Every week, AccountsRecovery.net brings you the most important news in the industry. But, with compliance-related articles, context is king. That’s why the brightest and most knowledgable compliance experts are sought to offer their perspectives and insights into the most important news of the day. Read on to hear what the experts have to say this week.
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Judge Grants MTD in FDCPA Case over Avila Disclosure in Collection Letter
A District Court judge in New York has granted a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act for a number of reasons, including saying in a collection letter than the balance owed “may” increase because of interest that was accruing when, in fact, the balance owed was increasing because of accruing interest. More details here.
WHAT THIS MEANS, FROM SARAH DEMOSS OF PREMIERE CREDIT OF NORTH AMERICA: There are a three things that stand out in the Paracha case. First, the Court ruled on this matter on a Motion to Dismiss. This distinction is important, because the judge was able to take the letter solely on its face and evaluate the legality instead of the individual fact pattern. This approach is helpful to collection agencies, because it takes away some of the more creative arguments often put forth by consumer attorneys. Second, it reminds us that the “least sophisticated consumer” is also capable of making “logical deductions and inferences,” as cited in Dewees v. Legal Servicing, 506 F.Supp. 2d 128, 132 (E.D.N.Y. 2007). It is impossible to write a letter that won’t be confusing to someone, but including the reasonableness factor certainly helps level the playing field. Last, on more of a personal observation as in-house counsel, I can’t reiterate enough that agencies truly aren’t trying to trick consumers when drafting correspondence. We are trying to make the information as clear as possible while still adhering to the often conflicting, and everchanging case law. Sometimes it works in our favor, and other times it does not.
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N.J. Judge Denies MTD in FDCPA Case Over Offer in Letter
A District Court judge in New Jersey has denied a defendant’s motion to dismiss and to compel arbitration after it was accused of violating the Fair Debt Collection Practices Act by making offers in a collection letter that falsely implied they would expire, when in fact they would not. More details here.
WHAT THIS MEANS, FROM DENNIS BARTON OF THE BARTON LAW GROUP: In Shanthi Hejamadi and Ricardo Varela v. Midland Funding, LLC and Midland Credit Management, Inc., the court addressed technical issues regarding the application of arbitration. The issue was whether a debt buyer purchases the right to arbitration. Plaintiffs in the case admitted to signing arbitration agreement but claimed they (and the court) needed to see the purchase agreement to prove the right to arbitration against plaintiffs was included. While that may elicit an eye-roll from a normal person, the court agreed.
Arbitration, just like the right to collect on the debt itself, arises from a contract between the consumer and the original creditor. If the debt was purchased and there is an assignment of the debt, that agreement is chain of title between the consumer, the creditor, and the new creditor. Just as the collection of a debt would be improper without the existence of an assignment, so is compelling arbitration. Thankfully for the defendants in this case, the effect of the court’s order was to allow defendants to refile their motion to compel arbitration after the assignment agreement was produced.
In some states, the assignment agreement must be attached to a collection lawsuit when attempting to collect purchased debt. The overall takeaway from this case is that you must always have the full chain of title and be able to produce it when needed. Agencies do not typically require this type of documentation upon placement. To reduce exposure, however, agencies should have as part of their agreements with their debt purchasing creditors assurances that a full chain of title exists and can produced to the agency if requested.
Dental Practice Accused of Posting PHI on Social Media Settles With HHS For $10k
A dental practice in Dallas, Texas has agreed to pay a $10,000 fine to the Department of Health and Human Services’s Office for Civil Rights after it was found to have potentially violated the Health Insurance Portability and Accountability Act (HIPAA) by allegedly sharing protected health information on the practice’s Yelp! page. More details here.
WHAT THIS MEANS, FROM LESLIE BENDER OF BCA FINANCIAL SERVICES: How could or should a business make a proper use of social media in this day and age? Or asked this way – exactly how far can or should a business go in sharing non-public “protected health information” in an effort to protect or develop its business reputation? This critical compliance issue was taken up last week by the U.S. Department of Health and Human Services (HHS). HHS sent a strong message that it did not “like” the way Elite Dental of Dallas, Texas (Elite) chose to share information on Yelp.
