Judge Grants Plaintiff’s Reconsideration Motion in TCPA Case Over Gov’t Debt Exception

A District Court judge in Delaware has granted a plaintiff’s motion for reconsideration in a Telephone Consumer Protection Act case, ruling that the Supreme Court’s decision to invalidate the exception for using an automated telephone dialing system to collect on debts owed to the federal government means that companies that used that exception should be liable for the calls that were made while the exception was in place.

A copy of the ruling in the case of Franklin v. Navient can be accessed by clicking here.

The plaintiff received 86 robocalls from the defendant in an attempt to collect on an unpaid student loan debt. The plaintiff sued, alleging the defendant violated the TCPA. A District Court judge granted partial summary judgment for the defendant. But after the Supreme Court ruled in Barr v. American Association of Political Consultants, the plaintiff asked the Court to reconsider the summary judgment ruling. And reconsider it he did.

“When the Supreme Court severed the government-debt exception from the Act, it ruled that the law never had the exception — despite the law’s text,” wrote Judge Stephanos Bibas. “So Navient cannot get summary judgment based on the exception’s coverage.”

The defendant attempted to argue that the law was in effect when the calls were made and that it lacked fair notice that its calls were illegal, which would violate due process and the First Amendment. The defendant, Judge Bibas wrote, “is mistaken” and it may have to compensate the defendant for those calls.

Supreme Court decisions, Judge Bibas wrote, “clarify what the law ‘has[s] always meant’ ” and rulings are applied retroactively. “If Navient relied on the government-debt exception, it made a mistake,” Judge Bibas wrote. “Because the Constitution trumps the Act, the Act never had a valid exception. This Court erred in granting partial summary judgment.”

While the ruling itself is likely to cause headaches for many in the ARM industry, Judge Bibas did provide a small amount of good news in his ruling, saying that the plaintiff is unlikely to get punitive damages and may even not get “the full $500” per violation. “If Franklin wins, he may recover a part of the statutory damages that reflects both monetary and nonmonetary losses. Those include emotional and psychological harms, which are hard to quantify. But even though I will take those proof problems into account, Franklin needs some proof of his losses.”

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