Barr Ruling Cures Claims Arising During Life of Government-Debt Exception, Holds Texas District Court

Last week, the U.S. District Court for the Southern District of Texas concluded that plaintiffs can bring claims for violations of 47 U.S.C. § 227(b) that arose while the government-debt exception (“GDE”) to that provision was still on the books.  The decision comes amid growing contention among courts in the wake of the U.S. Supreme Court’s decision last year in Barr v. American Association of Political Consultants, 140 S. Ct. 2335 (2020), which struck down the GDE as an unconstitutional content-based restriction on speech.

In Thomas v. Life Protect 24/7, Inc., Civil Action No. 4:20-cv-03612, 2021 WL 4127144 (S.D. Tex. Sept. 10, 2021), the plaintiff alleged that, beginning in 2019, the defendant placed several calls to her cell phone containing pre-recorded voice messages advertising medical-alert devices, in violation of § 227(b).  Id. at *1.  The plaintiff also brought claims under § 227(c) and 47 C.F.R. § 64.1200(c) because her cell number was listed on the national do-not-call registry at the time of the calls.  Id. 

On its motion to dismiss, the defendant argued that it couldn’t be held liable for violating § 227(b) because the alleged calls were made before the Supreme Court remedied that provision by invalidating the GDE, which was added as an amendment to the TCPA in 2015.  Id. at *6.  The claim could not be pursued because the entire provision was unconstitutional and without effect while the GDE remained on the books, the defendant argued.  Id. 

The district court noted that this “question of retroactivity” was left open in Barr because it was unnecessary to that case’s disposition.  Id.  Since then, however, courts have split on the issue.  Many courts have adopted the Barr plurality’s suggestion that the existence of the GDE “does not negate the liability” of parties who made calls prohibited by the TCPA before Barr corrected the statute.  Id. (citing Barr, 140 S. Ct. at 2355 n.12, and collecting cases).  On the other hand, some courts have declined to accord dispositive weight to that suggestion and have instead held that all of § 227(b) was invalid between enactment of the GDE and the Barr ruling.  Id. (collecting cases).

“[T]he better view,” the court held, “is plainly in favor of applying the Barr remedy retroactively.”  Id. at *7.  First, the court reasoned, acts of Congress come with a “presumption of constitutionality” under the principle of constitutional supremacy.  Id. (citing Skilling v. United States, 561 U.S. 358, 405-06 (2010)).  And since the finding of a law to be unconstitutional means that it “is as no law,” courts must treat “the original, pre-amendment statute as the valid expression of the legislative intent.”  Id. (quoting Ex parte Siebold, 100 U.S. 371, 376 (1879) & Barr, 140 S. Ct. at 2353) (internal quotation omitted).  As there was no question of the TCPA’s constitutionality in its pre-GDE form, the court believed itself bound to uphold the remedied version of the statute handed down in BarrId.

“The decision in Barr finding unconstitutional only the government-debt exception means that only it was void from inception,” said the court.  Id. (emphasis in original).  The fact that the GDE was found to be severable from the rest of § 227(b) “further confirms that its unconstitutional nature didn’t infect the constitutionality of the remainder of the TCPA[.]”  Id.  The plaintiff was therefore allowed to proceed with her claim, even though it arose before the Supreme Court’s ruling in Barr.

The court also rejected the defendant’s attacks on the plaintiff’s standing and on personal jurisdiction.  The plaintiff’s allegation that the defendant “repeatedly” called her “on a repetitive and continuous basis” for solicitation purposes clearly satisfied the injury-in-fact requirement of Article III, the court held.  Id. at *5 (citing Cranor v. 5 Star Nutrition, 998 F.3d 686 (5th Cir. 2021)).  As to personal jurisdiction, the court held that although the defendant didn’t specifically aim its robocalls at Texas, it nonetheless availed itself of the state’s laws by engaging in conduct that was bound to cause harm in some forum.  Id. at *9.  “Where a business is alleged to engage in intentional practices assuredly designed to manifest results across the country in contravention of a federal statute,” the court reasoned, “the act of reaching out in that prohibited manner is purposeful availment . . . in whatever state that call reaches.”  Id. at *10 (citation omitted).

The split among district courts on the retroactive effect of the Barr remedy may prompt the circuit courts to resolve the issue.  In fact, last week the Sixth Circuit became the first circuit to do so, holding that claims arising during the GDE’s existence are viable.  (See here for our coverage of that decision.)  Other circuits that take up the issue may follow this lead or take the other direction.  Until the courts reach consensus, TCPA defendants should stay apprised of developments in this area in all relevant jurisdictions.

Zoë K. Wilhelm

About the Author: Zoë K. Wilhelm

Zoë Wilhelm advocates for her clients in consumer class actions and commercial litigation in California and in multiple jurisdictions throughout the country. Zoë is a co-leader of the firm’s consumer products and retail industry group, a partner liaison to the Associates Committee, and a member of the steering committee for Faegre Drinker Women. Zoë defends consumer class actions involving state and federal consumer protection laws such as the Consumer Legal Remedies Act (CLRA), Unfair Competition Law (UCL), False Advertising Law (FAL), California Gift Card Law, California Invasion of Privacy Act (CIPA), the Telephone Consumer Protection Act (TCPA). Zoë is well-versed in class action procedural issues and works with her clients to develop litigation strategies that incorporate their unique business concerns.

Anthony F. Jankoski

About the Author: Anthony F. Jankoski

Anthony Jankoski assists clients with various aspects of legal proceedings and trial preparation, including legal research and the drafting of motions and other legal memoranda.

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