This afternoon, Judge Richard G. Stearns granted ACA International's request for a temporary restraining order (TRO) against Massachusetts Attorney General Maura Healey's (AG) emergency rules that prohibits debt collectors from making outbound telephone calls and bringing legal enforcement actions against consumers. The order can be read here.

Judge Stearns heard oral arguments on the matter on Friday, May 1. A summary of the oral arguments can be found here. While the decision was a little bit delayed—it was expected to be issued yesterday—it's easy to see why. The judge's order is 29 pages long. 

Quick Refresher on Temporary Restraining Orders

The decision on a 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. 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. 

In this case, the certain action the TRO would prohibit is the AG's ban on outbound collection calls and ban on legal enforcement of debt during the pandemic.

ACA Has Shown a Likelihood of Success on the Merits for the First Amendment Claim

First, the judge clarified that at issue here were First Amendment rights for commercial speech, which has a lower scrutiny test than other forms of speech. Regardless, ACA has met its burden and the TRO was granted.

Government Interests in Blocking the Speech

The AG proposed several allegedly substantial government interest: shielding consumers from aggressive debt collectors during the pandemic, protecting residential tranquility while citizens are largely at home, and vouching for citizens' financial wellbeing during a pandemic. The judge found that all but one met the bar required for the interest to be "substantial."

The court states regarding the first interest (shielding consumers from debt collectors):

[T]he Attorney General offers no empirical support for the proposition that consumers are more susceptible to undue influence exerted by debt collectors during a pandemic than would ordinarily be the case.

Of the third interest :

The third of the asserted state interests, vouchsafing the financial wellbeing of Massachusetts residents, seems to have little to do with the prohibition of only one form of communication facilitating collection of payment on a debt, that is, a telephone call.

The court did find that the second interest—promoting domestic tranquility—was sufficient to pass muster in the constitutional test. 

The Restriction Does Not Materially Advance the Domestic Tranquility Interest

Once a sufficient government interest is stated, the AG must be able to show that the restriction materially advances it. In this case, the court found that the AG's restriction did not do so. The court states:

The best that can be said for the Regulation is that it decreases incrementally the number of times that a phone might ring in a debtor’s home with a wanted or unwanted call from one species of debt collector – although in this day and age of cell phones and caller ID the option of simply not answering the phone or placing it in silent mode is a viable alternative for consumers. I say incrementally because the prior supplanted regulation had already imposed a limit of two calls per week by debt collectors. 

And further:

If what the Attorney General meant to accomplish by way of the Regulation was a strict liability ban on all deceptive and misleading debt collection calls, the Regulation is redundant as that is already the law, both state and federally.

. . .

While I laud the Attorney General’s desire to protect citizens of Massachusetts during a time of financial and emotional stress created by the Covid-19 pandemic, I do not believe that the Regulation adds anything to their protections that the existing comprehensive scheme of law and regulation already affords to debtors, other than an unconstitutional ban on one form of communication.

Since the restriction fails to materially advance the interest of domestic tranquility, the restriction very well might be unconstitutional. For this reason, ACA has shown its likelihood of success on the merits. 

Irreparable Harm

The other requirement for a TRO is that the moving party must show that they will suffer irreparable harm if one is not entered. The judge was satisfied with the written testimony of select ACA members that shows they will likely end up in bankruptcy if the AG's restrictions are allowed to be in place during the pendency of this lawsuit.


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