Really?: Court Enforces Unconstitutional Content-Specific Exemption After Two Appellate Courts Sever it from the Statute—Rejects Reyes

TCPAWorld is just getting messier and messier. Still, we all knew this was coming.

As we’ve reported at length, the TCPA has been twice deemed a content-specific restriction on speech that fails strict scrutiny review. Rather than strike down the statute—which is the proper remedy—two Circuit Court of Appeals have, instead, elected to sever one of many content-specific exemptions found within the TCPA. The exemption at issue—an amendment from 2015 permitting calls on federally-backed debt.

While the exemption might be dead in the Fourth and Ninth Circuits, it still lives on elsewhere as perfectly demonstrated in yesterday’s decision in Franklin v. Navient Corp., Civil Action No. 17-1640-RGA, 2019 U.S. Dist. LEXIS 150902 (D. Del. Sept. 5, 2019). There the court concluded that the “plain language” of the TCPA exempted calls made by the Defendant—which were to collect a debt that was plainly guaranteed by the government. While Plaintiff argued that the exemption never went into effect because the FCC never promulgated rules implanting the exemption—as Congress had mandated in passing the amendment back in 2015—this argument has been repeatedly rejected and the Franklin court made short work of it. Remarkably, however, the decision makes no mention of the Constitutional dimensions of its application of a content-specific exemption in this case.

Next, the court holds—without analysis—that calls made before the date of the amendment are still actionable under the TCPA. (That is a questionable conclusion to a tricky question.) As to the earlier calls, however, there was a question of fact as to whether revocation of consent was valid–but the Court found directly that contractual consent is revocable.

Defendant had argued that contractual consent cannot be revoked—relying on Reyes. Defendant countered that Gager rejected the contract principles underlying Reyes. Although that argument is categorically false—Gager holds only that the mere existence of a contract does not make consent irrevocable, it does not hold that a specific consent clause within a contract is somehow subject to unilateral modification— the Franklin court agreed and holds that contractual consent is always revocable in the Third Circuit. Yikes.

The Franklin case also affords a brief—and frankly unrewarding—discussion of ATDS issues while never really refining an ATDS position. The Court does not specifically address the functionalities of an ATDS and simply remarks that the Defendant had failed to introduce sufficient evidence of the functionalities of its dialer to earn summary judgment. This is a bit odd as the Defendant argued—in a manner permitted under Celotex –that Plaintiff lacked evidence that its dialer qualified under the TCPA. Yet the Court pushed back and denied judgment on the grounds that the Defendant somehow had a further burden of production of evidence. Interesting stuff.

Just another day in TCPAWorld.

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