Tuesday, March 15, 2016

FYI: 6th Cir Rules in Favor of Debt Collector in TCPA "Attenuated Consent" Case

The U.S. Court of Appeals for the Sixth Circuit recently affirmed summary judgment in favor of a debt collector on federal Telephone Consumer Protection Act ("TCPA") allegations.


In so ruling, the Court held that, by providing their cellular telephone number to the primary service provider when they incurred the debt, the plaintiffs gave their "prior express consent" to be called on their cellular telephones by the debt collector of a secondary services provider, even though the debt collector did not receive the cellular telephone numbers directly from the plaintiffs. 


A copy of the opinion is available at:  http://www.ca6.uscourts.gov/opinions.pdf/16a0037p-06.pdf


Plaintiffs received medical care from a hospital.   As part of their care at the hospital, the plaintiffs received anesthesiology services.  After plaintiffs did not pay their bills for the anesthesiology services, the delinquent accounts were sent to the debt collector for collection. The debt collector called plaintiffs' cell phone numbers, despite never having received their contact information directly from the plaintiffs. 


The debt collector received the numbers from the anesthesiology services provider, which in turn received them from the hospital.  As part of their admission for services to the hospital, the plaintiffs signed Patient Consent and Authorization forms covering "all medical and surgical care." 


One of the plaintiffs' authorizations also provided that the hospital could use the health information as needed. 


The other plaintiff signed two different forms. In 2011, she agreed to the same terms described above.  Another form, however, was different and provided that the hospital can use her health information for, among other things, collecting moneys due from the plaintiff.  The form also authorized the hospital to release the health information to other third parties, as necessary. 


Plaintiffs alleged that the debt collector violated the TCPA by using an "automatic telephone dialing system" and an "artificial or prerecorded voice" to place nonconsensual calls to their cell phone numbers because they had not given their numbers to the debt collector, or the creditor on whose behalf it was calling, the anesthesiology services provider. The district court granted summary judgment in favor of the debt collector, reasoning that plaintiffs had given their "prior express consent" by way of providing their contact information to the hospital and therefore were precluded from bringing claims under the TCPA.  Plaintiffs appealed.


As you may recall, the TCPA regulates the use of certain technology when placing calls to consumers. It makes it unlawful for any person to place a call "using any automatic telephone dialing system or an artificial or prerecorded voice" to a cell phone number without obtaining the "prior express consent of the called party." 47 U.S.C. § 227(b)(1)(A)(iii). "[T]he FCC has interpretive authority over the [TCPA]," Charvat v. EchoStar Satellite, LLC, 630 F.3d 459, 467 (6th Cir. 2010), and its "rulings . . . shape the law in this area[.]" Hill v. Homeward Residential, Inc., 799 F.3d 544, 551 (6th Cir. 2015).


The Sixth Circuit began its analysis by discussing the FCC's role in interpreting the TCPA.  The FCC has provided extensive guidance regarding what constitutes "prior express consent," and four of its interpretations are particularly pertinent. First, in 1992, the FCC interpreted "prior express consent" to include a form of implied consent, reasoning in a Report and Order that "persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary." In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 7 FCC Rcd. 8752, 8769 (1992) (the "1992 Order").


In support of this construction, the FCC relied upon the TCPA's legislative history, "noting that in such instances, 'the called party has in essence requested the contact by providing the caller with the telephone number for use in normal business communications.'" Id. at 8769 n.57. The FCC was careful to distinguish between these permissible contacts where a party "call[s] a number which was provided as one at which the called party wishes to be reached" and impermissible contacts where a party learns of a telephone number in another way, such as by capturing a telephone number via Caller ID. Id. at 8769. The FCC extended this general proposition in 2008 to cell phone numbers. In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23 FCC Rcd. 559, 559 (2008) (the "2008 Ruling").


The FCC 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, and that such number was provided during the transaction that resulted in the debt owed. Id. at 564–65 (footnote omitted).


