Cunningham v. Matrix Financial Services, LLC et al
MEMORANDUM REJECTING REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE. Having received the report (Dkt. #142) of the Magistrate Judge and having conducted a de novo review, the Court is of the opinion that the Magistrate Judge's report should be rejected as to the issue of subject matter jurisdiction. The Court dismisses this case without prejudice for lack of subject matter jurisdiction. Signed by District Judge Amos L. Mazzant, III on 03/31/2021. (tls)
United States District Court
EASTERN DISTRICT OF TEXAS
MATRIX FINANCIAL SERVICES, LLC,
Civil Action No. 4:19-cv-896
MEMORANDUM REJECTING REPORT AND
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Came on for consideration the report of United States Magistrate Judge Christine Nowak
in this action, this matter having been heretofore referred to the Magistrate Judge pursuant to 28
U.S.C. § 636. On February 12, 2021, the report of the Magistrate Judge (Dkt. #142) was entered
containing proposed findings of fact and recommendations that the Court has subject matter
jurisdiction over the action; that Plaintiff Craig Cunningham’s claims against Defendants Matrix
Financial Services, LLC, David Glenwinkel, and Sing for Service, LLC d/b/a Mepco (Dkt. #50)
be dismissed in their entirety pursuant to Rule 12(b)(6); and that Plaintiff’s claims against
Defendants National Car Cure, LLC and Zander, Collins & Smith, LLC (Dkt. #50) be dismissed
in part pursuant to Rule 12(b)(6). Having received the report of the Magistrate Judge and having
conducted a de novo review, the Court is of the opinion that the Magistrate Judge’s report should
be rejected as to the issue of subject matter jurisdiction.
Plaintiff Craig Cunningham (“Cunningham”) is a citizen who allegedly received calls to
his cell phone in violation of the Telephone Consumer Protection Act of 1991 (“TCPA”). On May
4, 2020, Cunningham filed an amended complaint asserting, among others, TCPA claims against
Defendants Matrix Financial Services, LLC, David Glenwinkel, Sing for Service, LLC d/b/a
Mepco, National Car Cure, LLC, and Zander, Collins & Smith, LLC. After Cunningham filed his
amended complaint, Defendants moved for dismissal for failure to state a claim. In addition,
several Defendants later filed motions to dismiss for lack of subject matter jurisdiction.
In the report, the Magistrate Judge recommended the Court deny the motions to dismiss
for lack of subject matter jurisdiction (Dkt. #142 at pp. 9–18). After framing the issue and
presenting the parties’ contentions (Dkt. #142 at pp. 9–14), the Magistrate Judge analyzed the
arguments and their applicability to existing law (Dkt. #142 at pp. 15–18). In the report, the
Magistrate Judge found three points sufficiently compelling to recommend denial of the motions
to dismiss for lack of subject matter jurisdiction. First, while acknowledging its non-binding
status, the Magistrate Judge found footnote twelve of Justice Kavanaugh’s plurality opinion
persuasive (Dkt. #142 at p. 15, 17). Second, the Magistrate Judge found persuasive that the
majority of district courts that already decided this issue had held that federal courts retained
subject matter jurisdiction over the sort of claims in question (Dkt. #142 at pp. 15–16). Third, the
rationales of the district courts finding subject matter jurisdiction lacking in similar situations were
unconvincing to the Magistrate Judge (Dkt. #142 at p. 16).
After concluding that Defendants’ motions to dismiss for lack of subject matter jurisdiction
should be denied, the Magistrate Judge turned to Defendants’ motions to dismiss for failure to
state a claim (see Dkt. #142 at pp. 18–34). The Magistrate Judge ultimately recommended that
the claims against Defendants Matrix Financial Services, LLC, David Glenwinkel, and Sing for
Service, LLC d/b/a Mepco be dismissed in their entirety and the claims against Defendants
National Car Cure, LLC and Zander, Collins & Smith, LLC be dismissed in part (Dkt. #142 at p.
“‘Federal courts are courts of limited jurisdiction,’ possessing ‘only that power authorized
by Constitution and statute.’” Xitronix Corp. v. KLA-Tencor Corp., 916 F.3d 429, 435 (5th Cir.
2019) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)); see 13
CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3522 (3d ed.) (“A federal
court’s entertaining a case that is not within its subject matter jurisdiction is no mere technical
violation; it is nothing less than an unconstitutional usurpation of state judicial power.”). Absent
subject matter jurisdiction, federal courts are without authority to act. Lower Colo. River Auth. v.
Papalote Creek II, L.L.C., 858 F.3d 916, 927 (5th Cir. 2017). And while “[c]ourts have an
independent obligation to determine whether subject-matter jurisdiction exists,” Hertz Corp. v.
Friend, 559 U.S. 77, 94 (2010) (citing Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006)), parties
may challenge the constitutional or statutory subject-matter jurisdiction of a federal court under
Federal Rule of Civil Procedure 12(b)(1), Kumar v. Frisco Indep. Sch. Dist., 443 F. Supp. 3d 771,
777 (E.D. Tex. 2020). See FED. R. CIV. P. 12(b)(1), (h)(3). If a 12(b)(1) analysis indicates that a
court lacks subject-matter jurisdiction, then the case must be dismissed without prejudice. Mitchell
v. Bailey, 982 F.3d 937, 944 (5th Cir. 2020).
In considering a 12(b)(1) motion, courts may examine “any of the following: ‘(1) the
complaint alone; (2) the complaint supplemented by the undisputed facts evidenced in the record;
or (3) the complaint supplemented by undisputed facts plus the court’s resolution of disputed
facts.’” Lane v. Halliburton, 529 F.3d 548, 557 (5th Cir. 2008) (quoting Barrera-Montenegro v.
United States, 74 F.3d 657, 659 (5th Cir. 1996)). Courts “accept as true all well-pleaded
allegations set forth in the complaint and construe those allegations in the light most favorable to
the plaintiff.” Earl v. Boeing Co., No. 4:19-CV-00507, 2020 WL 759385, at *2 (E.D. Tex. Feb.
