Supreme Court Agrees to Hear Arguments on TCPA Collection Case

The Supreme Court on Friday announced it had granted a petition from the U.S. government to hear arguments in a Telephone Consumer Protection Act case regarding an exemption that allows companies collecting debts on behalf of the federal government to contact individuals on their cell phones using an automated telephone dialing system without needing to obtain prior consent to do so.

The docket for the case of William P. Barr, Attorney General v. American Association of Political Consultants can be accessed by clicking here.

Last year, the Fourth Circuit Court of Appeals ruled that the exemption from complying with the TCPA was unconstitutional, a ruling that was backed by other Appeals Courts. The Fourth Circuit’s decision did overturn a lower court’s summary judgment ruling in favor of the exemption, saying it does not violate the Free Speech Clause of the First Amendment.

In granting the petition to hear arguments, the Supreme Court did not provide any details regarding why it decided to hear the case.

In its petition, the government is asking the Supreme Court “Whether the government-debt exception to the TCPA’s automated-call restriction violates the First Amendment, and whether the proper remedy for any constitutional violation is to sever the exception from the remainder of the statute.”

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. 

While there might be a split at the Appeals Court level — a normal prerequisite for the Supreme Court to decide to intervene in a case — the government noted that the Fourth Circuit’s ruling “invalidated a provision of a federal statute,” and the Supreme Court needs to get involved to right that wrong.

The government also took issue with the Appeals Court example that a collector could make two calls using the same technology and one would be legal and the other not because the call made to collect on a debt guaranteed by the federal government is exempted from the TCPA.

That conclusion does not follow. The fact that a particular debt is owed to or guaranteed by the federal government may sometimes be apparent from the prerecorded message on an automated call, but often that will not be the case. Thus, under the TCPA, a debt collector could use an automated telephone dialing system to send numerous debtors the prerecorded message “Please pay up.” The applicability of the government-debt exception to a particular call would turn on whether the recipient’s debt was “owed to or guaranteed by the United States,” on whether the requisite federal nexus actually existed, not on whether the prerecorded message referred to that nexus. Different calls having precisely

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the same content thus would be treated differently un- der the statute depending on the precise nature of the economic activity in which the caller was engaged.

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