TCPA Connect

Prior Express Consent Exists When Cellphone Number Is Shared With Intermediary

Joining other federal appellate courts, the Sixth Circuit Court of Appeals recently held that prior consent that is provided indirectly to a third party can be deemed express consent for purposes of TCPA compliance.

Two patients of Mount Carmel Hospital in Columbus, Ohio provided their cellphone numbers while completing authorization forms for medical care. Zachary Baisden agreed that Mount Carmel could use his "health information" for "billing and payment" purposes, which information could be released in a variety of forms, from electronic to verbal. Brenda Sissoko signed a different version of the form, permitting the release of her health information whether in electronic, written, or verbal form "to companies who provide billing services for physicians or other providers involved in my medical care."

Baisden and Sissoko owed $850 and $444.94, respectively to Consultant Anesthesiologists, which provided anesthesiology services to Mount Carmel. Consultant transferred their delinquent accounts to Credit Adjustments. The debt collector called their cellphone numbers in an attempt to collect on their accounts.

In response, Baisden and Sissoko filed suit. Because they never provided Credit Adjustments with their cellphone numbers, they claimed the debt collector violated the TCPA by calling them. Credit Adjustments moved for summary judgment, arguing that by providing their numbers to the hospital where they received medical care, the plaintiffs gave their prior express consent to receive such calls.

A federal district court agreed that the necessary consent can be provided indirectly and a panel of the Sixth Circuit affirmed.

The Federal Communications Commission has provided "extensive" guidance on what constitutes prior express consent, the court explained, referencing four interpretations pertinent to the case. In 1992, the FCC interpreted prior express consent to include a form of implied consent in a Report and Order, writing 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." For support, the agency relied upon the TCPA's legislative history.

In 2008, the FCC extended this proposition to cellphone numbers in a Ruling that placed the burden on callers to demonstrate that consent was provided. Applying both the 1992 Order and 2008 Ruling to intermediaries, a 2014 Declaratory Ruling from the FCC held "that the TCPA does not prohibit a caller … from obtaining the consumer's prior express consent through an intermediary[.]"

Most recently, the agency's 2015 Order affirmed the 2014 Declaratory Ruling, and stated again that consent can be provided more than one way and that the context in which consent is provided is important.

The plaintiffs took a narrow reading of the FCC guidance, zeroing in on language in the 2008 Ruling that "prior express consent is deemed to be granted only if the wireless number was provided by the consumer to the creditor."

Relying heavily on an Eleventh Circuit decision with similar facts (Mais v. Gulf Coast Collection Bureau Inc.), the Sixth Circuit rejected the plaintiffs' interpretation of the FCC guidance as well as their objections to the Mais ruling.

Baisden and Sissoko argued that Mais was "seriously flawed" and enlarged the scope of the FCC rulings to read out the consumer protections found in the TCPA. But the court refused to opine on the validity of the FCC's rulings or ignore the agency's guidance. The 2014 Declaratory Ruling "stressed that 'allowing consent to be obtained and conveyed via intermediaries … facilitates … normal, expected, and desired business communications in a manner that preserves the intended protections of the TCPA.'"

The 2015 Order similarly stressed the importance of context when considering a consumer's consent, which depends on the facts of each situation, the court said. "[I]f one provides a cell phone number to a health organization seeking medical treatment, and a provider affiliated with that health organization treats that person for the same ailment, it is normal, expected, and desired to interpret that provision of the cell phone number as an invitation for an entity affiliated with that organization to call for something arising out of one's treatment."

"The FCC's rulings in this area make no distinction between directly providing one's cell phone number to a creditor and taking steps to make that number available through other methods, like consenting to disclose that number to other entities for certain purposes," the court said. "And, the FCC's [Declaratory Ruling] and 2015 Order make clear that there is no one way for a caller to obtain consent, and that such consent can be conveyed by another party."

Considering the context of the consent provided by both Baisden and Sissoko, the panel found both forms satisfied the TCPA.

Sissoko's authorization form was nearly identical to that in Mais, the court noted, and it "could not be clearer … as to what Sissoko permitted Mount Carmel Hospital to do with her 'health information'—Mount Carmel Hospital could give it to Consultant Anesthesiologists for the purposes of debt collection, and Consultant Anesthesiologists could give the same to Credit Adjustments."