Next, the Sixth Circuit recognized that in the FCC's 2014 GroupMe Declaratory Ruling, the FCC held "that the TCPA does not prohibit a caller . . . from obtaining the consumer's prior express consent through an intermediary[.]" Matter of GroupMe, Inc./Skype Commc'ns S.A.R.L Petition for Expedited Declaratory Ruling Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 29 FCC Rcd. 3442, 3444 (2014) ("GroupMe"). Extending the logic of the 1992 Order and the 2008 Ruling to intermediaries, the FCC noted the TCPA's ambiguity as to how consent need be obtained. But the FCC emphasized that "prior express consent" is not so narrow as to only require consent between the parties, but it did make clear that consent to be called at a number in conjunction with a transaction extends to a wide range of calls "regarding" that transaction, even in at least some cases where the calls were made by a third party. Id. at 3446. Thus, consent may be obtained by and conveyed through an intermediary. Id. at 3444–47.


Fourth and finally, the FCC affirmed its GroupMe decision on July 10, 2015. See In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961 (2015) ("2015 Order"). The FCC stated that "[i]mportantly, . . . an intermediary can only convey consent that has actually been obtained, and cannot provide consent on behalf of another party." Id. at 7990–91. Put differently, the context of the consent provided is critical. See Hill, 799 F.3d at 552; compare, e.g., Murphy v. DCI Biologicals Orlando, LLC, 797 F.3d 1302, 1308 (11th Cir. 2015) with Nigro v. Mercantile Adjustment Bureau, 769 F.3d 804, 806–07 (2d Cir. 2014).


Plaintiffs argued the FCC's rulings do not apply where a consumer provides his cell phone number to one entity during the course of a business relationship, which then provides that number to another entity, which then provides that number to a debt collector to call on its behalf.


Plaintiffs focused on the 2008 Ruling's statement that "prior express consent is deemed to be granted only if the wireless number was provided by the consumer to the creditor." 2008 Ruling, 23 FCC Rcd. at 564. The essence of their argument was that in order for the FCC's "prior express consent" rulings to apply, the plaintiffs needed to provide their cell phone numbers to their creditor -- here, the anesthesiology services provider -- which they did not do. The Sixth Circuit rejected this reading of the FCC's interpretations.


The Sixth Circuit referenced its holding in Hill where "a person gives his 'prior express consent' under the [TCPA] if he gives a company his number before it calls him." 799 F.3d at 552. There, the Sixth Circuit emphasized that the context in which a debtor provides his cell phone number matters.  Importantly, we noted that while debtors "typically give their cellphone number as part of a credit application at the beginning of the debtor-creditor relations, it doesn't have to be that way." Id.


The Sixth Circuit next discussed Mais v. Gulf Coast Collection Bureau, Inc., 768 F.3d 1110 (11th Cir. 2014), which the district court in this case found dispositive. Indeed, the Sixth Circuit found Mais was indistinguishable from the present facts, and persuasive regarding how to apply the FCC's "prior express consent" interpretations.


In Mais, the plaintiff sought emergency medical treatment from a hospital. Id. at 1113. As part of the admissions process, the plaintiff's wife provided the hospital with the plaintiff's cell phone number. Id. The admissions forms, signed by the plaintiff's wife, contained a variety of disclosures regarding what the hospital may do with the plaintiff's "health information," including disclosing the information to its "business associates" (i.e., its independent physicians) and for the purpose of "bill[ing] and collect[ing] payment." Id. at 1114.  The account was eventually referred to a debt collection agency, which used automated technology to place calls to plaintiff's cell phone number, and the plaintiff brought a purported class action under the TCPA. Id. The Eleventh Circuit rejected the same argument plaintiffs present here:  that the FCC's 2008 Ruling applies only to situations where a consumer provides a cell phone number "to the creditor . . . during the transaction that resulted in the debt owed." Id. at 1122–23.


The Sixth Circuit found persuasive the Eleventh Circuit's reliance on the fact that the FCC has held that "prior express consent" exists when one has "made the number available to the creditor regarding the debt"; i.e., not just in "direct delivery" cases. Id. The Mais court bolstered this conclusion by noting the FCC's recognition in GroupMe "that the TCPA does not prohibit a caller from obtaining consent through an intermediary."


Plaintiffs attempted to distinguish Mais, arguing that it enlarges the scope of the FCC's rulings. 


First, they argued Mais construed the phrase "provide" too broadly to mean something more than just "directly giving a cellular telephone number to a creditor" and thus read out its consumer protection construction. The Sixth Circuit found this contention to be meritless because it would require it to both opine on the validity of the FCC's rulings (which it cannot do) and ignore the FCC's use of the word "available."


