Takeaway: In Lindenbaum v. Realgy, LLC, — F.4th —-, 20-4252, 2021 WL 4097320 (6th Cir. Sept. 9, 2021), the Sixth Circuit rejected the defendant’s argument that the Phone Consumer Protection Act (“TCPA”) experienced been unconstitutional and unenforceable from 2015 to 2020. The Court of Appeals discovered as a substitute that the Supreme Court’s severance of the authorities-financial debt exception applied retroactively and hence reversed the district court’s dismissal of the plaintiffs’ TCPA promises for lack of matter-issue jurisdiction. Issue to probable Supreme Court docket certiorari review, the Lindenbaum conclusion could set an finish to the uncertainty arising out of the Supreme Court’s determination that a narrow portion of the TCPA violated the Constitution.
In Barr v. American Association of Political Consultants, Inc., 140 S. Ct. 2335 (2020) (“AACP”), the Supreme Court docket held an amendment exempting from the TCPA calls to collect govt credit card debt to be unconstitutional, as impermissible information discrimination. Seven Justices concluded that “the appropriate final result in this scenario is to sever the 2015 federal government-debt exception and leave in spot the longstanding robocall restriction.” Id. at 2355. Most commentators comprehended AACP to invalidate the government-debt exception as unconstitutional even though preserving the remainder of the TCPA. Even though AACP did not instantly deal with no matter whether severance would use retroactively, a footnote in a plurality viewpoint indicated that the decision “does not negate legal responsibility of functions who designed robocalls covered by the robocall decision.” Id. at 2355 n.12.
But in Creasy v. Constitution Communications, Inc., CV 20-1199, 2020 WL 5761117, at *1 (E.D. La. Sept. 28, 2020), the district court accepted Charter’s argument that severance of the government-financial debt exception only permitted the automated-phone ban to be enforced prospectively. The court docket found the entire robocalling restriction experienced been unconstitutional – and thus unenforceable – all through the time the authorities-personal debt exception remained in the statute (from 2015 to 2020).
Pursuing Creasy, the district court docket in Lindenbaum granted the defendant’s movement to dismiss for absence of subject-issue jurisdiction. The district courtroom found the Supreme Court’s severance of the authorities personal debt exception only used prospectively and so, at the time of the challenged robocalls, the TCPA contained an unconstitutional defect, which means the court docket lacked matter-issue jurisdiction above the TCPA claims.
On attractiveness, the Sixth Circuit turned down the problem to the constitutionality of the TCPA between 2015 and 2020, finding that AACP applies retroactively and that retroactive software of AACP raises no Initial Modification considerations.
1st, the courtroom observed the Supreme Court’s severance of the authorities-debt exception could utilize retroactively. 2021 WL 4097320, at *3. The court’s ruling hinged on its summary that severance of the govt-personal debt exception constituted mere statutory interpretation. Id. Though a new remedy or new laws can only function prospectively, judicial conclusions work retrospectively. In AACP, the Supreme Court docket “recognized only that the Structure experienced ‘automatically displace[d]’ the authorities-debt-collector exception from the start, then interpreted what the statute has often meant in its absence.” Id. at *4. Since AACP concerned authorized interpretation – and not (as the defendant claimed) the “elimination” of component of a statute – it applies retroactively.
2nd, the court docket found that retroactive severance did not implicate the To start with Modification. Id. at *5. The defendant argued that retroactive severability would result in either (a) imposing liability on federal government-debt collectors devoid of reasonable detect of unlawfulness or (b) exempting authorities-personal debt collectors from legal responsibility, when imposing liability on private debt-collectors, recreating the content material-discrimination the Supreme Court docket rejected. The court docket rejected this argument, locating that the likely for a governmental credit card debt collector to assert a fair observe defense that was or else not readily available to non-public debt collectors did not represent a restriction on speech.
Since the Sixth Circuit’s feeling signifies the very first Court of Appeals ruling on the retroactivity issue, it will probable have persuasive drive transferring ahead. It follows a selection of district courts that have rejected Creasy’s reasoning. See, e.g., Thomas v. Everyday living Safeguard 24/7, Inc., Civil Motion No. 4:20-cv-03612, 2021 WL 4127144 (S.D. Tex. Sept. 10, 2021) Miles v. Medicredit, Inc., No. 4:20-cv-001186, 2021 WL 872678 (E.D. Mo. Mar. 9, 2021). But other district courts have agreed with Creasy’s reasoning. See, e.g., Cunningham v. Matrix Financial Companies, LLC, No. 4:29-cv-896 (E.D. Tex. Mar. 31, 2021) Hussain v. Sullivan Buick Cadillac-GMC Truck, No. 20-0038, 2020 WL 7346536 (M.D. Fla. Dec. 11, 2020). Even though Lindenbaum may well be persuasive to potential district courts, it does not preclude TCPA defendants from raising the enforceability argument outdoors of the Sixth Circuit.