FTC Beat
Sep 16
2013

Appeals Court Rules TCPA Does Not Violate First Amendment

The U.S. Court of Appeals for the Fourth Circuit recently ruled that the Telephone Consumer Protection Act (TCPA) does not violate the First Amendment by requiring robocallers to identify themselves when making calls.

Three months before the Maryland gubernatorial election in 2010, political consultant Julius Henson and his company Universal Elections, Inc., were hired to assist with efforts for the Republican candidate. On Election Day, Universal Elections made 112,000 robocalls to voters that did not identify the campaign as the source of the message, nor did the calls include the campaign’s phone number. The State of Maryland filed a civil suit against Henson and Universal Elections for violating the TCPA. The state alleged that the defendants violated the TCPA by failing to identify the campaign as the sponsor of the message as required under the statute.

The TCPA and its implementing regulations require that automated and prerecorded messages state clearly at the beginning of the message the identity of the business, individual, or other entity that is responsible for initiating the call. If a business or other corporate entity is responsible, the prerecorded voice message must contain that entity’s official business name. In addition, the telephone number of the business must be provided either during or after the prerecorded voice message. This disclosure applies regardless of the content of the message.

Political calls are exempt from some of the TCPA’s requirements, but other requirements do apply — including the disclosure requirement at issue here and the restrictions on autodialed or prerecorded calls or texts to wireless phones, which require prior express consent. Last year the Federal Communications Commission issued an enforcement advisory regarding political robocalls to cellphones and cited two marketing companies for making millions of illegal robocalls.

In its supplemental motion to dismiss, the defendants asserted a First Amendment defense, arguing that the TCPA is a content-based burden on political speech that cannot withstand a high strict-scrutiny standard of review. The United States intervened to defend the constitutionality of the TCPA. The district court ruled in favor of Maryland, holding that the TCPA withstands First Amendment challenges, and granted a $1 million judgment in favor of the state.

The Fourth Circuit affirmed the district court. The appeals court had previously issued the opinion in July, but as an unpublished opinion. The court issued an order amending its previous opinion to change it to a published opinion after a request from the government that it be published.

The Fourth Circuit held that the TCPA provisions requiring all automated and prerecorded telephone messages to disclose the source of the message are content-neutral and thus subject to an intermediate scrutiny level of review. Content-neutral laws that regulate speech are valid if they further a substantial governmental interest. The Fourth Circuit noted that at least three important governmental interests are advanced by the TCPA’s identity disclosure provision, including protecting residential privacy, promoting disclosure to avoid misleading recipients of recorded calls, and promoting effective law enforcement. Since the TCPA advances important governmental interests and the appellants did not raise an argument to the contrary, the Fourth Circuit affirmed that the TCPA’s identity disclosure provisions are constitutional.

TCPA litigation continues to increase, and potential liability can be significant. All businesses should review their TCPA compliance policies carefully to ensure that their procedures and scripts comply with all requirements. In addition to the identification requirements that have been in effect for many years, companies should make sure that they are prepared for the upcoming TCPA rule changes. These changes will require a called party’s prior express written consent for autodialed or prerecorded calls to wireless phone numbers and for prerecorded telemarketing calls to residential lines, among other requirements.

Ifrah Law is a leading white-collar criminal defense firm that focuses on mobile and telephone marketing.

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About Ifrah Law

FTC Beat is authored by the Ifrah Law Firm, a Washington DC-based law firm specializing in the defense of government investigations and litigation. Our client base spans many regulated industries, particularly e-business, e-commerce, government contracts, gaming and healthcare.

Ifrah Law focuses on federal criminal defense, government contract defense and procurement, health care, and financial services litigation and fraud defense. Further, the firm's E-Commerce attorneys and internet marketing attorneys are leaders in internet advertising, data privacy, online fraud and abuse law, iGaming law.

The commentary and cases included in this blog are contributed by founding partner Jeff Ifrah, partners Michelle Cohen and George Calhoun, counsels Jeff Hamlin and Drew Barnholtz, and associates Rachel Hirsch, Nicole Kardell, Steven Eichorn, David Yellin, and Jessica Feil. These posts are edited by Jeff Ifrah. We look forward to hearing your thoughts and comments!

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