VI. Prior Express Consent
A. FCC TCPA Orders Regarding Prior Express Consent
1. The 1992 TCPA Order
On October 16, 1992, the FCC issued a formal order, entitled “In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act” (hereinafter “1992 TCPA Order”). This order provides 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. Hence, telemarketers will not violate our rules by calling a number which was provided as one at which the called party wishes to be reached.” 1992 TCPA Order, 7 FCC Rcd. 8752, 8769 ¶ 31(Oct. 16, 1992).
2. The 2008 TCPA Order
On January 4, 2008, the FCC issued another order addressing prior express consent in the context of debt collection calls. See 2008 TCPA Order, 23 FCC Rcd. at 559. In this order, the FCC stated 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 the number regarding the debt.” 2008 TCPA Order, 23 FCC Rcd. at 564 ¶ 9. This grant of consent extends to calls made by a third-party debt collector on behalf of the creditor itself. Id. at 565 ¶ 10.
3. The 2012 TCPA Order (Telemarketing Specific): Written Prior Express Consent Requirement (Effective October 16, 2013, Forward)
On February 15, 2012, the FCC released a new order addressing prior express consent under the TCPA (hereinafter “February 2012 TCPA Order). The February 2012 TCPA Order specified that the FCC would now require “prior express written consent for all telephone calls using an automatic telephone dialing system or a prerecorded voice to deliver a telemarketing message to wireless numbers and residential lines.” February 2012 TCPA Order, 27 FCC Rcd. 1830, 1838 ¶ 20(Feb. 15, 2012) (emphasis added).
For telemarketers to receive prior express consent, a consumer’s written consent must be signed and show that the consumer “(1) received ‘clear and conspicuous disclosure’ of the consequences of providing the requested consent, i.e., that the consumer will receive future calls that deliver prerecorded messages by or on behalf of a specific seller; and (2) having received this information, agrees unambiguously to receive such calls at a telephone number the consumer designates.” February 2012 TCPA Order, 27 FCC Rcd. at 1844 ¶ 33. This consent cannot be obtained as a condition of the purchase of any good or service. Id.
The FCC’s 2012 TCPA Order requiring written consent was prospective only; it did not come into effect until October 16, 2013. See February 2012 TCPA Order, 27 FCC Rcd. at 1856-1857 ¶ 66 (“we establish a twelve-month period for implementation of the requirement that prior express consent be in writing for telemarketers…This twelve-month period will commence upon publication of OMB approval of our written consent rules in the Federal Register”); 77 Fed.Reg. 63240 (Oct. 16, 2012) (Office of Management and Budget approved the new rule). As the written requirement only came into effect on October 16, 2013, these requirements do not apply to calls made prior to October 16, 2013.
Additionally, the written prior express requirement is specific to telemarketing calls; it does not apply to non-telemarketing, informational calls. February 2012 TCPA Order, 27 FCC Rcd. at 1841 ¶ 28. Debt collection calls are specifically exempted. Id. (“we note that many commenters expressed concern about obtaining written consent for certain types of autodialed or prerecorded calls, including debt collection calls . . . Again, such calls, to the extent that they do not contain telemarketing messages . . . require either written or oral consent if made to wireless consumers . . .”) Thus, existing consent rules as outlined in the 1992 and 2008 TCPA Orders still apply to non-telemarketing (e.g., debt collector) calls. Id.
B. The Meaning of “Prior Express Consent”
Several recent cases have helped define the meaning of “prior express consent.”
1. Mais v. Gulf Coast Collection Bureau, Inc.
In Mais v. Gulf Coast Collection Bureau, Inc., 768 F.3d 1110 (11th Cir. 2014), the Eleventh Circuit determined that a debt collector possessed prior express consent to contact a plaintiff, even though a third party, the plaintiff’s wife, provided the proxy authority to call his cell phone number to the original creditor –- a hospital -- and even though the call was made by a different party than the hospital to whom authority was originally given. Mais, 768 F.3d at 1113.
Mais was admitted to the emergency room at a hospital. His cell phone number was given to the hospital by his wife. While being treated at the hospital, Mais received related radiology services from Florida United Radiology –- an entity separate from the hospital. Id. at 1114. A billing agent of United Radiology, not the hospital, electronically retrieved the plaintiff’s contact information from the hospital’s records and sent the plaintiff a bill for the radiology services. When the bill was not paid, the account was assigned by United Radiology to a debt collector, Gulf Coast Collection Bureau, which began to make automated calls to collect on the debt.