14, 2020) (citing Truman v. United States, 26 F.3d 592, 594 (5th Cir. 1994)). Once a defendant
moves for dismissal under 12(b)(1), “the party asserting jurisdiction” bears “[t]he burden of
proving subject matter jurisdiction” “by a preponderance of the evidence.” In re S. Recycling,
L.L.C., 982 F.3d 374, 379 (5th Cir. 2020); Morris v. Thompson, 852 F.3d 416, 419 (5th Cir. 2017)
(“The party asserting jurisdiction ‘constantly bears the burden of proof that jurisdiction does in
fact exist.’” (quoting Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001))). “Yet that is
no high bar: ‘It is extremely difficult to dismiss a claim for lack of subject matter jurisdiction.’”
Outlaw Lab., LP v. Shenoor Enter., Inc., 371 F. Supp. 3d 355, 360 (N.D. Tex. 2019) (cleaned up)
(quoting Santerre v. Agip Petrol. Co., 45 F. Supp. 2d 558, 566 (S.D. Tex. 1999)).
The immediate dispute concerns the Court’s authority to adjudicate this case. Cunningham
presses three causes of action against Defendants and proffers that the Court has subject matter
jurisdiction over the case on account of the federal question involved (Dkt. #50 at pp. 2, 16–18).
For each and every case or controversy, it is incumbent upon the Court to police its subject matter
jurisdiction vigilantly because “district courts may not exercise jurisdiction absent a statutory
basis.” 1 Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005); see Home Depot
U.S.A., Inc. v. Jackson, 139 S. Ct. 1743, 1746 (2019).
The crux of the matter involves a recent Supreme Court case, Barr v. American Association
of Political Consultants, Inc. (AAPC), 140 S. Ct. 2235 (2020). In their motions, Defendants argue
Neither side disputes the Court’s subject matter jurisdiction under Article III. The Court therefore does not address
the issue. Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 807 (1986) (explaining that “all cases in which a
federal question is ‘an ingredient’ of the action” fall within the Constitution’s bounds of subject matter jurisdiction
(quoting Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738, 823 (1824))).
that, in finding the government-debt exception of 47 U.S.C. § 227(b)(1)(A)(iii) unconstitutional,
AAPC invalidated the statutory provision during the exception’s operative time period, thereby
stripping federal courts of subject matter jurisdiction over alleged violations of § 227(b)(1)(A)(iii)
that occurred from the moment Congress enacted the government-debt exception to the Supreme
Court’s invalidation of the exception in AAPC (Dkt. #131 at pp. 2–3; Dkt. #133 at p. 2–3).
Cunningham wholeheartedly disagrees (Dkt. #137 at p. 2). While these motions present the
atypical situation of reevaluating subject matter jurisdiction following a Supreme Court decision,
it is certainly not a first. See, e.g., Rodriguez Delgado v. Shell Oil Co., 322 F. Supp. 2d 798, 816–
17 (S.D. Tex. 2004). Moreover, because complete diversity is not present in this suit (Dkt. #50 at
p. 1), the stakes are high—if Defendants are correct, the Court must dismiss this case. See id. at
In AAPC, the two-part question before the Supreme Court was:
Whether the government-debt exception to the TCPA’s automated-call restriction
violates the First Amendment, and whether the proper remedy for any constitutional
violation is to sever the exception from the remainder of the statute.
Petition for Writ of Certiorari at I, AAPC, 140 S. Ct. 2335 (2020) (No. 19-631), 2019 WL 6115075,
at *I. 2 As summarized in the plurality opinion, six Justices found the government-debt exception
of 47 U.S.C. § 227(b)(1)(A)(iii) violative of the First Amendment as a content-based speech
restriction, and seven Justices concluded that the pre-2015 version of § 227(b)(1)(A)(iii) should
remain operative following invalidation and severance of the government-debt exception. AAPC,
The term “remedy” is regularly used in this context to describe the effect severance has on a statute. E.g., AAPC,
140 S. Ct. at 2350, 2355–56 (plurality opinion). Justice Gorsuch took issue with the plurality opinion’s invocation of
the term in AAPC, finding it “hard to see how today’s use of severability doctrine qualifies as a remedy at all.” Id. at
2365 (Gorsuch, J., concurring in the judgment in part and dissenting in part); see Murphy v. NCAA, 138 S. Ct. 1461,
1485–87 (2018) (Thomas, J., concurring); John Harrison, Severability, Remedies, and Constitutional Adjudication, 83
GEO. WASH. L. REV. 56, 82–83 (2008).
140 S. Ct. at 2343–44 (plurality opinion). For additional clarity, the Court outlines exactly what
the AAPC Court addressed.
Looking to the first question presented, the Supreme Court answered it in the affirmative:
the government-debt exception to the TCPA’s automated-call restriction violated the First
Amendment. Id. at 2347. Phrased differently, when Congress added the government-debt
exception to the TCPA’s statutory language, § 227(b)(1)(A)(iii) in its entirety became a
content-based restriction on speech that violated the First Amendment. Id. at 2346; see Turner
Broad. Sys., Inc. v. FCC, 512 U.S. 622, 658 (1994) (“[L]aws favoring some speakers over others
demand strict scrutiny when the legislature’s speaker preference reflects a content preference.”).
