"In the 1976 movie, "The Marathon Man," Sir Laurence Olivier is torturing Dustin Hoffman attempting to determine if it is safe for Olivier to retrieve his cache of ill-gotten diamonds. Olivier believes Hoffman knows the location of the diamonds and whether the site is being watched. So as he drills into his teeth, Olivier continually asks Hoffman, "Is it safe?" At the time, Hoffman does not know.
In context, the issue of "express consent" under the Telephone Consumer Protection Act, 47 U.S.C. § 227 has recently been considered by two federal district courts. Perhaps it should not be surprising that the two courts came to polar opposite conclusions regarding the application of "express consent" to third party debt collectors and collection agencies are left to wonder, "is it safe?
The TCPA prohibits making a call to a cellular telephone using an automatic telephone dialing system (ATDS) without the prior express consent of the called party. 47 U.S.C. § 227(b). A debt collection company sued for violating the TCPA (either individually or in a class context) can defeat these TCPA claims by demonstrating the debtor gave "express consent" to be called on his/her cellular telephone.
The Federal Communications Commission has issued two relevant orders regarding consent to call a cell phone. In 1992, the FCC issued an order which stated that cellular carriers do not need consent from "their cellular subscribers prior to initiating autodialer ... calls for which the cellular subscriber is not charged." In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 7 FCC Reg. 8752, 8775. Thereafter in 2008, the FCC expanded the issue of "consent" by stating that if a party provides a cell phone number to a creditor, for example, as part of a credit application, they are deemed to have provided express consent to be autodialed by the creditor at that cell number. In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 23 F.C.C.R. 559, 564. The latter FCC ruling also states that calls "placed by a third party collector on behalf of that creditor are treated as if the creditor itself placed the call." Id. at 565.
These "express consent" provisions were tested in the case of Leckler v. Cash Call, 554 F.Supp. 1025 (N.D. Cal. 2008). The Leckler court held the FCC's declaratory ruling regarding express consent was "manifestly contrary to the statute and unreasonable." Id. at 1029. Fortunately, the Court vacated this order in November of 2008. The FCC rulings remained in tact and could be relied upon by courts when determining the issue of consent.
However, on May 8, 2013, a federal district court in Florida rendered its opinion in Mais v. Gold Coast Collection Bureau, Inc., 2013 WL 1899616 (S.D. Fla. May 8, 2013). The Mais court held the Hobbs Act does not deprive a federal district court of jurisdiction to review the FCC's 2008 Ruling. The court then determined that the provision in the 2008 FCC Ruling stating, "the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent ... to be contacted at that number . . ." constitutes implied consent not express consent, and impermissibly amends the TCPA to provide an exception that Congress did not write in the TCPA. The court stated it could ignore the FCC's ruling. The court continued on its path of holding Gold Coast liable when it held that even if applicable, the FCC ruling did not apply to medical debt, that the ruling only pertained to consumer retail credit transactions, and that even if applicable, a defendant had the burden of proof to prove "express consent." The Mais court completed its autopsy on Gold Coast by holding that the FCC's 2008 ruling, even if applicable, only applied to the creditor and in attempting to expand protection to the agent, the FCC impermissibly added a vicarious liability provision to the TCPA when Congress did not. [Since the underlying creditors in the Mais case did not make the alleged offensive calls, their motion for summary judgment was granted.] My colleague, David Kaminski wrote a very thorough article on the Mais decision in insidearm.
Less than three weeks later, a federal district court in Missouri issued its opinion, O'Connor v. Diversified Consultants, Inc. No. 4:11-cv-1722-RWS (E.D. Mo. May 28, 2013). In the O'Connor case, the plaintiff sought certification of a nationwide class of those persons who received on their cellular phone any telephone call from Diversified wherein Diversified utilized an ATDS and where the consumer failed to provide express consent. The O'Connor court gave deference to the FCC's rulings and specifically held, "Diversified argues that in collecting the debt from these cellular customers it stands in the shoes of U.S. Cellular and is entitled to the shelter that the FCC has provided to cellular companies. I agree with Diversified's position. I find that a debt collector for a cellular company ma invoke the shelter given to the cellular company for calls to its subscribers." The O'Connor court then went one step further when it stated, "Because we find that autodialed and prerecorded message calls to wireless numbers provided by the called party in connection with an existing debt are made with the "prior express consent" of the called party, we clarify that such calls are permissible. [emphasis added] We conclude 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."
Because of this language, the argument can be made that the FCC's rulings regarding express consent and the basis underlying the O'Connor decision can be applied to the collection of all consumer debts to which the TCPA may be applicable. The O'Connor case is the next step in "leveling the playing field" as advocated by Mr. Kaminski.
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