On appeal, the Eleventh Circuit reversed the District Court’s grant of summary judgment for Mais, finding that Gulf Coast had received “prior express consent” under the 1992 and 2008 TCPA Orders. The Court rejected Mais’ argument that the 2008 TCPA Order only applied when “a cell phone number is given directly to a creditor.” Id. at 1123 (emphasis in original). Rather, the Court found that the 2008 TCPA Order indicated that “prior express consent existed” anytime “a cell phone subscriber ‘made the number available.’” Id. (emphasis added).
The Court of Appeals further held the FCC’s prior interpretations of prior express consent demonstrated “the appropriate analysis turns on whether the called party granted permission or authorization, not on whether the creditor received the number directly.” Id. at 1123. This conclusion was based on language from the 2012 TCPA Order, the 1992 TCPA Order, and the TCPA’s legislative history. Id. at 1123-1124.
The court also concluded that under the 2008 TCPA Order, “a cell phone subscriber like Mais could provide his number to a creditor like Florida United –- and grant prior express consent to receive autodialed or prerecorded calls –- by affirmatively giving an intermediary like the Hospital permission to transfer the number to Florida United for use in billing.” Id. at 1124. The Court specifically determined that the proper analysis under the FCC’s prior express consent exception “turns on whether the called party granted permission or authorization, not on whether the creditor received the number directly.” Id. at 1123. Since Mais’ wife had been given authority to give his cell phone number to a hospital representative, it was held that Mais –- through his wife –- provided “prior express consent.” Id. at 1124.
2. Van Patten v. Vertical Fitness Group, LLP
In Van Patten v. Vertical Fitness Group, LLP, 22 F.Supp.3d 1069 (S.D. Cal. 2014), the District Court granted the defendants’ motion for summary judgment based on a finding of prior express consent. 22 F.Supp.3d at 1078. There, the plaintiff provided his cell phone number when he signed up for a gym membership; but he canceled his membership shortly thereafter. Id. at 1071. Approximately three years later, the plaintiff brought suit after he received two text messages informing him that his former gym was changing its name, and it was inviting him to rejoin. Id. at 1072.
The court found that the plaintiff had given prior express consent under the 1992 and 2008 TCPA Orders. Id. at 1076. This was true even if the plaintiff never expressly consented to text messages. Id. at 1073. The court found that the plaintiff’s cancellation of his gym membership did not constitute revocation of his prior express consent. Id. at 1077-1078.
3. Elkins v. Medco Health Solutions, Inc.
In Elkins v. Medco Health Solutions, Inc., 2014 WL 1663406 (E.D. Mo. April 25, 2014), the plaintiff provided her cell phone number during her enrollment in a prescription benefit management services program offered by her employer. Elkins, 2014 WL 1663406 at *3. The plaintiff subsequently utilized Medco Health Solutions’ prescription benefit management services to fill twelve prescriptions. Id. Sometime later, plaintiff received two phone calls regarding other benefits that were available to her. Id. at *4.
The court found the Plaintiff’s provision of her cell phone number constituted prior express consent under the FCC’s 1992 TCPA Order. Id. at *7. Additionally, the court noted that Plaintiff never provided any restrictions stating she should “not be contacted at the number she provided with respect to her health benefits.” Id.
4. Andersen v. Harris & Harris, Ltd.
In Andersen v. Harris & Harris, Ltd., 2014 WL 1600575 (E.D. Wis. April 21, 2014), the plaintiff opened an account to receive utility services. Andersen, 2014 WL 1600575 at *3. In connection to this account, the plaintiff provided his cell phone number and later made it his primary phone number on his account. Id. When the plaintiff stopped paying his account, the utility company hired Harris & Harris (“H&H”) to collect the debt. Id. H&H made collection calls and left prerecorded voicemail messages on the plaintiff’s cell phone, despite a voicemail greeting purporting to revoke prior express consent. Id. at *3.
