Key Points

  • The Sixth Circuit recently issued a significant ruling in a closely watched TCPA proceeding.
  • The Sixth Circuit ruled that the TCPA's automated call provisions could be enforced against businesses in connection with calls made between 2015 and July 2020 notwithstanding the Supreme Court's decision in Barr v. American Association of Political Consultants, Inc., 140 S. Ct. 2335 (2020). In Barr, the Supreme Court held that the government debt exception to the automated call provisions (added in 2015) created an unconstitutional content-based restriction on speech.
  • This is the first circuit-level decision addressing the implications of the Supreme Court's ruling in Barr.
  • Businesses should be mindful that the TCPA's automated call provisions can still be enforced against them in connection with calls made during that time period (subject to the four-year statute of limitations).

The Telephone Consumer Protection Act (TCPA) has been the subject of two significant Supreme Court decisions over the past 18 months. Recent focus has understandably been on the decision in Facebook, Inc. v. Duguid,1 which resolved the deep circuit split over the definition of an automatic telephone dialing system, or ATDS, under the TCPA. That decision, which unanimously rejected the Ninth Circuit's broad interpretation of the statute, was an important step in realigning the TCPA with its intended purpose. The Court's definitive holding - that an ATDS "must have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator"2 - has already been relied on by several courts in dismissing and granting summary judgment on ATDS-based claims since the decision came down on April 1, 2021. 

There has been less focus on the Court's earlier decision in Barr v. American Association of Political Consultants, Inc. (Barr),3 which struck the government-debt exception to the automated technology provision as an impermissible content-based speech restriction. The Court's multiple opinions left uncertain whether the automated technology provision (with the impermissible exception stricken) could be enforced retroactively during the time period that it was unconstitutional. On September 9, 2021, the Sixth Circuit addressed this open question with its decision in Lindenbaum v. Realgy, LLC,4 becoming the first appellate court to rule on the scope and retroactive applicability of the Court's decision. Reversing the district court, the Sixth Circuit held that Barr's prospective remedy did not cause the key statutory restriction to be unenforceable during the time it contained an unconstitutional content-based speech restriction. This decision perpetuates the statute's impermissible content-based restriction that the Court intended to eliminate.

The Court in Barr, in affirming the Fourth Circuit, held that the government-debt exception to the automated technology restriction in the TCPA, which had been added by amendment in connection with the Bipartisan Budget Act in 2015, was an impermissible content-based restriction on speech in violation of the First Amendment.5 While the Court's ruling in Barr was fractured, with multiple concurrences and dissents, a majority of the Court - six Justices (Justices Alito, Gorsuch, Kavanaugh, Roberts, Sotomayor, and Thomas) - agreed that Section 227(b)(1)(A)(iii), as it existed from 2015 to July 2020, was unconstitutional.6 To address this constitutional infirmity, the Court severed the government-debt exception: "[T]he entire 1991 robocall restriction should not be invalidated, but rather [] the 2015 government-debt exception must be invalidated and severed from the remainder of the statute."7  

Despite finding Section 227(b)(1)(A)(iii) unconstitutional as it existed from 2015 to 2020, the Court was not asked to and consequently did not address the retroactive application of its decision in connection with calls made during that period. Instead, the Court granted certiorari only to address two forward-looking questions: "[1] Whether the government-debt exception to the TCPA's automated-call restriction violates the First Amendment, and [2] whether the proper remedy for any constitutional violation is to sever the exception from the remainder of the statute."8 Thus, the Court decided how Section 227(b)(1)(A)(iii) should be enforced going forward, and not whether the statute was enforceable against past violators. 

Two summers have elapsed since Barr was decided without appellate guidance as to the decision's retroactive scope. The Barr ruling made clear that the TCPA's provision concerning automated calls to cellphones could be applied, post-severance, to all future callers. Indeed, the plaintiff-respondent in Barr sought only prospective declaratory relief, and the relief granted was prospective only. And, by severing the government-debt exception from Section 227(b)(1)(A)(iii), the Court rendered the statute constitutional going forward. But as noted, the Court left lingering the question of whether that same provision could be enforced in connection with calls made pre-severance, when the unconstitutional, content-based restriction on speech was still in place. In other words, can a rehabilitated statute now be used to retroactively punish a group of speakers, even though at the time of the speech, the law unconstitutionally discriminated against that very group? Last week, in a decision already decried for its far-reaching free-speech implications, the Sixth Circuit answered yes. 

