ACA v. Mass. AG: Oral Argument Summary, Decision Expected Tomorrow

Editor's Note: For all pandemic-related insideARM articles and other information, please check insideARM's COVID-19 Impact resources page.

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On Friday, the court held oral arguments in the ACA International lawsuit against Massachusetts Attorney General Maura Healey (AG) challenging the AG's ban on outbound telephone calls during the COVID-19 emergency and for 90 days thereafter. The hearing on Friday was in regard to a temporary restraining order requested by ACA. If granted, the temporary restraining order would put the AG's outbound call ban on hold until the court can decide the issue on the merits. The court is expected to make a decision on the temporary restraining order tomorrow (Tuesday). 

In sum, the court was most interested in hearing about the First Amendment issue regarding whether the AG's actions were an unconstitutional ban on commercial speech. There was some discussion on whether the AG exceeded her authority to issue such a rule, but that discussion was dwarfed by the constitutional question. 

ACA focused its argument on how the AG's emergency rule went too far by banning all outbound collection calls. The content-based speech ban—since it targets only collection calls and no other category—deprives debt collectors of their commercial speech rights without the necessary elements needed to make the ban. ACA's argument also pointed out that the purpose of the emergency rule—to ensure consumers aren't harassed or coerced by debt collectors—is already in place with existing laws against such conduct that don't flat out prohibit debt collection calls. ACA's counsel referenced all of the functions of calls placed by debt collectors, other than collection of money, that the ban prohibits, such as setting up forbearances, payment plans, or notating hardships. There was also a discussion about how consumers already have a very easy way to stop collection calls from happening—they just have to tell the collector to stop calling. 

The AG's counsel focused its argument on how this restriction is only temporary and therefore companies should be able to ride it out. (The judge mentioned in the opening part of the hearing that the briefs on the issues included written testimony from debt collectors that discussed the impact this restriction will have.) The AG also argued that right now, consumers are facing a loss of employment and financial distress—they should not also be subject to phone calls from collectors that coerce them to make payments. The AG referenced that it only blocks one avenue of communication—outbound telephone calls—and debt collectors can still use text messages and email. (Editor's Note: This comment didn't sit particularly well with me, considering even the CFPB noticed—under both Kraninger's and Cordray's leadership—that currently there are no clear rules of the road for debt collectors regarding electronic communications.)

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insideARM Perspective

A quick Civil Procedure 101 lesson for all the non-legal folks out there who might be wondering what the heck it all means. In deciding whether to grant a restraining order, the judge looks at several factors including the moving party's likelihood of success on the merits and balancing hardships of both parties. In other words, what kind of hardship would each party suffer if he grants the order to the other party? 

The decision on the temporary restraining order is not a full and final decision on the merits—temporary restraining orders seek to preserve the status quo and prevent irreparable harm while the court considers the full merits of the case. The case, unless dismissed, would still go on until the judge makes a final decision. 

If the court grants the temporary restraining order in this case, then it would put a pause on the AG's emergency rule banning outbound collection calls. However, just because the court grants the temporary restraining order, it doesn't necessarily mean that a permanent restraining order will be the end result of the case. Likewise, if the court denies the request a temporary restraining order, it does not necessarily mean that it will also decline to enact permanent restraining order. The temporary restraining order only determines whether or not the court needs to order a party to take or stop taking a certain action to preserve the status quo until it can reach a full decision on the merits. 

Overall, the judge didn't show his cards regarding which side he was leaning toward. He did reference in his opening that even a temporary prohibited restriction on the First Amendment is wrong. Other than that he had an even disposition throughout the arguments and didn't ask too many questions, which makes it difficult to read. He asked for supplementary briefs to be filed today, and he is expected to make a decision on the temporary restraining order tomorrow, so at least we don't have to wait long.