In the Continuing Saga of the TCPA: Good News, Bad News From a Court in Miami

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In a recently released decision from the U.S. District Court for the Southern District of Florida, Mais v. Gulf Coast Collection Bureau, et al., Judge Robert N. Scola, Jr., granted in part and denied in part cross motions for summary judgment in a putative class action before considering the issue of class certification.

The suit was brought by a gentleman seeking damages in connection with a series of telephone calls made to his mobile phone by an independent debt collector (Gulf Coast Collection Bureau, Inc.), using a predictive dialer, on behalf of a hospital-based provider of radiology services (Florida United Radiology, L.C.), to which the gentleman apparently owed $49.03 incurred during an emergency hospitalization. The action was brought against Florida United (the service provider), Sheridan Acquisition, P.A. (the holding company for Florida United), and Gulf Coast (the independent debt collector).

The underlying facts were these: the plaintiff’s spouse had given the hospital her husband’s mobile phone number for contact purposes when she went through the admissions process on her husband’s behalf and, as part of that process, she had acknowledged and received a copy of the hospital’s privacy practices, which included a disclosure that the hospital, physicians or other health professionals might release a patient’s health care information “for purposes of treatment, payment or healthcare operations,” and might use and disclose such information to “bill and collect payment from the patient, his insurance company or a third party payor.”

The judge granted summary judgment in favor of the creditors, ruling that the court was not bound by a previous FCC order interpreting certain statutory provisions of the TCPA because the judge found those provisions to be unambiguous on their face. Thus, Judge Scola rejected the FCC’s 2008 declaratory ruling finding that “[c]alls placed by a third party collector on behalf of [a] creditor are treated as if the creditor itself placed the call.” Instead, after a detailed analysis, the court concluded that deference need not be accorded to the Agency’s statutory interpretation and that “on behalf of” liability simply does not apply to autodialer cases under the TCPA because of the way that statute is structured.

The court also rejected the application of traditional tort rules of vicarious liability, finding that the entities on whose behalf the debt was being collected had not exercised, or had the right to exercise, the kind of control over the independent debt collector necessary to create vicarious liability. In reaching that conclusion, the court found that the entities had done what they could by, among other things, specifying in the contract with the outside debt collector that “Gulf Coast shall perform third party collection services on referred accounts receivable in accordance with all applicable state, federal and local laws, regulations, ordinances and rules[.]”

But before defense lawyers start uncorking the bubbly, Judge Scola did grant summary judgment in part in favor of the plaintiff and against the independent debt collector by again rejecting a portion of the FCC’s 2008 declaratory ruling, this time that portion of the ruling concluding 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.”

Rather, quoting Black’s Law Dictionary’s definition of “express consent,” the court found that the FCC had engrafted into the TCPA statute an exception to the requirement of prior express consent for “implied consent” based on an individual’s conduct…an exception that Congress had not included nor intended. Again, the court reasoned that, since the plain words of the statute were unambiguous, the court was not bound by the language of the FCC’s 2008 declaratory ruling, a ruling that, in the years since it was handed down, so many entities involved in debt collection have come to rely on.

While there is something for everyone (except independent debt collectors) in the Mais decision, its perspective – in direct contrast, for example, to the recently decided Nelson case in Wisconsin (2013 WL 1141009 (W.D. Wis. Mar. 8, 2013)) – leaves those trying to comply with the TCPA, as well as their advisors, more confused than ever. While all of us have been patiently (and for years) awaiting further guidance from the FCC in response to a wide array of pending petitions for declaratory rulings on such points as the definition of an autodialer, the Mais decision raises a question about whether such guidance, if and when it ever comes, will be binding on the courts.

If some of these recently decided district court cases ever make their way to, and are affirmed by, their respective courts of appeals in a fashion that results in a conflict among the circuits, perhaps the U.S. Supreme Court will be called in; but that, or any clarification from Congress, would be very far down the road and, in the meantime, an extremely active plaintiffs’ bar has been milking the uncertainty, with at least a couple of new putative class actions being filed almost every day, and many millions of dollars being paid in damages or settlements.

Unless or until Congress or higher courts step into the fray, potential litigants must expect plaintiffs’ counsel or defense counsel, depending on the particulars of the case, to argue that the FCC's 2008 ruling should be distinguished. If, for example, a defendant attempts to rely on the affirmative defense of prior express consent – unless the document containing the patient’s/borrower’s/debtor’s cell number specifies that the number given can be used for bill collection calls made by the provider/lender/creditor and/or its third-party collection agent using an autodialer and/or a prerecorded message – expect an argument that there was no express agreement to accept calls. On the other hand, in actions where a third-party debt collector made the allegedly offending calls, expect defense counsel to maintain that the entity on whose behalf those calls were made is not liable for any TCPA violations that might have occurred.

So what’s an attorney or in-house compliance or privacy officer to do? First, try always to obtain prior express written consent at the time a debt is created and make certain to state clearly at that time exactly what it is that the customer is consenting to. Anything other than unambiguous language could impact an entity’s ability to rely on such consent as an affirmative defense in any subsequent litigation.

Use a disclosure such as, “by signing here and disclosing your mobile telephone number, you are agreeing that we or our agents or contractors can call you on that number using an automatic telephone dialer and/or that we or our agents or contractors can leave a prerecorded and/or text message on that number.” Then, once you get prior express written consent to a clearly articulated disclosure, make sure that you keep good, admissible records of how, when, and from whom you received the consent.

Next, adopt some internal rules designed to mitigate consumer frustration, such as procedures insuring that requests to cease calling are respected and that consumers are not unduly bombarded with a high number of unwelcome interruptions in any given period or at any especially inconvenient times. We have never seen a case where a single call, or even a couple of calls, has resulted in a lawsuit or a complaint to the FCC, even if the call or calls were in violation of some provision of the TCPA.

Finally, although it’s far from a guarantee of protection, one might want to consider leaving all one’s debt collection to an independent contractor, and always making certain to include specific language in a written agreement with that contractor that it, and it alone, is responsible for complying with all relevant state and federal laws and regulations, including, but not limited to, the TCPA and the FTC’s Fair Debt Collection Practices Act.

And watch for more uncertainty than ever in litigation involving the TCPA, and further tough calls on the counseling and compliance side.

Rob Jackson also contributed to this article.