Tuesday, August 22, 2017

FYI: DC Cir Confirms Mediation Not Required Prior to Judicial Foreclosure

The U.S. Court of Appeals for the District of Columbia Circuit recently affirmed the dismissal of a borrower's counterclaims and the entry of summary judgment in the mortgagee's favor, holding that the borrower failed to state claims a) for declaratory and injunctive relief for allegedly failing to properly foreclose a deed of trust; b) for supposedly violating the federal Fair Debt Collection Practices Act (FDCPA);  c) quite title;  d) for supposedly violating the Fair Credit Reporting Act (FCRA);  and  e) civil conspiracy.

 

In so ruling, the Court held that District of Columbia law clearly does not require mediation prior to judicial foreclosure.

 

A copy of the opinion is available at:  Link to Opinion

 

The borrower took out a loan in 2003 secured by a deed of trust on his home in Washington, D.C., but defaulted in 2012. The loan was assigned to the bank in 2013 by the original lender.  The mortgagee filed a foreclosure action in the Superior Court for the District of Columbia, but the case was removed to federal court by the Internal Revenue Service, which was named as a party.

 

The borrower raised a number of counterclaims against the mortgagee.  The trial court granted summary judgment in the mortgagee's favor and dismissed the borrower's counterclaims challenging the validity of the assignment of the loan and deed of trust. The borrower appealed.

 

The DC Circuit first addressed whether summary judgment was appropriate, finding that "[b]ecause [the borrower] provided no evidence to indicate the Bank is not the rightful holder of the Note, there is no dispute of material fact that the Bank holds the Note."  The Appellate Court held that, because "D.C. law allows the holder of a note to enforce the deed of trust by judicial foreclosure, … the district court property entered summary judgment for judicial foreclosure."

 

The Court then rejected the borrower's argument that the mortgagee violated the National Housing Act, 12 U.S.C. § 1701x(c)(5), by not providing him with a notice that "homeownership counseling", and also violated D.C. law by providing him with "notice of his right to 'foreclosure mediation.'"

 

The DC Circuit reasoned that the mortgagee's law firm provided the borrower with a letter "advising him of his default and of a telephone number to call for homeownership counseling", and the borrower "does not explain why this was insufficient notice." 

 

The Court also disagreed that D.C. law "requires mediation prior to judicial foreclosure."

 

The DC Circuit refused to address the borrower's argument that the mortgagee violated the pooling and servicing and trust agreements for the loan at issue, because "even a pro se complainant must plead factual matter that permits the court to infer more than the mere possibility of misconduct."

 

The Court next rejected the borrower's FDCPA claim because that statute only applies to debt collectors, not creditors like the mortgagee here collecting its own debt.

 

The DC Circuit also rejected the borrower's quiet title claim because his argument that the mortgagee "has no right to the property … is contradicted by the Deed of Trust signed by [the borrower]."

 

The Court affirmed the trial court's dismissal of the FCRA claim on the basis that "there is no private cause of action for the alleged violations", because the borrower did challenge the ruling in his brief and, therefore, "forfeited his claim."

 

Finally, the DC Circuit found that the trial court correctly dismissed the civil conspiracy claim because the borrower "failed to meet the heightened pleading requirements for fraud" by not providing any evidence supporting an inference that an illegal agreement existed among the alleged conspirators, the bank, "unknown new investors," and the mortgagee's attorney, to defraud the borrower.

 

Accordingly, the trial court's judgment in favor of the mortgagee was affirmed.

 

 

 

 

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

 

 

 

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Monday, August 21, 2017

FYI: 11th Cir Confirms that Servicer May Designate Address for QWRs

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed a summary judgment ruling in favor of a mortgage servicer, holding that the servicer had no duty to respond to a Qualified Written Request ("QWR") under the federal Real Estate Settlement Procedures Act, 12 U.S.C. 2601 et seq. ("RESPA") because the borrower failed to send the QWR to the servicer's designated address for QWR receipt.

 

A copy of the opinion is available at:  Link to Opinion

 

A mortgage servicer sent a letter to a borrower advising that the lender transferred the servicing of the borrower's mortgage loan to the servicer. The letter notified borrower of three separate addresses to use for correspondence — one address for General Correspondence, one address for all Disputes/Inquiries, and one address for Payment Remittance.  The otherwise identical addresses contained different post office box numbers.