In brief the facts are that in 2016 the Office for Civil Rights or “OCR” in HHS – the HIPAA enforcer, received a complaint that Elite went too far in “sharing” information about a patient that included her full name, details of her treatment plan, insurance and cost information in responding to the complainant’s review on Yelp and in fact in regard to other patients. After a lengthy investigation the OCR determined that Elite had failed to live up to its HIPAA duties because it erred in these ways:
- Elite improperly disclosed PHI;
- Elite had not implemented policies and procedures about releasing PHI – more specifically about releasing PHI in social media or public platforms; and
- Elite’s required notice of privacy practices failed to meet the de minimis requirements under HIPAA.
It is important to note that Elite did not admit to liability by entering into an agreement to, among other things, pay a $10,000 fine to the OCR and to enter into a “CAP” or “corrective action plan.” In the CAP Elite commits to updating its written policies and procedures to meet HIPAA’s privacy and data security standards, to submit them within thirty days to the OCR, and once approved by the OCR to implement such policies and procedures within 30 days. Thereafter Elite has to update its HIPAA policies and procedures and must assure that any members of its workforce are trained properly on them.
What caught the regulator’s attention here was Elite’s use of patients’ protected health information to respond to and even rebut reviews from patients in Yelp. Reading between the lines it does not appear that Elite obtained or had a practice of obtaining patients’ permission before making third party disclosures about them in social media.
Drilling a little further into the facts, a quick Google search shows Elite has been “yelping” (is that a verb now?) since 2011. They have accumulated 87 reviews in Yelp of Elite Dental of Dallas. The practice’s “yelpers” (a word actually found in Yelp) give Elite an average 3.5 star rating. While there are 46 5-star reviews there are a whopping 24 one-star reviews. Some recent “comments” from Elite’s CEO in response to the one-star reviews say,
“per Federal Privacy Law (HIPPA)[sic], this office and any health related offices are prohibited to confirm, deny or comment on this review … Please do understand that Federal Privacy Laws prohibits any additional comments from a health related business directly online hence why they are unable to legally respond to your concerns and comments.”
Yelp was founded in 2004, to try and create connections among consumers who read and write reviews about the local businesses they patronize. Per Yelp, an impressive 45 % of consumers check reviews on Yelp before visiting a business – making Yelp second only to Google. See, Www.reviewtrackers.com, but at what point does being a top digital platform for “businesses looking to improve their online reputation … engage with potential and existing customers, and drive more people to their business locations” become exactly the wrong place to share “protected health information”? Pretty much at all points is the position of the OCR.
Social media resources have proven to offer a cornucopia of information about both businesses and consumers. But unlike old time media that was more or less two-way communication – social media opens the door to and offers unbridled communication, republication, repurposing, editing, and forwarding. There is no way to control the future life of information put out in the world via social media – an issue with which the Bureau of Consumer Financial Protection (the Bureau) concerned itself in its recent notice of proposed rulemaking about debt collection. The Bureau asked key questions about social media.
So what are the take-aways from the OCR enforcement action in Elite Dental? Here are a few:
- No matter what consumers say or do in the public domain including social media, a business may not use or disclose non-public information about those consumers without first obtaining those consumers’ permission to do so.
- Even though no “HIPAA police” have existed since HIPAA became enforceable in 2003, businesses entrusted with the responsibility to safeguard non-public information need to take that responsibility seriously and have policies, procedures and training to reinforce this safeguarding responsibility among all members of their workforces.
- Any business that is consumer-facing and wants to take advantage of one or more forms of social media must first set some ground rules that properly respect good old fashioned fair information principles (stated otherwise: consumers’ choice and control over their non-public information) with business objectives. Should there be a doubt: err on the side of protecting consumers’ privacy.
- Know that if you invite or encourage social media reviews of your business you should prepare for less than favorable reviews and take to heart some of that negative feedback to continuously improve (rather than “yelping” back).
Calif. Gov. Signs Anti-Robocall Bill into Law
California Gov. Gavin Newsom has signed into law an anti-robocall bill called the Consumer Call Protection Act of 2019 that aims to eliminate neighbor spoofing, requires carriers to adopt SHAKEN/STIR protocols, and bolsters the state’s enforcement against alleged robocalls. More details here.