Post-Barr, three district courts ruled otherwise and refused to hear claims for violation of Section 227(b)(1)(A)(iii) arising between 2015 and July 2020. These courts, including the Northern District of Ohio in Lindenbaum, dismissed the claims, having found they lacked subject matter jurisdiction to enforce alleged violations of the statute while it was unconstitutional.9 In Lindenbaum, for example, the plaintiff challenged calls allegedly made in late 2019 and early 2020. After a rigorous analysis, the district court dismissed the plaintiff's claims because the Court's severance remedy in Barr, which was tailored to the prospective relief before it on certiorari, did not remedy the harm to parties who spoke while the TCPA's unconstitutional prohibitions were in place.10 Confronted with the retroactive application of Section 227(b)(1)(A)(iii), the district court explained that "[a] forward-looking fix offers no remedy for this past wrong."11 The district court then dismissed the plaintiff's claims for lack of subject matter jurisdiction: "The Court cannot wave a magic wand and make that constitutional violation disappear. Because the statute at issue was unconstitutional at the time of the alleged violations, this Court lacks jurisdiction over this matter."12 The district court's ruling was consistent with civil and criminal precedent providing that a court does not have jurisdiction to hear a claim for the violation of an unconstitutional law.13

The plaintiff appealed. The appeal elicited considerable interest not only in connection with the TCPA, but also with regard to its broader free speech implications. The United States of America intervened in the appeal; the Public Citizen Foundation, National Consumer Law Center, and Electronic Privacy Information Center, among others, provided amici support for plaintiff-appellant; and the American Civil Liberties Union, U.S. Chamber of Commerce, ACA International, and Credit Union National Association, Inc., among others, provided amici support for defendants-appellees. Leading TCPA experts addressed the briefing and shared takeaways on the July 29, 2021 oral argument.14 There was even an (unsuccessful) attempt to compel the recusal of one of the judges on the panel. The motion focused on the fact that Judge Stranch's husband and children are attorneys at a small firm, which Judge Stranch's father had founded and at which she had practiced, that has pending TCPA cases for which an affirmance would be dispositive.15  

The Sixth Circuit's ruling came down on September 9, 2021. Judge Bush, writing for the court, began his opinion by quoting Marbury v. Madison: "Courts do not rewrite, amend, or strike down statutes. We only 'say what the law is.'"16 The Sixth Circuit explained that severance in Barr was an interpretation, not "a legislative act" or a "remedy" that could "operate prospectively only."17 On this basis, the Sixth Circuit squarely rejected the district court's analysis, holding: 

To sum up, the district court erred in concluding that, in [Barr], the Supreme Court offered 'a remedy in the form of eliminating the content-based restriction' from the TCPA. Instead, the Court recognized only that the Constitution had 'automatically displace[d]' the government-debt-collector exception from the start, then interpreted what the statute has always meant in its absence. That legal determination applies retroactively.16  

Notably, the Sixth Circuit brushed off the First Amendment concerns without analysis of precedent that support the conclusion that the automated technology restriction cannot be enforced during the time period that was constitutionally infirm. It merely explained, in less than a page of its opinion, that the situation "does not create a First Amendment problem."19 The Sixth Circuit also cited dictum in Justice Kavanaugh's plurality opinion20 - which the district court had recognized as "passing Supreme Court dicta of no precedential force."21 And the Sixth Circuit did not address the fact that, one week prior to Barr, the same plurality of Justices expressed the understanding that severance does not retroactively remedy a statute's past unconstitutional application. Specifically, in Seila Law LLC v. CFPB,22  Justices Kavanaugh, Alito, and Roberts concluded that severing a portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act that unconstitutionally "insulate[d] the agency's Director from removal" nullified the director's past actions unless they were subsequently ratified.23 Thus, in joining in the decision to sever the government debt exception, these Justices understood that declaring Section 227(b)(1)(A)(iii) unconstitutional would nullify past unadjudicated claims that accrued before the constitutional infirmity was cured through severance.