Second, Plaintiffs argued that "prior express consent" is an exception and thus must be strictly construed. To follow this argument, the Sixth Circuit noted it would have to reject the FCC's guidance — which it cannot do.


Third, plaintiffs contended that none of the FCC's rulings relied upon by the Eleventh Circuit support its conclusion. Notably, according to the plaintiffs, the Mais court misread GroupMe to apply to the provision of cell phone numbers by an intermediary as opposed to "prior express consent." They also contended that GroupMe's holding is narrower because the servicer at issue obtained prior express from consumers then represented that prior express consent to others. 


The Sixth Circuit disagreed.  The Sixth Circuit recognized that the FCC's GroupMe ruling stressed that "allowing consent to be obtained and conveyed via intermediaries in this context facilitates . . . normal, expected, and desired business communications in a manner that preserves the intended protections of the TCPA." 29 FCC Rcd. at 3445. The 2015 Order also emphasized that consent depends "upon the facts of each situation." 30 FCC Rcd. at 7990.


Fourth, the plaintiffs argued that Mais undermines the rationale of the "prior express consent" exception. That is, the plaintiffs argued the rule codifies social practice:  if one gives a number (especially when requested), it is an invitation to be called.  From this, the plaintiffs argued there is no social practice to extend the giving of a number to one party as an invitation for a third party to call.


The Court rejected these arguments.  In sum, the Sixth Circuit adopted the Mais conclusion that consumers may give "prior express consent" under the FCC's interpretations of the TCPA when they provide a cell phone number to one entity as part of a commercial transaction, which then provides the number to another related entity from which the consumer incurs a debt that is part and parcel of the reason they gave the number in the first place.


More specifically, the Sixth Circuit held that the provision of a cell phone number to a hospital, that then provides that cell phone number to an affiliated physicians' group that provided medical services to a consumer arising out of the same occurrence of hospitalization, constitutes "prior express consent" under the TCPA for the affiliated physicians' group or its debt collector to call the cell phone number.


The Court noted that the FCC's rulings in this area make no distinction between directly providing one's cell phone number to a creditor and taking steps to make that number available through other methods.  Moreover, the Court noted that the FCC's GroupMe ruling and 2015 Order make clear that there is no one way for a caller to obtain consent. 


Next, the Sixth Circuit examined the facts at hand to determine whether plaintiffs provided their "prior express consent" as part of their admissions to the hospital. One authorization signed in 2009 and the authorization at issue in Mais was virtually indistinguishable. In Mais, the plaintiff acknowledged that the hospital "may use and disclose health information about your treatment and services to bill and collect payment from you[.]"  One plaintiff here similarly represented that "[the hospital] may use [her] health information for a range of purposes including . . . billing and collecting money's due from [her.]" The Mais plaintiff understood that the hospital could "use and disclose health information . . . [t]o business associates we have contracted with to perform the agreed upon service and billing for it," "disclose your health information to our business associates so that they can perform the job we've asked them to do and bill you," and "release the healthcare information for purposes of . . . payment . . . ." Id. Likewise, the 2009 authorization here included similar language.


The issue here was whether "health information" in the authorization included the plaintiff's cell phone number. Relying on Mais, the district court answered in the affirmative, relying in part on the Health Information Portability and Accountability Act ("HIPAA"), finding that the hospital's registration forms, in which it received plaintiffs' wireless numbers, constitute information related to future payment, and therefore, part of plaintiffs' health information. 


Plaintiffs contended this was in error because: (1) the authorization in Mais expressly defined "health information," and the 2009 authorization did not; (2) HIPAA and its definition of "health information" do not apply to consumers; (3) the general public would not understand the ordinary meaning of "health information" to include a cell phone number; and (4) the adhesive nature of the authorization must be construed in plaintiffs' favor.

The Sixth Circuit acknowledged that these arguments carry some weight, but held that the result would be nonsensical. That is, the Court explained that the plaintiffs' reading would make the express provision authorizing disclosure of the plaintiff's information as "necessary for . . . purposes" of "billing and collecting moneys due from [her]" inoperative if the hospital could not release the very contact information —including her cell phone number — she provided to the hospital as part of her admission.