 

After receiving the service transfer notice, borrower's counsel sent correspondence designated as a QWR under RESPA, 12 U.S.C. § 2605(e), to the servicer at the servicer's General Correspondence address.  The letter disputed the servicer's standing to enforce the note, requested the loan owner's name, address and phone number, and requested a certified copy of the note in its current condition.

 

The servicer received the letter at its General Correspondence address and forwarded the letter to its Disputes/Inquiries department. In response to the QWR, the servicer sent borrower two letters.  The first letter identified the holder of the note.  The second letter advised borrower that he mailed his letter to the wrong address, and once again notified borrower of the correct Disputes/Inquiries address.  However, the servicer failed to timely provide borrower a certified copy of the note in its current condition.

 

The borrower sued the servicer alleging that he was entitled to actual and statutory damages under RESPA because the servicer did not properly respond to his purported QWR.

 

The servicer moved for summary judgment claiming, among other things, that the purported QWR did not trigger its acknowledgment and response obligations under RESPA because borrower did not mail the letter to the correct address.  The trial court granted the servicer summary judgment.  Specifically, the trial court found that the servicer had no duty to respond to the QWR because borrower mailed the QWR to the wrong address.

This appeal followed.

Initially, the Eleventh Circuit observed that when a borrower submits a QWR then the servicer must provide "a written response acknowledging receipt of the correspondence" and otherwise respond within specified time periods.  12 U.S.C. § 2605(e)(1)(A), (e)(1)(B), (e)(2).

 

As you may recall, RESPA authorized the Secretary of the Department of Housing and Urban Development "to prescribe such rules and regulations" and "make such interpretations . . . as may be necessary to achieve [the statute's] purposes."  12 U.S.C. § 2617 (repealed 2011).  The Secretary then promulgated Regulation X, 24 C.F.R. § 3500.21 (repealed 2014), RESPA's primary implementing regulation. 

 

Regulation X authorized servicers to "establish a separate and exclusive office and address for the receipt and handling of qualified written requests."  24 C.F.R. § 3500.21(e)(1). The Secretary's final rulemaking notice indicated that when a servicer designates and address for receiving QWR's, "then the borrower must deliver its request to that office in order for the inquiry to be a 'qualified written request.'"  Real Estate Settlement Procedures Act, Section 6, Transfer of Servicing of Mortgage Loans (Regulation X), 59 Fed. Reg. 65,442, 65,446 (Dec. 19, 1994). 

 

Later, the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") transferred the Secretary's rulemaking authority to the Consumer Financial Protection Bureau ("CFPB").  The CFPB rescinded the version of Regulation X at issue in this case, and promulgated a new Regulation X that also permits a servicer to require borrowers to send QWR's to a designated address. 12 C.F.R. §§ 1024.35(c), 1024.36(b).

The borrower maintained that he did not have to send the QWR to the Disputes/Inquiries address because the servicer did not designate a specific address to receive only QWRs. The borrower argued that designating a general address to receive Disputes/Inquiries was insufficient.  Instead, the borrower argued, section 3500.21 required the servicer to explicitly use the term "qualified written requests."

 

The Eleventh Circuit rejected this argument.  As the servicer directed borrowers to send "all written requests to the specified address," it necessarily directed borrowers to send QWRs to the specified address.  The Eleventh Circuit also noted that the servicer used "more accessible language than Regulation X required," because borrowers probably would be more familiar with lay terms like "disputes," "inquiries," and "written requests" than with the statutory term, "qualified written request." 

 

Further, the Eleventh Circuit observed that it would be "perverse" to penalize a servicer for subjecting itself to the additional administrative burden to evaluate and sort a larger quantity of mail to identify QWRs to minimize consumer confusion. 

 

The Court noted that this does not mean that a servicer may designate an address to receive QWR's with terminology so vague that it would fail to advise a borrower of the specified address intended for QWRs.  Instead, the Court held that a servicer must designate an exclusive address for QWRs that is "clear to a reasonable borrower." 

