REPUBLISHED: Why the Supreme Court’s Review of the TCPA is Likely to End the Biggest (And Weirdest) Class Action Cash Cow of All Time In the Name of Freedom

This article ran today as a Law360 “Expert Analysis” piece entitled “High Court May Interpret TCPA Autodial Rules Narrowly.” It is re-published here with permission of Law360. The original article can be found here.

The TCPA — which prohibits the use of certain dialing technology to call cellphones without express consent — is the single broadest restriction on constitutionally protected speech in our nation’s history. It also happens to contain a massive $500 to $1,500 per violation penalty which, along with the availability of uncapped statutory damages and a four-year statute of limitations, makes the statute one of the deadliest consumer protection statutes on the books. But that’s only the beginning of the weirdness.

This has prompted a consortium of liberal and conservative groups — think state Democratic parties and tea party organizations — to sue the Federal Communications Commission and U.S. Attorney General William Barr, challenging the constitutionality of the statute in a case known as American Association of Political Consultants Inc. et al. v. Federal Communications Commission et al.

The U.S. Court of Appeals for the Fourth Circuit ultimately agreed that the TCPA violates the First Amendment based on one of many content-based distinctions — the government-backed debt exemption — but severed that lone provision to save the statute’s constitutionality.

Well, the attorney general and political groups both sought certiorari, which the U.S. Supreme Court granted and is now poised to decide, once and for all, whether the statute is constitutional.

Due to the novel background of the statute — the TCPA was never actually supposed to offer a stand-alone private right of action and was intended merely to be leveraged where state law afforded a remedy — the statute is incomplete, incredibly vague and difficult to apply. Since the statute involves telecommunications, the Federal Communications Commission is empowered to implement and interpret the statute by ordering clarifications to the TCPA.

That these clarifications: (1) are inconsistent and offer evolving (yet retroactive) remakes of the statute over time; (2) may or may not have binding effect under something called the Hobbs Act, depending on which Supreme Court Justice you ask; and (3) may or may not have been set aside by a recent U.S. Court of Appeals for the District of Columbia Circuit decision, adds immeasurably to the fun of applying (and complying with) the statute.

Depending on what court is applying the TCPA, therefore, the statute may be limited to random-fire telemarketing calls — as the U.S. Court of Appeals for the Eleventh Circuit recently held in Glasser v. Hilton Grand Vacations — or it may apply to any equipment with even the capacity to dial from a list of numbers.

The statute may require you to have the consent of your customer, or the person who pays for your customer’s cell phone subscription, or anyone who answers the phone — no one really knows for sure. That consent is either revocable or irrevocable, depending on where you’ve been sued. And of course, calls are only actionable where someone picks up, except in jurisdictions where that’s not true.

As you can tell, the statute is a mess.

Where the promise of fast cash and ambiguity intersect, you’re likely to find litigation. And the TCPA promises lots of fast cash and contains lots of ambiguity, so it produces lots of litigation. With millions (or even billions) in potential TCPA exposure arising out of pedestrian and unavoidable so-called crimes — like accidentally calling the wrong number when your customer changes cell phones without letting you know — the TCPA quickly became the plaintiffs bar’s golden goose.

Indeed, as far as we can tell, the TCPA is the single largest producer of multimillion-dollar settlements (and therefore the single largest producer of millionaire plaintiffs lawyers) in history. That is based on over a decade of experience litigating consumer class actions and monitoring nationwide class settlements in real time.

Yep, the TCPA is officially the biggest cash cow of all time. All the while, well-meaning companies spend additional millions trying to dissect the thicket of technical “gotcha” regulations, shifting declaratory rulings and volumes-thick decisional law needed to determine whether or not their speech is legal in the first place.

But here is the weirdest part of all — the courts have generally been tolerant of TCPA class actions, allowing litigation under the statute to skyrocket in their courtrooms. The reason? The plaintiffs bar has successfully conflated robocalls with automatic dialing in the public’s eye, so any large-scale caller is deemed a detestable robocaller — even if the calls at issue are helpful fraud alerts, requested low balance reminders, or scheduling or appointment reminders.

