SCOTUS Invalidates Government-Debt Exception, but Upholds TCPA Ban on Autodialed & Prerecorded Voice Calls to Cell Phones

On July 6, 2020, the Supreme Court of the United States gave consumers a major victory in the fight to limit automated telemarketing calls made to mobile phones. The Court not only upheld the Telephone Consumer Protection Act (“TCPA”) provision prohibiting most autodialed or prerecorded calls and text messages to cell phones, but also found the so-called “government-debt exception” to this ban unconstitutional. Six justices concluded that this exception — which allows autodialed and prerecorded calls to be made to cell phone numbers “solely to collect a debt owed to or guaranteed by the United States” — violates the First Amendment to the U.S. Constitution.

A different lineup of seven justices held that the proper solution is to sever the unconstitutional provision from the TCPA, rather than invalidate the law’s entire autodialer ban. The full text of the Court’s opinion is available here.

The Court’s decision opens the door to more TCPA-related litigation. The ruling is expected to have the biggest and most immediate impact on those who use autodialers to collect debts, such as student loans and mortgages, that are owed to or guaranteed by the federal government. However, the Federal Communications Commission (“FCC”) could go after carriers and VoIP providers if they are found to be helping robocallers violate the TCPA or, possibly, even if they do not directly or indirectly aid violators, but know that violators are using their network to make unlawful robocalls. And, as the Court points out, “The TCPA imposes tough penalties for violating the robocall restriction. Private parties can sue to recover up to$1,500 per violation or three times their actual monetary losses, which can add up quickly in a class action.”  Also, Congress passed and the President signed a new law (The “TRACED Act”) increasing the maximum civil forfeiture to $10,000 per violation.

But the Court’s narrow and fragmented decision also creates opportunities for businesses. Most notably, the justices do not clarify in their various opinions what does and does not constitute an “automatic telephone dialing system” or autodialer under the TCPA, despite being asked to do so by the parties to the lawsuit. Although the FCC has recently determined that systems requiring the manual dialing of numbers are not autodialers, more clarity would be helpful. The resulting uncertainty paves the road for companies to narrow the scope of the autodialer ban by obtaining a favorable ruling that limits prohibited activities covered by this provision.

If you have questions or concerns about how the Supreme Court’s recent TCPA ruling could affect your business, please contact Robert H. Jackson, Esq., at rhj@commlawgroup.com or (703) 714-1316, or Michal J. Nowicki, Esq., at mjn@commlawgroup.com or (703) 714-1311.

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