Thursday, May 17, 2012

FYI: 7th Cir Rules Against Defendant in TCPA Action Regarding Re-Assigned Cell Phone Numbers

The U.S. Court of Appeals for the Seventh Circuit recently held that automated calls to a cell phone number that was formerly, but is no longer, subscribed to by the customer violates the federal Telephone Consumer Protection Act, notwithstanding the consumer's prior consent to be called at that number.  A copy of the opinion is attached. 
A debt collection company made numerous automated calls to cell phone numbers provided to the creditor by various debtors.  The debtors consented to these calls.  However, at the time the calls were placed, the relevant cell phone numbers had been reassigned to third parties.  Two such third parties initiated a class action against the debt collector, alleging violations of the federal Telephone Consumer Protection Act ("TCPA"). 
The lower court certified a class, and held that only the consent of the current subscriber assigned to a given cell phone number justified an automated call.  The debt collector appealed. 
As you may recall, the TCPA provides that it is unlawful "to make any call (other than a call...made with the prior express consent of the called party) using any automatic telephone dialing any telephone number assigned to a...cellular telephone service...or any service for which the called party is charged for the call."  See 47 U.S.C. Sec. 227. 
The case turned on whether "called party" meant the intended or actual recipient of a call.  The debt collector argued for the former interpretation, noting that consent is typically valid until revoked, and that the lower court's interpretation of the TCPA would drive up the cost of debt collection. 
The Seventh Circuit began by noting that "called party" is not defined in the TCPA.  However, the Court observed that the reference to a service "for which the called party is charged" must refer to the current subscriber, "because only the current subscriber pays."  The presumption "that a statute uses a single phrase consistently...implies that the consent must come from the current subscriber." 
The Court further scrutinized the statute, finding that "called party" appears seven times in Section 227 of the TCPA: four instances "unmistakably denote the current subscriber," one refers to the individual answering the call, and two are unclear. 
The Seventh Circuit found the debt collector's argument to interpret "called party" to mean "intended recipient" unpersuasive, because the latter phrase "does not appear anywhere in Sec. 227."  The Court also cited case law establishing that neither customers nor phone companies own property rights in a given phone number - and accordingly observed that "there can't be any long-term consent to call a given cell number..."
The Court did appear sympathetic to the debt collector's arguments regarding the practical difficulties of determining who currently subscribes to a given number; however, it suggested that "if Congress has failed to appreciate changes in the telecommunications business" the debt collector's appropriate remedy was legislative, not judicial. 
Based on the reasoning above, the Seventh Circuit held that under the TCPA, "called party" means the person subscribed to the called number at the time the call is made.  Accordingly, it affirmed the decision of the lower court. 


Ralph T. Wutscher
McGinnis Tessitore 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

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