Ohio District Court Holds TCPA Unenforceable From 2015 Through 2020

Lidenbaum v. Realgy, LLC, 2020 WL 6361915 (N.D. Ohio Oct. 29, 2020)

Pending before the Court was a class action lawsuit, contending Defendants violated the Telephone Consumer Protection Act, 47 § U.S.C. 227 (“TCPA”). Defendants filed a Motion to Dismiss under Fed.R.Civ.P. 12(b)(1), contending that the Court lacked subject matter jurisdiction over Plaintiffs’ claims because they arose during a time that the TCPA included a “government-debt” exception, which exempted calls made to collect a debt owed or guaranteed by the United States held to be unconstitutional in Barr v. American Association of Political Consultants, Inc., 140 S.Ct. 2335 (2020). Defendants reasoned that though AAPC severed the unconstitutional government-debt exception, the severance did not apply retroactively. Thus, the TCPA was unconstitutional, void and unenforceable from the date that the government-debt exception was enacted to the date that it was severed.

Undertaking an extensive analysis of AAPC, the Court noted that in footnote 12 of the opinion, the plurality provided that:

As the government acknowledges, although our decision means the end of the government-debt exception, no one should be penalized or held liable for making robocalls to collect government debt after the effective date of the 2015 government-debt exception and before entry of final judgment by the District Court on remand in this case, or such other date that the lower courts determine is appropriate. On the other side of the ledger, our decision today does not negate liability of parties who made robocalls covered by the robocall restriction.

The Court then cited the dissent’s seeming acknowledgment that the plurality suggested severance might apply retroactively, and statement that “the [plurality] opinion suggests that the ban on government-debt collection calls announced today might be applied only prospectively. But prospective decision-making has never been easy to square with judicial power. And a holding that shields only government-debt collection callers from past liability under an admittedly unconstitutional law would wind up endorsing the very same kind of content discrimination we say we are seeking to eliminate.” Agreeing with Defendants that AAPC did not address whether severance of the government-debt exception applied retroactively to cases currently pending, the Court also noted that footnote 12 was only endorsed by three Justices, and that while the Court strives to give serious consideration and persuasive effect to non-binding dictum, it agreed with the characterization of footnote 12 set forth in Creasy v. Charter Communications, Inc., 2020 WL 5671117 (E.D. La. Sept. 28, 2020) as “‘passing Supreme Court dicta of no precedential force.‘”

Thereafter, citing Arthrex, Inc. v. Smith & Nephew, Inc., the Court pointed out that the plaintiffs in AAPC “sought the right to speak going forward on the grounds that the statute, as written, is an unconstitutional content-based restriction. The Supreme Court denied that relief, but offered a remedy in the form of eliminating the content-based restriction. Here, severance of the content-based restriction does not offer a ‘remedy’ to correct past harm. Defendants do not seek the right to speak, having already done so. They seek the right to be free from punishment for speaking during a time when an unconstitutional content-based restriction existed. A forward-looking fix offers no remedy for this past wrong.”

Finally, the Court recognized the plurality’s characterization of the government-debt exception as a “nullity,” and “void,” therefore having “no effect on the original statute” in the context of footnote 12 and the portion of the dissent set forth above stating:

Although dicta, the plurality noted in footnote 12 that “no one should be penalized or held liable for making robocalls to collect government debt after the effective date of the 2015 government-debt exception and before the entry of final judgment [in this case]....” This statement would make no sense if the term “void” meant “void ab initio,” because, in essence, footnote 12 indicates the statute as amended should be enforced with respect to government-debt collector robocalls made during this period. Presumably, the plurality was rightly concerned with due process issues that would arise if courts treated the amendment as void ab initio. But, if the statute is not considered void ab initio, it contains an unconstitutional content-based restriction that improperly favors some speech over other speech. And, to treat it as void ab initio only as to certain parties would likely raise its own set of equal treatment concerns– the very concern raised by the AAPC dissent. The fact remains that at the time the robocalls at issue in this lawsuit were made, the statute could not be enforced as written. And, a later amendment to a statute cannot be retroactively applied.

In sum, the Court concluded that at the time Defendants allegedly engaged in the speech at issue, they were subject to an unconstitutional content-based restriction and that the Court “cannot wave a magic wand and make that constitutional violation disappear.” As such, because the TCPA was unconstitutional at the time of the alleged violations, the Court lacked jurisdiction over Plaintiffs’ claims.

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