WHAT THIS MEANS, FROM JUNE COLEMAN OF CARLSON & MESSER: There is another law on the books in California and this one addresses robocalling, ostensibly. California’s Governor signed new legislation, the Consumer Call Protection Act of 2019, which many are calling anti-robocall legislation. A better name for this new law might be anti-spoofing legislation, meant to address spoofing calls by requiring telecom companies to implement Secure Handling of Asserted information using toKENs (SHAKEN) and Secure Telephony Identity Revisited (STIR) protocols or other similar protocols for calls carried over the internet by January 1, 2021. These protocols are designed to attest to the authenticity of caller identification data and provide telecom companies with information to help ensure that calls are not spoofed. The technology used to implement these protocols is expensive, and will probably be passed onto the consumer. Controlling the telecom companies controls the platform on which robocalls are delivered to consumers.
This is different than simply forcing the development of call blocking protocols. This new California legislation focuses on fraudulent calls and makes clear that the new law does not require telecom companies to develop call blocking capabilities. One of the major issues with SHAKEN and STIRred is that call blocking solutions blocks permitted calls and calls consumers would want. Straightforward call blocking does not necessarily address call spoofing, including neighbor spoofing, involving fake phone numbers with the recipient’s area code. But the focus on fraudulent calls (which are not made for a legitimate business purpose), is the first step to filtering illegal robocalls, calls made with dialing systems that are not legitimate calls.
The new legislation also allows the California Attorney General to and the California Public Utilities Commission to create new California regulation regarding the TCPA and to enforce such regulation and any federal TCPA regulation. It will be interesting to see how these two agencies work on this, especially since the PUC has no authority over cell phone services.
The new California legislation echoes legislation on the federal level. This year, both the U.S. Senate and House of Representatives passed anti-robocall/anti-spoofing legislation with call authentication provisions (the Senate TRACED Act and the House Stopping Bad Robocalls Act). Both houses of the legislature need to work together to morph these separate bills into one bill that will pass both the House and Senate. There are indications that anti-spoofing/anti-robocalling might be an issue that may have bipartisan support and may actually gain some traction after the legislative recess ends in mid-October. Additionally, in June 2019, the FCC released a controversial Declaratory Ruling and Third Further Notice of Proposed Rulemaking regarding call blocking and call authentication. The FCC was not happy with the proposals and comments the FCC received in response to the Declaratory Ruling and Notice of Proposed Rulemaking. And it will be interesting to see whether any federal legislation preempts state laws.
It seems everyone agrees that “robocalls” should be blocked, but does that mean that everyone agrees that it is appropriate to block legitimate calls simply because you do not want to speak to the caller? And some of the call blocking technology blocks calls from a number to everyone when a certain number of people have blocked that number? Should you be able to block calls for legitimate purposes? If you don’t want to speak to a caller, does that mean that your neighbor may have that number blocked as well? The interesting aspect of this legislation is that the focus of the legislation is to block fraudulent calls, but the stats used to justify the legislation come from companies with call blocking apps that block phone numbers who place too many calls, or are rejected by a certain number of the app subscribers. For instance, First Orion, one of the caller ID and call blocking services for major cell phone companies, states that about 30% of all calls in 2018 were robocalls, and according to YouMail, another call blocking service, people in the major cities in California receive a disproportionate number of those calls.
For the receivables management industry, close tabs should be kept on this new law and any similar ones to make sure that the focus remains improper spoofing, and does not grow as the TCPA did to cover all calls made with a dialing system.
N.J. Judge Dismisses FDCPA Case About Dispute Notice
A District Court judge in New Jersey has granted a defendant’s motion to dismiss a lawsuit that accused it of violating the Fair Debt Collection Practices Act by sending a letter to the plaintiff that allegedly misled the plaintiff into thinking that the debt could be disputed orally, instead of in writing. More details here.
