The AAHAM Government Relations Committee in conjunction with Hogan Lovells US, LLP, is providing a summation of yesterday’s Supreme Court decision in Barr vs AAPC, which upholds the law banning cellphone robocalls. Please note that even in light of the decision, AAHAM continues to urge the FCC to rule on our petition request to verify the phone number provided to any healthcare provider constitutes prior express consent for healthcare calls subject to HIPAA by a HIPAA covered entity and/or business associate acting on its behalf. We will continue to support our membership in this important endeavor and will provide updates as appropriate. In short, the Court affirmed the Fourth Circuit's ruling by:
• Striking down the federal-debts exemption under the First Amendment (6-3 vote). The Court found that the exemption was a content-based restriction and applied strict scrutiny. Because the government conceded that the exemption could not survive strict scrutiny, the Court invalidated the federal-debts exemption.
• Saving the TCPA’s autodialer restriction by severing the federal-debts exemption from the rest of TCPA (7-2 vote). After invalidating the exemption, the Court next determined what the remedy would be. In other words, could the exemption be severed from the TCPA’s general prohibition against sending autodialed calls without prior express consent? Drawing from prior decisions, the Court found that the federal debts exemption could be severed from the TCPA. The Court determined that striking down the TCPA would be administratively unworkable, a dramatic judicial overreach, and contrary to the public interest of combating unsolicited robocalls. As a result, the rest of the TCPA remains intact.
Based on our review, below are some key takeaways from the decision:
• The decision is a mixed result for the government and mostly negative for AAPC and caller-side interests. The government lost because the federal-debts exemption was invalidated, but won insofar as the rest of the TCPA remains intact. AAPC won its argument that the federal debts exemption is now unconstitutional, but lost insofar as the provision can be severed from the rest of the TCPA, leaving the autodialer restriction intact. For the broader caller-side community (collections and otherwise), meanwhile, the Court’s decision provides no immediate relief.
• Federal debt collectors get some grandfathered relief. Even though it struck down the exemption, the Court specifically clarified 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 by the District Court on remand in this case, or such date that the lower courts determine is appropriate.”
• The future of FCC exemptions remains uncertain. If the federal-debts exemption was a content-based regulation of speech, what about other forms of special treatment for calls and texts? In footnote 1, the Court noted the existence of these other exemptions, including for package delivery and healthcare messages. While the Court did not say these rules were unconstitutional, these issues could be litigated with increasing frequency following AAPC (and understanding that the specific legal issues involved would be different). Additionally, First Amendment issues could gain particular salience in any rule making proceedings where the FCC seeks to adopt nuanced treatment depending on the nature of the call.
• What constitutes a regulation of speech? The Court decided that the law was content-based because it drew distinctions on the message the speaker conveyed. While the Court observed that speaker-based classifications could also trigger the First Amendment, it declined to provide further clarification on the issue. Thus it remains unclear whether the FCC or Congress could defensibly implement speaker-based exemptions that are, at least, facially neutral with respect to content.
• What sorts of TCPA restrictions satisfy strict scrutiny? The government conceded that the exemption did not survive scrutiny, so the Court did not have to weigh in further on what would be needed to overcome the presumption of unconstitutionality.
• The autodialer issue remains unsettled. While some raised the issue during briefing, the Court did not provide guidance on what constitutes an "automatic telephone dialing system" under the TCPA. As a result, attention turns back to the FCC to issue a clear autodialer decision.
The TCPA as a whole seems unlikely to be invalidated under the First Amendment. In the lower courts over the years, some defendants have worked to develop a full-frontal theory that the TCPA as a whole is unconstitutional under the First Amendment (regardless of any exemptions). In response to this argument, the majority opinion’s statement includes the following sentence in its severability analysis: “A generally applicable robocall restriction would be permissible under the First Amendment.” It remains unsettled whether this statement is holding or dicta, but it seems that at least five justices on the Court would be reluctant to embrace the most aggressive First Amendment challenge to the TCPA.