Antitrust Law Daily Wrap Up, PRIVACY—7th Cir.: TCPA did not preempt Indiana autodialer statute, (Nov 25, 2013)

By Jody Coultas, J.D.

The federal district court in Indianapolis erred in finding that the federal Telephone Consumer Protection Act (TCPA) preempted Indiana’s statutory prohibition of automated dialing calls without the receiver’s consent, the U.S. Court of Appeals in Chicago has held (Patriotic Veterans, Inc. v. State of Indiana, November 21, 2013, Rovner, I.).

Patriotic Veterans, Inc., an Illinois corporation whose purpose is to inform voters of the positions taken by the candidates and office holders on issues of interest to veterans, used automatically dialed phone calls that deliver a political message related to a particular candidate or issue.

Patriotic Veterans sought a declaration that the Indiana Automated Dialing Machine Statute, which bans these autodialed calls unless the receiver has consented to the calls in some manner before the automated message is delivered, was invalid as it violated the First Amendment and was preempted by the TCPA. Because a state’s powers cannot be preempted by a federal act unless the preemption was the clear intent of Congress, Patriotic Veterans had a high burden to show that the statute was preempted.

The district court found that the TCPA preempted Indiana’s statute and granted Patriotic Veterans’ request for an injunction against the enforcement of the regulation with regard to political messages. Although a facial reading of the statute indicated that the TCPA did not preempt Indiana’s autodialer statute, the court found that Indiana’s statute, by exempting certain entities and types of calls, merely regulated autodialers and did not prohibit them, and therefore did not fall into the expressly saved category of statutes that prohibit the use of automatic telephone dialing systems.

Under the TCPA’s savings clause, state laws are not preempted if those laws impose more restrictive intrastate requirements or regulations on, or prohibit, the use of automatic telephone dialing systems or the use of artificial or prerecorded voice messages.

The district court erred by presuming that laws that were not explicitly saved were expressly preempted, according to the court. Contrary to the district court’s holding, the Indiana’s statute was a prohibition. It prohibited automatic dialing devices unless consent was first obtained. Even if the Indiana statute was not a prohibition, it merely imposed more restrictive interstate regulations. The TCPA does not address interstate requirements.

Patriotic Ventures was unable to show that the statute was impliedly preempted under the field of conflict preemption, according to the court. Conflict preemption arises when state law conflicts with federal law to the extent that compliance with both laws is impossible or the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”

Patriotic Veterans argued that the regulations of the Federal Communications Commission permit noncommercial pre-recorded messages and thus Indiana’s law conflicted with the full purposes and objectives of Congress. The fact that a state has more stringent regulations than a federal law does not constitute conflict preemption. Patriotic Veterans could not show that it was impossible to comply with both the Indiana statute and the TCPA, or that Indiana’s law stood as an obstacle to the accomplishments of Congress’s goal to protect the privacy of citizens against unsolicited telephone calls.

The Indiana statute was not impliedly preempted under the doctrine of field preemption, according to the court. Field preemption arises when the federal regulatory scheme is so pervasive or the federal interest so dominant that it may be inferred that Congress intended to occupy the entire legislative field. Telemarketing is unlike those areas of law in which the courts have found that a disorganized method of regulation and enforcement would frustrate federal purposes. The fact that Congress included a savings clause made it clear that the federal government did not intend to occupy the entire field of robocall regulation. Although the Indiana law was more restrictive than the TCPA, it did not frustrate any process required by the TCPA.

The case is No. 11-3265.

Attorneys: Mark J. Crandley (Barnes & Thornburg LLP) for Patriotic Veterans, Inc. Thomas M. Fisher, U.S. Attorneys’ Office, for State of Indiana.

Companies: Patriotic Veterans, Inc.

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