Amanda Balschmiter’s boyfriend, Victor Loshek, purchased a car with a loan that was serviced by TD Auto Finance LLC (“TDAF”), and subsequently defaulted on the loan.  Balschmiter, on Loshek’s behalf, began making calls on her cellular phone to TDAF to make payments for Loshek and otherwise assist him on paying the loan.  TDAF designated Balschmiter’s number as a “contact approved” non-customer as Balschmiter was acting on Loshek’s behalf in attempting to pay the loan, and began to initiate auto-dialed debt collection calls to Balschmiter.

Balschmiter filed a putative class action against TDAF, alleging that auto-dialed debt-collection calls TDAF made to her cellular phone violated the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), and sought to represent a nationwide class of similarly situated individuals.  Balschmiter sought certification under Fed. R. Civ. P. 23(b)(2) for the “equitable” portion of her class and certification under Fed. R. Civ. P. 23(b)(3) for the damages portion of her class. 

On November 20, 2014, the District Court, in an extensive opinion, denied Balschmiter’s motion for class certification.  Balschmiter v. Td Auto Fin. Llc, No. 13-CV-1186, 2014 U.S. Dist. LEXIS 163771 (E.D. Wis. Nov. 20, 2014).  The Court’s decision delves into a wide variety of TCPA and class certification issues, including Rule 32(b)(2) classes, debt collection calls under the TCPA (and the myriad conflicting decisions/orders on the issue), the burden of proof with respect to the issue of consent at the class certification stage, and the unreliability in attempting to ascertain class members’ identities by performing a “reverse lookup” to attempt to identify the subscribers to particular telephone numbers years ago.

Rule 23(b)(2)

The District Court made short work of Balschmiter’s attempt to obtain class certification under Fed. R. Civ. P. 23(b)(2).  The Court noted that certification under Rule 23(b)(2) was unavailable under the Supreme Court’s holding in Walmart v. Dukes, which held that claims may not be certified under Rule 23(b)(2) when each class members would be entitled to an individualized award of monetary relief.  As the TCPA provides for statutory damages for violations, certification under Rule 23(b)(2) was barred as a matter of law.

Consent

Balschmiter argued that she never gave TDAF express consent to call her cell phone with an auto-dialer, and that her act of calling TDAF from her cell phone could not constitute consent as a matter of law, even though she was calling on Loshek’s behalf regarding the payment and servicing of his loan.  TDAF, unsurprisingly, argued that Balschmiter’s act of calling on Loshek’s behalf from her cell phone was part of the “transaction” resulting in the debt owed, thus constituting prior express consent under a 2008 ruling from the Federal Communications Commission (“FCC”).

In one of the most artful summaries regarding the conflicting rulings and miasma of uncertainty regarding prior express consent, the District Court began by noting that much of the confusion is the result of “the FCC’s own guidance on the TCPA,” noting that the FCC “appears to be allergic to brevity and clarity.”

The District Court held that a reasonable interpretation of the FCC’s use of the word “transaction,” based upon the dictionary definition, included the “process of doing business” with TDAF, which could include provision of a consumer’s number to a creditor as part of making payments or inquiring about a debt.  The Court held that no specific records were required to shown that a consumer expressly consent under prior FCC guidance (instead noting that such records could be shown as examples to demonstrate consent), and thus the ability to provide consent to be called by a creditor could arise at a time subsequent to the origination of the debt under certain circumstances, including circumstances where a non-debtor, such as Balschmiter, could consent to being called about another person’s debt. 

The District Court did not hold that Balschmiter had in fact given consent to TDAF on the merits of her claim, but rather that is was a viable defense for TDAF.  As such, the issue of whether any particular class member gave prior express consent to be called constituted an individualized issue that could not be resolved via class-wide proof.  Notably, the District Court expressly rejected Balschmiter’s argument that TDAF was required to provide evidence (such as statistical evidence) showing that a “significant percentage” of other putative class members had consented.  The Court noted that such a requirement could impermissibly shift the burden of proof to the defendant to prove that individualized issues predominated, rather than properly keeping the burden on the plaintiff to show how issues such as consent could be adjudicated on a class-wide basis.  The court  concluded that TDAF was only required to show the viability of consent as a defense—not that class members had in fact consented to defeat the merit of the claim—and that the plaintiff’s proposed methodology was unable to resolve the issue on a class wide basis, such that Balschmiter had failed to meet her burden of proof.

Finally, the Court also held that Balschmiter failed to show that class members were ascertainable, concluding that Balschmiter’s proposed “reverse-lookup” of telephone numbers to identify putative class members was unreliable and generally inaccurate in identifying a particular subscriber at a particular point in the past. 

Accordingly, the District Court denied class certification.