Even though § 227(b)(1)(A)(iii) existed for nearly a quarter-century as a constitutional,
content-neutral speech regulation, once Congress enacted the government-debt exception, the
interaction of the preexisting statutory provision and the newly added exception worked in tandem
to run afoul of the Constitution. See Free Enter. Fund v. PCOAB, 561 U.S. 477, 509 (2010)
(pointing out that statutory provisions, “working together, [may] produce a constitutional
While not phrased in “if-then” language, the second question presented to the AAPC Court
was conditioned on locating a constitutional infirmity in the statute at issue. See Petition for Writ
of Certiorari at *I, AAPC, 140 S. Ct. 2335 (No. 19-631). Upon finding the First Amendment
violation in § 227(b)(1)(A)(iii), the Supreme Court also proceeded to answer the second question
in the affirmative: the proper remedy for this constitutional violation was to sever the exception
from the rest of the statute. AAPC, 140 S. Ct. at 2353–54. Phrased another way, to resolve the
conflict between the Constitution and § 227(b)(1)(A)(iii) that the government-debt exception
introduced, id. at 2351 n.7, the Supreme Court severed the government-debt exception to remove
the statute’s unconstitutional element and to restore § 227(b)(1)(A)(iii) to its pre-severance
existence as a valid, content-neutral regulation of speech. Id. at 2355; see Note, The Effect of an
Unconstitutional Exception Clause Upon the Remainder of a Statute, 55 HARV. L. REV. 1030, 1033
(1942) (“When an exception is an amendment to the original statute it will almost always be
excised, on the theory that such an amendment was void ab initio and can neither build up nor tear
down the original statute.”).
In short, the AAPC Court’s answer to this question permits
prospective litigants to bring lawsuits against alleged violators of § 227(b)(1)(A)(iii). AAPC, 140
S. Ct. at 2355.
Additionally, given the instant dispute, it is just as important to make clear what the AAPC
decision did not address.
Despite Cunningham’s repeated overtures to AAPC’s purported
retroactive effect (see Dkt. #137 at pp. 4, 7–13, 15–20), the Supreme Court was not presented with
a question regarding the retroactive effect of statutory severance and took up no such issue. See
Petition for Writ of Certiorari at *I, AAPC, 140 S. Ct. 2335 (No. 19-631). As the decision’s
language evidences, the AAPC Court only considered how § 227(b)(1)(A)(iii) would operate
prospectively. 3 See, e.g., AAPC, 140 S. Ct. at 2344 (“As a result, plaintiffs still may not make
political robocalls to cell phones, but their speech is now treated equally with debt-collection
speech.”); id. at 2354 (“When the constitutional violation is unequal treatment, as it is here, a court
theoretically can cure that unequal treatment either by extending the benefits or burdens to the
exempted class, or by nullifying the benefits or burdens for all.”); id. at 2355 (“[T]he correct result
in this case is to sever the 2015 government-debt exception and leave in place the longstanding
The Court addresses Cunningham’s argument regarding footnote twelve in the AAPC plurality opinion below, infra
at pp. 13–15.
The arguments Cunningham and Defendants present are voluminous and somewhat
scattered, but the Court sees a pair of disputed positions that predominate. First, Cunningham and
Defendants do not agree on the temporal effect the severability decision in AAPC has on the instant
litigation. Compare (Dkt. #131 at pp. 5, 8–9; Dkt. #133 at pp. 6, 8, 12), with (Dkt. #137 at pp. 6–
10). Second, the litigants do not see eye to eye as to § 227(b)(1)(A)(iii)’s availability during the
existence of the government-debt exception involving alleged violations unrelated to the collection
of government debt. Compare (Dkt. #131 at pp. 4, 9–10; Dkt. #133 at pp. 5–6, 14), with (Dkt.
#137 at pp. 8–10). The Court examines each dispute in turn.
a. Retroactivity and Severability
In its decision, the AAPC Court found the government-debt exception severable from the
pre-2015 version of § 227(b)(1)(A)(iii). Id. at 2343. The parties before the Court dispute how this
statutory severance impacts the immediate litigation. Defendants argue that the AAPC Court’s
severance applies only prospectively, meaning that the calls upon which Cunningham’s alleged
§ 227(b)(1)(A)(iii) violations rest are nonjusticiable (Dkt. #131 at p. 8; Dkt. #133 at p. 6).
Cunningham disagrees, arguing that because “the legal effect of severing the government-debt
exception is retroactive,” the Court retains subject matter jurisdiction over his claims (Dkt. #137
at pp. 7, 10, 12–13). The position Defendants advance proves more legally sound.
A bit of background helps contextualize the severability conversation. Severability refers
to the notion that courts may remove unconstitutional language from a statutory provision and
leave the remainder of the statute in force so long as the result is consistent with the intent of the
legislature. 4 Dorchy v. Kansas, 264 U.S. 286, 289–290 (1924). “[W]hen a portion of a statute is
unconstitutional, ‘the traditional rule is that the unconstitutional provision must be severed unless
the statute created in its absence is legislation that Congress would not have enacted.’” United
States v. Bonilla-Romero, 984 F.3d 414, 418 (5th Cir. 2020) (quoting Seila Law LLC v. CFPB,
140 S. Ct. 2183, 2209 (2020)); see Texas v. United States, 945 F.3d 355, 394 (5th Cir. 2019)
(describing the two-step severability analysis), cert. granted sub nom. California v. Texas, 140 S.
Ct. 1262 (2020) (mem.). Courts do so to “limit the solution to the problem,” and, as such, sever
“any ‘problematic portions while leaving the remainder intact.’” Free Enter. Fund, 561 U.S. at
508 (internal quotation marks omitted in first quotation) (quoting Ayotte v. Planned Parenthood
of N. New England, 546 U.S. 320, 328–29 (2006)). Importantly, severance only occurs after a
court identifies a constitutional defect within the statute. 5 Seila Law, 140 S. Ct. at 2209.
Cunningham argues that when the AAPC Court severed the government-debt exception
from § 227(b)(1)(A)(iii), the statutory provision left standing remained enforceable (1) in its
entirety moving forward, and (2) as to violations unrelated to government-debt collection that
allegedly occurred between the time Congress enacted the government-debt exception and the
Supreme Court handed down AAPC (Dkt. #137 at pp. 6–10). The second part of this line of
reasoning is incorrect.
The doctrine of severability has existed “since the beginnings of judicial review, yet it remains shrouded in mystery.”
David H. Gans, Severability as Judicial Lawmaking, 76 GEO. WASH. L. REV. 639, 639 (2008) (footnote omitted); see
John Copeland Nagle, Severability, 72 N.C. L. REV. 203, 210–15 (1993) (detailing the severability doctrine’s historical
development). Severability’s conceptual intricacies continue to generate significant debate. Compare Collins v.
