The Sixth Circuit recently reversed a trial court’s dismissal of
a putative class action lawsuit alleging violations of the federal Telephone
Consumer Protection Act, 47 U.S.C. § 227(b) (TCPA).
The
trial court dismissed the case on the basis that amendments to the TCPA in 2015
rendered the entire Act unconstitutional until the Supreme Court of the United
States severed the 2015 amendments in Barr v. Am. Ass’n of Pol.
Consultants, Inc., 140 S. Ct. 2335 (2020) (AAPC).
This would have made any alleged TCPA violation not actionable from the date of
the amendments in 2015 until the SCOTUS severed the unconstitutional provisions
in 2020.
In
reversing the trial court’s ruling, the Sixth Circuit held that AAPC applied
retroactively, and the TCPA was not invalidated by the 2015 unconstitutional
amendments and before the date of the AAPC ruling.
In addition, the Sixth Circuit rejected the defendant’s First Amendment
arguments based on the retroactive application of AAPC.
A
copy of the opinion in Lindenbaum v. Realgy, LLC is
available at: Link to Opinion.
As
you may recall, the TCPA prohibits many automated calls to cell phones and
landlines. In 2015, Congress amended the TCPA to allow robocalls if they
were made “solely to collect a debt owed to or guaranteed by the United
States.” 47 U.S.C. § 227(b)(1)(A)(iii), (b)(1)(B).
However,
the Supreme Court of the United States held in Barr v. Am. Ass’n of Pol.
Consultants, Inc. (AAPC), 140 S. Ct. 2335 (2020), that “adding the
exemption for government-debt robocalls would cause impermissible content
discrimination” in violation of the First Amendment to the United States
Constitution, and that “the exception was severable from the rest of the
restriction, leaving the general prohibition intact.”
The
plaintiff here received alleged non-consensual automated calls from the
defendant in late 2019 and early 2020, and filed a putative class action
lawsuit in federal court under the TCPA. The defendant moved to dismiss
for lack of subject matter jurisdiction. The trial court granted the
defendant’s motion.
The
trial court held that “severability is a remedy that operates only
prospectively,” and that the amended TCPA “was unconstitutional and therefore
void for the period the exception was on the books” from 2015 to 2020.
Therefore, the trial court held, the TCPA “could not provide a basis for
federal-question jurisdiction.”
The
plaintiff appealed, and the United States intervened in support of the
plaintiff to defend the TCPA.
On
appeal, the Sixth Circuit first noted that the motion to dismiss for lack of
subject matter jurisdiction should have been treated as a motion to dismiss for
failure to state a claim. The Sixth Circuit explained that a trial court
has jurisdiction when “the right of the petitioners to recover under their
complaint will be sustained if the Constitution and laws of the United States
are given one construction and will be defeated if they are given another.”
Here, if the plaintiff’s “arguments about the continuing vitality of the [TCPA]
from 2015 to 2020 are correct, she is entitled to relief.”
The
Sixth Circuit then addressed the defendant’s arguments.
The
defendant first argued that “severability is a remedy that fixes an
unconstitutional statute, such that it can only apply prospectively.”
Because the SCOTUS ruling in AAPC severed the
unconstitutional 2015 amendment from the TCPA, the defendant argued that the
amended TCPA was wholly unconstitutional from the date of the amendments in
2015 until the SCOTUS severed the unconstitutional provisions in 2020.
The
Sixth Circuit disagreed, holding that the SCOTUS in AAPC “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,” and that the SCOTUS’ “legal
determination applies retroactively.”
The
Court explained that, in order “to say what the law is,” courts “must exercise
the negative power to disregard an unconstitutional enactment.” Then, “[a]fter
disregarding unconstitutional enactments, we then determine what (if anything)
the statute means in their absence — what is now called ‘severability’
analysis.” However, the Sixth Circuit continued, “those steps are all
part of explaining what the statute has meant continuously since the date when
it became law and applying that meaning to the parties before us.”
Relevant
here, the Sixth Circuit noted that “the Constitution itself displaces unconstitutional
enactments: a legislative act contrary to the constitution is not law at
all.” Because the 2015 amendments were unconstitutional, and therefore
“not law at all”, the Court concluded that the remainder of the TCPA stayed in
full force as if the 2015 amendments were never enacted.
The
defendant also argued that “if it can be held liable for the period from 2015
to 2020, but government-debt collectors who lacked fair notice of the
unlawfulness of their actions cannot, it would recreate the same First
Amendment violation the Court recognized in AAPC.”
The
Sixth Circuit disagreed again, noting that “[w]hether a debt collector had fair
notice that it faced punishment for making robocalls turns on whether it
reasonably believed that the statute expressly permitted its conduct. That, in
turn, will likely depend in part on whether the debt collector used robocalls
to collect government debt or non-government debt.”
Because
the defendant here was not collecting on government debt, which was the subject
of now unconstitutional 2015 amendments, the Sixth Circuit held that “applying
the speech-neutral fair-notice defense in the speech context does not transform
it into a speech restriction.”
Accordingly,
the Sixth Circuit reversed the trial court’s dismissal, and the case was
remanded for further proceedings.
