AMERICAN ASSOCIATION OF POLITICAL CONSULTANTS, INC.; DEMOCRATIC PARTY OF OREGON, INC.; PUBLIC POLICY POLLING, LLC; WASHINGTON STATE DEMOCRATIC CENTRAL COMMITTEE, Plaintiffs – Appellants, and TEA PARTY FORWARD PAC, Plaintiff, v. FEDERAL COMMUNICATIONS COMMISSION; WILLIAM P. BARR, in his official capacity as Attorney General of the United States, Defendants – Appellees.
No. 18-1588
United States Court of Appeals for the Fourth Circuit
April 24, 2019
PUBLISHED. Argued: December 12, 2018. Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. James C. Dever III, District Judge. (5:16-cv-00252-D)
Vacated and remanded by published opinion. Judge King wrote the opinion, in which Judge Keenan and Judge Quattlebaum joined.
ARGUED: William Edward Raney, I, COPILEVITZ & CANTER LLC, Kansas City, Missouri, for Appellants. Lindsey Powell, UNITED STATES DEPARTMENT OF
The American Association of Political Consultants, Inc. and three other plaintiffs (hereinafter the “Plaintiffs“) appeal from a summary judgment award made by the district court to the defendants, the Federal Communications Commission (the “FCC“) and the Attorney General (collectively the “Government“). See Am. Ass‘n of Political Consultants v. Sessions, 323 F. Supp. 3d 737 (E.D.N.C. 2018) (the “Opinion“).1 The Plaintiffs initiated this litigation in May 2016 in the Eastern District of North Carolina, alleging that part of the Telephone Consumer Protection Act of 1991 (the “TCPA“) contravenes the Free Speech Clause of the First Amendment. As pertinent here, the TCPA prohibits calls to cell phones by use of an automated dialing system or an artificial or prerecorded voice, subject to three statutory exemptions (the “automated call ban“). The Plaintiffs allege that one of the statutory exemptions to the automated call ban — created by a 2015 TCPA amendment — is facially unconstitutional under the Free Speech Clause. That exemption authorizes automated calls that relate to the collection of debts owed to or guaranteed by the federal government (the “debt-collection
In awarding summary judgment to the Government in March 2018, the Opinion rejected the free speech challenge interposed by the Plaintiffs. The district court applied strict scrutiny review to the debt-collection exemption and ruled that it does not violate the Free Speech Clause. As explained below, we agree that strict scrutiny review applies in this case but conclude that the debt-collection exemption does not satisfy such a review. As a result, we agree with the Plaintiffs that the debt-collection exemption contravenes the Free Speech Clause. In agreement with the Government, however, we are satisfied to sever the flawed exemption from the automated call ban. We therefore vacate the judgment and remand.
I.
A.
Enacted in 1991, the TCPA was a response by Congress to the reactions of American consumers over intrusive and unwanted phone calls. As a result of congressional concern with automated phone calls, the automated call ban prohibits phone calls to cell phones that use “any automatic telephone dialing system or an
For more than twenty years, the emergency and consent exemptions were the only statutory exemptions to the automated call ban. In 2015, however, Congress enacted the
B.
In May 2016, the Plaintiffs filed this lawsuit in the Eastern District of North Carolina, alleging, inter alia, that the debt-collection exemption to the automated call ban contravenes their free speech rights because it is a content-based restriction on speech that fails to satisfy strict scrutiny review. According to the complaint, the debt-collection exemption creates a regime that permits — and thereby unconstitutionally favors — a select group of otherwise prohibited automated calls to cell phones. The complaint also alleges that whether an automated phone call satisfies the debt-collection exemption, and thus escapes the prohibitions of the automated call ban, depends on the call‘s content.
In 2017, the Plaintiffs and the Government each moved in the district court for summary judgment. By its Opinion of March 26, 2018, the court denied the summary judgment request of the Plaintiffs and awarded summary judgment to the Government. In so ruling, the court rejected the Free Speech Clause challenge of the Plaintiffs. At its outset, the Opinion correctly recognized that the Free Speech Clause prohibits a restriction on speech that is predicated on “‘its message, its ideas, its subject matter, or its content.‘” See AAPC, 323 F. Supp. 3d at 742 (quoting Reed v. Town of Gilbert, 135 S. Ct. 2218, 2226 (2015)). As the Opinion explained, such content-based speech restrictions “‘are presumptively unconstitutional‘” and are only permissible if they satisfy strict scrutiny review. See id. (quoting Reed, 135 S. Ct. at 2226). That is, the Government must establish that content-based speech restrictions have been narrowly tailored to further a compelling governmental interest.
