Big Victory For the Collection Industry Under The Telephone Consumer Protection Act

September 30, 2014

Yesterday, in Gulf Coast Collection Bureau, Inc. v. Mais, No. 13-14008 (11th Cir. Sept. 29, 2014), the Eleventh Circuit Court of Appeals issued a clear and decisive victory for the collection industry under the Telephone Consumer Protection Act (TCPA). In general, the TCPA is a consumer protection statute that prohibits certain telephone solicitations and automated telephone equipment. Although many TCPA cases involve the use of automatic dialing programs/systems, the TCPA also covers, among other things, prerecorded messages and text messages sent using an autodialer.  The TCPA authorizes a private right of action for injunctive relief and the greater of actual damages or $500 for each violation.  Moreover, a willful or knowing violation opens the door for a court to increase the monetary award up to three times. Not surprisingly, therefore, putative TCPA class actions are on the rise across the country.

The lower-court case, Mais v. Gulf Coast Collection Bureau, Inc., 944 F. Supp. 2d 1226 (S.D. Fla. 2013), involved, among other things, an outstanding account for medical services that was placed with a debt collector for collection. One of the central questions in Mais was whether a patient's consent under HIPAA for his or her medical provider to use and disclose patient information, including phone numbers, constitutes "prior express consent" under the TCPA for affiliates and agents of that provider to call the patient on his cell phone for debt collection purposes using an automated telephone dialing system. The Federal Communications Commission (FCC) had found “prior express consent” in this situation, but the Southern District of Florida in Mais disagreed with the FCC’s ruling and refused to give it deference in denying summary judgment on the consent defense. Plaintiffs' lawyers across the country have attempted to rely on the Southern District of Florida’s Mais decision to file TCPA lawsuits, including alleged class actions.

Fortunately, the Eleventh Circuit reversed the Southern District of Florida’s decision and enforced the FCC’s ruling.  The Eleventh Circuit held that “the district court lacked the power to consider in any way the validity of the 2008 FCC Ruling and also erred in concluding that the FCC’s interpretation did not control the disposition of the case.” The FCC’s interpretation of the term “prior express consent” was a critical issue before the Court. The Court recognized that the 2008 FCC ruling clarified that “autodialed and prerecorded message calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt are permissible as calls made with the ‘prior express consent’ of the called party.” (citing 2008 FCC Ruling, 23 FCC Rcd. at 559). As the Eleventh Circuit confirmed, “[s]pecifically, the FCC conclude[d] 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."

The Eleventh Circuit confirmed that Mais’s allegations pertaining to a medical debt fell within the scope of the FCC’s ruling, which “conclude[d] that 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 regarding the debt.” (citing 23 FCC Rcd. at 564).  Mrs. Mais provided her husband’s cell phone on the hospital admission documents, which included agreed-to privacy practices and procedures, and authorized the release of health information for billing.  Such actions evidenced the TCPA “prior express consent” exception consistent with the FCC’s ruling.

It remains to be seen whether the Eleventh Circuit’s decision provides finality on the issue, at least outside of the Eleventh Circuit.  Only a few days prior to the oral argument in Mais in the Eleventh Circuit, a federal judge in New York agreed with the Southern District of Florida and refused to defer to the FCC’s ruling.  See Zyburo v. NCSPlus, Inc., 2014 U.S. Dist. LEXIS 129850 (S.D.N.Y. Sep. 15, 2014). While it seems that the clear weight of authority across the Country agrees with the reasoning of the Eleventh Circuit, it is entirely possible that other Circuits might disagree in the future.

For now, the collection industry can breathe a sigh of relief. The Eleventh Circuit’s ruling appears to extend beyond just medical debts as the Court even noted that the FCC’s general language “sends a strong message that it meant to reach a wide range of creditors and collectors.”  However, those using predictive dialers to dial telephone numbers through automated technology should still be careful. The FCC had also explained that “prior express consent is deemed to be granted only if the wireless number was provided by the consumer to the creditor, and that such number was provided during the transaction that resulted in the debt owed.” Those in the collection industry should be careful to ensure that the information they are relying upon meets the FCC’s standards. Otherwise, the plaintiffs’ bar will surely seek ways to distinguish the Eleventh Circuit’s Mais decision.

For further information or any questions, please contact Matthew Rosenkoff at or 678.336.7280.

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