Further, the plaintiff's cellphone number was included within the scope of "health information," the panel found, concluding that a ruling it excluded would yield a nonsensical result. "[T]he authorization is a contract related to giving consent for medical care, and, as such, 'health information' must be read through this prism to give it a proper meaning," the court said. "Contact information most undoubtedly is any information that relates to a patient's payment for care provided."

As for Baisden, his authorization form allowed Mount Carmel to use his health information "for as many reasons as needed" and the court reiterated that contact information was included in the scope of "health information."

"[T]he context in which Baisden and Sissoko provided their cell phone numbers is essential to determining whether they provided 'prior express consent' to receive calls to those numbers," the panel concluded. "They sought medical treatment from Mount Carmel Hospital, and in the course of this relationship, both gave Mount Carmel Hospital their cell phone numbers and authorized it to disclose their cell phone numbers to others. The 'other' in this case—Consultant Anesthesiologists—has a significant relationship to Mount Carmel Hospital, plaintiffs, and most critically, the debts owed by plaintiffs that arose from the transactions in which plaintiffs provided their cell phone numbers. This case, therefore, fits comfortably within the 'prior express consent' limits set forth by the FCC."

To read the opinion in Baisden v. Credit Adjustments, Inc., click here.

Why it matters: Context is everything, the Sixth Circuit emphasized in its decision: the plaintiffs provided their cellphone numbers and authorization for the hospital to share them with third parties and the calls made were in direct relation to the services they received at the hospital. The panel joined the Ninth and Eleventh Circuits to recognize that prior express consent in satisfaction of the TCPA can be provided in a number of different ways, including indirectly.

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State AGs Call on Legislators to Repeal TCPA Amendment

On behalf of their consumer residents, a group of 25 state Attorneys General sent a letter to the Senate Committee on Commerce, Science, and Transportation urging the lawmakers to pass the HANGUP Act.

A provision in the Bipartisan Budget Act of 2015 amended the Communications Act of 1934 to permit debt collection robocalls to consumers' cellphones if the calls are made pursuant to the collection of debt owed to or guaranteed by the United States. In response, Sen. Ed Markey (D-Mass.) introduced S. 2235, the Help Americans Never Get Unwanted Phone Calls Act of 2015 and the AGs called upon lawmakers to move the bill forward.

"It is inappropriate to grant debt collectors the right to harass citizens simply because the debt has a nexus to the federal government when the law specifically prohibits all other private and public entities, including political callers, from doing so," the AGs wrote, particularly as the largest number of consumer complaints received by their offices are about unwanted telemarketing calls, "with robocalls and debt collection calls at the top of the list."

Prior to the amendment, the TCPA prohibited all robocalls to cellphones, which "protected consumers and provided a mechanism to combat these unwanted calls," the signatories, including Connecticut AG George Jepsen and New York AG Eric T. Schneiderman, argued. Now consumers are facing the possibility of a "barrage of debt collection robocalls that can be misdialed, at times harassing and frustrating our citizens who pay for such calls to their cellular numbers."

The Federal Communications Commission recognizes the proliferation of robocalling, the letter noted, and in an Order issued last year, formally adopted "a rule change which states that federal law does not prohibit telecommunication service providers from offering, upon a customer's request, services intended to block unwanted calls. This clarification moved enforcement efforts forward and armed consumers with ways to prevent unwanted calls."

Federal lawmakers have "the opportunity to further advance these efforts and provide citizens with much needed protection from robocalls," the AGs concluded. "By passing the HANGUP Act to repeal the TCPA amendment, citizens will benefit from the prohibition of all robocalls to cell phones, regardless of the content of the call. We urge you to act without delay."

To read the letter from the state Attorneys General, click here.

To read S. 2235, the HANGUP Act, click here.

Why it matters: The HANGUP Act was introduced in the Senate in November 2015 and referred to the Senate Committee on Commerce, Science, and Transportation, where it remains. A related bill was introduced in the House in March and is currently being considered by the House Committee on Energy and Commerce.

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Limited VoIP Plan = Cellphone For TCPA Purposes, New York Court Rules

Calls with a prerecorded message or made using an automated telephone dialing system to a Voice-over-Internet number with limited minutes should be treated the same as calls to a cellphone under the Telephone Consumer Protection Act, a New York federal court has ruled.

Reny Rivero sued America's Recovery Solutions alleging violations of the TCPA based on three calls to his phone number, which had a greeting that directed callers not to leave a message unless in an emergency. Representatives from ARS nonetheless left a voicemail message on each occasion, stating their name and requesting that Rivero return the call to the representative.

