"Retroactive" Liability after Barr v. AAPC

Judge Stephanos Bibas "does not see how" he can follow the plurality opinion


One of the most theoretically important and underappreciated Supreme Court decisions of 2020 was Barr v. AAPC, though it has been discussed repeatedly on this blog. In Barr, a fractured group of Supreme Court Justices concluded that it was unconstitutional for Congress to ban most "robocalls" while privileging those robocalls that try to collect government debt; and that in light of this, the statute should be read to ban all robocalls.

The opinion expressing both of those views was a plurality opinion by Justice Kavanaugh that was not supported by five votes. In addition to questions of free speech and severability, the plurality addressed in a footnote the question of liability for those who had made robocalls to collect government debt in the past:

As the Government acknowledges, although our decision means the end of the government-debt exception, no one should be penalized or held liable for making robocalls to collect government debt after the effective date of the 2015 government-debt exception and before the entry of final judgment by the District Court on remand in this case, or such date that the lower courts determine is appropriate. See Reply Brief 24. On the other side of the ledger, our decision today does not negate the liability of parties who made robocalls covered by the robocall restriction.

At the time, I wrote: "This conclusion is perfectly logical, but its legal basis is a bit mysterious to me." The plurality had purported to agree, in its severability analysis, that courts do not actually have the power to invalidate statutes in the sense of repealing them or changing the law—rather, the "term 'invalidate' is a common judicial shorthand" employed when the Court "recognizes that the Constitution is a 'superior', paramount law,' and that 'a legislative act contrary to the constitution is not law' at all." It would seem to follow that whatever the law is after the Supreme Court's decision in Barr was also the law before the Supreme Court's decision in Barr.

I will add that I was especially puzzled by the plurality's expectation that this immunity from enforcement of the robocall prohibition would continue into the future until "the entry of final judgment by the District court on remand" or some other unknown date for unknown reasons.

In any case, in light of all this I was especially interested and please to see a new and excellent opinion on these issues. The opinion is by Judge Stephanos Bibas, who sat by designation on a district court, in a case called Franklin v. Navient. From the beginning:

"[J]udicial decisionmaking" after the fact "necessarily involves some peril to individual expectations." Rivers v. Roadway Express, Inc., 511 U.S. 298, 312 (1994). Navient may have to learn that the hard way. It robocalled Ricky Franklin for years to collect on his government-backed student loans. Although many types of robocalls are illegal, a federal law said that Navient's were exempt. Yet after Navient made the calls, the Supreme Court struck down the government-debt exception. And now Franklin is suing. Navient responds that it should not be liable for calls that were legal at the time.

But the calls were not legal at the time. When a court finds a law unconstitutional, it finds that the law was void since the day it was passed. So the robocalling ban never had a valid exception for government debt. Navient cannot rely on one. And while it reasonably thought it was covered by the exception, that is no defense to paying compensation.

Yet Franklin wants more than compensation; he wants punitive damages. And due process bans punishing parties without fair notice. By (mistakenly) saying that Navient's calls were allowed, Congress deprived it of fair notice. So if Franklin wins at trial, he may recover damages—but only to compensate him for the injuries he can prove.

And the middle:

Courts cannot change the law; they can only declare what the law has always been. When the Supreme Court severed the government-debt exception from the Act, it ruled that the law never had the exception—despite the law's text.

So Navient cannot get summary judgment based on the exception's coverage.
Still, Navient seeks summary judgment for a different reason: even though the exception was void, it was on the books. So the company lacked fair notice that its speech was illegal. Enforcing the Act, it argues, would violate due process and the First Amendment.

Navient is mistaken. In civil cases, courts may apply surprising rulings to past acts. There is no exception for free speech (at least not yet).

So Navient may have to compensate Franklin for its calls, whether before or after 2015.

A. The government-debt exception never took effect

A severance ruling, like any other ruling, says only what the law is and has always been. Thus, the Supreme Court's decision severing the government-debt exception applies retroactively. That exception was never the law.