Moreover, the Sixth Circuit held that the district court properly relied upon HIPAA to bolster its conclusion.  Although the plaintiff did not draft the 2009 authorization, the authorization is a contract related to giving consent for medical care, and, as such, "health information" must be read through this prism to give it a proper meaning. See Savedoff v. Access Grp., Inc., 524 F.3d 754, 764 (6th Cir. 2008).  Under HIPAA, "health information" includes "any information . . . created or received by a health care provider . . . relat[ing] to . . . the past, present, or future payment for the provision of health care to an individual." 42 U.S.C. § 1320d(4).  The Sixth Circuit held that contact information most undoubtedly is any information that relates to a patient's payment for care provided.


Next, the Sixth Circuit rejected the plaintiffs' argument that the consent was valid for only one year.  After setting forth all of the specific "authorizations," the 2009 authorization then carved out a specific authorization for the release of a certain kind of information:  "The preceding authorizations for release of medical information include authorization for the release of information regarding drug and/or alcohol abuse, HIV (Human Immunodeficiency Virus) testing or HIV infection related conditions. This authorization shall remain valid for one (1) year."  The Court held that a plain reading of this language indicates that the one-year restriction is not for the entire 2009 authorization, but rather for the authorization relating to release of information for drugs, alcohol, and HIV.


In sum, the Sixth Circuit held that the district court correctly granted summary judgment in favor of the debt collector for those calls it placed to plaintiff arising out of her 2009 authorization.


The Court also held that the plaintiffs' 2011 authorizations similarly could not be read in the manner suggested by plaintiffs. Just as in Mais and the 2009 authorizations, the 2011 authorization similarly put plaintiffs on notice that the hospital "may use [their] health information for many reasons as needed . . . [including for] billing and payment." This authorization is broader in two key respects: (1) it allows the hospital to use plaintiffs' health information "for many reasons as needed" as opposed to the 2009 authorization's "for a range of purposes"; and (2) unlike the 2009 authorization, the 2011 authorization is not limited to the "release [of their] health information . . . to such employees, agents or third parties as are necessary for these purposes and to companies who provide billing services for physicians or other providers involved in my medical care."


In addition, and as with the 2009 authorization, the Court held that "health information" necessarily includes plaintiffs' contact information; otherwise, the provision concerning "billing and payment" would be rendered meaningless.  Next, the Court held that the plaintiffs' contentions that the 2011 authorization's "may use" phrase could not be read as "may disclose," and that the authorization did not specifically identify the entities to which the hospital would disclose, wholly ignored the broad and separate provision authorizing the "release" of plaintiffs' health information.

Accordingly, the Sixth Circuit held that the district court also correctly granted summary judgment to the debt collector for those calls it placed to plaintiffs arising out of the 2011 authorization.


The Sixth Circuit ultimately concluded that plaintiffs sought medical treatment from the hospital, and in the course of this relationship, both gave the hospital their cell phone numbers and authorized it to disclose their cell phone numbers to others. The "other" in this case — the anesthesiology services provider — had a significant relationship with the hospital, plaintiffs, and most critically, the debts owed by plaintiffs that arose from the transactions in which plaintiffs provided their cell phone numbers.


As a final matter, the Sixth Circuit rejected the plaintiffs' reliance on the statement in the FCC's 2008 Ruling that the cell phone number must be "provided during the transaction that resulted in the debt owed" for the proposition that the debt collector "failed to prove that the numbers were provided during the anesthesiology services transactions that resulted in the anesthesiology services debts owed."  


The Court noted that this same argument was previously rejected in Hill, 799 F.3d at 551.  The Court noted that the FCC never used the words "initial" or "original" before "transaction," but instead said that the debtor gives his consent when he gives his number "during the transaction" that involves the debt (i.e., "regarding the debt").


Accordingly, the Sixth Circuit affirmed the district court's ruling in favor of the debt collector.





Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com


Admitted to practice law in Illinois




California   |   Florida   |   Illinois   |   Indiana   |   Maryland   |   Massachusetts   |   New Jersey   |   New York   |   Ohio   |   Pennsylvania   |   Texas   |   Washington, DC



NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.

Our updates and webinar presentations are available on the internet, in searchable format, at:


Financial Services Law Updates




The Consumer Financial Services Blog








California Finance Law Developments




Insurance Recovery Services