District Court Relies on “Capacity” Issue in Denying Debt Collector Summary Judgment Under TCPA

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On December 18, 2020, the U.S. District Court for the Northern District of Indiana denied a debt collector’s motion for summary judgment, suggesting that an open question of whether a telephone system had the capacity to place automatic calls might support a claim under the Telephone Consumer Practices Act (“TCPA”), even if that functionality had not been used.

Taylor Law, PLLC (“Taylor Law”) was engaged to recover a debt from Russell Friend. According to Friend, after he sent a letter requesting debt validation and no further contact, Taylor Law sent additional correspondence and called Friend multiple times. Friend brought suit alleging among other counts that Taylor Law violated the TCPA by using an automatic dialing system.

Taylor Law moved for summary judgment on the TCPA count based on the testimony of its corporate representative. Specifically, the representative testified that although the telephone software they used was capable of automatic dialing, he “believed” that Taylor Law did not use that function.

The Court denied the motion on two grounds. First, the Court found that a reasonable juror might not find testimony of “belief” sufficient evidence that Taylor Law did not use an automatic dialer. Second, the Court questioned generally whether Taylor had violated the TCPA by using a system with the capacity to automatically dial numbers, even if it did not actually use that function. The Court concluded that it did not have enough information to decide the latter issue, but the open question reinforced its denial of Taylor Law’s motion for summary judgment.

Whether the TCPA regulates calls even if placed manually when the telephone system has the latent capacity to place call automatically is a hot-button issue under the TCPA. The pending appeal in Duguid v. Facebook, discussed here, may resolve this and other fundamental questions about the applicability of the TCPA to telephony systems.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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