1. Judicial decisions apply retroactively.

The Supreme Court has the power to declare law, not make it. The Constitution vests "[a]ll legislative Powers" in Congress. U.S. Const. art. I, § 1. Courts are limited to judging "Cases" and "Controversies." Art. III, § 2. As Blackstone explained, they are "not delegated to pronounce a new law, but to maintain and expound the old one." 1 William Blackstone, Commentaries *69. Their only power is "to say what the law is." Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803) (emphasis added). So federal courts cannot " 'change[ ]' the law"; they can only, in deciding cases, say what a law "has meant continuously since the date when it became law." Rivers, 511 U.S. at 313 n.12.

Because Supreme Court decisions clarify what the law "ha[s] always meant," their rulings apply to all open cases, even those whose facts predate the ruling. Id.; Harper v. Va. Dep't of Tax'n, 509 U.S. 86, 97 (1993). Otherwise, they would be "not … adjudication but in effect … legislation." Griffith v. Kentucky, 479 U.S. 314, 323 (1987) (quoting Mackey v. United States, 401 U.S. 667, 679 (1971) (Harlan, J., concurring in the judgment)). In short, judicial decisions apply retroactively. Harper, 509 U.S. at 94, 97.

2. Severance rulings apply retroactively.

That rule is equally true of severance decisions. Severance is just ordinary statutory interpretation. See Ayotte v. Planned Parenthood of N. New England, 546 U.S. 320, 330 (2006). When a court finds a law unconstitutional, it finds that it is "void, and is as no law" from the day it is passed. Ex parte Siebold, 100 U.S. 371, 376 (1879). It never took effect as written. Often, the court must then decide what did take effect. Maybe no law did. But maybe Congress passed the law with a fallback rule. That is a question of statutory interpretation. The severance analysis answers it, telling us what the law has meant from the start.

3. AAPC's rule applies retroactively.

When Congress amended the Act in 2015, it wanted to allow robocalls to collect government debt but ban other robocalls. In AAPC, the Court held that this combination of aims violates the First Amendment. If it violated the First Amendment in 2020, then it has violated the First Amendment since 2015. So Congress's ideal version of the Act was void from the start. It never became law.

Instead, some fallback rule kicked in right away. To cure the content discrimination, either the exception was void (so the Act covered all robocalls) or the exception became the rule (so it covered none). The Act has a severability clause. Thus, the AAPC plurality reasoned, Congress had picked the first rule. 140 S. Ct. at 2352.
AAPC addressed only what the Act means going forward. But if the exception was void the day it was passed, and Congress's fallback rule was to nix it, then it never took effect. As Justice Kavanaugh put it, the exception was " 'not law' at all." 140 S. Ct. at 2351 n.8 (quoting Marbury, 5 U.S. at 177). If Navient relied on the government-debt exception, it made a mistake. Because the Constitution trumps the Act, the Act never had a valid exception. This Court erred in granting partial summary judgment.

Judge Bibas then went on to explain why the Due Process Clause didn't forbid liability, and also why the Court's decisions about retroactive criminal liability had not yet been extended to civil cases. And as to the AAPC plurality opinion:

C. To follow the AAPC plurality, I would need to overhaul the law

The AAPC plurality thought that government-debt collectors would avoid all liability. But I do not see how. In a footnote, Justice Kavanaugh wrote that "no one should be penalized or held liable for making robocalls to collect government debt after the effective date of the 2015 government-debt exception and before … th[at] case." AAPC, 140 S. Ct. at 2355 n.12 (emphasis added). To follow the second half of this dictum, I would need to either treat AAPC like legislation or extend Bouie to free-speech cases. Either would be a stretch. Plus, "a holding that shields only government-debt collection callers from past liability … would wind up endorsing the very same kind of content discrimination [that AAPC] s[ought] to eliminate." Id. at 2366 (Gorsuch, J.). The Supreme Court could reasonably extend Bouie to shield speakers, but I will not.