Those cashing in on the TCPA, therefore, are viewed as waging the front-line war against robocalls — when, by and large, they’re really just exploiting holes and blind spots in TCPA compliance efforts made by legitimate companies sending legitimate messages.

In the face of this storm, Congress recently did something truly extraordinary with the TCPA — it exempted certain government-favored speech from its provisions. Since the amendment, only those delivering messages favored by the government can make use of certain highly efficient dialing technology, while those delivering less-favored messages must meet the statute’s opaque requirements.

But can the government really engage in this sort of content favoritism? Doesn’t the First Amendment afford everyone the equal right to speak and deprive the government of punishing — directly or through private actors — unfavored speech?

That is the question set to be answered by the U.S. Supreme Court in its recent appeal in William P. Barr et al. v. American Association of Political Consultants et al. The petitioner, the U.S. government, is challenging that the lower court incorrectly struck an exemption favoring speech by government contractors collecting on federally backed debt.

Before the Supreme Court on appeal is the question of whether that exemption is tolerable under free speech principles and — perhaps more importantly — whether, if it is not, the remedy is to strike down just the exemption (thus expanding an illegal restriction on speech) or to strike down the statute as a whole.

We have written elsewhere — and at tedious length — regarding the resounding impact this ruling is likely to have on our First Amendment rights. Indeed, we have prophesied that it will be the most enduring free speech decision in decades and will likely be the most important decision of Chief Justice John Roberts’ entire tenure.

We will not dive into those nuances here except to note that it is extremely unlikely the Supreme Court will tolerate the current state of the TCPA. Vague, shifting and content-specific restrictions on speech have no place in a free society and are inconsistent with the First Amendment, as Supreme Court precedent has observed for decades.

Without question, however, the Supreme Court will be reluctant to strike down the entire TCPA — even if that’s precisely what it should do. Congress has recently reaffirmed the TCPA as the crown jewel of the federal response to the robocall epidemic with the passage of the TRACED Act — which sits atop the broken foundation of the TCPA like a castle upon sand — and a country already reeling from the robocall epidemic is ill-prepared to see all federal restrictions on mass calling evaporate. So we can expect the court to bend over backward to keep something on the books.

But how to solve the issue? If striking down the entire statute is ill-advised and merely striking the exemption leads to an intolerable expansion of an unworkable statute, what is the Supreme Court to do?

Well, we believe we have stumbled upon the road map. Actually the Eleventh Circuit did in theaforementioned decision in Glasser. There the court held, among other things, that the only way the TCPA is consistent with First Amendment principles is if the autodialer restrictions are read very narrowly.

Applying the statute this way it will still apply to random-fire technology and true prerecorded robocalls, but it will not apply to the vast majority of legitimate calls made by legitimate businesses. In other words, the statute becomes narrowly tailored to a compelling government interest, keeping our phones safe from nuisance calls, which is precisely the standard a content-specific statute must meet to survive First Amendment review.

That is a very nifty observation for any court keen on upholding the TCPA while yet preserving decades of free speech protection. All the Supreme Court needs to do to arrive at the same conclusion is first hold that in the face of a restriction on speech containing a content-specific exemption from the restriction on speech — i.e., the TCPA’s autodialer prohibitions — needs to be reviewed under strict scrutiny and not just the exemption. This is the critical and enduring legacy part we talked about earlier — the appellate court had reached the opposite conclusion.

Then the court can apply well-worn save-the-statute presumptions to require a narrow interpretation of the TCPA’s automatic telephone dialing system restrictions to keep it compatible with the First Amendment. In other words, the Supreme Court can — and we expect will — interpret the TCPA’s automatic telephone dialing system restrictions narrowly and consistent with Glasser in order to simultaneously save both the statute — and our free-speech rights.

That AAPC may kill the plaintiffs bar’s golden goose in the process is just an added perk.



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