Mnuchin, 938 F.3d 553, 591–95 (5th Cir. 2019) (en banc) (Haynes, J., writing for the majority), with id. at 608–11
(Oldham & Ho, JJ., concurring in part and dissenting in part).
At all times, legislative intent controls severability analysis. See Murphy, 138 S. Ct. at 1482 (majority opinion); see
also Texas, 945 F.3d at 394–95 (discussing the difficulties inherent to this aspect of the severability doctrine). See
generally RICHARD H. FALLON, JR. ET AL., HART AND WECHSLER’S THE FEDERAL COURTS AND THE FEDERAL SYSTEM
172–74 (7th ed. 2015).
Starting with first principles, Congress makes law by enacting statutes. See Forrest Gen.
Hosp. v. Azar, 926 F.3d 221, 228 (5th Cir. 2019). And, as the Supreme Court has established,
statutes are inherently prospective creatures, United States v. Sec. Indus. Bank, 459 U.S. 70, 79
(1982), that do not operate retroactively “unless such be ‘the unequivocal and inflexible import of
the terms, and the manifest intention of the legislature,’” Union Pac. R. Co. v. Laramie Stock Yards
Co., 231 U.S. 190, 199 (1913) (quoting United States v. Heth, 7 U.S. (3 Cranch) 399, 413 (1806)
(opinion of Paterson, J.)). By contrast, judicial decisions apply retroactively as “to avoid the
injustice caused by the earlier application of ‘incorrect’ law.” 6 Wilkerson v. Whitley, 28 F.3d 498,
505 (5th Cir. 1994); see Kuhn v. Fairmont Coal Co., 215 U.S. 349, 372 (1910) (Holmes, J.,
dissenting) (“Judicial decisions have had retrospective operation for near a thousand years.”).
In AAPC, the Supreme Court drew two conclusions: (1) the government-debt exception
was unconstitutional under the First Amendment, and (2) the proper course of action to fix this
issue was to sever the government-debt exception from the rest of the statute. 140 S. Ct. at 2343–
44. The first decision was quintessentially judicial in nature. See Harper v. Va. Dep’t of Tax’n,
509 U.S. 86, 107–09 (1993) (Scalia, J., concurring). The Supreme Court examined the statutory
provision, compared it to the strictures of the First Amendment, and determined that the statute
conflicted with the Constitution. See Marbury v. Madison, 5 U.S. (1 Cranch) 137, 178 (1803)
(“If . . . the courts are to regard the constitution; and the constitution is superior to any ordinary act
of the legislature; the constitution, and not such ordinary act, must govern the case to which they
both apply.”); see also Rivers v. Roadway Express, Inc., 511 U.S. 298, 312–13 (1994) (“A judicial
This manner of speaking may sometimes cause the fundamental distinction between “a change in judicial doctrine
and a change in law” to be misconceived. See Lester v. United States, 921 F.3d 1306, 1312 (11th Cir. 2019) (W.
Pryor, J., respecting the denial of rehearing en banc). Sufficient for the Court’s immediate purposes, when courts are
faced with an unconstitutional statute, they cannot “give a ‘remedy’ . . . since an unconstitutional statute is not itself
a cognizable ‘wrong’”—courts are “simply to ignore” an unconstitutional statute. Reynoldsville Casket Co. v. Hyde,
514 U.S. 749, 759 (1995) (Scalia, J., concurring). See generally Stephen E. Sachs, Finding Law, 107 CALIF. L. REV.
construction of a statute is an authoritative statement of what the statute meant before as well as
after the decision of the case giving rise to that construction.”).
The AAPC Court’s severability decision, however, was less characteristically judicial—as
is the case whenever a federal court severs statutory language. Unable to allow an unconstitutional
law to remain as such, the Supreme Court had to decide “whether (i) to invalidate the entire 1991
robocall restriction . . . , or (ii) to invalidate just the 2015 government-debt exception and sever it
from the remainder of the statute.” 7 AAPC, 140 S. Ct. at 2349. The judicial inquiry into the
propriety of severance is “essentially an inquiry into legislative intent.” Minnesota v. Mille Lacs
Band of Chippewa Indians, 526 U.S. 172, 191 (1999). And “[u]nless it is evident that the
Legislature would not have enacted [the statutory provision at issue], independently of that which
is not, the invalid part may be dropped if what is left is fully operative as a law.” Champlin Ref.
Co. v. Corp. Comm’n of Okla., 286 U.S. 210, 234 (1932). Given the deliberate focus courts direct
toward legislative intent in this area, adjudicating severability is a judicial act that is, at least
somewhat, legislative. See AAPC, 140 S. Ct. at 2365 (Gorsuch, J., concurring in the judgment in
part and dissenting in part) (disagreeing with the plurality opinion’s severance solution because of
doubt as to the judicial authority “to rewrite the law in this way”); see also, e.g., Harrison, supra,
at 87–88 (“If the United States Court of Appeals for the First Circuit rests a judgment on the
conclusion that a provision of a federal statute is void because it is inconsistent with the
Constitution, that decision will bind district courts in the First Circuit, and panels of that court, in
subsequent cases. That precedent will resemble a legislative act eliminating the provision for the
purposes of those who expect to litigate subject to First Circuit precedent in the future.”).
While severability shorthand typically speaks in terms of “striking down” or “invalidating” acts of Congress, this
characterization is inexact. AAPC, 140 S. Ct. at 2351 n.8. In reality, “[c]ourts hold laws unenforceable; they do not
erase them.” Pool v. City of Houston, 978 F.3d 307, 309 (5th Cir. 2020). See generally Jonathan F. Mitchell, The
Writ-of-Erasure Fallacy, 104 VA. L. REV. 933 (2018).