The court found that plaintiff nonetheless had given prior express consent under the 1992 and 2008 TCPA Order. Id. at *9. Additionally, the court determined that while it was unclear if the TCPA allowed the right to revoke consent, there was no authority to support the contention that a voicemail message was sufficient to do so. Id. at *10.
5. Steinhoff v. Star Tribune Media Co., LLC
In Steinhoff v. Star Tribune Media Co., LLC, 2014 WL 1207804 (D. Minn. March 24, 2014), the court found the plaintiff had provided prior express consent under the 1992 and 2008 TCPA Orders by providing her telephone number when she signed up for a newspaper subscription. Steinhoff, 2014 1207804 at *2. The subscription order form specifically stated the subscription “will continue unless you [Plaintiff] notify us [Defendant] that you wish to cancel,” and there was no indication that plaintiff gave notice of cancellation. Id. at *1. After the subscription lapsed, defendant began to leave pre-recorded “service verification” voice messages for plaintiff. Id. at *1. The court rejected plaintiff’s argument that she provided her cell phone number “for the sole purpose of having her call returned so that she could obtain more detailed information regarding this special offer.” The Court noted there was no allegation plaintiff gave this instruction to defendant.
6. Baird v. Sabre, Inc.
In Baird v. Sabre, Inc., 995 F.Supp.2d 1100 (C.D. Cal. 2014), the District Court relied upon the FCC’s 1992 TCPA Order to determine that the plaintiff had provided prior express consent. Baird, 995 F.Supp.2d at 1107.
The plaintiff in Baird provided her cell phone number under “Contact Information” while booking flights online. Id. at 1101. The website required a phone number to make a flight reservation. Id. The court found that plaintiff’s provision of her cell phone number constituted prior express consent. Id. at 1103. It rejected plaintiff’s argument that Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009) mandated a contrary determination. Baird, 995 F.Supp.2d at 1103. The court determined that plaintiff’s arguments that (1) she had, at best, only provided “implied consent” and that (2) the FCC’s 1992 TCPA Order was erroneous and not entitled to “Chevron” deference where precluded by the Hobbs Act. Id. at 1103-1106.
7. Wills v. Optimum Outcomes, Inc.
In Wills v. Optimum Outcomes, Inc., 2014 WL 220707 (D. Utah Jan. 21, 2014), the court found prior express consent when the plaintiffs provided their cell phone number in a letter to the original creditor and the debt collector/defendant. Wills, 2014 WL 220707 at *1. The court noted that under the 2008 TCPA Order, the plaintiffs had “provided their express consent to receive calls on their cellular telephone.” Id. at *4. This was the case even though the letter specified “Any further correspondence on this account should be in writing and sent to my attention at the address listed above.” Id. at *2.
8. Murphy v. DCI Biologicals Orlando, LLC
In Murphy v. DCI Biologicals Orlando, LLC, 2013 WL 6865772 (M.D. Fla. Dec. 31, 2013), the District Court found that the plaintiff had provided prior express consent. Murphy, 2013 WL 6865772 at *4-*5. This was true even though the plaintiff had provided his phone number to the defendants more than two years earlier , and he had no further contact with the defendants. Id. at *2. The court rejected the plaintiff’s arguments consent was merely implied, and it found it was precluded from ruling on the plaintiff’s challenge to the FCC’s 1992 TCPA Order because of the Hobbs Act. Id at *6-*7.
9. Roberts v. PayPal, Inc.
In Roberts v. PayPal, Inc., 2013 WL 2384242 (N.D. Cal. May 30, 2013), the plaintiff provided his cell phone number while accessing his PayPal account. Roberts, 2013 WL 2384242 at *1. Immediately after providing his phone number, plaintiff received a text message from PayPal. Relying upon the 1992 TCPA Order and Pinkard v. Wal-Mart Stores, Inc., 2012 WL 5511039, the court found that the plaintiff “consented to receive text messages from PayPal simply by providing his cell phone number.” Roberts, 2013 WL 2384242 at *5.
