LoanDepot is Newest Defendant to Challenge TCPA’s Constitutionality

LoanDepot became the latest defendant facing alleged violations of the Telephone Consumer Protection Act to challenge the statute’s constitutionality, when it filed an answer Monday (docket 3:22-cv-00374) to an Oct. 21 complaint in U.S. District Court for Western Texas in El Paso, denying it inundated consumer Mabel Arredondo with at least 18 unauthorized automated text messages to a personal cellphone between July 26 and Oct. 21 (see 2210250045).

Application of the TCPA, as interpreted by the FCC, violates the First Amendment “because such application relies upon content-based restrictions of protected speech,” said LoanDepot. It cited the unanimous June 2015 Supreme Court decision in Reed v. Town of Gilbert, which said government regulation of speech is content-based if a law applies to particular speech because of the topic discussed or the idea or message expressed.

The defendant also argued the TCPA is “unconstitutionally vague because the restrictions imposed by the TCPA do not give a person of ordinary intelligence adequate notice of the conduct that is prohibited.” Its citation in that argument was the 1972 Supreme Court opinion in Grayned v. City of Rockford.

An award of punitive or statutory damages against LoanDepot would be unconstitutional because it would violate the due process clause of the 14th Amendment and the excessive fines clause of the Eighth Amendment, said the defendant. “The amount of damages prescribed by the TCPA statute are so severe and oppressive as to be wholly disproportionate to the offense and obviously unreasonable allowing for the Court to reduce the damage award, if any,” said LoanDepot. “Thus, as applied in this case any award of damages should be reduced to comport with due process.”

The TCPA’s statutory damages clause in and of itself is constitutional, but a specific damages award may be unconstitutional if “it is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable,” said LoadDepot. Its citation was the September 2012 decision by the 8th Circuit U.S. Court of Appeals in Capitol Records, Inc. v. Thomas-Rasset.

Plaintiff Arredondo’s TCPA claims “fail or otherwise are barred, in whole or in part, or are limited because to the extent the subject telephone calls occurred, the calls were made with the prior express consent” of Arredondo, or someone acting on Arredondo’s behalf, said LoanDepot. The defendant “admits it has defended itself against other meritless TCPA suits that were eventually dismissed, but denies any stigma or inference that can be drawn from the mere fact that suits have previously been filed,” it said.

One TCPA case that gained brief notoriety last month was when DOJ filed an acknowledgment of Comcast’s challenge to the TCPA’s constitutionality and signaled its intention to intervene in the case at the appropriate time as a result to defend the statute (see 211080031). Comcast’s argument was that the TCPA’s statutory damages provisions violate the safeguards guaranteed in the Fifth, Sixth, Eighth and 14th Amendments because they enable excessive fines that are “grossly disproportionate” to any actual harm that TCPA plaintiffs may suffer. Comcast’s constitutional challenge and DOJ’s possible intervention were rendered moot earlier in December when U.S. District Judge Wilhelmina Wright for Minnesota in St. Paul signed an order dismissing the case with prejudice (see 2212080008).