Although the Opinion ruled that the debt-collection exemption to the automated call ban is constitutional, it initially recognized the exemption as a “content-based speech restriction.” See AAPC, 323 F. Supp. 3d at 743. As the district court explained, the debt-collection exemption “makes content distinctions on its face.” Id. To support that proposition, the court drew on a decision from a California court and explained that whether an automated phone call to a cell phone qualifies for the exemption “derives from the call‘s communicative content,” and requires a court to review such content. Id. (citing Gallion v. Charter Commc‘ns Inc., 287 F. Supp. 3d 920, 927 (C.D. Cal. 2018)).
Notwithstanding the content-based restriction imposed by the debt-collection exemption, the Opinion ruled that it does not contravene the Free Speech Clause. The district court thus rejected the proposition advanced by the Plaintiffs that the exemption undermines the narrow tailoring of the automated call ban. In that regard, the court agreed with the Government that the exemption does not subvert the privacy interests furthered by the ban. The Opinion therefore concluded that the debt-collection
Finally, the district court rebuffed the argument of the Plaintiffs that less restrictive alternatives would equally advance the purposes of the automated call ban. The Opinion explained that alternatives proposed by the Plaintiffs — such as time-of-day limitations, mandatory caller identity disclosure, and do-not-call lists — would not further the privacy interests underlying the TCPA and were otherwise implausible. Because the court ruled that the debt-collection exemption to the automated call ban satisfies strict scrutiny and does not contravene the Free Speech Clause, it awarded summary judgment to the Government.
The Plaintiffs have noted a timely appeal, which has been briefed and argued. Being satisfied that the district court had subject matter jurisdiction and rendered a final decision, we possess appellate jurisdiction pursuant to
We review de novo legal rulings made by a district court in connection with a summary judgment award. See Bostic v. Schaefer, 760 F.3d 352, 370 (4th Cir. 2014). In so doing, we apply “the same legal standards as the district court,” under which summary judgment is appropriate where there is no genuine dispute of material fact, “and the movant is entitled to judgment as a matter of law.” See Lawson v. Union Cty. Clerk of Court, 828 F.3d 239, 247 (4th Cir. 2016) (citations and internal quotation marks omitted). Being confronted with a facial constitutional challenge to a statute, we review the various issues de novo. See Maryland v. Universal Elections, Inc., 729 F.3d 370, 375 (4th Cir. 2013).
III.
A.
1.
Although the Plaintiffs agree with the district court that the debt-collection exemption to the automated call ban constitutes a content-based restriction on speech, they challenge the court‘s ruling that the exemption satisfies strict scrutiny review. As support, they contend that the debt-collection exemption does not further any compelling
2.
In order to properly assess and dispose of the Plaintiffs’ Free Speech Clause challenge to the debt-collection exemption, we must address three issues. First, we must decide whether, on one hand, the debt-collection exemption is a content-based speech restriction subject to strict scrutiny review, or whether, on the other hand, it constitutes a content-neutral speech restriction subject to intermediate scrutiny analysis. See Reed v. Town of Gilbert, 135 S. Ct. 2218, 2227 (2015). Second, we must evaluate whether the debt-collection exemption to the automated call ban survives the applicable level of scrutiny. See id. at 2231. Finally, if the debt-collection exemption impermissibly infringes on free speech rights, we must identify the appropriate remedy for that infringement. That is, we must then decide whether to strike the automated call ban in its entirety, or whether to simply sever the flawed exemption therefrom. See Regan v. Time, Inc., 468 U.S. 641, 652-53 (1984).
B.
1.
a.
In the First Amendment context, a statutory provision constitutes a content-based speech restriction if it “applies to particular speech because of the topic discussed or the idea or message expressed.” See Reed, 135 S. Ct. at 2227. Such a speech restriction is presumptively unconstitutional and can only be justified if it is narrowly tailored to further a compelling governmental interest. See id. To determine whether a statutory provision imposes a content-based speech restriction, the Supreme Court has identified a two-prong inquiry. As the Court explained in its Reed decision in 2015, the inquiry‘s first prong requires a reviewing court to decide whether the statute is content-based on its face — that is, whether the text thereof distinguishes between speech based on content or subject matter. See id. at 2228. If the statute is determined to be facially content-based, the court must conduct a strict scrutiny review. If the statute is facially content-neutral, however, it must satisfy the second prong of the Reed inquiry in order to be reviewed
b.