10. Emanuel v. Los Angeles Lakers, Inc.
In Emanuel v. Los Angeles Lakers, Inc., 2013 WL 1719035 (C.D. Cal. April 18, 2013), the court similarly relied upon the 1992 TCPA Order to dismiss the plaintiff’s TCPA claim. The plaintiff was attending a Lakers game at the Staples Center when the Lakers displayed a message on its jumbotron encouraging fans to text a message to a certain number to be displayed on the jumbotron. Emanuel, 2013 WL 1719035 at *2. Plaintiff texted a message to the number displayed, received a message in response and brought an action under the TCPA. The court held “because Plaintiff voluntarily provided his number to the Lakers in requesting that his personal message appear on the Staples Center jumbotron, the Court would conclude that he consented to receiving a confirmatory text from the Lakers.” Id. at *4.
11. Pinkard v. Wal-Mart Stores, Inc.
In Pinkard v. Wal-Mart Stores, Inc., 2012 WL 5511039 (N.D. Ala. Nov. 9, 2012), the court applied the 1992 TCPA Order to find that the plaintiff had provided prior express consent. Pinkard, 2012 WL 5511039 at *4-*5. The plaintiff in Pinkard visited a Wal-Mart pharmacy to fill her prescription. During the visit, Wal-Mart employees asked plaintiff for several pieces of personal information, including her phone number, which the plaintiff provided. Id. at *2. The employees never explicitly sought permission from the plaintiff for text messages to be sent. Shortly after, plaintiff received a number of text messages from Wal-Mart. Id.
The District Court found that because plaintiff “provided her telephone number to defendant at defendant’s request,” plaintiff provided “‘clear and unmistakable’ consent to be contacted at that number,” and the court thereafter dismissed her claim. Id. at *5-*6. The court noted that “…distributing one’s telephone number is an invitation to be called, especially when the number is given at another’s request.” Id. at *5.
Courts have been consistently willing to find prior express consent based on the FCC’s 1992 and 2008 TCPA Orders. Moreover, the Van Patten and Murphy decisions demonstrate that prior express consent does not expire simply due to the passage of time. In situations involving telemarketing calls made before October 2013 or non-telemarketing (debt collector) calls, the more stringent written consent requirements do not apply, and the Courts continue to apply the 1992, 2008 and 2012 TCPA Orders.
C. Revocation of Prior Express Consent
The TCPA is silent on the ability to revoke prior express consent. As such, some courts have declined to read such a right into the TCPA. See e.g. Chavez v. Advantage Group, 959 F.Supp.2d 1279, 1282-1283 (D. Col. 2013); Saunders v. NCO Financial Systems, Inc., 910 F.Supp.2d 464, 468-469 (E.D. N.Y. 2012).
Recently, however, the Court of Appeals for the Third Circuit ruled in Gager v. Dell Financial Services, LLC, 727 F.3d 265 (3d Cir. 2013) that the TCPA did allow a consumer to revoke prior express consent. In Gager, plaintiff Ashley Gager defaulted on her debt with Dell. After Dell began to leave pre-recorded messages on Gager’s cell phone, Gager sent a letter to Dell listing her phone number and asking Dell to stop calling her. When Dell continued to call her cell phone, Ms. Gager filed suit under the TCPA. Gager, 727 F.3d at 267.
The Third Circuit held the TCPA permitted the revocation of prior express consent, stating that “[a]lthough the TCPA does not expressly grant a right of revocation to consumers who no longer wish to be contacted on their cellular phones by autodialing systems, the absence of an express statutory grant of this right does not mean that the right to revoke does not exist.” Id. at 270.
The Court found a right of revocation to exist based on three factors: (1) consent may be revoked at common law; (2) any ambiguity in the TCPA should be resolved in favor of the consumer; and (3) an FCC Order suggested that revocation was possible. 12;Id.
In Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014), the Eleventh Circuit similarly held prior express consent can be revoked orally, based on the common-law analysis of consent. Osorio, 746 F.3d at 1255-1256. The Court relied upon the November 2012 TCPA Order, but noted that the FCC’s ruling was not necessarily dispositive or subject to “Chevron” deference since “the ruling may not have been promulgated with the requisite meaningful review.” Id. at 1256.
Although some courts have followed Gager and determined that prior express consent can be revoked, several of these courts have found that notice of revocation of prior express consent must be expressly made. For example, in the aforementioned Andersen case, the court held that even if consent was revocable, a voicemail message purporting to revoke consent was not sufficient to do this. Andersen, 2014 WL 1600575 at *10. The court noted that allowing voicemail messages to revoke consent “would create a totally unworkable rule” as it would create a trap for all debt collectors who would be unlikely to receive notice of the revocation. Id.
