For the first time, a court has upheld a good faith defense in a TCPA consent dispute for ATDS calls made to cell phones without prior express consent in violation of 47 U.S.C. § 227(b)(1) based on a debt collector’s reliance on information provided by a third party.
The Telephone Consumer Protection Act (“TCPA”) provides a good faith defense for claims of violation of the do-not-call rules if the defendant “has established and implemented, with due care, reasonable practices and procedures to effectively prevent telephone solicitations in violation of the [federal do-not-call list].” 47 U.S.C. § 227(c)(5).
No similar good faith defense exists, however, for claims of violation of the rules concerning automatic telephone dialing system (“ATDS”) calls made to cell phones or prerecorded calls without prior express consent. 47 U.S.C. § 227(b)(1). Until now, courts have never interpreted there to be a good faith defense for such calls, and plaintiffs have often argued claims under § (b)(1) were “strict liability” violations, where damages could be obtained without regard to whether the violation was a mistake or not.
In Chyba v. First Fin. Asset Mgmt., 2013 U.S. Dist. LEXIS 165276 (S.D. Cal. 2013), a consumer sued a debt collector for making ATDS calls to her cell phone without prior express consent. The debt collector claimed it had consent because the consumer provided her cell phone number to Enterprise Rent-A-Car, which hired the debt collector to collect the consumer’s debt.
When a consumer provides a phone number to a creditor as part of an underlying transaction, that action is express consent for the creditor to contact the consumer about the debt. 23 F.C.C. Rcd. 559, 564-65 (Jan. 4, 2008). The FCC treats calls placed by a third party collector on behalf of that creditor as if the creditor itself had placed the calls.1 Id. at 565.
While parties disputed whether plaintiff had given her phone number to Enterprise, the court held:
Even if plaintiff is correct in stating that she never gave defendant or Enterprise consent to call, and there was no actual prior consent from plaintiff, defendant is not liable for acting in good faith upon the information provided to it.
Chyba, 2013 U.S. Dist. LEXIS 165276 at *33.
In its opinion, Chyba relied on Clark v. Capital Credit & Collection Services, 460 F.3d 1162, 1174 (9th Cir. 2005), in which the court held a debt collector was entitled to rely on information provided by a creditor for purposes of “verification” of a debt. Id. The Chyba court stated it would be “incongruous” to hold a debt collector liable under the TCPA for acting on information when it had a good faith basis for doing so. Chyba, 2013 U.S. Dist. LEXIS 165276 at *31.
This is likely the first successful good faith defense in a TCPA consent dispute under 47 U.S.C. § 227(b)(1) based on a debt collector’s reliance on information provided by a third party, i.e. that the number called was provided by Chyba. Other businesses could similarly argue they should not be held liable even if ATDS calls were made to a consumer’s cell phone because they believed they had consent to contact a consumer when they relied on information in good faith from a third party.
Thus, Chyba may provide an additional way to refute plaintiffs’ allegations of violations of the TCPA on ATDS calls made to cell phones without prior express consent. Unfortunately, there is no guarantee other courts will come to the same conclusion.
The FCC revised the rules on October 16, 2013, and now requires prior express written consent to make any ATDS marketing calls to cell phones. The rule leaves unchanged the restrictions on prerecorded messages by non-telemarketing or advertising calls or texts. FCC Order, 27 FCC Rcd. 1830, 1837-1838 (Feb. 15, 2012). To the extent that debt collection calls do not contain telemarketing messages, the calls are permitted with oral or written express consent. Id. at 1841.