As succinctly stated by Justice Kavanaugh: “Americans passionately disagree about many things. But they are largely united in their disdain for robocalls.”(( Barr v. Am. Ass’n of Pol. Consultants, Inc., 591 U.S. ___, 140 S. Ct. 2335, 2343 (2020) [hereinafter Barr v. AAPC or Barr]. )) And on February 1, 2021, a bipartisan coalition of 35 state attorneys general, led by North Carolina Attorney General Josh Stein and Indiana Attorney General Todd Rokita, echoed this sentiment and filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit to ensure state attorneys general can continue holding robocallers accountable for their actions. The attorneys general are urging the Sixth Circuit to reverse a district court decision that has given rise to a lack of clarity about the enforceability of the Telephone Consumer Protection Act’s (TCPA) prohibition on robocalls for violations that occurred between 2015 and 2020.(( See Brief of Indiana et al. as Amici Curiae Supporting Appellant, Lindenbaum v. Realgy, LLC, No. 20-4252 (6th Cir. Feb. 1, 2021). After the Sixth Circuit granted its request on December 16, 2020, the U.S. Solicitor General now has until February 15, 2021, to review the case and decide if it wants to intervene on behalf of the federal government. ))
For decades now, American consumers have stood arm in arm, phones in hand, in a never-ending struggle against robocalls. Robocalls are unsolicited, often repetitive, calls with pre-recorded messages, many of which come from scam artists. YouMail Robocall Index estimates that of the approximate 3.9 billion robocalls, or roughly 124.8 million calls each day, made to Americans during the last month of 2020 alone, 39% were scams.(( YouMail, December 2020 Nationwide Robocall Data, https://robocallindex.com/ (last visited Jan. 29, 2021). ))
As early as 1991, Congress labelled robocalls a “nuisance and an invasion of privacy” for any consumer with a home phone or cell phone.(( Telephone Consumer Protection Act of 1991, Pub. L. No. 102-243, 105 Stat. 2394 (codified as amended at 47 U.S.C. § 227 (2018)) (“The use of the telephone to market goods and services to the home and other businesses is now pervasive due to the increased use of cost-effective telemarketing techniques. Over 30,000 businesses actively telemarket goods and services to businesses and residential customers. More than 300,000 solicitors call more than 18,000,000 Americans every day.”). )) In an effort to restrict such calls, Congress passed the Telephone Consumer Protection Act of 1991 (TCPA).1 Subsequently, in 1994, the Telemarketing Consumer Fraud and Abuse Prevention Act (Telemarketing Act) was passed to provide further protection against fraudulent and annoying telemarketing calls.(( The Telemarketing Act is codified at 15 U.S.C. §§ 6101-6108. The body of regulations adopted by the Federal Trade Commission to implement the Telemarketing Act is known as the Telemarketing Sales Rule and is codified at 16 CFR § 310. )) In 2003, the National Do Not Call Registry was created, allowing consumers to opt out of receiving most unwanted telemarketing calls.(( The Do Not Call Implementation Act, which implemented and enforces the National Do Not Call Registry, is codified at 15 U.S.C § 6101. ))
Since the passage of these laws, the Federal Trade Commission and state attorneys general have made vigorous enforcement a priority, bringing dozens of enforcement actions. Yet robocalls have persisted, as creative scofflaws have utilized technology to elude detection and call blocking efforts. The Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act) was passed in 2019 to tighten control further by requiring carriers to implement technological tracking tools to aid enforcers in tracing calls to the violators who originated them.(( Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act, Pub. L. No. 116-105, S. 151, 116th Cong. (2019). )) Enforcement has increased further with several high-profile actions against violators responsible for millions, if not billions, of robocalls.