Courts have similarly held the mere fact a consumer’s contract lapses or is cancelled does not mean prior express consent is ipso facto also automatically revoked. See Van Patten, 22 F.Supp.3d at 1077-1078 (plaintiff’s cancellation of his gym membership did not constitute revocation of prior express consent); Steinhoff, 2014 WL 1207804, at *4-*5 (the lapse of plaintiff’s one year newspaper subscription did not constitute revocation of prior express consent).
D. “Good Faith Belief” that Prior Express Consent Exists May Be a Defense
In Chyba v. First Financial Asset Management, Inc., 2014 WL 1744136 (S.D. Cal. April 30, 2014), the plaintiff seemingly provided her cell phone as her “home” number on a written car rental agreement, and she listed a different number as her contact cell phone number on the same agreement. Chyba, 2014 WL 1744136 at *1. Plaintiff argued however that she did not in fact provide prior express consent as she had no recollection of either renting the car, or providing in writing her phone numbers in the transaction. Id. at *11.
The court nonetheless found that under the FCC’s 2008 TCPA Order’s definition of prior express consent, the rental agreement gave First Financial “a good-faith basis to believe that it had consent to contact Plaintiff at that number.” Id. at *11. The court held that even if the plaintiff was correct in stating that she never gave defendant or the original creditor consent, defendant could not be held liable for “acting in good faith upon the information provided to it.” Id. at *12.
Under the Chyba analysis, a creditor, or a debt collector who is assigned an account from the creditor, may defend TCPA liability by establishing a reasonably based good faith belief that prior express consent exists. A good faith belief can be shown if the file on the debt could reasonably lead the debt collector to conclude that the debtor had provided the original creditor with his or her phone number.
E. “Present Capacity” of an Automated Telephone Dialing System
Another new development is the issue of whether an automated telephone dialing system (“ATDS”) must have a present capacity to dial the number called by use of predictive or number-generating technology. Under the TCPA, a violation occurs if a call is made using an ATDS or prerecorded/automated message is left; an ATDS is defined as equipment that has the capacity to store or produce numbers to be called using a “random or sequential number generator” and dial such numbers. 47 U.S.C. § 227(a)(1). 13
In Hunt v. 21st Mortg. Corp., 2013 WL 5230061, *4 (N.D. Ala. Sep. 17, 2013), the court determined that to meet the TCPA definition of an ATDS, the communication system must have “a present capacity, at the time the calls were being made, to store or produce and call numbers from a number generator.” Id. (emphasis in original). The District Court distinguished previous analyses of “capacity” by noting a computer’s capacity for “modification and alteration are virtually limitless.” Id. As an example, the court observed: “it is virtually certain that computer software could be written, without much trouble, that would allow iPhones ‘to store and produce telephone numbers to be called, using a random or sequential number generator, and to call them.’ Are the roughly 20 million American iPhone users subject to the mandates of § 227(b)(1)(A) of the TCPA? More likely, only iPhone users who were to download this hypothetical ‘app.’ would be at risk.” Id.
Present capacity was also analyzed in Gragg v. Orange Cab Co., Inc., 995 F.Supp.2d 1189 (W.D. Wash. 2014). In Gragg, Orange Cab used a computer program called TaxiMagic to send text message dispatch notifications to its customers. Id. at 1191. When a customer called Orange Cab, the dispatcher obtained the customer’s name and telephone number along with the requested pickup and drop-off locations. Id. The dispatcher then manually imputed the information into the dispatch terminal, which transmitted the information to the TaxiMagic program and the driver closest to the customer’s requested pickup location. Id. When a driver accepted the request on his or her Mobile Data Terminal, the driver communicated his or her acceptance to TaxiMagic. Id. The program then composed a notification and transmitted the message to the customer’s phone, stating the cab number and the time the request was accepted by the driver. Id.