Grafting the aforementioned principles onto AAPC, a court’s decision to sever an aspect of
a statutory provision appears more similar to a traditional legislative function than an adjudicatory
one, which gives severance its prospective character. This conclusion makes good sense. 8 To
reach the point at which severability must be considered, a court must have already exercised its
judicial power and identified a constitutional issue within the statutory provision at issue. See
Marbury, 5 U.S. at 178. At this juncture, an Article III tribunal has two choices: excise the
constitutionally offensive aspect of the law or invalidate the statute in toto. Either way, this
decision affects the applicability of a legal rule moving forward—those subject to the law will
either (a) now be subject to the same law minus the unconstitutional facet, or (b) will no longer be
subject to the same law at all. Even though federal courts act only to say what the law is, a
severability decision is quasi-legislative, and thereby prospective. 9
While federal courts shoulder the responsibility “to enforce the [constitutional] limits on
federal power by striking down acts of Congress that transgress those limits,” they only possess
“the authority to interpret the law”—not “the expertise [or] the prerogative to make policy
Under current precedent, that is. Several judges and scholars have expressed unease regarding the Supreme Court’s
modern severability jurisprudence. See, e.g., AAPC, 140 S. Ct. at 2365–67 (Gorsuch, J., concurring in the judgment
in part and dissenting in part); Murphy, 138 S. Ct. at 1485–87 (Thomas, J., concurring); Kevin C. Walsh, Partial
Unconstitutionality, 85 N.Y.U. L. REV. 738, 749–55 (2010).
Separation-of-powers considerations confirm this conclusion. The presumption favoring severability “reflects the
confined role of the Judiciary in our system of separated powers” and “manifests the Judiciary’s respect for Congress’s
legislative role by keeping courts from unnecessarily disturbing a law apart from invalidating the provision that is
unconstitutional.” AAPC, 140 S. Ct. at 2351 (plurality opinion); see R.R. Ret. Bd. v. Alton R. Co., 295 U.S. 330, 362
(1935) (“[N]otwithstanding the presumption in favor of [severability] . . . , [courts] cannot rewrite a statute and give
it an effect altogether different from that sought by the measure viewed as a whole.”). As such, courts must tread
carefully by necessity when conducting a severability analysis, for “amendment may not be substituted for
construction” and “a court may not exercise legislative functions to save [a] law from conflict with constitutional
limitation.” Yu Cong Eng v. Trinidad, 271 U.S. 500, 518 (1926). As the Court recounted above, “judicial construction
of a statute ordinarily applies retroactively.” DIRECTV, Inc. v. Imburgia, 577 U.S. 47, 56 (2015) (emphasis added).
If the effects of judicial severability were to apply retroactively, the constitutional order would be in complete disarray.
Congress—the creator of law—would face the steep presumption against retroactivity that requires Congress to state
in “‘clear, strong, and imperative’ language” that an enactment has retroactive effect, while Article III tribunals—the
interpreters of law—would face no such obstacle in rendering statutory language (which they did not create)
unenforceable. See Landgraf v. USI Film Prods., 511 U.S. 244, 270 (1994) (quoting Heth, 7 U.S. at 413); see JOHN
F. MANNING & MATTHEW C. STEPHENSON, LEGISLATION AND REGULATION 312–13 (2d ed. 2013) (discussing the
presumption against retroactivity).
judgments.” Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 538 (2012). Policy decisions
“are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people
disagree with them.” Id. At base, the Constitution neither vests nor equips Article III tribunals
with the authority or tools to alter a statute and then give it retroactive effect. See Levin v. Com.
Energy, Inc., 560 U.S. 413, 427, (2010) (“[C]ourts may attempt, within the bounds of their
institutional competence, to implement what the legislature would have willed had it been apprised
of the constitutional infirmity.” (emphasis added)). Contrary to Cunningham’s position, in
situations like the one currently before the Court, the American constitutional order precludes
federal courts from adjudicating severability matters with retrospective effect. See Standard Oil
Co. of N.J. v. United States, 221 U.S. 1, 102 (1911) (Harlan, J., concurring in part and dissenting
in part) (“[Courts] will not judicially legislate, since [their] function is to declare the law, while it
belongs to the legislative department to make the law.”).
ii. Cunningham’s Arguments
As to the issue of retroactivity, the Court perceives Cunningham to defend his stance in
three ways. The Court looks to each in turn.
First, Cunningham offers footnote twelve of the AAPC plurality opinion to mean that the
now-severed statute applies retroactively. Footnote twelve reads, in relevant part:
[A]lthough 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. On the other side of the ledger, our decision
today does not negate the liability of parties who made robocalls covered by the
AAPC, 140 S. Ct. at 2355 n.12 (plurality opinion) (citation omitted). Cunningham specifically
contends this statement indicates that AAPC “impacted only robocalls that were made to collect
government debt after the exception was added in 2015 and that parties remained liable for
robocalls made for other purposes” (Dkt. #137 at p. 8). The Court finds this argument problematic
for two key reasons. First and foremost, this footnote contradicts the judgment of the Supreme
Court in AAPC. According to Cunningham, after severing the government-debt exception, the
determination as to which speakers are liable under § 227(b)(1)(A)(iii) during the exception’s
existence should turn on the message conveyed—i.e., the speech’s content (see Dkt. #137 at p. 8).
Accepting this argument would produce a result entirely predicated on whether a TCPA defendant
called an individual to collect government debt, which would eviscerate the six-Justice holding
that Congress “impermissibly favored debt-collection speech over political and other speech in
violation of the First Amendment.” 10 Id. at 2343; see id. at 2366 (Gorsuch, J., concurring in the
judgment in part and dissenting in part) (“[A] holding that shields only government-debt collection
callers from past liability under an admittedly unconstitutional law would wind up endorsing the
very same kind of content discrimination we say we are seeking to eliminate.”).
