(Reuters) - In 2015, Congress amended the Telephone Consumer Protection Act to protect private contractors working to collect debts owed to the government. Under the amended law, you’re not liable for using an automated system to place calls or send texts to cellphones if you’re trying, for instance, to get recipients of government-backed student loans to pay up. But if you’re, say, Time Warner trying to collect overdue cable bills via the same automated system, you could be on the hook for millions of dollars in a TCPA class action.
That distinction, according to a ruling this week by U.S. District Judge Paul Oetken of Manhattan in a TCPA class action against – you guessed it – Time Warner, means that the TCPA is subject to the most stringent form of review under the First Amendment. The U.S. Supreme Court held in 2015’s Reed v. Town of Gilbert that strict scrutiny applies to content-based regulations on speech. The TCPA’s carve-out for government debt collection, Judge Oetken held, is a regulation based on content.
But the judge refused to take the next step and hold the TCPA to be unconstitutional under the First Amendment. Time Warner’s lawyers at Latham & Watkins argued in a motion for judgment on the pleadings that TCPA fails the strict scrutiny review because the law, as amended, is not narrowly tailored to serve a compelling government interest. The TCPA’s autodialing provision is supposed to protect privacy and safety concerns of cellphone users, Time Warner said, but the exemption for government debt collectors “renders the speech restriction prototypically under-inclusive and results in an irrational, ineffective and patently unfair regime.”
Judge Oetken disagreed. Privacy is a compelling interest, he held, whether it’s the traditional respect courts have accorded for privacy in the home or the modern extension to cellphone privacy. And the carve-out for government debt collectors, he held, is a narrow exemption that does not doom the entire law.
“Congress, in crafting this provision, carefully targeted the calls most directly raising its concerns about invasion of privacy, while also furthering its interest in collecting federal government debts,” the judge held. “This narrow exception, and the provision as a whole, are well-designed to further the interests that Congress sought to pursue with the TCPA.” (The Oetken ruling was first reported by Steptoe & Johnson’s SDNY Blog.)
The TCPA has withstood First Amendment attacks before, as Judge Oetken described in his decision. Before the 2015 carve-out and the Supreme Court’s ruling in Reed, the 9th U.S. Circuit Court of Appeals twice held TCPA law to be constitutional even though it regulates speech. Since Reed, as Time Warner noted in its brief, two federal courts have struck down state versions anti-robocalling laws.
Judge Oetken, however, threw in his lot with two San Francisco federal judges who have also upheld the TCPA’s constitutionality after the 2015 amendment. The previous rulings were from U.S. District Judge Thelton Henderson in Brickman v. Facebook last January and U.S. District Judge Jon Tigar of San Francisco in Holt v. Facebook last March. Like Judge Oetken, the San Francisco judges agreed with defendants that the 2015 amendment means the TCPA is subject to strict scrutiny but that the law meets that tough standard of review. No appellate court has ruled on the law’s constitutionality since it was amended.
The Justice Department, which intervened in the case to address the TCPA’s constitutionality, raised procedural defenses about Time Warner’s standing to challenge the law and the severability of the exemption for government debt collectors. The plaintiffs suing Time Warner, who are represented by Hughes Ellzey, Bursor & Fisher and Siri & Glimstad, raised similar points. The procedural arguments failed, but luckily for the plaintiffs and the law, Judge Oetken agreed with them on the merits.
Time Warner counsel Andrew Prins of Latham declined to comment on the ruling.