On July 6, the U.S. Supreme Court ruled in Barr v. American Association of Political Consultants that the Telephone Consumer Protection Act’s exception from its automated call restriction for calls to collect government debts violates the First Amendment of the U.S. Constitution.  The Court also decided that the proper remedy for the constitutional violation is to sever the exception from the remainder of the TCPA, thereby making calls to collect government debts subject to the TCPA’s automated call restriction and otherwise leaving the restriction in place for any other calls to which it now applies.

The TCPA generally prohibits sending calls to cellular telephones using an automatic telephone dialing system or that deliver an artificial or prerecorded voice.  However, it includes an exception for emergency calls and calls made with the prior express consent of the called party.  In 2015, Congress amended the TCPA to create another exception for calls “made solely to collect a debt owed to or guaranteed by the United States.”

As described by Justice Kavanaugh in his opinion announcing the Supreme Court’s decision, the plaintiffs in the case were “political and nonprofit organizations that want to make political robocalls to cell phones.”  The plaintiffs argued that the government debt exception violated the First Amendment by favoring debt collection speech over political and other speech.  As a remedy for the alleged constitutional violation, the plaintiffs asserted that the TCPA’s entire restriction on automated calls should be invalidated, not just the government debt exception.

A North Carolina federal district court rejected the plaintiffs’ constitutional challenge but the Fourth Circuit vacated the judgment and held that the TCPA’s government debt exception violated the First Amendment.  Having concluded that the government debt exception was severable from the underlying automated call restriction, the Fourth Circuit invalidated and severed the exception.

In its petition for a writ of certiorari, the Government argued that because the TCPA exception is directed at communications concerning a discrete type of economic activity (i.e., collecting government debts) and not at the words used in the communications, the Fourth Circuit erred in concluding that the exception was an unconstitutional content-based restriction on speech.  The plaintiffs supported the petition but argued that the Fourth Circuit did not go far enough in providing relief and should have invalidated the TCPA’s entire provision restricting automated calls.

Justice Kavanaugh was among the Supreme Court majority that agreed with the Fourth Circuit that the exception was a content-based restriction on speech that violated the First Amendment.  He was also among the majority that agreed with the Fourth Circuit that the exception could be severed and the remainder of the law could function independently of the exception.  Notably, in his opinion (one of four separate opinions), Justice Kavanaugh wrote: “Americans passionately disagree about many things.  But they are largely united in their disdain for robocalls.”

The decision means that calls to collect debts owed or guaranteed by the federal government that are made to cellular phones using an automatic telephone dialing system or an artificial or prerecorded voice will now require the called party’s prior express consent.  Accordingly, companies must make sure their operations are TCPA compliant when servicing or collecting  government-owned or -guaranteed loans or other obligations, such as mortgage loans and student loans.

Given that the Supreme Court has not provided relief for industry from the TCPA’s automated call restriction, perhaps the FCC will ease industry’s compliance burden through the issuance of long-awaited guidance.  In 2018, the FCC issued a notice announcing that it was seeking comments on several TCPA issues following the D.C. Circuit’s ACA International decision, such as what constitutes an “automatic telephone dialing system” for purposes of the restriction, how to interpret the term “called party” in the TCPA’s prior express consent requirement for purposes of automated calls to reassigned numbers, and whether/how a party can revoke prior express consent to receive automated calls.