As well, Cunningham maintains that footnote twelve is not dictum, but even if it is, the
footnote is “extremely persuasive” (Dkt. #137 at pp. 17–18). For starters, footnote twelve is, by
definition, dictum. See Int’l Truck & Engine Corp. v. Bray, 372 F.3d 717, 721 (5th Cir. 2004) (“A
statement is dictum if it ‘could have been deleted without seriously impairing the analytical
The following hypothetical aptly demonstrates the problem with the argument Cunningham advances here:
[I]magine that in 2015 Congress instead created a content-based exception for ATDS calls soliciting
campaign donations for, say, Republicans, while leaving the ATDS restriction for calls soliciting
donations for Democrats. If both Republican and Democratic campaigns made ATDS calls under
that regime—before the exception was challenged—surely no court would (1) invalidate the
exception for Republican calls going forward, yet nonetheless (2) impose liability only for
Democratic calls that had already been made. Yet footnote 12 would require [a] blatantly
Brief of Amicus Curiae Facebook, Inc. in Support of Appellees at 28–29, Lindenbaum v. Realgy LLC, No. 20-4252
(6th Cir. Mar. 24, 2021).
foundations of the holding’ . . . .” (quoting Gochicoa v. Johnson, 238 F.3d 278, 286 n.11 (5th Cir.
2000))). Despite his characterization in response, Cunningham is incorrect in stating that “seven
Justices joined in [footnote twelve’s] holding” (Dkt. #137 at p. 17). Only Chief Justice Roberts,
Justice Alito, and Justice Kavanaugh endorsed the footnote. Id. at 2355 n.12 (plurality opinion).
Justices Breyer, Ginsburg, Sotomayor, and Kagan merely concurred in the judgment on the
severability issue, meaning they agreed with the result as to severability but did not join the
plurality opinion’s rationale (which includes footnote twelve). See AAPC, 140 S. Ct. at 2357
(Sotomayor, J., concurring in the judgment); id. at 2363 (Breyer, J., concurring in the judgment in
part and dissenting in part). Moreover, the Court simply cannot oblige Cunningham’s request for
the Court to give effect to footnote twelve without contravening AAPC’s holding. To be sure, the
Court acknowledges it is “generally bound by Supreme Court dicta, especially when [such dictum]
is ‘recent and detailed.’” Hollis v. Lynch, 827 F.3d 436, 448 (5th Cir. 2016) (quoting Gearlds v.
Entergy Servs., Inc., 709 F.3d 448, 452 (5th Cir. 2013)); see United States v. Becton, 632 F.2d
1294, 1296 n.3 (5th Cir. 1980) (“Dicta of the Supreme Court are, of course, another matter.”).
Nevertheless, given the AAPC Court’s holding, 140 S. Ct. at 2356 (plurality opinion), established
principles of severability, supra at pp. 8–11, and the discriminatory outcome that would result
from Cunningham’s position, supra at pp. 13–14 & 14 n.10, the Court concludes that footnote
twelve is unpersuasive. 11
Second, Cunningham argues that three Supreme Court cases confirm the accuracy of his
position: Harper v. Virginia Department of Taxation, 509 U.S. 86 (1993); Eberle v. Michigan, 232
U.S. 700 (1914); and Frost v. Corporation Commission of Oklahoma, 278 U.S. 515 (1929) (see
Moreover, the only forms of relief the AAPC plaintiffs actually requested for their alleged violations of
§ 227(b)(1)(A)(iii) were prospective. See First Am. Compl. 15, Am. Assoc. of Pol. Consultants, Inc. v. Lynch, No.
5:16-cv-00252-D (E.D.N.C. Aug. 5, 2016), ECF No. 18.
Dkt. #137 at pp. 8–10). Cunningham invokes this trio of cases to argue that the AAPC Court’s
severability determination applies retroactively to all pending cases. This argument is mistaken
for two main reasons. For one thing, none of these cases stand for Cunningham’s proposition—in
fact, Harper, Eberle, and Frost cut against his argument. Harper holds that when the Supreme
Court “applies a rule of federal law to the parties before it, that rule is the controlling interpretation
of federal law and must be given full retroactive effect in all cases still open on direct review and
as to all events,” irrespective of whether those events “predate or postdate [the] announcement of
the rule.” 509 U.S. at 97. Were the Court to accept Cunningham’s position as to the retroactive
effect of AAPC’s severability decision, the Court would actually violate Harper’s retroactivity rule
because certain TCPA speakers would be held liable under a statutory provision the Supreme Court
deemed unconstitutional. See AAPC, 140 S. Ct. at 2366 (Gorsuch, J., concurring in the judgment
in part and dissenting in part). As well, neither in Eberle nor Frost did the Supreme Court impose
retroactive liability for conduct expressly authorized by Congress that was later deemed
unconstitutional and severed.
Third, Cunningham presents broad assertions regarding his position on retroactivity, yet
what he offers is without support. For instance, he argues that “[t]he seven-Justice majority held
that the legal effect of severing the government-debt exception is retroactive” (Dkt. #137 at p. 7).
As the Court already discussed, supra p. 7, this statement is an incorrect characterization of
AAPC’s holding. Along the same lines, Cunningham takes bold legal stances to support his
position, such as: “The Supreme Court’s explanation of the consequences of its severance of the
government-debt exception is in line with the well-established principle that severability
determinations are interpretations of federal law that must apply retroactively to all pending cases”
(Dkt. #137 at p. 8); and “The weight of authority strongly supports the retroactive application of
the Supreme Court’s severability holding, ensuring that parties may still be held liable for robocall
violations made in the past five years” (Dkt. #137 at pp. 10–11). Because Cunningham provides
no caselaw for these sweeping propositions, and the Court cannot locate precedent to such effect,
these statements do not strengthen the position Cunningham takes. See, e.g., United States v.
Brown, 597 F. App’x 269, 270 (5th Cir. 2015) (per curiam) (indicating an argument’s futility
absent supporting precedent).
b. Section 227(b)(1)(A)(iii) Violations Outside the Government-Debt
Prior to its severance decision, the AAPC Court analyzed the government-debt exception
and determined that it violated the First Amendment. 140 S. Ct. at 2346–47 (plurality opinion).
The parties here disagree what this holding means for those § 227(b)(1)(A)(iii) violations unrelated
to the government-debt exception that allegedly occurred during the exception’s existence.