Finally, Judge Bibas then went on to make an interesting distinction, concluding that punitive damages would be unavailable, because retroactive punishment—as distinct from retroactive liability—raised a different set of issues.

Now Judge Bibas's opinion is limited to applying current Supreme Court precedent (not including the plurality opinion, which Judge Bibas rightly seems to assume is not binding). But this analysis is sufficiently thoughtful and persuasive that I wouldn't be surprised to see it having some influence even when the Justices next have to return to considering these issues.

NEXT: Social Media Platforms as Common Carriers?

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  1. I liked Thomas’ concurrence and Ginsburg’s dissent in Murphy v. NCAA, discussing severability and the federal ban on sports gambling.

    1. I wrote to my Representative, a lawyer dumbass feminist, do not vote for the Robocall Ban. It will not work. Instead, add a tax of 10 cents to each call. It may cost me $10 a month, but will cost $1 million a month to people making 10 million calls.

      This dumbass feminist lawyer did not listen. I am not allowed to use the “s” word as I want to, or I get emails from a law prof.

      Now robocalls have doubled since the ban was enacted.

      I can’t stand the stupidity of the lawyer dumbass.

      1. “This dumbass feminist lawyer”

        Oh shut up ya cunt

  2. Courts cannot change the law; they can only declare what the law has always been. When the Supreme Court severed the government-debt exception from the Act, it ruled that the law never had the exception—despite the law’s text.

    Judge Bibas is treating a highly contested (and really, quite wrong) conservative judicial axiom as if it is settled law here.

    Who says the Supreme Court can’t change the law? We inherited the common law system from the British, and under that system, a court certainly can change the law.

    And we have retroactivity rules in both civil and criminal cases that assume that the Supreme Court can change the law and that it doesn’t automatically mean that the law was always that way.

    I think the robocalls rule obviously should be given prospective effect, as it “‘changes the legal consequences of acts completed before its effective date”, as the Supreme Court once described the problem of retroactivity. But more generally, I don’t think it’s up to Judge Bibas to try to use a case like this to import talking points from the conservative legal movement into substantive law. We have a common law system. Sometimes courts change the rules. Deal with it.

    1. Yeah, if due process of fair notice means anything, it seems logical that it should been that following a statute that was enacted by Congress, signed by the president, and applied by courts for decades, should not give rise to liability based on the argument that it never ever *really* was the law, now that 5 justices have ruled the law unconstitutional so many years later. No one even pretends to argue that all the government debt collectors following the law (oops, the non-law) had any reason to question it. And if it truly was NEVER the law, then why the rule that a final judgment based on the now-invalid (oops, always-invalid) exception will not be disturbed?

      Basically law professors and judges who read too many law review articles sniffing their own farts, and having little real world experience being subject to such nonsense (IMO). What’s the saying about the law being an ass?

    2. So how would you “deal with it?”

      On one hand, you have an alleged wrongdoer, who acted in what was then an explicit statutory permission to do what it did.

      On the other hand, you have a party that was damaged (allegedly) by the other side’s actions, and now has been determined to fit within the statute.

      1. I think that the “actual but not punitive” balance is fair — to the extent he suffered actual damages, which he well may have if he had a pay-per-call cellphone, then that *is* fair because I don’t doubt that the debt collector (a) knew that and (b) was using that as an attempt to bully payment.

        I was once getting four automated calls a day, every day, for someone whom I didn’t know but apparently once had my number years ago — a fact I pointed out in a letter to the retail store chain employing said debt collecting creeps, which ended it.

        But I can see, relative to someone living below the poverty line, some real damages worthy of compensation.

        1. Remember that most of these defaulted student loans would be discharged in bankruptcy but for the statutory prohibition — they are going after people who really do not have the money, and they’d sue if the person actually had it.

