Federal Government Not Successful in Moving to Dismiss First Amendment Challenge to TCPA

By Andrew C. Glass, Gregory N. Blase, Christopher J. Valente, and Michael R. Creta

A North Carolina federal district court recently denied a motion by the federal government to dismiss claims raising a First Amendment challenge to a portion of the Telephone Consumer Protection Act (“TCPA”). See American Ass’n of Political Consultants v. Lynch, Case No. 5:16-00252-D (E.D.N.C.). At this early stage of the case, the government did not address the substance of the constitutional challenge.  Rather, the government asserted that the court did not have jurisdiction over the case and that the political organizations which filed the suit did not have standing to maintain suit.  The court, however, rejected the government’s arguments and allowed the case to proceed.

Background

Last year, a bi-partisan coalition of political groups filed a two-count complaint alleging that aspects of the TCPA run afoul of First Amendment free-speech protections. Specifically, the suit contends that the TCPA’s prohibition on making auto-dialed calls or texts to cell phones without the requisite consent, 47 U.S.C. § 227(b)(1)(A)(iii), imposes a content-based restriction on speech that fails to pass strict scrutiny and is unconstitutionally underinclusive.  The federal government moved to dismiss on standing and subject-matter jurisdiction grounds. In response, the plaintiffs amended their complaint to add the Federal Communications Commission (“FCC”) as a defendant and to address purported deficiencies in the original complaint.

The Court Denies the Defendants’ Second Motion to Dismiss

In response to the amended complaint, the federal government again moved to dismiss on standing and subject-matter jurisdiction grounds. First, the government asserted that the plaintiffs lack standing because they cannot show that a judgment in their favor would redress any injury they are alleged to have suffered.  In particular, as the government argued, the plaintiffs’ theory of the TCPA’s unconstitutionality is premised on the application of a 2015 TCPA amendment which exempts calls related to collection of debts owed to or guaranteed by the government.  The government reasoned that the only appropriate remedy to a finding of unconstitutionality in this case would be for the court to sever the 2015 amendment from the rest of the TCPA.  The government suggested that such relief would not aid the plaintiffs because they are not engaged in the collection of debts owed to or guaranteed by the government.

The court, however, ruled that the plaintiffs did have standing to sue because it could provide redress to them by finding some or all of the TCPA unconstitutional. In support of its conclusion, the court cited a recent decision of the Fourth Circuit Court of Appeals affirming a district court’s finding that the entirety of a South Carolina anti-robocall statute was unconstitutional even where the plaintiff in that case was not subject to a part of the statute that he challenged. See Cahaly v. Larosa, 796 F.3d 399, 402-06 (4th Cir. 2015).

Second, the government argued that the district court lacked subject-matter jurisdiction. According to the government, because the amended complaint sought to challenge FCC orders interpreting the TCPA, only a federal circuit court of appeals, and not a federal district court, could exercise jurisdiction over the matter under the limitations imposed by the Hobbs Act, 28 U.S.C. § 2342(a).  In disposing of that argument, the court acknowledged that the Hobbs Act vests exclusive jurisdiction in “[t]he court of appeals … to enjoin, set aside, suspend (in whole or in part) or to determine the validity of … all final orders of the Federal Communications Commission.”  Nevertheless, because the plaintiffs were seeking to challenge the constitutionality of a portion of the statute itself, and did not otherwise seek to enjoin, set aside, annul, or suspend an order of the FCC, the court ruled that the Hobbs Act did not apply and that it had jurisdiction to hear the plaintiffs’ challenge.

While we cannot predict how the court may ultimately rule on the merits of the case, it is significant that a broad challenge to the TCPA’s constitutionality survived the pleadings stage and will likely head into discovery.

K&L Gates LLP will continue to monitor the case and post developments as they occur.