The court rejected Gragg’s argument that the plain language of the statute required a focus on “whether the equipment has the capacity ‘to store or produce telephone numbers to be called, using a random or sequential number generator.’” Id. at 1192 (emphasis in original). Instead, the court relied upon Hunt and analyzed TaxiMagic under the system’s “present, not potential, capacity to store, produce or call randomly or sequentially generate telephone numbers.” Id. at 1193 (emphasis in original). As the telephone numbers were “provided directly by customers or captured using Caller ID and imputed by the dispatcher,” there was no evidence that TaxiMagic could autonomously generate random or sequential numbers. Id. Additionally, the court found that the program was not a predictive dialer as it did not have the ability to dial numbers without human intervention, as “human intervention [was] essential” to TaxiMagic. Id. at 1193-94.
In Dominguez v. Yahoo!, Inc., 2014 WL 1096051 (E.D. Penn. Mar. 20, 2014), the plaintiff purchased a cell phone and was assigned a phone number. The previous owner of the number had enrolled the number in a text message system of Yahoo to receive text messages each time the previous owner received an email in his Yahoo email inbox. Id. at *1. At issue was whether Yahoo’s “Email SMS System” constituted an ATDS. The system automatically converted email messages into a truncated format, accessed the appropriate user’s telephone number from a stored list, and automatically sent the text message to the customer’s mobile device. Id. at *4. Yahoo argued that its system did not have the capacity to store or produce telephone numbers to be called, using a random or sequential number generator. Id.
The court determined that the Email SMS System did not constitute an ATDS. It found that plaintiff did not offer any evidence to show that Yahoo’s system “had the capacity to randomly or sequentially generate telephone numbers (as opposed to simply sorting through telephone numbers loaded into the system), as required by the statutory definition.” Id. at *6. Additionally, the court further distinguished the 2008 TCPA Order, noting that the FCC’s language on “lists of phone numbers” only applied to predictive dialers, and there was no contention that Yahoo’s Email SMS Service was a predictive dialer. Id.
In Glauser v. GroupMe, Inc., 2015 WL 475111 (N.D. Cal. Feb. 4, 2015), the plaintiff received two text messages sent through the GroupMe application. The messages read:
Hi Brian Glauser, it’s Mike L. Welcome to GroupMe! I just added you to “Poker” w/ Richard L. Text back to join the conversation.
GroupMe is a group texting service. Standard SMS rates may apply. Get the app at http://groupme.com/a to chat for free. Reply # exit to quit or # help for more.
Glauser, 2015 WL 475111 at *1.
Plaintiff filed suit based on these “welcome texts.” Id. at *2. The court granted GroupMe permission to file an early motion for summary judgment on the issue of whether it used an ATDS as required to establish TCPA liability. Id.
The District Court determined that GroupMe’s telephone system did not constitute an ATDS. The court held that Satterfield v. Simon & Schuster, 569 F.2d 946 (9th Cir. 2009) did not require courts within the Ninth Circuit to focus on “potential capacity” since Satterfield never addressed the question of “present vs. potential capacity,” but only focused on an equipment’s capacity rather than present use. Glauser, 2015 WL 475111 at *4. The court found the reasoning in Gragg and Hunt persuasive and determined that only equipment that had a “present” capacity would constitute an ATDS. Id.
Additionally, the District Court held that the 2012 TCPA Order defined an ATDS as “cover[ing] any equipment that has the specified capacity to generate numbers and dial them without human intervention regardless of whether the numbers called are randomly or sequentially generated or come from calling lists.”Id. at *6 (emphasis in original). Here, since the “welcome texts” were sent to the plaintiff “as a direct response to the intervention of Mike L., the ‘Poker’ group creator,” GroupMe’s equipment did not constitute an ATDS. Id.
By focusing on the “present” capacity of an ATDS and not “potential” capacity, Glauser, Hunt and Gragg significantly narrow the definition of an ATDS.
Currently, there are several pending petitions to the FCC requesting that it consider whether an ATDS should be defined as a dialing system which is configured to have the present (rather than only potential) capacity to make automated calls. The FCC has yet to make a determination on these pending petitions.
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VII. Vicarious Liability
By its plain terms, the TCPA imposes direct liability on “any person” who “make[s] any call,” without prior express consent, to a cell phone, using an automatic telephone dialing system or an artificial or prerecorded voice. 47 U.S.C. § 227(b)(1)(A) (bracketed letter added). The relevant language of the statute is as follows: “It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States -- (A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice…” 47 U.S.C. § 227(b)(1)(A) (emphasis added).