The Sixth Circuit has not been a hotbed for TCPA filings. While this issue might very well be decided differently by courts outside of this circuit, there is no current case where the issue has been squarely presented to an appellate court for further consideration. Under well-established precedent the continued First Amendment problem with enforcing a speech restriction based on the content of the message should render the statutory provision unenforceable between 2015 and July 2020. Otherwise, the favored group - government debt collectors - will continue to be treated differently going forward. As recognized by Justice Kavanaugh (again in dictum), "no one should be penalized or held liable for making robocalls to collect government debt after the effective date of the 2015 government-debt exception."24 Indeed, the Sixth Circuit acknowledged that the enforcement of Section 227(b)(1)(A)(iii) as to calls placed by debt collectors between 2015 and July 2020 "will likely depend in part on whether the debt collector used robocalls to collect government debt or non-government debt."25 That distinction perpetuates the exact type of content-based restriction that the First Amendment bars. Yet, under the Sixth Circuit's holding, callers will only face liability for calls made between 2015 and July 2020 if their messaging did not involve government debt collection. Unfortunately, the Sixth Circuit did not meaningfully analyze this real concern.

In the meantime, the TCPA landscape continues to evolve with litigants teeing up an array of issues in the courts and before the Federal Communications Commission. In addition, there is already a constitutional challenge to the as-amended Florida Telephone Solicitation Act (FTSA) - a "Mini-TCPA," effective July 1, 2021, that was enacted as a direct rebuke of the Duguid ATDS ruling - pending before the Southern District of Florida.26 There are also other potential challenges to the Florida law that will likely be taken up in connection with other FTSA cases.

Footnotes

1. 141 S. Ct. 1163 (2021).

2. Id. at 1167.

3. 140 S. Ct. 2335 (2020) (plurality opinion).

4. No. 20-4252, 2021 WL 4097320 (6th Cir. Sept. 9, 2021) (publication forthcoming) (Lindenbaum II).

5. Id. at 2343-44.

6. Id.

7. Id.

8. Question Presented Report, Barr, No. 19-631, https://www.supremecourt.gov/docket/docketfiles/html/qp/19-00631qp.pdf.

9. See Hussain v. Sullivan Buick-Cadillac-GMC Truck, Inc., 506 F. Supp. 3d 1242 (M.D. Fla. 2020); Lindenbaum v. Realgy, LLC, 497 F. Supp. 3d 290 (N.D. Ohio 2020) (Lindenbaum I), rev'd, No. 20-4252, 2021 WL 4097320 (6th Cir. Sept. 9, 2021); Creasy v. Charter Commc'ns, Inc., 489 F. Supp. 3d 499 (E.D. La. 2020).

10. Lindenbaum I, 497 F. Supp. 3d at 292-99.

11. Id. at 297.

12. Id. at 298-99.

13. Id. (citing Grayned v. City of Rockford, 408 U.S. 104, 107 n.2 (1972)).

14. See, e.g., Eric J. Troutman, Oral Argument Held in Lindenbaum: Free Speech Hangs in the TCPA Balance (Again), NAT'L L. REV. (July 30, 2021), https://www.natlawreview.com/article/oral-argument-held-lindenbaum-free-speech-hangs-tcpa-balance-again.

15. Appellee's Mot. Seeking Recusal at 3-4, Lindenbaum v. Realgy, LLC, No. 20-4252 (6th Cir. Aug. 17, 2021), ECF No. 78-1.

16. Lindenbaum II, 2021 WL 4097320, at *1 (quoting Marbury v. Madison, 5 U.S. 137, 177 (1803)).

17. Id. at *3.

18. Id. at *4 (citations omitted).

19. Id. 

20. See id. at *1.

21. Lindenbaum I, 497 F. Supp. 3d at 296 (quoting Creasy, 489 F. Supp. 3d at 503).

22. 140 S. Ct. 2183 (2020).

23. See id. at 2207-11.

24. Barr, 140 S. Ct. at 2355 n.12.

25. Lindenbaum II, 2021 WL 4097320, at *4.

26. See Mot. to Dismiss Class Action Compl. at 1-2, Borges v. SmileDirectClub, LLC, No. 21-23011 (S.D. Fla. Aug. 18, 2021), ECF No. 4.

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