A Florida federal court has rejected the Federal Communication Commission's 2008 ruling that by providing a wireless number to a creditor on a credit application, a consumer has given "prior express consent" as required by the Telephone Consumer Protection Act (TCPA) for autodialed or prerecorded collection calls to that number.
The TCPA generally prohibits autodialed or prerecorded, non-emergency calls to wireless numbers unless they fall within certain exceptions, which include an exception for calls made with "the prior express consent of the called party." In 2008, the FCC issued a declaratory ruling in which it concluded that "the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt."
Because it viewed the FCC's ruling as having created a new exception for collection calls made with "implied consent," the court in Mais v. Gulf Coast Collection Bureau, Inc. found the ruling to be inconsistent with the TCPA's plain language and therefore not entitled to deference. According to the court, for an individual to give "express consent," he must "directly, clearly, and unmistakably [state] that the creditor may call him" at the telephone number provided on an application. (The court rejected the defendant debt collector's argument that it could not review the FCC's TCPA interpretation because under the Hobbs Act, the federal courts of appeals have exclusive jurisdiction to rule on the validity of FCC final orders.)
The plaintiff in Mais had filed a putative class action alleging that the debt collector had violated the TCPA by making autodialed calls to his cell phone without his consent. The calls were made to collect a debt owed by the plaintiff to a hospital-based provider of medical services. The collector argued that the plaintiff had provided "prior express consent" for the calls because, when he was admitted to the hospital, his wife had provided the plaintiff's cell phone number to the hospital's admissions representative.
The court found the plaintiff had not given express consent because none of the admission-related forms signed by or given to the plaintiff's wife expressly stated that the plaintiff agreed to the calls. Alternatively, the court found that the FCC's ruling did not apply "to the medical care setting." In contrast to a debtor in a consumer credit transaction who, according to the court, "might reasonably expect" a creditor to use a cell phone number provided on an application for debt collection purposes, the court observed that "[t]o receive automated debt collection calls is not necessarily or obviously one of the reasons" someone might give his phone number to a doctor or hospital.
In the court's view, such reasons would "likely relate to treatment, care, and insurance." In addition, the court found that because the FCC's ruling required consent to be given to the creditor, and the plaintiff's wife had given his phone number to the hospital instead of the provider that was the creditor, there was no consent under the FCC ruling.
The court did, however, reject the plaintiff's attempt to impose TCPA liability on the health care provider and the provider's parent company, finding that the FCC's ruling also was not entitled to deference on the issue of vicarious liability. In its ruling, the FCC had stated that, for purposes of TCPA liability, calls made by a third party "are treated as if the creditor had made the call." According to the court, the ruling was inconsistent with the language of the TCPA, which only imposes liability on those who "make" prohibited autodialed or prerecorded calls. It also found that neither of the two defendants exercised, or had the right to exercise, the kind of control over the debt collector necessary to create vicarious liability.
Mais illustrates the potential impact of the TCPA's draconian penalties. Violations can yield damages equal to the greater of $500 or actual damages per violation, triple damages for willful or knowing violations, and unlimited class action liability. The debt collector in Mais had attempted 30 calls to the plaintiff's cell phone, with 15 actually dialed and 15 others failed. While unwilling to count the failed calls as TCPA violations, the court found that the plaintiff was entitled to $500 for each of the 15 actually dialed calls. In addition, leaving open the possibility of class-wide TCPA liability, the court directed the parties to brief the question of whether the case could proceed as a class action.
Ballard Spahr's Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws, and its skill in litigation defense and avoidance. In addition to having vast experience in defending all manner of TCPA lawsuits, the group has counseled a number of clients on establishing autodialing and monitoring protocols.
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