Sixth Circuit rejects Creasy line of cases, holding TCPA claims arising between November 2015 and July 2020 are viable

The Sixth Circuit recently became the first federal court of appeals to weigh in on whether plaintiffs can bring TCPA claims for conduct occurring between November 2015 and July 2020—the respective dates on which the unconstitutional government debt exception was passed and the Supreme Court’s decision in Barr v. AAPC declared it unconstitutional and severed it from the statute. Some district courts, such as the District of Louisiana in Creasy v. Charter Communications, Inc., 2020 WL 5761117 (E.D. La. Sept. 28, 2020), have concluded plaintiffs cannot—reasoning that the TCPA was void while an unconstitutional provision was part of it. As covered in our prior posts, district courts have come down on both sides of the issue—leading to significant confusion.

Enter the Sixth Circuit’s decision in Lindenbaum v. Realgy, LLC, No. 20-4252, 2021 WL 4097320 (6th Cir. Sept. 9, 2021), which considered the Chief Judge of the Northern District of Ohio’s decision that dismissed a putative class action arising from prerecorded calls.

In the trial court, the defendant had moved to dismiss, arguing that “severance can only be applied prospectively,” that the applicable statutory sections were unconstitutional when the calls were made, and that courts lack jurisdiction to enforce unconstitutional statutes. In opposition, the plaintiff argued that a footnote in Justice Kavanaugh’s plurality opinion in Barr v. AAPC suggests “that severance of the government-debt exception applies retroactively to all currently pending cases.” The district court agreed with defendant and, following Creasy, reasoned that this issue “was not before the Supreme Court,” and the lone footnote in Justice Kavanaugh’s plurality opinion is “passing Supreme Court dicta of no precedential force.” It reasoned that, while judicial interpretations of laws are “given full retroactive effect in all cases still open on direct review and as to all events,” severance is different because it is “a forward-looking judicial fix” rather than a backward-looking judicial “remedy.” So, it concluded, the effect of severance was to render the statute void during the time the government debt exception was in place, and dismissed the claims. Plaintiff appealed.

On appeal, the defendant contended that severability is a remedy that fixes an unconstitutional statute, such that it can only apply prospectively. As a fallback, it argued that if it can be held liable for the period from 2015 to 2020, but government debt collectors who lacked fair notice of the unlawfulness of their actions cannot, as, in its view, that would recreate the same First Amendment violation the Court recognized in AAPC. The Sixth Circuit rejected both of defendant’s arguments.

In rejecting defendant’s first argument, it concluded that—rather than severance merely functioning prospectively—the Supreme Court recognized that the Constitution had automatically displaced the government debt exception from the start, and “then interpreted what the statute has always meant in its absence . . . That legal determination applies retroactively.” 2021 WL 4097320 at *4 (citations omitted).

Regarding defendant’s fallback argument, the Sixth Circuit explained that defendant’s premise was flawed. More specifically, defendant was contending that government debt collectors have a due process defense to liability because they did not have fair notice of their actions’ unlawfulness. If true, in defendant’s view, then holding private debt collectors liable would create the same content-discriminatory system that the Supreme Court held unconstitutional in AAPC: defendant would be liable, and government debt collectors would not. The Sixth Circuit explained that this premise is flawed because fair notice is not tied to speech. Rather, whether a debt collector had fair notice that it faced liability under the TCPA turned on whether it reasonably believed the statute prohibited its conduct. “That, in turn, will likely depend in part on whether the debt collector used robocalls to collect government debt or non-government debt. But applying the speech-neutral fair-notice defense in the speech context does not transform it into a speech restriction.” For these reasons, the Sixth Circuit reversed.

While it remains to be seen where other circuit courts will come down, the Sixth Circuit’s decision in Lindenbaum will no doubt be cited by plaintiffs in their quest to overcome the Creasy line of cases.