Analyzed under Reed‘s first prong, the debt-collection exemption to the automated call ban facially distinguishes between phone calls on the basis of their content. As that exemption specifies, otherwise prohibited automated calls made to cell phones “solely to collect a debt owed to or guaranteed by the United States” do not violate the automated call ban and are legally permissible. See
The content-based nature of the debt-collection exemption is demonstrated by an illustrative example. As explained by the district court, a private debt collector could make two nearly identical automated calls to the same cell phone using prohibited technology, with the sole distinction being that the first call relates to a loan guaranteed
c.
Seeking to avoid a judicial determination that the debt-collection exemption is a content-based speech restriction, the Government maintains on appeal that the exemption “is premised principally on the relationship between the [federal] government and the person being called.” See Br. of Appellees 6. That relationship, according to the Government, emanates from a loan or guarantee arrangement between the federal government and the debtor. Because the debt-collection exemption applies to automated phone calls that have a nexus with a government-debtor arrangement — and the relationship it creates — the applicability of the exemption turns on the debtor‘s relationship with the federal government. The Government therefore contends that whether an automated phone call is authorized by the debt-collection exemption, and thus not prohibited by the automated call ban, depends on the relationship of the parties thereto, and not on the content thereof.8
a.
Because the debt-collection exemption is a content-based restriction on speech, it can only pass constitutional muster if it satisfies a strict scrutiny review. See Reed, 135 S. Ct. at 2231. Strict scrutiny is a rigorous standard of review that requires the speech restriction to advance a sufficiently important governmental objective — that is, an objective of the “highest order.” See id. at 2232; see also McCutcheon v. FEC, 572 U.S. 185, 199 (2014). Any content-based restriction must also be narrowly tailored, that is, “closely drawn,” in order to fit that objective. See McCutcheon, 572 U.S. at 199. Thus, in order to survive strict scrutiny, the Government must show that the debt-collection exemption has been narrowly tailored to further a compelling governmental interest. See Reed, 135 S. Ct. at 2231.
In conducting a strict scrutiny review, we are obliged to examine the speech restriction for an infirmity that is commonly referred to as “underinclusiveness.” See Reed, 135 S. Ct. at 2232. An “underinclusive” restriction is one that covers too little speech, thereby leaving “appreciable damage to the government‘s interest unprohibited.” See Cahaly v. Larosa, 796 F.3d 399, 405 (4th Cir. 2015) (citations and internal quotation marks omitted). An underinclusive restriction thus fails a strict scrutiny review. See id. at 405-06.9
b.
In seeking to justify the debt-collection exemption, the Government maintains that the automated call ban (including that exemption) furthers a compelling governmental interest by protecting personal and residential privacy. Relying on congressional findings supporting the TCPA, the Government argues that automated calls are “the most intrusive” type of phone calls. See Br. of Appellees 20. By “generally preventing” the use of such calls to cell phones, the Government contends that the automated call ban protects and shelters the privacy interests of American consumers. See id. It also argues that, as part of the automated call ban, the debt-collection exemption does not undermine the privacy protection efforts embodied in the ban. According to the Government, that exemption applies only to a “narrow category of calls.” See id. at 18. It therefore asserts
We are unpersuaded by the Government‘s compelling interest argument. Again, the debt-collection exemption does not further the purpose of the automated call ban in a narrowly tailored fashion. Congress implemented the ban in order to protect privacy interests. See
Significantly, the potential reach of the debt-collection exemption belies the Government‘s asserted “narrow” framing of it. According to the FCC, the federal government, by the end of fiscal year 2016, had either guaranteed or was owed nearly eighty-percent of all outstanding student loan debt. See In re Rules & Regulations Implementing the TCPA, 31 FCC Rcd. 9074, 9077 n.28 (Aug. 11, 2016). An FCC report also revealed that more than 41 million borrowers owed over one trillion dollars in federal student loans. See id. Notably, student loan debt, which is generally handled through the Department of Education, is but one category of debt that is guaranteed by or owed to the federal government. See id. at 9077-78. Various other categories of such debt are handled through other departments, which include the Department of Agriculture, the Department of Housing and Urban Development, and the Department of
Because of the expansive reach of the debt-collection exemption, it is woefully underinclusive and does not serve the compelling governmental interest of protecting privacy in a narrow fashion. The exemption thus cannot be said to advance the purpose of privacy protection, in that it actually authorizes a broad swath of intrusive calls. In so doing, the debt-collection exemption exposes millions of American consumers to some of the most disruptive phone calls they receive. The exemption therefore erodes the privacy protections that the automated call ban was intended to further. See Williams-Yulee v. Florida Bar, 135 S. Ct. 1656, 1668 (2015) (recognizing that speech restrictions with vast carveouts can undermine compelling governmental interest). Although theoretically limited by the number of debtors owing loans guaranteed by the federal government, the debt-collection exemption authorizes a nearly “unlimited proliferation” of disruptive and intrusive automated debt-collection efforts. See Reed, 135 S. Ct. at 2231.10
Likewise, a comparative analysis of the automated phone calls authorized under the debt-collection exemption with those permissible under the other statutory exemptions shows the detrimental effect of debt-collection calls on the privacy interests that underlie the automated call ban. For example, phone calls authorized under the consent exemption require “the prior express consent of the called party.” See
The automated phone calls authorized under the emergency exemption also contrast sharply with debt-collection calls. In order to qualify for the emergency exemption, phone calls must be “necessary in any situation affecting the health and safety” of Americans. See
Unlike the consent and emergency exemptions, the debt-collection exemption impedes the privacy interests of the automated call ban. The debt-collection exemption is thus an outlier among the statutory exemptions. The divergence between the debt-
d.