WHAT THIS MEANS, FROM MITCH WILLIAMSON OF BARRON & NEWBURGER: Mincey v. Jefferson Capital Sys., LLC, No. 19-285 (NLH/JS), 2019 U.S. Dist. LEXIS 165282 (D.N.J. Sep. 26, 2019) is another in a long list of New Jersey cases holding that the statutorily mandated validation notice 1692g(a)(3)(4)(5) is fine as is. (By my count this is the 24th NJ case dismissing a complaint based on an alleged violation of 1692g for failure to explicitly state a dispute needs to be in writing) On the other side of the river in Pennsylvania, with fewer decisions, the pendulum swings in the opposite direction. Maybe it’s the water.
In the limited instances where a New Jersey federal court found the mandated language confusing, industry players have sought to appeal. Cadillo v. Stoneleigh Recovery Assocs., LLC, is the first case where a court found the language confusing, and is the most advanced and the only case with a briefing schedule. Amended recently, the Appellant’s brief and appendix is set to be filed and served on or before Oct. 18, 2019.
On October 8th the 3rd Circuit changed the status quo [waiting for a decision in Cadillo] issuing an Order in Riccio v Sentry Credit, Inc.:
A majority of the active judges who are not disqualified in the above captioned case have determined that the case is controlled by a prior decision of the court [Graziano] which warrants reconsideration. Accordingly, the Court sua sponte orders rehearing en banc in the above captioned case. The Clerk of this Court shall list the case for Wednesday, Feb. 19, 2020, at a time convenient to the Court.
By way of background, Riccio was one of four cases (others are Reizner v National Recoveries, Inc; Magana v Amcol Systems and Robinson v Northland Group, Inc.) where the issue was overshadowing, per Caprio v. Healthcare Revenue Recovery Group, LLC, 709 F.3d 142 (3rd Cir 2013). All four cases involved initial letters which provided phone numbers and an invitation to call with questions, concerns, complaints etc. in addition to the validation notice, which in all cases tracked the statutory language. In all four cases the district courts ruled that the inclusion of the phone number and invitation to call did not over shadow meet the Caprio standard and overshadow the Graziano holding that a dispute could only be made in writing. None of the decisions mentioned above focused on the language of the validation notice. The 3rd Circuit called in all four cases together; while plaintiff’s counsel was the same in all four, the defendants all had different counsel. The consolidated argument was held on September 12th. Two days after the Riccio Order, on October 10th, the Court issued a further Order staying those three cases pending resolution in Riccio.
So where does that leave Cadillo and the other “validation” cases currently pending? Of note is the fact that at the beginning of the consolidated oral argument the 3rd circuit made note of the fact that it is the only circuit with the “in writing” requirement for a dispute and then went on to question whether maybe the time has time to review Graziano’s holding. It appears that after hearing all parties positions, the Court decided to revisit Graziano as part of its review of the “overshadowing” cases.
If the Court reverses / overturns Graziano’s in writing requirement for an (a)(3) dispute then the four cases would become moot. However, if the Court does not reverse/vacate Graziano, they could still affirm the lower court decisions in all or some of the “overshadowing” cases leaving parties to walk a fine line regarding the inclusion of a phone number. The same holds true for Cadillo and the other straight “validation” cases. If a dispute doesn’t need to be in writing then the validation cases [which argued the statutory language is confusing regarding the requirement for a dispute to be in writing] become moot. But if the Court leaves Graziano as is, then it would be forced to review the question raised by the Cadillo decision, can a validation notice which tracks the statute be deemed violative of the statute.
So what to do? My take is that any pending district court cases would have to be stayed pending a ruling by the 3rd Circuit in Riccio which isn’t likely until the late spring next year and any newly filed suits would also have to sit and wait. It would appear based on the 3rd Circuit’s admission that they are the outlier it is likely that they would cease bucking the trend and join the other circuits that have ruled a dispute does not have to be in writing. But that’s just my opinion.
Trade Group Sues Maine Over Consumer Protection Laws
A trade group representing the three major credit bureaus filed a lawsuit last week against the state of Maine challenging a new law that, among other things, prevents furnishers, such as collection agencies, from reporting unpaid medical debts for at least 180 days. More details here.
