Fourth Circuit Rules TCPA Collection Exemption Unconstitutional

An exemption under the Telephone Consumer Protection Act that allows for individuals to be contacted on their cell phones using an automated telephone dialing system without first providing consent when collecting on debts that are guaranteed by the federal government is unconstitutional, the Fourth Circuit Court of Appeals ruled yesterday.

A copy of the ruling in American Association of Political Consultants, Inc. et al v. Federal Communications Commission can be accessed by clicking here.

The Fourth Circuit’s ruling overturns a ruling that was issued at the District Court level which awarded summary judgment to the FCC and ruled the exemption does not violate the Free Speech Clause of the First Amendment.

Congress enacted the exemption in 2015 as part of the Bipartisan Budget Act, as a means of allowing collectors who were essentially working on behalf of the federal government to collect student loans and mortgages, for example, to contact individuals on their cell phones using an ATDS. Since it was enacted, the exemption has faced several challenges as members on both sides of the aisle in the House of Representatives and Senate seek to remove it.

In filing the appeal, the plaintiffs acknowledged that the exemption constitutes a content-based restriction on speech, but challenged the lower court’s ruling that the exemption satisfies strict scrutiny review. The crux of the argument is whether the call that is being made is based on the content of the call, as the plaintiffs argued, or the relationship between the federal government and the called party, as the defendants argued.

A collector could make the same call using the same technology to two different individuals and one call would be legal and the other would be illegal, if one of the calls was made to collect on a debt guaranteed by the federal government, the plaintiffs argued. The defense countered that the applicability of the exemption depended on the relationship between the government and the called party.

The Fourth Circuit sided with the plaintiffs.

Under the debt-collection exemption, the relationship between the federal government and the debtor is only relevant to the subject matter of the call. In other words, the debt-collection exemption applies to a phone call made to the debtor because the call is about the debt, not because of any relationship between the federal government and the debtor.

Because it is a content-based restriction, the exemption must satisfy strict scrutiny review to be constitutional, the Court ruled, which it does not do.

The exemption thus cannot be said to advance the purpose of privacy protection, in that it actually authorizes a broad swath of intrusive calls. In so doing, the debt-collection exemption exposes millions of American consumers to some of the most disruptive phone calls they receive. The exemption therefore erodes the privacy protections that the automated call ban was intended to further.

Check Also

CFPB Enforcement Actions Spike in 3Q

Maybe there is something to the theory that people are far more productive when working …

Leave a Reply

Your email address will not be published.

X