As the Supreme Court emphasized in its Reed decision, a “‘law cannot be regarded as protecting an interest of the highest order, and therefore as justifying a restriction on truthful speech, when it leaves appreciable damage to that supposedly vital interest unprohibited.‘” See Reed, 135 S. Ct. at 2232 (quoting Republican Party of Minn. v. White, 536 U.S. 765, 780 (2002)). The content-based loophole created by the debt-collection exemption does what the Reed Court condemned. See Williams-Yulee, 135 S. Ct. at 1668 (explaining that underinclusive restrictions “can raise ‘doubts about whether the government is in fact pursuing the interest it invokes‘” (quoting Brown v. Entm‘t Merchs. Ass‘n, 564 U.S. 786, 802 (2011)); White, 536 U.S. at 780 (recognizing that a restriction on speech might permit so much of the objectionable speech as to “render belief in that purpose a challenge to the credulous“). In these circumstances, the debt-collection exemption fails to satisfy strict scrutiny, constitutes an unconstitutional content-based restriction on speech, and therefore violates the Free Speech Clause.
3.
a.
In that the debt-collection exemption contravenes the Free Speech Clause, we must also consider and identify the impact of that ruling on the balance of the automated call ban. Because the district court ruled that the exemption satisfies strict scrutiny, it had no reason to address the question of severance. Anticipating that we might rule in favor
For several reasons, we agree with the Government on the severance issue. First and foremost, the explicit directives of the Supreme Court and Congress strongly support a severance of the debt-collection exemption from the automated call ban. Furthermore, the ban can operate effectively in the absence of the debt-collection exemption, which is clearly an outlier among the statutory exemptions.
b.
In circumstances such as these, the Supreme Court has recognized that severance is the preferred remedy. As the Chief Justice explained in the Court‘s NFIB v. Sebelius decision, if Congress wants the balance of a statute to stand when one aspect is constitutionally flawed, a reviewing court “must leave the rest of the [statute] intact.” See 567 U.S. 519, 587 (2012). By severing the flawed portion of a statute, the court can limit the impact of its ruling of constitutional infirmity. See Ayotte v. Planned Parenthood of N. New Eng., 546 U.S. 320, 328 (2006); United States v. Under Seal, 819 F.3d 715, 721-22 (4th Cir. 2016) (recognizing that severance of a flawed portion of a statute prevents a court from nullifying too much of that enactment). The general rule is thus “‘that partial . . . invalidation [of a statute] is the required course.‘” See Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 508 (2010) (quoting Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 504 (1985)).
Complementing the Supreme Court‘s strong preference for a severance in these circumstances, Congress has explicitly mandated that, if a TCPA provision is determined to be constitutionally infirm, severance is the appropriate remedy. That is, Congress has directed that, if any part of the TCPA “is held invalid, the remainder . . . shall not be affected.” See
We are also satisfied that a severance of the debt-collection exemption will not undermine the automated call ban. For twenty-four years, from 1991 until 2015, the automated call ban was “fully operative.” Free Enter. Fund, 561 U.S. at 509 (citations and internal quotation marks omitted). As a result, the Plaintiffs simply cannot show that excising the debt-collection exemption will hamper the function of the ban. See Alaska Airlines, 480 U.S. at 686 (explaining that only “strong evidence” overcomes presumption created by severability clause). In these circumstances, we agree with the Government and direct the severance of the debt-collection exemption from the balance of the automated call ban.
IV.
Pursuant to the foregoing, we vacate the district court‘s award of summary judgment to the Government. We also direct the severance of the debt-collection exemption from the balance of the automated call ban and remand for such further proceedings as may be appropriate.
VACATED AND REMANDED
Notes
Seeto make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice —
. . . .
(iii) to any telephone number assigned to a . . . cellular telephone service . . . unless such call is made solely to collect a debt owed to or guaranteed by the United States . . . .