 

The Eleventh Circuit had "little difficulty" in determining that the servicer met this standard.

 

The borrower also argued that he did not have to send his QWR to the Disputes/Inquiries address because the servicer did not "establish a separate and exclusive office" solely to respond to QWRs.  The Eleventh Circuit noted that it construes "[r]egulations with a common sense regard for regulatory purposes and plain meaning."  United States v. Fuentes-Coba, 738 F.2d 1191, 1195 (11th Cir. 1984).  The Court held that the borrower's proposed construction of section 3500.21(e)(1) fails this test because it would frustrate, not serve, the regulation's purpose.

 

The Eleventh Circuit noted that the section 3500.21(e)(1) was designed "to help servicers timely respond to QWRs by enabling them to more easily identify and prioritize correspondence that purport to be QWRs."  To require "a servicer to maintain a separate office for the sole function of processing QWRs would impose high costs on the servicer while providing little benefit."  The borrower argued that a servicer could train employees at a QWR-only processing facility, but the Eleventh Circuit rejected this argument because a servicer could also train employees at a common mail processing office. 

 

The Eleventh Circuit concluded that it is more sensible to construe Section 3500.21(e)(1) to allow a servicer to designate an office "separate" from any other office as its exclusive office for receiving QWRs, without any regard to any other function that office may serve. This "construction accords with § 3500.21(e)(1)'s text and purpose."  The Court held that the servicer therefore "successfully invoked § 3500.21(e)(1) by directing borrowers to mail QWRs to a particular office, even though it used that office for other purposes as well."

 

Thus, the Eleventh Circuit held that a servicer does not have to devote an offer for the separate and exclusive purpose of processing QWRs to "establish a separate and exclusive office" to receive and handle QWRs.

Accordingly, the Eleventh Circuit affirmed the trial court's summary judgment ruling in favor of the servicer and against the borrower.

 

 

 

 

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

 

 

 

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

 

 

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Friday, August 18, 2017

FYI: ED NY Holds "Door Knocker" Notice Did Not Violate FDCPA, But "Hello Letter" May Have

The U.S. District Court for the Eastern District of New York recently granted in part and denied in part a mortgage servicer's motion to dismiss a borrower's claim that the servicing transfer notice supposedly violated the federal Fair Debt Collection Practices Act (FDCPA) because it allegedly did not disclose that the debt was increasing due to interest, and that a "door knocker" notice posted on the borrower's door failed to state that it was from a debt collector.

 

The Court held that under Avila v. Riexinger & Associates, LLC, 817 F.3d 72 (2d Cir. 2016), a debt collector must disclose that a debt is increasing due to interest and fees, and accordingly denied the servicer's motion to dismiss on that issue.

 

However, the Court granted the servicer's motion to dismiss as to the claim that the "door knocker" notice failed to state that it was a communication from a debt collector because the least sophisticated consumer would understand that the letter was from a debt collector.

 

A copy of the opinion is available at:  Link to Opinion

 

The mortgage loan servicer began servicing the mortgage when it was in default.  The servicer sent a servicing transfer notice to the borrower and advised him that "going forward, all mortgage payments should be sent to [the servicer], but that '[n]othing else about [the] mortgage loan will change."  

 

The letter also stated "[t]his notice is to remind you that you owe a debt.  As of the date of this Notice, the amount of debt you owe is $412,078.34."  Id. The notice further stated that the servicer was "deemed to be a debt collector attempting to collect a debt and any information obtained will be used for that purpose." Id. at *3. 

 

Later, the servicer posted a notice on the door of the debtor's home stating: "Date 02/23/17 Dear Borrower: Rego Baptiste URGENT NOTICE: Please contact your mortgage servicer immediately at: (800) 561-4567. Thank you."

 

The borrower filed suit against the servicer asserting violations of 15 U.S.C. §1692e(10) for failing disclose in the letter that the balance on his debt was increasing due to interest and of §1692e(11) for failing to state in the notice that it was from a debt collector.

 

The servicer moved to dismiss.