WHAT THIS MEANS, FROM SCOTT WORTMAN OF BLANK ROME: Notwithstanding the high bar in establishing representational standing, we once again see the uniquely positioned capacity for a trade association to take legal action to protect and advance the interests of the association’s members. Here, the Consumer Data Industry Association (“CDIA”) is challenging Maine’s attempt to restrict consumer report content allegedly already subject to the Fair Credit Reporting Act (“FCRA”). In order to substantiate a showing of federal preemption, the CDIA is relying on 15 U.S.C. §1681t(b)(1)(E), for the proposition that a state does not have the power to impose requirements or prohibitions relating to information contained in consumer reports. While the CDIA’s application of preemption in the Complaint may appear monochromatic, there are several contrasting decisions defining the contours of FCRA preemption. By way of example, in Leet v. Cellco P’ship, 480 F. Supp. 2d 422 (D. Mass. 2007), the court determined that a Massachusetts statute creating a cause of action for providing false information was not preempted by the FCRA. Alternatively, in Okocha v. HSBC Bank USA, N.A., 700 F. Supp. 2d 369 (S.D.N.Y. 2010), it was determined that the FCRA preempted claims under New York’s General Business Law [Unfair and Deceptive Practices]. See also, Davis v. Trans Union, LLC, 526 F. Supp. 2d 577 (W.D.N.C. 2007) (FCRA preempted consumer’s claims that a collection agency violated North Carolina statutes relating to prohibited practices by collections agencies).
Judge Certifies Class in FDCPA Suit Over Balance Disclosure
A District Court judge in New York has certified a class action against a collection law firm accused of violating the Fair Debt Collection Practices Act because it did not explicitly state in a collection letter that the plaintiff’s balance may increase in the future, even though the firm referenced that the amount owed represented the “balance due as of [date]” and included an itemized accounting of what the plaintiff owed. More details here.
WHAT THIS MEANS, FROM AMY JONKER OF THE JONKER LAW GROUP: When in doubt, use the exact safe harbor language (or statutory language) — don’t bet that the implicit meaning of your alternative language will be understood by the least sophisticated consumer. It will save you a ton money. Need an example? This New York judge applied the Increasing Amount Due safe harbor language requirements (Avila v. Riexinger & Assocs., LLC, 817 F.3d 72 (2d Cir. 2016); Miller v. McCalla, Raymer, Padrick, Cobb, Nickols, & Clark, L.L.C., 214 F.3d 872 (7th Cir. 2000)) to a class of 58,000 letters reasoning that a consumer could be misled by the implicit meaning of “balance due as of [date]” because the least sophisticated consumer could be misled into thinking that he could pay the debt in full by paying that “balance due”. The explicit Avila safe harbor language states, “As of the date of this letter, you owe $ [the exact amount due]. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check, in which event we will inform you before depositing the check for collection. For further information, write the undersigned or call 1-800- [phone number].”
Another Court Rules Collection Exemption in TCPA is Unconstitutional
If at first you don’t succeed, try and try again appears to be the legal strategy of a company accused of violating the Telephone Consumer Protection Act by making calls to an individual’s phone using an pre-recorded or artificial voice without the individual’s permission. The company is, for the second time, attempting to argue that the TCPA is unconstitutional because of an exemption allowing debt collectors to use an automated telephone dialing system when collecting debts owed to the federal government, but, for the second time, a District Court judge has shot down that argument. More details here.
WHAT THIS MEANS, FROM XERXES MARTIN OF MALONE FROST MARTIN: The constitutionality argument is a creative one that has some merit. However, I think the best defenses to the TCPA is interpretation of the ATDS definition and the actual technology used to place the calls.
Supreme Court Petition Argues CFPB Enforcement Actions Should be Dismissed If Structure is Unconstitutional
Not content to wait for the Fifth Circuit Court of Appeals to rule on whether it thinks the leadership structure of the Consumer Financial Protection Bureau is constitutional, a payday lender has filed a petition with the Supreme Court seeking a hearing, while also asking whether companies that have been the subject of enforcement actions by the CFPB are entitled to have those actions dismissed. More details here.