(( Jonathan Stempel, DISH Network Reaches $210 Million ‘Robocall’ Telemarketing Settlement, Reuters, Dec. 4, 2020, https://www.reuters.com/article/us-dish-network-settlement/dish-network-reaches-210-million-robocall-telemarketing-settlement-idUSKBN28E2UH; Press Release, FCC, FCC Proposes Record $225 Million Fine for Massive Spoofed Robocall Campaign Selling Health Insurance (June 9, 2020), https://docs.fcc.gov/public/attachments/DOC-364824A1.pdf. )) However, a string of recent district court decisions threatens enforcers’ ability to hold robocallers accountable for years of unwanted robocalls based on their interpretation of a recent Supreme Court case, Barr v. American Association of Political Consultants, Inc.(( Barr v. Am. Ass’n of Pol. Consultants, Inc., 591 U.S. ___, 140 S. Ct. 2335, 2343 (2020). ))
The TCPA and Barr v. AAPC
The TCPA was enacted in 1991 to rescue Americans from the plague of robocalls.(( Specifically, the TCPA was enacted to “protect the privacy interests of residential phone subscribers by placing restrictions on unsolicited, automated telephone calls to the home and to facilitate interstate commerce by restricting certain uses of facsimile (fax) machines and automatic dialers.” S. Rep. No. 102-178, at 1 (1991). )) Under the TCPA, automated calls to wireless telephone numbers, absent the prior express consent of the answering party or an applicable statutory exception, are generally prohibited.(( 47 U.S.C. § 227(b)(1)(A)-(B); S. Rep. No. 102-178, at 4 (1991). )) The Federal Communications Commission (FCC) is the federal agency tasked with the implementation and enforcement of the TCPA.(( 47 U.S.C. § 227(g)(3). )) State attorneys general are also authorized to enforce it,(( 47 U.S.C. § 227(g)(1). )) and the act includes a private right of action which has been widely used by attorneys filing class actions.(( 47 U.S.C. § 227(b)(3), (f)(1). ))
In 2015, the TCPA was amended by Congress’ Bipartisan Budget Act of 2015 (2015 Amendment).(( Bipartisan Budget Act of 2015, Pub. L. No. 114-74, § 301(a) (2015). )) Under the 2015 Amendment, an additional exception to the robocall restriction was included for calls “made solely pursuant to the collection of a debt owed to or guaranteed by the United States.”(( 47 U.S.C. § 227(b)(1)(A)(iii). )) As a consequence of this new exception, referred to as the “government-debt exception,” it became “easier for owners of debts owed to or guaranteed by the United States and their contractors to make calls to collect the debts.”(( A 2016 FCC report on the rules and regulations adopted by the agency to implement the 2015 Amendment notes that the Department of Education, which is one of several federal creditor agencies, had guaranteed or was owed more than 80% of all outstanding student loan debt in nation by the end of fiscal year 2016, with more than 41 million student loan borrowers owing $1.25 trillion in federal student loans. Rules and Regulations Implementing the TCPA as Amended by the Bipartisan Budget Act of 2015, Report and Order, 31 FCC Rcd. 9074 (Aug. 11, 2016) https://www.fcc.gov/document/rules-and-regulations-implementing-tcpa-act-1991. ))
Following the enactment of the 2015 Amendment, political and nonprofit organizations and groups sued the FCC and the U.S. Attorney General (collectively the “Government”), arguing that the 2015 Amendment’s “government-debt exception unconstitutionally favor[ed] debt-collection speech over political and other speech” in violation of the First Amendment.(( Barr v. AAPC at 2343. )) Specifically, the plaintiffs argued that the restriction on robocalls, with the government-debt exception, was an impermissible content-based regulation of speech.(( Id. at 2345. )) As relief for the alleged violation of their First Amendment rights, the plaintiffs sought a declaratory judgment invalidating the TCPA’s robocall restriction in its entirety.
The U.S. Court of Appeals for the Fourth Circuit agreed with the plaintiffs that the robocall restriction with the government-debt exception was a content-based regulation of speech and could not survive under strict scrutiny review.(( Id. )) However, the court, in applying the severability doctrine, severed the government-debt exception from the underlying robocall restriction of the TCPA to save the TCPA’s general prohibition on robocalls.