Proceeding pro se, Rivero sought damages under the TCPA as well as the Fair Debt Collection Practices Act and state law. Although ARS initially appeared in the action and answered the original complaint, its counsel withdrew after the complaint was amended and then failed to respond to the amended complaint. Plaintiff subsequently moved for a default judgment.

U.S. District Court Judge Eric N. Vitaliano granted the motion and referred the matter to Magistrate Judge Lois Bloom to consider the issue of damages.

The court began by noting that the Federal Communications Commission created a limited exemption for calls between debt collectors and consumers with an established business relationship that extends only to calls made to a "residential line," and not a cellphone or other service.

Rivero's VoIP service from Vonage offers him 300 minutes per month, routing calls through his Internet connection to his phone line. Although little guidance exists in the Second Circuit Court of Appeals on the issue of whether a VoIP intermediary connection alters the nature of the receiving telephone under the TCPA, Magistrate Judge Bloom turned to an opinion from the Fourth Circuit involving a plaintiff that subscribed to a VoIP service that charged her a set amount per call.

In that case, Lynn v. Monarch Recovery Management, the federal appellate panel held that because the plaintiff was charged for each of the defendant's calls, the calls were made to "a service for which the party is charged for the call," which is prohibited under the TCPA at Section 227(b)(1)(A)(iii). This conclusion aligned with Congress's intent that automated calls not add expense to annoyance, the Fourth Circuit wrote.

"Plaintiff's VoIP service is not an unlimited calls/flat fee plan as the TCPA presumes is generally the case with a traditional residential telephone line," the court said. "Rather, it is 'a service for which the party is charged for the call' described under Section 227(b)(1)(A)(iii), because each call by Defendant depletes Plaintiff's store of limited minutes. There is no regulatory exemption to this provision because the TCPA permits the FCC to create limited exemptions only to the prohibition of calls to certain cell phones (under subsection (A)) and to residential lines (under subsection (B)). Accordingly, Defendant's calls to Plaintiff's VoIP phone line violated the TCPA."

Turning to damages, Magistrate Judge Bloom denied Rivero's request to treble his statutory damages for the calls and instead recommended he receive just $500 per call. "Had Plaintiff used a traditional residential line, Defendant's calls would have fallen within the established business exemption and would not have violated the TCPA," the court said. "Given the lack of evidence that Defendant knew Plaintiff would be charged for its calls, treble damages are inappropriate."

The court added $750 to Rivero's damages for FDCPA violations (with another $423.50 for costs) but held he could not recover on his New York consumer protection law claim, for a total of $2,673.50.

Reviewing the report and recommendation, Judge Vitaliano found it "to be correct, well-reasoned, and free of any clear error," and adopted it in its entirety with an order to close the case.

To read the report and recommendation in Rivero v. America's Recovery Solutions, click here.

To read the order, click here.

Why it matters: The Rivero case provides companies that place unsolicited calls to consumers with something new to think about before dialing, specifically, what kind of phone service does the consumer have. Although the defendant elected not to mount a defense in the case, the court found the VoIP plan subscribed to by the plaintiff was "a service for which the party is charged for the call" under Section 227(b)(1)(A)(iii) of the TCPA, triggering liability on the part of the defendant. The magistrate judge declined to treble the plaintiff's damages, however, recognizing that the defendant had no way of knowing that Rivero subscribed to a VoIP plan – had he used a traditional residential line, the calls would have fallen within the established business exemption in the statute and would not have violated the TCPA. A different outcome might also have been possible had Rivero's Vonage plan featured unlimited minutes. Each call from the defendant reduced the plaintiff's 300 minutes per month, the court explained, leaving room for a defendant to distinguish a situation where a VoIP subscriber had no limit on his calls and would not have been charged for them.

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Noted and Quoted: Christine Reilly, Co-chair of Manatt's TCPA Compliance and Class Action Defense practice, talked to Legal Newsline about the value of citing the Ninth Circuit's unpublished opinion in the TCPA class action lawsuit Baird v Sabre, Inc.

The Baird case provides valuable lessons, Reilly told Legal Newsline: "The first is that the text messages in question contained information and were not for marketing purposes. The ruling would have been very different if the messages had been marketing in nature. The second lesson is that consent to receive text messages is not only to the first business but also extends to whoever the business contracts with to handle those text messages." To read more of Reilly's takeaway, click here.

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