 

The Court rejected the servicer's argument that the notice was not a collection attempt and thus not subject to § 1692e. Instead, the Court found that under Hart v. FCI Lender Servs., Inc., 797 F.3d 219 (2nd Cir. 2015), the notice was a collection attempt because it referenced the debt and directed that payments be sent to the servicer, it referenced the FDCPA and included the required § 1692g notice, and included a statement that the it is an attempt to collect a debt.  

 

The Court held that under Avila v. Riexinger & Associates, LLC, 817 F.3d 72 (2nd Cir. 2016), when a debt collector notified a debtor of an account balance, it must disclose that the balance may increase due to interest and fees." Avila, 817 F.3d at 76. 

 

The Court also rejected the servicer's argument that Avila should not apply because even a least sophisticated debtor knows that interest continuously accrues on an unpaid mortgage balance and that fees will be incurred if the mortgage is not timely paid. The Court pointed out that because the mortgage was in default at the time the servicer began servicing it, it was subject to the FDCPA and that there was no authority holding that servicers collecting on defaulted mortgages are treated differently than any other debt collectors under the FDCPA.

 

The Court found that the notice did not meet Avila's safe harbor requirements and that such a violation would be material because it "could impede a consumer's ability to respond to . . . collection."  Id. at *12. Accordingly, the Court denied the motion to dismiss as to the servicing transfer notice.

 

As for the "door knocker" notice, the Court found that a least sophisticated consumer would "surmise" that it was from the servicer "whom he would know as a debt collector."  Id. at *12. The Court found this sufficient because the FDCPA "requires no magic words or specific phrases to be used" but only requires that the least sophisticated consumer understand. The Court concluded that "even the least sophisticated consumer would know that a mortgage servicer is a debt collector."

 

Accordingly, the Court granted the motion to dismiss as to the "door knocker" notice, but denied the motion as to the servicing transfer notice.

 

 

 

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

 

 

 

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

 

 

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

 

and

 

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and

 

Webinars

 

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California Finance Law Developments 

 

Thursday, August 17, 2017

FYI: 6th Cir Holds Debtors Could Compel Abandonment of Home If Little Equity Available

The U.S. Court of Appeals for the Sixth Circuit recently affirmed a bankruptcy court's order granting the debtors' motion to compel the trustee to abandon their home as property of the estate because it had little equity and thus little value for unsecured creditors.

 

A copy of the opinion is available at:  Link to Opinion

 

Husband and wife debtors filed a petition under Chapter 7 of the Bankruptcy Code, listing their home on their schedules as having an appraised value of $108,000 and a mortgage of $91,581.

 

The bankruptcy trustee moved to evict debtors, arguing that the value of the property was closer to $200,000 and that it would be easier to sell the property unoccupied.

 

The debtors responded by filing a motion to compel the trustee to abandon the property because the value was inconsequential and provided little or nothing of value to unsecured creditors. In the alternative, they asked that their case be converted to a Chapter 13 reorganization in order that they could try to keep their home.

 

The bankruptcy trustee tendered to the debtors a check for $7,500, which was the value of the debtors' statutory homestead exemption under Tennessee law, which the debtors rejected.

 

The bankruptcy court held an evidentiary hearing in July of 2015, at which the parties presented competing valuations of the property. The debtors called two appraisers. One testified that the property would be worth $171,000 after making needed repairs of $63,000, leaving a net value of $108,000. The other appraiser testified that the home's property would be worth $185,000 after making $60,000 in needed repairs, leaving a net value of $125,000.

 

The trustee's witness, a realtor, testified that the property "was worth $204,000, which he based on his tour of the property." The trustee also called a home inspector, who testified that the amount needed for repairs was exaggerated. Finally, the trustee "himself testified … that, after repairs, the home was worth between $190,000 and $200,000."

 

In August of 2015, the bankruptcy court granted the debtors' motion to abandon, holding that the home's value was inconsequential to the estate. The trustee moved to alter or amend the judgment, which was denied.

 

The trustee appealed to the trial court, which affirmed the bankruptcy court. The trustee then appealed to the Sixth Circuit.

 

On appeal, the Sixth Circuit first addressed the trustee's argument that the debtors lacked standing to compel the trustee to abandon their home as property of the estate because they were not "parties in interest."

