar ruling in Duguid v. Facebook. There, the Ninth Circuit found that the federal government debt collection exemption is an impermissible content-based restriction. And, like the Fourth Circuit, the Ninth Circuit found that the appropriate remedy was to sever the provision, rather than invalidate the law as a whole.
Yet the issues in Facebook are broader than just the debt collection exemption, as Facebook has argued that the Ninth Circuit’s definition of an automatic telephone dialing system (ATDS) is far too broad. In defending itself in Duguid, Facebook argued that its equipment was not an autodialer because it stores numbers only to be called “reflexively” in response to “outside stimuli” such as a suspicious log-in. Facebook claimed its equipment does not “use a random or sequential number generator” and, thus, should not be considered an ATDS, despite Ninth Circuit jurisprudence.
According to Facebook, unless the Ninth Circuit narrows its interpretation of an ATDS, the TCPA would reach far more calls than it was intended to reach – echoing the same concerns the D.C. Circuit had years earlier. For example, Facebook noted that under the Ninth Circuit’s definition, all smartphones will be considered autodialers and any average consumer will violate the TCPA any time he or she sends an unsolicited text message. The Ninth Circuit rejected all of Facebook’s arguments, both by three-judge panel and again when Facebook requested en banc review.
Like the government, Facebook has petitioned the Supreme Court for review, but intends to ask the Court two separate questions: (1) whether the debt collection exemption passes strict scrutiny; and, more importantly for consumer-facing companies, (2) whether the TCPA’s definition of ATDS encompasses any device that can “store” and “automatically dial” telephone numbers, even if the device does not “us[e] a random or sequential number generator.” Should the Court choose to hear Facebook, the Court’s consideration of the ATDS question may resolve a split between the Ninth and Third Circuits.
Facebook attempted to have its petition reviewed during the same conference as Barr. The matter, however, is set for the justices’ private conference on January 24. The justices may decide to hear both cases, hear only Barr, or delay deciding whether to hear Facebook. Either way, the justices’ conference in two weeks will offer a crucial benchmark in the future of the TCPA.