Monday, June 11, 2012

Telephone Consumer Protection Act: The Federal Courts Giveth and They Taketh Away


Two federal courts recently issued decisions in cases construing the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227.  The more important decision, out of the Seventh Circuit and written by Judge Easterbrook, held that a consumer's consent to be contacted at a cell phone number by an autodialer or pre-recorded voice does not authorize such calls to be made to individuals other than the consumer, such as if the phone number has subsequently been assigned to a different individual than originally made such consent.  Therefore, individuals who have no relationship with a creditor and who innocently receive misdirected collection calls may sue and recover potentially very large sums of money to compensate them for the inconvenience such calls create.  The other decision, from the Eastern District of Pennsylvania, addresses what happens if the person being called actually did have a relationship with the creditor.  The court there held that a consumer who has consented to be called may not thereafter revoke that consent.  Although this is not a very consumer-friendly decision, consumers make take some solace in the fact that the bulk of other federal court decisions disagree, and hold such revocation effective.

The TCPA generally prohibits the making of a call with an automatic dialer or pre-recorded voice to any phone number unless there is an emergency purpose or the caller has the prior express consent of the "called party."  47 U.S.C. 227(b)(1).  The TCPA provides that for each violation (i.e. each call) the aggrieved consumer is entitled to a least $500 damages, and this is to be increased to $1500 per call if the violations are willful.  The FCC has opined since 2008 that a consumer's provision of a phone number to a creditor in a credit application or otherwise constitutes such "express consent."  These two recent cases address wrinkles in the operation of this "express consent" exception.

In the Seventh Circuit decision, Soppet v. Enhanced Recovery Company, LLC, No. 11-3819 (decision dated May 11, 2012), AT&T hired the defendant debt collector to collect a phone bill.  The debt collector used a predictive dialer to call a cellular number, at which its customer had consented to be called in his or her contract with AT&T.  However, the phone number had since been assigned to an unrelated individual, the plaintiff.  The lower court held that the "called party" whose consent must be obtained before autodialed calls may be placed is the party who is actually called, i.e., the current subscriber to the phone number.  The calls here were thus violations of the TCPA.

The Seventh Circuit affirmed, and in doing so, rejected the various statutory construction arguments put forward by the debt collector.  In effect, the collector argued that the court should not read the statute as Congress wrote it, because this would make it too hard to collect debts.  The court noted that it was conceded that the TCPA would be violated if the original customer had provided a false telephone number - whether on purpose or by mistake.  Similarly, were the collector to dial an erroneous number by mistake, it seems clear the TCPA would be violated.

Many people have had the experience of receiving collection or other annoying and potentially expensive autodialed calls directed to a former subscriber to their cellular telephone number.  Under Soppet it is clear that a remedy may be had for such annoyance and expense.  In a lawsuit against the caller, the TCPA makes available substantial minimum damages.

While the Seventh Circuit clarified the broad scope of TCPA liability in Soppet, the Eastern District of Pennsylvania meanwhile issued a particularly narrow decision in Gager v. Dell Financial Services, LLC, No. 3:11-cv-2115 (Mariani, J) (filed May 29, 2012).  

In Gager, the court addressed whether a consumer who has given express consent to be called at a cellular number may revoke that consent.  Numerous courts have held that the consumer can do so, differing only over how - orally or in writing.  Many courts addressing TCPA claims brought in conjunction with claims against debt collectors under the Fair Debt Collection Practices Act have held that because the FDCPA imposes liability for violation of requests to "cease and desist" contact only where those requests are written, withdrawals of consent to receive collection calls must also be in writing.  Starkey v. Firstsource Advantage, LLC, 2010 WL 2541756 (W.D.N.Y. 2010); Cunningham v. Credit Mgmt., L.P., 2010 WL 3791104 (N.D. Tex. 2010); Moore v. Firstsource Advantage, LLC, 2011 WL 4345703 (W.D.N.Y. 2011); Moltz v. Firstsource Advantage, LLC, 2011 WL 3360010 (W.D.N.Y. 2011).

Other courts have rejected this position, holding - sensibly - that one's interpretation of the TCPA should not vary depending on whether the defendant is a debt collector.  The TCPA either allows oral withdrawal of consent or it doesn't.  If it allows withdrawal of consent, nothing in the TCPA suggests it has to be in writing.  Adamcik v. Credit Control Services, Inc., 2011 WL 6793976 (W.D. Tex. 2011) (so holding in case also involving FDCPA claims); Gutierrez v. Barclays Group, 2011 WL 579238 (S.D. Cal. 2011) (so holding in creditor case without FDCPA claims). 

Decisions finding that consent may be revoked - by whatever means - have generally relied on a 1992 FCC order that stated that a customer's release of his or her phone number constitutes authorization to call only "absent instructions to the contrary."  7 FCC Rcd. 8752, 8769 (1992). 

The court in Gager disagreed with both sets of decisions, and held that express consent, once given, cannot be revoked at all, by any means.  In doing so, the court read the 1992 FCC order as referring to instructions to the contrary given at the same time the phone number is provided.  The court acknowledged that consent may be revokable where debt collectors are concerned, because the FDCPA expressly allows a written cease-and-desist request; thus, the court's logic apparently will not apply to TCPA suits against debt collectors.  However, because a creditor, and not a debt collector, was at issue, the court held that consent was irrevokable.

Whatever may be the merit of this reading of the 1992 order, the order certainly doesn't say that consent, once given, is irrevokable, and such an interpretation seems inconsistent with the very idea of consent and so appears an unnaturally strict construction of the statute itself, particularly where the statute being construed is one that Congress intended to protect consumers from having undesired costs and inconvenience imposed on them by undesired cellphone contacts.  The most natural reading of the TCPA "express consent" language seems to be that once a consumer communicates expressly a lack of consent, there is no longer express consent to receive calls.  If the 1992 order clarifies anything, it is that the mere fact of the creditor having the consumer's phone number, alone, cannot be treated as consent where the creditor knows otherwise.  If consent was to be irrevokable, one would expect that to be noted in the statute.

As noted, the Gager court itself distinguished cases against debt collectors.  Thus, consumers receiving autodialed calls or calls with a pre-recorded voice from debt collectors who have sent a written cease-and-desist request may still be able to obtain substantial minimum damages as compensation.  To the extent non-debt collectors are making the calls, the bulk of extant authority continues to hold consent revocable, and so consumers aggrieved by such calls from a business they have had some relationship with will still find it advisable to communicate, ideally in writing, a revocation of their consent to such calls.

My firm handles TCPA claims against debt collectors, creditors, or other abusive companies.  If you have received such calls, contact us.

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