The Government then filed a petition for a writ of certiorari to review the Fourth Circuit’s decision, which was supported by the plaintiffs.(( Id. )) While the Government sought to have the Supreme Court reinstate the government-debt exception, or, at the very least, affirm the severance of the government-debt exception in order to preserve the TCPA’s robocall restriction, the plaintiffs wanted the Supreme Court to invalidate the entire TCPA robocall restriction.(( Id. at 2346. ))
The case was heard by the Supreme Court in May 2020, and on July 6, 2020, Justice Kavanaugh announced the Court’s judgment and a plurality opinion affirming the Fourth Circuit’s decision.(( Barr v. AAPC, 591 U.S. ___, 140 S. Ct. 2335 (2020). )) The Supreme Court held that the government-debt exception “impermissibly favored debt-collection speech over political and other speech, in violation of the First Amendment.”(( Id. at 2343. )) Applying “traditional severability principles,” the Supreme Court also affirmed the decision that the “entire 1991 robocall restriction should not be invalidated, but rather that the 2015 debt-collection exception must be invalidated and severed from the remainder of the statute.”(( Id. ))
As noted by Justice Kavanaugh, there is a presumption of severability as a means “to salvage rather than destroy the rest of the law passed by Congress and signed by the President. The Court’s precedents reflect a decisive preference for surgical severance rather than wholesale destruction, even in the absence of a severability clause.”(( Id. at 2350-51. )) The opinion notes that severability is particularly appropriate as it relates to the 2015 Amendment for two reasons. First, the TCPA is a part of the Telecommunications Act of 1934 which has a specific severability clause requiring severance of provisions held to be unlawful.2 Second, the opinion held that the robocall restriction was not unconstitutional prior to the addition of the 2015 amendment; it only became so with the addition of the constitutionally repugnant government-debt collection provision. The opinion noted that in similar circumstances, dating back to Marbury v. Madison, where a subsequent addition made a previously constitutional section suddenly constitutionally infirm, the correct application of severance principles was to remove the offending provision and that doing so had “no effect on the original statute.”(( Id. at 2353 (citing Frost v. Corp. Comm’n of Okla., 278 U.S. 515 at 526-527 (1929)). See also Stoutt v. Travis Credit Union, No. 2:20-cv-01280 WBS AC, 2021 WL 99636 (E.D. Cal. Jan. 12, 2021); Rieker v. Nat’l Car Cure, LLC, Case. No. 3:20-cv-5901 (N.D. Fla. Jan. 5, 2021). ))
Justice Kavanaugh’s plurality opinion was joined in whole by Justices Roberts and Alito, and in part by Justice Thomas.3 Justice Sotomayor concurred in the judgment.(( Id. at 2356. )) Justice Breyer, joined by Justices Ginsberg and Kagan, dissented to the plurality’s conclusion that the TCPA’s government-debt exception violated the First Amendment but concurred in the judgment with respect to severability.(( Id. at 2357. )) Justice Gorsuch also authored an opinion concurring in part and dissenting in part, which was joined in part by Justice Thomas.(( Id. at 2363. ))
Post-Barr Confusion
Although the TCPA’s robocall restriction was explicitly upheld by the Supreme Court in Barr v. AAPC, three federal district court decisions in Louisiana, Florida, and Ohio have since interpreted the Barr decision in a way that effectively shields robocallers from all liability under the TCPA for illegal robocalls made during the time after the passage of the 2015 Amendment through the Supreme Court’s issuance of the Barr decision.(( Creasy v. Charter Commc’ns, Inc., No. 20-1199, 2020 WL 5761117 (E.D. La. Sept. 28, 2020); Lindenbaum v. Realgy, LLC, No. 1:19 CV 2862, 2020 WL 6361915 (N.D. Ohio Oct. 29, 2020), appeal docketed, No. 20-04252 (6th Cir. Nov. 30, 2020); Hussain v. Sullivan Buick-Cadillac-GMC Truck, Inc., No. 5:20-cv-00038, 2020 WL 7346536 (M.D. Fla. Dec. 11, 2020). As of February 2, 2021, only Lindenbaum has been appealed. ))
The three cases at issue involve class actions rather than government enforcement actions. In Creasy v. Charter Communications, Inc., Lindenbaum v. Realgy, LLC, and Hussain v. Sullivan Buick-Cadillac-GMC Truck, Inc., three different district courts concluded that the Supreme Court’s severance of the government-debt exception in Barr applied prospectively, not retroactively. Therefore, according to the reasoning of the Creasy decision, “the entirety of the pre-severance version of [the robocall restriction] is void because it itself is repugnant to the Constitution before the Supreme Court restored it to constitutional health in [Barr v.] AAPC.”(( Creasy, 2020 WL 5761117, at *5. )) The Lindenbaum and Hussain decisions followed Creasy in concluding that “[a]n unconstitutional statute being ‘as no law,’” they lacked jurisdiction to enforce an unconstitutional statute and dismissed the plaintiffs’ claims concerning robocalls that defendants placed between November 2015 and July 2020.(( Creasy at *8. ))
