A district court for Maryland recently issued a stay in a class action lawsuit involving alleged violations of the Telephone Consumer Protection Act ("TCPA") in anticipation of a decision from the United States Supreme Court in Barr v. American Association of Political Consultants, Inc.. The pending ruling in that case, which concerns a challenge to the constitutionality of the statute's government-debt exception to the robocalling prohibitions, continues to have ripple effects on TCPA suits nationwide.
How does the anticipated Supreme Court ruling affect this TCPA suit?
The Supreme Court is expected to hear oral argument next month
on a constitutional challenge to an exemption from the TCPA's
robocalling prohibition for calls attempting to collect on
government debt. The challenge essentially argues that the
exemption is an unconstitutional content-based restriction on free
speech that violates the First Amendment to the United States
Constitution. The Supreme Court is set to review both the
constitutionality of the exemption and, if it determines the
exemption to be unconstitutional, whether (i) the exemption can be
severed from the rest of the TCPA; or (ii) the entire TCPA must be
thrown out along with the exemption. In this action, the Maryland
court ultimately concluded that temporarily staying the TCPA suit
was prudent given the possibility that the entire statute could be
struck down by the Supreme Court in a ruling expected to be handed
down this fall.
While the District Court opted to stay the proceedings pending
Supreme Court action in Barr, it expressly rejected the
opportunity to grant a stay pending guidance from the Federal
Communications Commission ("FCC") on the appropriate
interpretation of what is an automatic telephone dialing system for
TCPA purposes. Despite the propensity of many federal courts that
have stayed cases in deference to a forthcoming FCC rulemaking on
this issue, this court found that waiting for such guidance would
be too prejudicial to plaintiffs due to the now years-long effort
from the FCC to issue a final and binding autodialer-related
rule.
Taking Steps to Avoid a TCPA Suit
This case is yet another example of the uncertain regulatory
environment that has evolved in the post-ACA International
telemarketing world. As such, it is critical for businesses to
understand the scope of the TCPA's restrictions before
commencing any telemarketing campaign. The hodgepodge of rules
governing compliance with the TCPA, and the staggering exposure to
liability that companies face for violating the statute, makes it
imperative to have telemarketing practices and procedures examined
by experienced counsel in order to mitigate risk.
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