On the other hand, a separate subsection of section 227 regarding the so-called “Do Not Call Registry” provides:
47 U.S.C. § 227(c)(5) (emphasis added).
A person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed under this subsection may, if otherwise permitted by the laws or rules of court of a State bring in an appropriate court of that State –-
(A) an action based on a violation of the regulations prescribed under this subsection to enjoin such violation,
(B) an action to recover for actual monetary loss from such a violation, or to receive up to $500 in damages for each violation, whichever is greater, or,
(C) both such actions.
The U.S. Supreme Court has stated that where Congress: “includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Russello v. U.S., 464 U.S. 16, 23 (1983).
Several subsequent Supreme Court cases have utilized this inference. See Corley v. U.S., 556 U.S. 303, 304 (2009) (“[t]he terms ‘inadmissible’ and ‘involuntary’ are not synonymous…and this Court would not presume to ascribe this difference to a simple mistake in draftsmanship”) (citations omitted); Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 440 (2002) (“[w]here Congress wanted to provide for successor liability in the Coal Act, it did so explicitly . . .”); U.S. v. Gonzales, 520 U.S. 1, 5 (1997) (“[g]iven that Congress expressly limited the phrase ‘any crime’ to only federal crimes, we find it significant that no similar restriction modifies the phrase ‘any other term of imprisonment,’ which appears only two sentences later and is at issue in this case”).
Consequently, the absence of the “by or on behalf of” language in section 227(b)(1)(A) appears significant. Section 227(c)(5) permits “on behalf of,” or indirect, liability. The absence of similar “on behalf of” language in section 227(b)(1)(A) creates the inference that Congress did not intend for vicarious or indirect liability to apply with respect to that subsection. See Russello, 464 U.S. at 23; Barnhart, 534 U.S. at 440. Congress cannot be presumed to have made a “mistake;” in short, it does not appear Congress intended for one party to be vicariously liable for an alleged TCPA violation committed by someone else under 47 U.S.C. section 227(b)(1).
Courts have noted the difference in language between the two subsections of the TCPA and held there is no “on behalf of” or vicarious liability under section 227(b)(1)(A). See Mey v. Pinnacle Sec., LLC, 2012 WL 4009718, at *3-*4 (N.D. W.Va. 2012); Thomas v. Taco Bell Corp., 879 F.Supp.2d 1079, 1084 (C.D. Cal. 2012).
The Southern District of Florida recently conducted a thorough comparative statutory analysis of these sections of the TCPA and reached the same conclusion. In Mais v. Gulf Coast Collection Bureau, Inc., 944 F.Supp.2d 1266 (S.D. Fla. 2013), overruled in part on other grounds at 768 F.3d 1110 (11th Cir. 2014), the District Court found the TCPA does not permit vicarious liability under section 227(b)(1)(A) by virtue of the TCPA’s plain language and structure. For this reason, the District Court refused to extend common law vicarious liability to section 227(b) of the TCPA:
Even while recognizing that Congress must not have intended such liability for violations of section 227(b), some of those courts have found it appropriate to also consider whether a defendant may nonetheless be held vicariously liable under traditional tort principles. Those other courts apparently felt compelled to do so by Meyer v. Holley, 537 U.S. 280, 286-87 (2003), wherein the Supreme Court stated that “when Congress creates a tort action, it legislates against a legal background of ordinary tort-related vicarious liability rules and consequently intends its legislation to incorporate those rules,” absent any contrary indications. That rule is fine as far as it goes, but the Court does not see how it can apply where, as here, Congress has specifically provided for vicarious liability in one part of the statute, but not in the other.
In Meyer, the Supreme Court considered legislation, the Fair Housing Act, that was altogether silent on whether vicarious liability could be imposed. In that context, it makes sense to turn to traditional vicarious liability rules, which we presume Congress did not intend to supplant absent it saying so. But because Congress here made a choice about where vicarious liability ought to be imposed, this Court should not go to the common law to alter Congress’s choice.
Mais, 944 F.Supp.2d at 1242 (emphasis added) (citations omitted).