To support their conclusion, the Creasy, Lindenbaum, and Hussain courts construed part of Justice Kavanaugh’s plurality opinion in Barr v. AAPC as “non-binding obiter dictum.”(( Hussain at *5; Lindenbaum at *8; Creasy at *4. )) The part in question is a footnote to the section of Justice Kavanaugh’s plurality opinion addressing severability. In footnote 12, Justice Kavanaugh clarifies that “no one should be penalized or held liable for making robocalls to collect government debt” during the time the 2015 Amendment was in effect until a final judgment is entered by a lower court on remand. However, perhaps anticipating the question that confronted the Creasy, Lindenbaum, and Hussain courts, the footnote goes on to address liability of those who made non-government debt collection robocalls during the period following the 2015 Amendment: “On the other side of the ledger, our decision today does not negate the liability of parties who made robocalls covered by the robocall restriction.”(( Barr v. AAPC, 140 S. Ct. at 2335 n. 12 (emphasis added). ))
Indeed, the plaintiffs in the Creasy, Lindenbaum, and Hussain cases urged those courts that the language in the footnote dictated a denial of the defendants’ arguments, however those courts rejected that argument. Instead, they concluded that footnote 12 was only endorsed by three Justices(( Justice Kavanaugh’s plurality opinion was joined in whole by Chief Justice Roberts and Justice Alito. Barr v. AAPC, 591 U.S. ___, 140 S. Ct. 2335 (2020). )) and as such, they classified it as “passing Supreme Court dicta of no precedential force.”(( Creasy at *2, *4, n.4; Lindenbaum, 2020 WL 2020 WL 6361915, at *8; Hussain, 2020 WL 7346536, at *5. )) Consequently, they held that footnote 12’s clarification that the Court’s decision in Barr v. AAPC did “not negate the liability of parties who made robocalls covered by the robocall restriction[,]”(( Barr v. AAPC, 140 S. Ct. at 2335 n. 12. )) was “merely persuasive, as opposed to mandatory[.]”(( Creasy at *4, n.4; Lindenbaum at *8. )) Despite finding the footnote’s reasoning “extremely persuasive,” the Creasy court found the defendant’s argument more so and granted the motion to dismiss as to calls made after the 2015 amendment and before the Barr v. AAPC decision.4
Defendants in pending TCPA class actions across the country are now citing the Creasy, Lindenbaum, and Hussain decisions, and those courts’ interpretation of severability, in their filed motions to dismiss for lack of subject matter jurisdiction.(( See e.g., Reply in Support of Defendant Royal Seas Cruises, Inc.’s Motion to Dismiss and Vacate Order Granting Class Certification for Lack of Subject Matter Jurisdiction, McCurley v. Royal Seas Cruises, Inc., No. 3:17-cv-00986 (S.D. Cal. Jan. 20, 2021); Defendant Grubhub Inc.’s Motion to Dismiss for Lack of Subject Matter Jurisdiction, Marshall v. Grubhub Inc., No. 1:19-cv-03718 (N.D. Ill. Jan. 19, 2021). )) Defendants have also sought dismissal in pending government enforcement actions.(( See Defendants’ Motion to Dismiss Counts II and III, Texas v. Rising Eagle Capital Group LLC, No. 4:20-cv-2021 (S.D. Tex. Jan. 7, 2021) (requesting dismissal for lack of jurisdiction of claims concerning alleged violations of the TCPA’s robocall restriction that occurred prior to July 6, 2020). ))
A Response to Creasy, Lindenbaum, and Hussain
More courts have rejected the approach espoused in the Creasy, Lindenbaum, and Hussain decisions than adopted it.(( Shen v. Tricolor Cal. Auto Group, LLC, No. CV 20-7419 PA (AGRx), 2020 WL 7705888 (C.D. Cal. Dec. 17, 2020); Trujillo v. Free Energy Sav. Co., LLC, No. 5:19-cv-0272-MCS-SP, 2020 U.S. Dist. LEXIS 239730 (C.D. Cal. Dec. 21, 2020) (discussed infra); Abramson v. Fed. Ins. Co., No. 8:19-cv-2523-T-60AAS (M.D. Fla. Dec. 11, 2020) (denying defendant’s motion to dismiss after rejecting the reasoning of the Creasy decision); Buchanan v. Sullivan, No. 8:20-CV-301 (D. Neb. Oct. 30, 2020) (noting the Supreme Court’s favorable ruling on the constitutionality of the TCPA’s robocall restriction in Barr v. AAPC); Schmidt v. AmerAssist A/R Sols., No. CV-20-00230-PHX-DWL (D. Ariz. Oct. 19, 2020) (concluding that a party may still bring claims under the portions of the TCPA’s robocall restriction unchanged by the Barr decision). See also Canady v. Bridgecrest Acceptance Corp., 2020 U.S. Dist. LEXIS 161629, at *5 (D. Ariz. Sept. 3, 2020); Komaiko v. Baker Techs., Inc., 2020 U.S. Dist. LEXIS 143953, at *5 (N.D. Cal. Aug. 11, 2020). )) In Shen v. Tricolor California Auto Group, LLC, the court, in taking the “more limited view of severance” espoused by Justice Kavanaugh, denied the defendant’s motion to dismiss.(( Shen v. Tricolor Cal. Auto Group, LLC at *4–5. )) In its analysis, the Shen court commented on how the Creasy, Lindenbaum, and Hussain decisions “appear[] to be at odds with the views of a majority of the Supreme Court’s Justices[.]”(( Id. )) Indeed, according to the Shen decision, those three decisions have “broadened the scope of [Barr v.] AAPC’s limited holding by construing it as, in essence, invalidating the entirety of [the robocall restriction], rather than just the government-debt exception.”(( Id. ))