Defendants argue that from the time of the exception’s enactment until the Supreme Court’s
decision in AAPC, § 227(b)(1)(A)(iii) was constitutionally deficient and therefore unenforceable
(Dkt. #131 at pp. 8–10; Dkt. #133 at pp. 6–8). Cunningham disagrees, maintaining that because
the AAPC Court determined the government-debt exception to be unconstitutional—and thereby
null and void when enacted—the exception did not affect § 227(b)(1)(A)(iii) violations outside of
the exception’s scope that allegedly occurred during the exception’s existence (Dkt. #137 at p. 10).
The position Defendants offer is more legally sound.
The First Amendment proscribes Congress from enacting any law “abridging the freedom
of speech.” U.S. CONST. amend. I. “The hallmark of the protection of free speech is to allow ‘free
trade in ideas’—even ideas that the overwhelming majority of people might find distasteful or
discomforting.” Virginia v. Black, 538 U.S. 343, 358 (2003) (quoting Abrams v. United States,
250 U.S. 616, 630 (1919) (Holmes, J., dissenting)). In protecting the individual right “to speak
freely,” the First Amendment demonstrates its value by “defend[ing] equally all viewpoints.”
Morgan v. Swanson, 659 F.3d 359, 401 (5th Cir. 2011) (en banc) (Elrod, J., writing for the majority
As such, if nothing else, the free-speech guarantee signifies the government’s
powerlessness “to restrict expression because of its message, its ideas, its subject matter, or its
content.” Ashcroft v. ACLU, 535 U.S. 564, 573 (2002) (internal quotation marks omitted); see
Sorrell v. IMS Health Inc., 564 U.S. 552, 566 (2011) (“Lawmakers may no more silence unwanted
speech by burdening its utterance than by censoring its content.”).
Content-based laws are “those that target speech based on its communicative
content . . . and may be justified only if the government proves that they are narrowly tailored to
serve compelling state interests.” Reed v. Town of Gilbert, Ariz., 576 U.S. 155, 163 (2015). By
contrast, content-neutral laws are “those that ‘are justified without reference to the content of the
regulated speech.’” City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 48 (1986) (emphasis
omitted) (quoting Va. Pharmacy Bd. v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 771
(1976)). This distinction is “the keystone of First Amendment law.” Elena Kagan, Private Speech,
Public Purpose: The Role of Governmental Motive in First Amendment Doctrine, 63 U. CHI. L.
REV. 413, 443 (1996); see Daryl J. Levinson, Rights Essentialism and Remedial Equilibration, 99
COLUM. L. REV. 857, 902 (1999) (“The single most important feature of free speech doctrine is its
different treatment of content-based laws . . . and content-neutral laws . . . .”).
The general prohibition against content-based speech regulations is ever present, but
particularly so where “speech is unpopular[—even] though such protection may be both more
distasteful and more difficult.” United States v. Michelletti, 13 F.3d 838, 849 (5th Cir. 1994) (en
banc) (Smith, J., dissenting); see Texas v. Johnson, 491 U.S. 397, 414 (1989) (“If there is a bedrock
principle underlying the First Amendment, it is that the government may not prohibit the
expression of an idea simply because society finds the idea itself offensive or disagreeable.”).
Determining whether government regulation concerns the content of speech can be determined on
the face of the regulation, and if the regulation “describes speech by content[,] then it is
content-based.” Jornaleros de Las Palmas v. City of League City, 945 F. Supp. 2d 779, 796 (S.D.
The AAPC Court did just that, finding that Congress “impermissibly favored
debt-collection speech over political and other speech, in violation of the First Amendment.” 140
S. Ct. at 2343. The parties’ dispute, however, does not concern AAPC’s conclusion regarding
constitutionality—instead, they disagree as to the impact this holding has on § 227(b)(1)(A)(iii)
violations unrelated to the government-debt exception that allegedly occurred during the
But as the Court discussed above, supra p. 6, the root of
§ 227(b)(1)(A)(iii)’s constitutional infirmity stems from the government-debt exception’s
commingling with the pre-2015 version of § 227(b)(1)(A)(iii). Therefore, fundamental legal logic
dictates that whenever the government-debt exception actually interacted with the pre-2015
version of § 227(b)(1)(A)(iii), all violations of § 227(b)(1)(A)(iii) were legally flawed, as they are
unable to withstand constitutional scrutiny.
This result is sensible. During the time the government-debt exception was in effect,
§ 227(b)(1)(A)(iii) favored the content of some speech—that which concerned the collection of
government debt—while all speech unrelated to government debt collection was disfavored. As
AAPC characterized it, “A robocall that says, ‘Please pay your government debt’ is legal. A
robocall that says, ‘Please donate to our political campaign’ is illegal.
That is about as
content-based as it gets.” Id. at 2346. Accordingly, any instance in which this content-based
speech restriction exposed some speakers to liability while shielding others altogether violated the
Constitution. As a result, holding TCPA defendants liable for § 227(b)(1)(A)(iii) violations during
the government-debt exception’s existence would contravene the First Amendment as outlined by
the Supreme Court in AAPC—no matter the content of the speech. 12
Without a doubt, Cunningham’s argument carries intuitive appeal. It is certainly true that
“Congress’s act of amendment gains lawful expression only through enactment of a valid
statute”—if a statutory amendment is invalid, “the act is void ab initio, and it is as though Congress
had not acted at all.” Med. Ctr. Pharmacy v. Mukasey, 536 F.3d 383, 401 (5th Cir. 2008); Ex parte
Siebold, 100 U.S. (10 Otto) 371, 376 (1879) (“An unconstitutional law is void, and is as no law.”).
So if the government-debt exception was never technically law, what is the problem with enforcing
the pre-2015 version of § 227(b)(1)(A)(iii) during the exception’s existence?
This point notwithstanding, the reality is that the severed statutory language did in fact
exist at one point and was presumed constitutional. See Boumediene v. Bush, 553 U.S. 723, 738
(2008) (“The usual presumption is that Members of Congress, in accord with their oath of office,
considered the constitutional issue and determined the amended statute to be a lawful one . . . .”).
The Supreme Court has held that “[e]ven where a statute is unconstitutional and hence declared
void as of the beginning, . . . its existence before it has been so declared is not to be ignored.”