 

The Court rejected this argument, reasoning that a trustee's statutory power to liquidate the estate and use the proceeds to pay unsecured creditors was limited by the requirement in section 554(b) of the Code that the trustee "must generally abandon property ["of inconsequential value and benefit to the estate"] that does not possess substantial equity."

 

The Sixth Circuit explained that since a "party in interest" means "anyone who has a practical stake in the outcome of a case[,] and the debtors would get to keep their home if the trustee was required to abandon it, they were "parties in interest" and "thus had standing to pursue a motion to compel abandonment."

 

The Court rejected the trustee's argument that because he tendered their statutory homestead exemption, the debtors "lacked any 'legal or possessory interest' in their residence. It reasoned that while the statutory homestead exemption was one remedy that debtors had available to them "to provide them with a 'fresh start' after the loss of their property[,]" it was not the exclusive remedy. "An alternative remedy is for the debtor to seek abandonment by the trustee under 11 U.S.C. § 554(b) if the property is 'of inconsequential and benefit to the estate.' If [the trustee] could extinguish the abandonment remedy by simply tendering the homestead exemption, then he could effectively nullify 11 U.S.C. § 554(b)."

 

The Sixth Circuit also rejected the trustee's second argument that the debtors "lacked Article III standing to proceed on their motion to compel abandonment" because they met the 3-pronged test. Specifically, they would suffer an injury-in-fact if they were evicted, caused by the trustee, which would be redressed by a favorable ruling on the motion to compel abandonment.

 

The Sixth Circuit next rejected the trustee's argument that there was insufficient evidence for the bankruptcy court to find that the debtors' home was only worth $108,000, reasoning that "[t]he record here is replete with evidence on which the bankruptcy court could reasonably have concluded that the [debtors'] estimate of value was the more accurate one, especially because the [debtors] presented two appraisers who had thoroughly inspected the house, whereas [the trustee] presented no appraisers, instead relying on a realtor, a home inspector, and himself."

 

Having concluded that the "bankruptcy court did not err in order the trustee to abandon the property[,]" the Court rejected the trustee's "Hail Mary" attempt to avoid this result, … that, because the [debtors] offered to convert their Chapter 7 case to a case under Chapter 13 and pay the estate roughly $50,000 (albeit by utilizing funds made available by a relative), the bankruptcy court abused its discretion in concluding that the residence was of inconsequential benefit to the estate's unsecured creditors."

 

First, the Sixth Circuit held, the argument failed because it was waived, not having been raised in the trustee's brief. "Second, there is a total disconnect between the debtors' alternative offer and the issue of abandonment." The Court found unpersuasive and inapposite the trustee's cite to "a single unpublished out-of-circuit decision that reversed an abandonment order" because in that case the abandonment order was revered because "abandonment is not available where the value of the property had not been established[,]" whereas in the case at bar, the bankruptcy court "ably discharged it responsibility in determining the value of the residence." 

 

Accordingly, the judgment of the district court was affirmed.

 

 

 

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

 

 

 

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

 

 

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.


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Monday, August 14, 2017

FYI: 11th Cir Holds TCPA Allows Partial Revocation of Consent

The U.S. Court of Appeals for the Eleventh Circuit recently held the Telephone Consumer Protection Act ("TCPA") permits a consumer to partially revoke her consent to be called by means of an automatic telephone dialing system ("ATDS"), and thereby only receive calls at certain times of the day or on certain days.

 

Accordingly, the Eleventh Circuit reversed the trial court order granting summary judgment in favor of the defendant, and ruled that whether the consumer had partially revoked consent was a question of fact for a jury. 

 

A copy of the opinion is available at:  Link to Opinion

 

The plaintiff consumer ("Consumer") applied for and was issued a credit card by the defendant bank ("Bank").  In her application, the Consumer provided her cellular phone number to the Bank, and initially consented to allow the Bank to call that number.

 

After the Consumer fell behind on her credit card payments, the Bank began placing calls to her cellular phone using an ATDS falling within the purview of the TCPA. 

 

On a call on October 13, 2014, the Consumer stated: "And if you guys cannot call me, like, in the morning and during the work day, because I'm working, and I can't really be talking about these things while I'm at work.  My phone's been ringing off the hook with you guys calling me." 