In Trujillo v. Free Energy Savings. Co., LLC, the court noted that Justice Kavanaugh’s footnote 12 “presents a paradox.”(( Trujillo v. Free Energy Sav. Co., LLC, No. 5:19-cv-0272-MCS-SP, 2020 WL 7768722, at *3 (C.D. Cal. Dec. 21, 2020). ))
It indicates that government-debt collectors should not be held liable for making robocalls between 2015 and 2020, suggesting that either the government-debt exception was effective during that period or the statute in its entirety was ineffective during that period. At the same time, the plurality states that AAPC “does not negate” general robocaller liability, suggesting that the statute generally was effective during that period, irrespective of whether it was effective as to government-debt robocallers. The footnote leaves unexplained how these outcomes may coexist.(( Id. ))
Faced with this lack of clarity, the court relied on the same reasoning cited by Justice Kavanaugh, relying on Frost, that statutes that were valid prior to amendment remain so after severance of the offending provision and are not invalidated as to violations of what was otherwise a constitutional statute.(( Id. at *7-12. )) The Trujillo decision has been relied on by three other court in denying a motion to dismiss.(( Stoutt v. Travis Credit Union, No. 2:20-cv-01280, 2021 WL 99636, at *3–4 (E.D. Cal. Jan. 12, 2021); Rieker v. Nat’l Car Cure, LLC, 2020 U.S. Dist. LEXIS 9133 (N. D. Fla. Jan. 5, 2021); and Less v. Quest Diagnostics, Inc. 2021 U.S. Dist. LEXIS 14320 (Jan. 26, 2021). ))
Admittedly, a plurality opinion invites confusion; it can be hard to keep exactly straight who was in agreement and what they agreed to. But in Barr v. AAPC, seven Justices, a majority of the Court, agreed that the unconstitutional government-debt exception was severable from the remainder of the TCPA, thereby curing the First Amendment issue raised by the plaintiffs without scrapping the entire robocall restriction. Thus, the conclusion reached in the Creasy, Lindenbaum, and Hussain decisions, that footnote 12 is unnecessary because only three Justices expressly endorsed it, arguably fails to account for the four other Justices who also concluded that the government-debt exception is severable.(( Shen v. Tricolor Cal. Auto Group, LLC at *4 (“Because Justices Sotomayor, Breyer, Ginsberg, and Kagan joined in the judgment on severability, they did not expressly join the portion of Justice Kavanaugh’s opinion containing footnote 12. As such, [footnote 12] may not be binding on this Court, but it is persuasive.”). ))
Justice Kavanaugh stated: “[c]onstitutional litigation is not a game of gotcha against Congress, where litigants can ride a discrete constitutional flaw in a statute to take down the whole, otherwise constitutional statute.”(( Barr v. AAPC at 2351. )) Using a simple metaphor, Justice Kavanaugh illustrated the application of severability as “the tail (one unconstitutional provision) does not wag the dog (the rest of the codified statute or the Act as passed by Congress).”(( Id. ))
The interpretation by the Creasy, Lindenbaum, and Hussain courts that the Supreme Court’s severance of the government-debt exception in Barr is prospective, rather than retroactive, yields an outcome that stands in direct opposition to the holding of Barr v. AAPC and the principles of severability.(( Id. at 2352 (“With the government-debt exception severed, the remainder of the law is capable of functioning independently. . . . Indeed, the remainder of the robocall restriction did function independently and fully operate as a law for 20-plus years before the government-debt exception was added.”). )) Embracing the “gotcha” approach which Justice Kavanaugh criticized, robocallers, aided by the Creasy, Lindenbaum, and Hussain decisions now have an opportunity to “ride a discrete constitutional flaw” “to take down the whole, otherwise constitutional statute” and escape liability for years of robocall violations.5
Although it currently remains unclear whether the approach advanced by the Creasy, Lindenbaum, and Hussain decisions will gain traction, as the number of motions to dismiss continues to grow, plaintiffs and government enforcers pursuing TCPA cases for illegal robocalls made from the time of the 2015 Amendment through the issuance of the Barr v. AAPC decision remain stuck on hold without a clear answer.