          That’s the problem with student loans — the value of the education isn’t sufficient to secure them. It’s just like the housing bubble where the value of the house was far less than what was owed on it.

          And unless we return to debtor’s prisons — which would also cost far more than we’d ever get in return — we aren’t going to collect from a lot of these people. The degree in feminist theory just doesn’t pay that well…

        2. I’d say that the debt collector should be able to present the government itself with a bill for the damages, since the calls were made in reliance on the government’s statute.

    3. under that system, a court certainly can change the law

      Or, alternatively, under that system a court can determine that the law is not and was not what it was previously thought to be.
      The fact that a new precedent can be established isn’t determinative one way or the other as to whether that finding should be applied retroactively.

  3. Judge Bibas is wrong. Even in the civil context, fair notice is required, under the First Amendment. See, e.g., Cohen v. San Bernardino Valley College, 92 F.3d 968 (9th Cir. 1996) (professor couldn’t be punished for “sexual harassment” over longstanding lecture content that he wasn’t on clear notice violated the policy); Bullfrog Films v. Wick, 847 F.2d 502 (9th Cir. 1988) (voiding civil regulation impacting speech for lack of fair notice, under the First Amendment).

    Yet, Judge Bibas claimed that “In civil cases, courts may apply surprising rulings to past acts. There is no exception for free speech (at least not yet).” Yes, there is such an exception, at least in the Ninth Circuit.

  4. Probably not a bad compromise. If actual damages are limited to out of pocket costs, then lawsuits won’t be worth the time and effort.

    But I wonder, if congress has banned robocalls why do I get called several times a week about my car warranty?

    1. Probably because the robocallers pay their phone bills, so the phone companies have no particular incentive to deal with them. While the actual robocalls generally originate either from domestic scammers, who use spoofing to hide, or overseas, beyond our legal system’s reach.

      1. We used to have a term “pink contract” describing a special contract where an ISP charging a higher rate for the right to send spam. Maybe CAN-SPAM ended that deal for domestic companies.

    2. There’s also an exception for “existing business relationship” which I think is bullshyte — but as to the larger issue of damages, why couldn’t there be a class action lawsuit?

      I recently saw one for people who were stupid enough to put Dollar General oil in their cars, although I don’t understand why it wasn’t the API suing because I believe those certifications belong to them, much like the UL labels belong to the UL.

      1. I’m reminded of a Jay Leno joke about the abundance of department store santas and how they were all unemployed college graduates hiding from the student loan collection folk.

  5. This is just dumb. He is acting as if Thomas’s dissent reasoning applies onto Kavanagh’s concurrence, which explicitly rejected this theory. If Thomas was right, then the consequences of his opinion follow. But the court rejected it, so you can’t say Thomas’s theory applies and reaches Kavanaughs conclusion, and in the process create a clear violation of due process neither justice thought was acceptable.

  6. This “excellent,” “thoughtful and persuasive” opinion strikes this non-lawyer as plain silly.

    And, (for the second time today!!!), I’m going to agree with Brett that if anyone should pay damages it should be the federal government. They’re the ones who made the mess.

  7. This is an unnecessary pretzel.

    Did SCOTUS rule that congress could not ban robocalls, or only that it could not discriminate against robocalls?

    If the ruling is that it could not discriminate against robocalls, it’s not actually Franklin who was damaged by Navient’s exception to the robocall ban. It was the people/organizations whose robocalls experienced discrimination.

    SCOTUS remedied this discrimination, and the imposition of future restrictions and fines is part of this remedy. Franklin’s inconvenience is moot.

  8. Couldn’t the logic in this opinion be applied to Qualified Immunity? As soon as a court determines (realizes?) an action is unconstitutional won’t it always have been unconstitutional and the officer subject to liability but not punitive damages? Where is the logical difference?

  9. I’d pay good money to someone who can provide a method to fire a lightning bolt back through the telephone line into the ear of any spam caller.

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