 

The Bank employee replied that "[i]t's the phone system.  When it's reporting two payments past due, it's a computer that dials.  We can't stop calls like that."

 

Five months later, on March 19, 2015, a Bank employee again called the Consumer, who twice told the employee to stop calling.  The Bank did not place any more automated calls to the Consumer after that conversation. 

 

The Consumer subsequently sued the Bank for violating the TCPA.  She alleged that during the October 13 conversation she revoked her consent to have the Bank make calls to her cellular telephone using an ATDS.  The Consumer further alleged that the Bank made over 200 automated calls to her cellular phone between October of 2014 and March of 2015. 

 

The trial court granted summary judgment in favor of the Bank, finding the Bank "did not know and should not have had reason to know that [the Consumer] wanted no further calls."  The trial court further found that the Consumer did not "define or specify the parameters of the times she did not want to be calls," and as a result "no reasonable jury could find that [she] revoked consent to be called."  

 

The Consumer appealed.

 

The Bank made two arguments on appeal defending the trial court's ruling.  First, the Bank argued that the TCPA does not permit partial revocations of consent.  Second, the Bank argued that even if partial consent were possible, the Consumer's statements on October 13 did not constitute revocation of her consent to be called in the morning or during work hours.

 

With respect to whether the TCPA permits partial revocations of consent, the Eleventh Circuit first noted that "[a]lthough the TCPA is silent on the issue of revocation, our decision in Osorio [v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014)] holds that a consumer may orally revoke her consent to receive automated calls."  The Court explained that it reasoned that "based upon statutory silence regarding the means for providing or revoking consent, we could infer that Congress intended for the TCPA to incorporate the common-law understanding of consent, which generally allows for oral revocation," and "allowing consent to be revoked orally is consistent with the government interest articulated in the legislative history" of the TCPA.

 

The Eleventh Circuit then stated that "[b]ecause the TCPA is silent as to the partial revocation of consent, our analysis is again informed by common-law principles." 

 

At common law "consent is a willingness for certain conduct to occur," and "[s]uch willingness can be limited, i.e., restricted."  Thus, "if an actor exceeds the consent provided, the permission granted does not protect him from liability for conduct beyond that which is allowed." 

 

Moreover, the Eleventh Circuit noted that the notion of limited consent finds support in other areas of federal law, such as the Fourth Amendment, which allows a person to provide limited consent to a search.  

The Court therefore held "that the TCPA allows a consumer to provide limited, i.e., restricted, consent for the receipt of automated calls.  It follows that unlimited consent, once given, can also be partially revoked as to future automated calls under the TCPA." 

 

The Eleventh Circuit next addressed the Bank's argument that a recent declaratory ruling by the FCC precludes partial revocation of consent under the TCPA.  See In the Matter of Rules & Regulations Implementing the TCPA, 30 F.C.C. Rcd. 7961 (2015). 

 

The Court first quoted language from the ruling, which concluded that "[n]othing in the language of the TCPA or its legislative history supports the notion that Congress intended to override a consumer's common law right to revoke consent."  Thus, the Eleventh Circuit determined that the ruling "does not cast doubt on our reliance on common-law principles." 

 

The Court further noted that the language the Bank relied on that "'consumers may revoke consent in any manner that clearly expresses a desire not to receive further messages,' was used by the FCC in rejecting a creditor's claim that express consent, once given, cannot be revoked at all under the TCPA.  This language cannot be reads out of context to forbid the partial revocation of consent."

 

Having concluded a consumer may partially revoke her consent, the Eleventh Circuit next turned to whether the Consumer did partially revoke her consent on the October 13 call.  The Court determined that "[t]his issue is close, but we conclude on this record the matter of partial revocation is for the jury."

 

The Eleventh Circuit therefore held that summary judgment was inappropriate, as "a reasonable jury could find that [the Consumer] partially revoked her consent to be called in 'the morning' and 'during the workday' on the October 13 phone call with a [Bank] employee."      

 

 

 

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

 

 

 

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

 

 

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

 

and

 

The Consumer Financial Services Blog

 

and

 

Webinars

 

and

 

California Finance Law Developments