WHAT THIS MEANS, FROM ANN LEMMO OF CLARK HILL: After CFPB’s brief in CFPB v. Seila Law and pair of letters to Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi that stated the CFPB will no longer be defending the constitutionality of the agency, industries in the midst of enforcement actions have changed their strategy. Industry attorneys in these actions have previously raised the argument that the CFPB lacks constitutional standing under Article II of the Constitution due to the CFPB’s lack of internal checks and the President’s inability to remove the Director unless for cause. The CFPB’s recent change in position has rejuvenated this argument. Just this week in the 5th Circuit case All American Check Cashing, Inc. v. CFPB, the payday lender filed a petition with the Supreme Court for a hearing on its case and questioning whether other enforcement actions that are pending are entitled to a dismissal.
Ocwen Financial Corp. recently asked for a motion for reconsideration in its case pending in the Southern District of Florida regarding the lower court’s dismissal of their motion to dismiss in which Ocwen asserted the unconstitutionality argument. Industries in the midst of younger enforcement actions are also following suit. Forster & Garbus, LLP earlier this month received a stay in Eastern District of New York pending the Supreme Court’s decision to take up certiorari in the Seila Law case.
Whether these arguments will gain recognition will become clear on October 11th when the Supreme Court will decide whether it will take up certiorari in the Seila Law case. The chances of the Supreme Court doing so seem high given that the question of constitutionality of a single-headed agency is prevalent in other agencies. For example, the question of the constitutionality of the Federal Housing Finance Agency that is similarly structured to the CFPB created a circuit split between the 5th and 9th Circuits that has yet to be resolved.
While the CFPB falling on its sword may seem like a gift to industry, it comes with possible strings attached. If the CFPB is found unconstitutional, its recent rulemakings may also be called into question. The long-awaited proposed Regulation F may face validity challenges and may leave the industry trapped in the 1970s.
Judge Grants MTD in FDCPA Case Over Time-Barred Debt Disclosure
A District Court judge has granted a defendant’s motion to dismiss, ruling it is “preposterous” for a plaintiff to interpret “we will not sue you” in a disclosure related to a time-barred debt as a false statement under the Fair Debt Collection Practices Act because it could be read to mean that defendant may change its mind and file suit at a later date. More details here.
WHAT THIS MEANS, FROM JUDD PEAK OF FROST-ARNETT: In Will v. PRA, the debt collection letter disclosed that due to the statute of limitations having passed, the collection agency “will not sue” the consumer for the debt. Instead of paying the debt, the consumer ran to an attorney who filed suit. The crux of the argument was that “will not sue you” somehow implies (to the least sophisticated consumer) that the collection agency may change its mind and choose to file suit at some point in the future. According to the consumer, the debt collector should have written “may not sue you” instead of “will not sue you.” Thus, the federal lawsuit that also claimed class action status. Thankfully, the judge dismissed the argument out of hand. The statement in the collection letter was accurate and unequivocal. (Side note: the specific language used in the letter was crafted pursuant to a consent order with the Consumer Financial Protection Bureau, so presumably the CFPB had endorsed the use of that phrase.)
This case is another in a line of decisions that – surprise, surprise – are actually based on common sense. The judge here properly injected a requirement of rationality into the analysis. The accepted standard of a “least sophisticated consumer” has forced collection agencies to defend legal claims on the flimsiest of arguments, and assume that the standard will allow virtually any claim to be heard by a jury. Now, I see that trend beginning to turn to a more acceptable interpretation: “least sophisticated consumer” does not mean “no sophistication whatsoever.”
Extra special note: the consumer was represented by the Sulaiman Law Group of Chicago, notorious for being one of the most frequent-filers of consumer claims.
Judge Allows TCPA Case Filed By Professional Plaintiff to Proceed; Rules Debt Collection Exemption Unconstitutional
The fact that an exemption in the Telephone Consumer Protection Act that spares debt collectors attempting to collect on debts owed to the federal government is unconstitutional is not enough to make the entire TCPA unconstitutional, ruled a District Court judge in Massachusetts, who is allowing portions of a class-action lawsuit to continue. The judge also ruled that a professional plaintiff, who makes a living suing companies for violating the TCPA, still has standing to sue in this case. More details here.
