Hot Topics In TCPA Litigation After Barr v. American Association of Political Consultants

July 13, 2020

Shay Dvoretzky and Jeffrey Johnson

The Telephone Consumer Protection Act (TCPA) is one of the most abused statutes in the United States Code.  Plaintiffs’ lawyers have leveraged uncapped statutory damages, relatively easy class certification, and widespread judicial uncertainty into massive settlements in nearly every sector of the economy.

Two issues have dominated recent litigation surrounding the TCPA: the constitutionality of the statute in light of its exemption for calls made to collect government-owned or government-backed debt, and the scope of its restriction on calls made from an “automatic telephone dialing system.” In Barr v. American Association of Political Consultants, the Supreme Court (largely) resolved the first question by severing the content-based exemption, leaving every caller subject to the TCPA’s demands. And in Facebook Inc. v. Duguid—granted for review just a few days after Barr was decided—the Supreme Court will resolve the second issue, deciding (once and for all?) the kinds of equipment subject to the TCPA.  

The TCPA

The TCPA makes it generally unlawful to place a call using an “automatic telephone dialing system or an artificial or prerecorded voice” to a wireless number without the called party’s consent.  47 U.S.C. § 227(b)(1)(A)(iii). The “prerecorded voice” part of that prohibition has always been straightforward, but the “automatic telephone dialing system” (ATDS) part has generated a welter of litigation.

The statute defines an ATDS as equipment that “has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Id. § 227(b)(1) (emphasis added). For years, everyone (including the FCC) read the definition to cover only equipment that could randomly or sequentially generate numbers, but then the FCC began to suggest that it in fact covered everything that could dial from a list.  A flood of litigation followed.    

In 2015, Congress exempted from this deluge calls “made solely to collect” government-owned or government-backed debt.  Id.  But the nature of the exemption gave all callers facing expansive TCPA liability (under the rewritten ATDS provision) a glimmer of hope: by transforming the TCPA into an arguably content-based restriction on speech, Congress might have unwittingly sown the seeds of the TCPA’s demise for callers generally, not just those seeking to collect government-owned or government-backed debt.

Barr v. AAPC

In Barr, a fractured Supreme Court largely—but not entirely—ended that hope.  Five Justices agreed that, with the exemption, the TCPA created a content-based restriction on speech that triggered strict scrutiny.  See slip op. 6–9 (plurality opinion of Kavanaugh, J.); slip op. 1 (Gorsuch, J., concurring in the judgment in part and dissenting in part).  Six Justices further agreed that, because calls to collect government debt infringe on consumer privacy as much (and maybe more) than other calls, the TCPA flunked heightened scrutiny.  See slip op. 9 (plurality op.) (strict scrutiny); slip op. 1 (Sotomayor, J., concurring in the judgment) (intermediate scrutiny); slip op. 3 (Gorsuch, J., concurring in the judgment in part and dissenting in part) (strict scrutiny).

That left the question of remedy: Should the Court (as the Chamber urged in an amicus brief) “level up” by invalidating the TCPA as to all callers?  Or “level down” by severing the exemption, making everyone—including government-debt collectors—subject to the TCPA’s restrictions?  Seven Justices took the latter course. 

The plurality held that the Act’s severability clause, the strong presumption in favor of severability, and a line of precedent severing unconstitutional amendments rather than invalidating the amended legislation all compelled this approach.  See slip op. 17–20.  And although Justices Ginsburg, Breyer, and Kagan would have upheld the constitutionality of the exemption in the first place, they “agree[d] with Justice Kavanaugh’s conclusion that the provision is severable.”  Slip op. 11 (Breyer, J., concurring in the judgment with respect to severability and dissenting in part).

Added together, the Court’s divergent opinions in Barr lead to a clear result—going forward, everyone is subject to the TCPA’s restrictions, no matter what they wish to say when placing a call. 

Though there is one business-friendly wrinkle. People cannot be punished under an unconstitutionally discriminatory scheme, no matter how a court might cure that problem going forward. See, e.g., Grayned v. City of Rockford, 408 U.S. 104 (1972). Under this bedrock principle, callers cannot be punished for calls placed between the exemption’s enactment in 2015 and its final invalidation this year. While unreasoned dicta in the plurality opinion suggested that the Court’s decision does “not negate the liability of parties who made robocalls covered by the robocall restriction” while the exemption was in place, slip op. 22 n.12, no majority of the Court addressed this issue, and businesses remain free to raise this compelling defense.

Facebook v. Duguid

Barr thus put an end to the hope that the debt-collection exemption would bring down the TCPA entirely.  Yesterday, however, the Supreme Court offered another, more substantial ray of light to businesses facing unpredictable TCPA liability: it granted certiorari in Facebook to consider the scope of the ATDS definition. 

As the Chamber has explained (again and again and again), that provision unambiguously covers only equipment that can “randomly or sequentially generate[] numbers.” Glasser v. Hilton Grand Vacations Co., 948 F.3d 1301, 1305 (11th Cir. 2020) (Sutton, J.). The contrary interpretation—that it covers equipment that merely dials from a list—makes mincemeat of the statutory text and “create[s] liability for every text message sent from an iPhone.” Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 467 (7th Cir. 2020) (Barrett, J.).    

If Facebook comes out the right way, then the TCPA’s reign of terror may finally come to an end; few (if any) modern businesses use equipment that randomly or sequentially generates numbers to place calls or texts, and so few (if any) would be subject to the high-stakes class action litigation currently sweeping the country.  As a result, legitimate businesses would finally be free to do what they and their customers both want: send timely, important communications in a convenient, consumer-friendly way.         

Shay Dvoretzky and Jeffrey Johnson are partners at Jones Day.  The views and opinions set forth herein are the personal views or opinions of the authors; they do not necessarily reflect views or opinions of anyone else.