Monday, June 10, 2013

FYI: S.D. Fla. Rules FCC's 2008 TCPA Ruling Not Entitled to Deference, Interprets "Express Consent" in TCPA Narrowly

In a putative class action for alleged violation of the federal Telephone Consumer Protection Act ("TCPA"), the U.S. District Court for the Southern District of Florida recently ruled that:


(1) The defendant debt collectors failed to show that the plaintiff consumer provided express consent to receive auto-dialed debt collection calls to his cell phone from the relevant creditor, although the plaintiff consumer may have provided consent to a related entity; and


(2) The FCC's finding in its 2008 TCPA ruling that "the provision of a cell phone number to a creditor…reasonably evidences prior express consent" is not entitled to deference by the Court.


A copy of the opinion is attached.


Plaintiff consumer ("Debtor") had become ill and went to the emergency room.  During the admissions process, Debtor's wife, acting on his behalf, provided Debtor's cell phone number and signed several admission documents.  By signing the "Conditions of Admission" form, the wife acknowledged that hospital staff may release Plaintiff's healthcare information for the purposes of payment.


Subsequently, Debtor received treatment from Florida United Radiology, L.C. ("Florida United"), a hospital based provider owned by Sheridan Acquisition, P.A. ("Sheridan"), and incurred a debt of less than fifty dollars.  Upon Debtor's failure to pay, the account was forwarded to Gulf Coast Collection Bureau, Inc. ("Gulf Coast") for collection.  Using its predictive dialer, Gulf Coast made between 15 and 30 calls to Debtor's cell phone and left four messages relating to the debt.


Debtor brought a putative class action against Gulf Coast, Florida United, and Sheridan for violations of the Telephone Consumer Protection Act ("TCPA").  Without class certification having been decided, the Court considered each party's motion for summary judgment.


Under the TCPA, it is unlawful for any party to make a non-emergency call, using an automatic telephone dialing system to any cellular telephone number, "unless the call is made with the prior express consent of the called party."  See 47 U.S.C. §227(b)(1)(A)(iii).  Courts have held that prior express consent is a defense to a TCPA violation.  See Manfred v. Bennet Law, PLLC, 2012 WL 6102071, at *2 (S.D. Fla. Dec. 7, 2012).


In 2008, the Federal Communications Commission ("FCC") issued a declaratory ruling that interpreted the statutory phrase "prior express consent" under the TCPA ("2008 FCC Ruling").  The FCC found that calls to wireless numbers provided by the called party "in connection with an existing debt" are permissible.  See 23 F.C.C.R. 559 (2008).  It 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."  Id.


As a preliminary matter, the Court found that it had jurisdiction to pass on the validity of the 2008 FCC Ruling.  The Court held that the "exclusive jurisdiction" of the federal courts of appeals was limited to proceedings "to enjoin, set aside, annul, or suspend" any order of the FCC.  See 28 U.S.C. §2342(1); 47 U.S.C. §402(a).  Because Debtor's action sought damages for TCPA violations and did not seek to enjoin, set aside, annul or suspend an FCC order, the Court ruled that it had jurisdiction to review the 2008 FCC Ruling.


Examining the 2008 FCC Ruling itself, the Court held that the FCC was not discussing "express consent," but was "instead engrafting into the statute an additional exception for 'implied consent' – one that Congress did not include."  The Court held that, although it may be "reasonable to presume" that, in providing a cell phone number on a credit application, the debtor consents to be called by a creditor, such consent is "implied."  Therefore, the Court held that the FCC's construction is "inconsistent" with the TCPA's requirement of "express consent," and "is not entitled to deference."


Alternatively, the Court found that the 2008 FCC Ruling does not apply to the medical case setting, at least under the facts in this case.  As opposed to the context of retail purchases, when a person provides a phone number to a hospital, he "would expect that number to be used to inform him of issues relating to his health and treatment, first and foremost."


Even assuming that the 2008 FCC Ruling applies, the Court held that the defendants failed to show that Debtor provided consent to be called to the "relevant creditor."  The Court noted that the defendants bore the burden to establish consent under the TCPA and must show that Debtor in fact gave prior express consent to be called.  See Hicks v. Client Servs., Inc. 2009 WL 2365637, at *5 (S.D. Fla. June 9, 2009).  Here, the Court noted that Debtor's cell phone number was provided "to the Hospital, not to Florida United, which is the creditor in this case."  The Court noted that, although the Hospital may have been permitted to disclose Debtor's information to affiliated entities and agents, that "has nothing to do with whether [Debtor] gave consent to Florida United, a separate creditor."  As such, the Court granted Debtor's motion for summary judgment on the consent issue.


Additionally, because neither Sheridan nor Florida United made any calls to Debtor, the Court granted their summary judgment motion.  Even assuming traditional tort rules of vicarious liability apply, the Court held that the undisputed evidence revealed that neither Sheridan nor Florida United "exercised, or had the right to exercise, the kind of control over Gulf Coast necessary to create vicarious liability."


Accordingly, the Court denied Gulf Coast's Motion for Summary Judgment; granted Sheridan and Florida United's motion for summary judgment; granted Debtor's motion for summary judgment in part, leaving the issue of whether Gulf Coast's violations were willful or knowing to be decided at trial.  Due to the "significant changes in the case's landscape," the Court also denied Debtor's motion for class certification without prejudice.




Ralph T. Wutscher
McGinnis Wutscher Beiramee 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


Admitted to practice law in Illinois


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