Nonetheless, the FCC has expressly ruled that vicarious liability principles apply to the TCPA and the precedential value of the Mais District Court decision is questionable. 14
Indeed, numerous cases have found vicarious liability (agency) principles apply under the TCPA. For example, in Gomez v. Campbell-Ewald Co., 768 F.3d 871 (9th Cir. 2014), the plaintiff Gomez alleged that the Campbell-Ewald Company instructed or allowed a third-party vendor to send unsolicited text messages on behalf of the United States Navy –- with whom Campbell-Ewald had a marketing contract. Gomez, 768 F.3d at 873. Campbell had argued that it could not be held liable for the potential TCPA since it had outsourced the dialing and did not actually make any calls on behalf of its client. Id. at 877. Even if it vicarious liability applied to the TCPA, Campbell-Ewald argued that vicarious liability did not extend to a third party marketing consultant. Id. at 877.
The Ninth Circuit rejected this argument and ruled that under the federal common law, and giving Chevron deference to the 2013 TCPA Order, the TCPA did allow for vicarious liability. Id. at 878. It also rejected Campbell-Ewald’s argument that a third party marketing consultant could not be held liable under the TCPA, finding that a “defendant may be held vicariously liable for TCPA violations where the plaintiff establishes an agency relationship, as defined by federal common law, between the defendant and a third-party caller.” Id. at 878-879.
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As noted above, Bank of America recently settled a TCPA class action for over $32,000,000. Clearly the potential risks of TCPA liability have not gone away. However, because the potential for annihilating, business-ending liability exists under the TCPA, courts appear to be scrutinizing TCPA plaintiffs’ claims more closely, and they are more narrowly interpreting the statute. This is altogether proper for many of the same reasons our courts closely scrutinize punitive damage awards under a due process analysis. Although ostensibly a consumer statute, the imposition of statutory “damages” under the TCPA with no relation to any real compensable loss is more properly characterized, in our view, as imposing a statutory “penalty,” and the statute should -- in the authors’ judgment -- be narrowly, not expansively, interpreted.
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1 See Mark E. Ellis, "Part I – Tales From The Frontline: The ABC’s Of The TCPA," Collector’s Ink Magazine, p. 28 (May/June 2009); Mark E. Ellis, "Part II – Tales From The Frontline: The ABC’s Of The TCPA," Collector’s Ink Magazine, p. 20 (July 2009). Both articles, Part I and Part II, are also available on this website. (Return To Text)
2 Senate Report No. 102-178, at *2 (1991), reprinted in 1991 U.S.C.C.A.N. 1968, 1969 (“Having an unlisted number does not prevent those telemarketers that call numbers randomly or sequentially…[and] some automatic dialers will dial numbers in sequence, thereby tying up all lines of a business and preventing any outgoing calls . . .”) (Return To Text)
3 137 Cong. Rec. S9840-02 (1992) (“Computerized calls are the scourge of modern civilization…These calls are a nuisance and an invasion of our privacy.”) (Return To Text)
4 Senate Report No. 102-178, at *2 (1991), reprinted in 1991 U.S.C.C.A.N. 1968, 1969 (“[U]nsolicited calls placed to fax machines, and cellular or paging telephone numbers often impose a cost on the called party.”) (Return To Text)
5 House Report No. 102-317, at *16 (1991) (“The definition of a ‘telephone solicitation’ is in no way intended to include calls to collect debts or to follow up on billing a subscriber for some service, purchase or other transaction.”) (Return To Text)
6 This has been held to include “text” messaging. See Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 953 (9th Cir. 2009). (Return To Text)
7 ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513, 519 (3d Cir. 1998); Foxhall Realty Law Offices, Inc. v. Telecommunications Premium Servs., Ltd, 156 F.3d 432, 434 (2nd Cir. 1998); Nicholson v. Hooters of Augusta, Inc., 136 F.3d 1287, 1287-1288 (11th Cir. 1998); Chair King, Inc. v. Houston Cellular Corp., 131 F.3d 507, 514 (5th Cir. 1997); International Science & Technology Inst. v. Inacom Communications, Inc., 106 F.3d 1146, 1158 (4th Cir. 1997). (Return To Text)
8 Charvat v. EchoStar Satellite, LLC, 630 F.3d 459, 463-465 (6th Cir. 2010); Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 447 (7th Cir. 2005). (Return To Text)