NLRB v. Rockaway News Supply Co., 345 U.S. 71, 77 (1953). Even though unenforceable on
paper from its inception, the government-debt exception nevertheless resides in the United States
Code, and, prior to AAPC, individuals conformed their conduct in accordance with the
presumptively constitutional government-debt exception. See, e.g., Lee v. Macon Cnty. Bd. of Ed.,
The Court’s conclusion also comports with binding precedent that requires “the legal effect of conduct [to] be
assessed under the law that existed when the conduct took place.” Landgraf, 511 U.S. at 265; see, e.g., Grayned v.
City of Rockford, 408 U.S. 104, 107 & n.2 (1972) (assessing the constitutionality of a speech restriction as it existed
when the violative conduct allegedly occurred).
453 F.2d 1104, 1112–13 (5th Cir. 1971); see also Ruth Bader Ginsburg, Address, Some Thoughts
on Judicial Authority to Repair Unconstitutional Legislation, 28 CLEV. ST. L. REV. 301, 308
(1979). Giving credence to Cunningham’s argument here would neglect the “operative fact” that
the government-debt exception actually existed prior to “a determination of unconstitutionality”—
a reality that has “consequences which cannot justly be ignored.” Chicot Cnty. Drainage Dist. v.
Baxter St. Bank, 308 U.S. 371, 374 (1940); see, e.g., United States v. Donnelly’s Est., 397 U.S.
286, 291–95 (1970).
ii. Cunningham’s Arguments
Regarding alleged § 227(b)(1)(A)(iii) violations unrelated to the government-debt
exception that occurred during the exception’s existence, Cunningham cites two sets of caselaw in
support of his position. The Court looks at each in turn.
First, Cunningham cites to a bevy of district-court cases for the proposition that federal
courts nevertheless retain subject matter jurisdiction over claims for TCPA violations unrelated to
the government-debt exception during the exception’s existence (Dkt. #137 at p. 12). This caselaw
is unavailing for two reasons. For one thing, not a single case Cunningham cites is binding on the
Court, let alone originating from within the Fifth Circuit. 13 See Hoyt v. Lane Constr. Corp., 927
F.3d 287, 300 n.1 (5th Cir. 2019) (Haynes, J., dissenting) (“[Courts] are not bound to follow
out-of-circuit decisions.”). Additionally, the Court finds these cases unpersuasive because they
offer little to no explanation as to why or how they concluded that AAPC’s severability holding
applies retroactively. See, e.g., Burton v. Fundmerica, Inc., No. 8:19-CV-119, 2020 WL 4504303,
at *1 n.2 (D. Neb. Aug. 5, 2020).
The only other on-point case within the Fifth Circuit is Creasy v. Charter Communications, Inc., No. CV 20-1199,
2020 WL 5761117 (E.D. La. Sept. 28, 2020), which produced the same result the Court does here.
Second, Cunningham cites two other cases, United States v. Miselis, 972 F.3d 518 (4th Cir.
2020), and National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012), for the
notion that an individual still faces liability when their conduct falls within the ambit of statutory
language that is constitutional, even when a different part of the language is unconstitutional (see
Dkt. #137 at pp. 15–16). But Cunningham misunderstands what these cases stand for. Unlike the
matter currently before the Court, the cases Cunningham offer do not concern equal treatment. See
AAPC, 140 S. Ct. at 2354 (“The ‘First Amendment is a kind of Equal Protection Clause for ideas.’
And Congress violated that First Amendment equal-treatment principle in this case by favoring
debt-collection robocalls and discriminating against political and other robocalls.” (quoting
Williams-Yulee v. Fla. Bar, 575 U.S. 433, 470 (2015) (Scalia, J., dissenting))). In Miselis, there
was no issue in upholding defendants’ convictions under “the Anti-Riot Act’s surviving
applications” because the provisions the Fourth Circuit deemed unconstitutional and severed did
not impact defendants’ proceedings. See 972 F.3d at 526, 546–48. As well, National Federation
of Independent Business does not conflict with the Court’s holding because the statutory provision
severed by the Supreme Court in that case involved the anticommandeering principle and other
considerations of federalism, which bear little in common to the concerns involved in
equal-treatment cases like AAPC. See 567 U.S. at 575–88. As such, these cases Cunningham
advances are inapposite.
In light of the foregoing analysis, the necessary conclusion is that § 227(b)(1)(A)(iii) was
unconstitutional from the moment Congress enacted the government-debt exception until the
Supreme Court handed down its decision in AAPC. In other words, during that stretch of time,
§ 227(b)(1)(A)(iii) had no legal effect. See Ex parte Royall, 117 U.S. 241, 248 (1886). Seeing as
the § 227(b)(1)(A)(iii) violations Cunningham alleges occurred during this time period, these
statutory offenses are not constitutionally sound—and are therefore inoperative. Considering that
the federal question forming the basis of the Court’s subject matter jurisdiction is no longer present
(Dkt. #50 at p. 2), the Court must dismiss this case for lack of subject matter jurisdiction.
The Court understands the effect of its decision, particularly that Cunningham (and others
similarly situated) are no longer able to seek relief from the Court for this specific subset of TCPA
violations. Nevertheless, the Court cannot “formulate new law or pass judgment upon what the
law should be, for ‘judicial power is never exercised for the purpose of giving effect to the will of
the Judge’ but instead is exercised only to give effect ‘to the will of the law.’” Tex. Voters All. v.
Dall. Cnty., No. 4:20-CV-00775, 2020 WL 6146248, at *1 (E.D. Tex. Oct. 20, 2020) (quoting
Osborn, 22 U.S. at 866). The Court has done nothing more here than say what the law is.
Having conducted a de novo review, the Court rejects the Magistrate Judge’s report (Dkt.
#142) as the findings and conclusions of the Court. It is ORDERED Plaintiff’s claims against
Defendants are hereby DISMISSED WITHOUT PREJUDICE. All relief not previously granted
is DENIED. The Clerk is directed to CLOSE this action.
SIGNED this 31st day of March, 2021.
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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