WHAT THIS MEANS, FROM DAVID KAMINSKI OF CARLSON & MESSER: This decision from the US District Federal Court in Massachusetts raises multiple issues that are of import. First, the court resolves whether the exemption for govt. debt collection added by congress is 2015 is unconstitutional under the first amendment. The Federal Court concluded, as have other Federal District and two federal Circuit Courts of Appeal (4th, 9th), that the section is unconstitutional and is a prohibited “contest based” restriction. The Court severed this section from the entire TCPA statute but stated that the rest of the TCPA statute remains.
COMMENT: This ruling on this issue appears to be the way the courts throughout the country are headed, and as we have seen, the govt. debt exemption in the TCPA is being chipped away in a significant way, and has little if any life at this point. However, all courts that have dealt with the issue have held the rest of the TCPA remains a viable statute. See Duguid v. Facebook, Inc., 926 F.3d 1146, 1156 (9th Cir. 2019); Am. Ass’n of Political Consultants, Inc. v. FCC, 923 F.3d 159, 166 (4th Cir. 2019);
Second, the court resolved whether Mr. Katz has standing to bring a TCPA claim, i.e., whether he maintained the number that was called for any purpose other than attracting telemarketing calls to support his TCPA lawsuits. Since Katz testified that he maintained the number for emergency purposes and has three young children, the court found he was not using the line for solely to bring unwanted calls to himself and to use the TCPA as a business.
COMMENT: The standing issue is an important challenge to the serial and other TCPA filers who plague the country with a plethora of lawsuits. However, it is important to thoroughly vet and examine the plaintiff filing the claim in your case to discover and defend the issue, and to determine whether it is wise to raise standing in your particular case. The defense attack and investigation have to be carefully orchestrated and crafted. The defense side does not need more decisions that further bolster the standing of serial filer plaintiffs in TCPA cases.
Third, as to whether Rhodes had standing to sue since she was not the “subscriber” of the phone at issue, the facts showed she was a “regular user” of the phone and therefore had “standing” to bring suit. The Court held that the TCPA’s zone of interest encompasses suits by “a regular user of the phone line who occupies the residence being called” at least when she answers the calls that give rise to her claim.
Comment: As we have seen, several courts over the years have held that the subscriber, and regular user of the phone at issue have standing to bring TCPA lawsuits. It is important to challenge the “standing” (right to bring suit) of persons filing TCPA lawsuits, where relevant and applicable. Again, the investigation has to be carefully orchestrated and crafted so that one can decide if it is the best course of attack in your case at hand.
Consumer Groups File Brief Supporting En Banc Request in Text Message TCPA Case
A handful of consumer groups have submitted an amicus brief and motion for leave to have it entered into the record as the plaintiff in Salcedo v. Hanna seeks to have his case re-heard by the entire Eleventh Circuit Court of Appeals in an en banc hearing. More details here.
WHAT THIS MEANS, FROM NICOLE STRICKLER OF MESSER STRICKLER: Recently, a group of consumer advocates filed a brief with the 11th Circuit requesting a re-hearing en banc (before the entire bench rather than a panel of judges) in Salcedo v. Hanna. The original Salcedo panel had ruled that the receipt of a single, unauthorized text message was insufficient to convey Article III standing to the plaintiff. Article III of the Constitution requires that a plaintiff suffer injury-in-fact sufficient to present a “case or controversy” in order to pursue a lawsuit against a defendant in the wake of recent Supreme Court case law, courts, like Salcedo, appear to be taking a tougher stance on plaintiffs seeking to benefit from bare statutory violations. Relevant to the Salcedo opinion, the plaintiff purportedly failed to establish harm because he did not allege anything specific harm—such as, for example spending time or money as a result of the particular text. Nor did he allege an intangible harm, such as having the “domestic peace shattered by the ringing of a telephone.” Instead, “Salcedo’s allegations of a brief, inconsequential annoyance” were found to be “categorically distinct from those kinds of real but intangible harms.” In requesting a rehearing, the consumer groups argue that this conclusion was incorrect in that a concrete injury can establish standing even where it is only an “identifiable trifle.” Further, it argues that the original panel’s decision is unsound because it fails to identify the number of unauthorized text messages sufficient to establish standing, which could lead to a flood of unwanted text messages. Ultimately, it will be interesting to see if the 11th Circuit will re-hear the matter en banc given its diveragnce from other appellate level decisions on the same issue.
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