November 21, 2014

TCPA Decision: Wife Gave Cell Phone Number To ER -- Consent For Calls?

A big issue in the TCPA is whether consent, and the proper type of consent, was given that would allow a company to auto dial a consumer's cell phone without being subject to damages of $500-1500 per call.

Helping us as lawyers fill in the picture is a recent decision from the Eleventh Circuit on September 29, 2014, in Mais v. Gulf Coas Collection Bureau.

As usual, we will include the relevant parts from the decision with our analysis below it.

Plaintiff Mark Mais filed a claim in federal district court against a hospital-based radiology provider and its debt collection agent for making autodialed or prerecorded calls in violation of the Telephone Consumer Protection Act of 1991 (TCPA), Pub. L. No. 102-243, 105 Stat. 2394 (codified at 47 U.S.C. § 227). Defendant Gulf Coast Collection Bureau, Inc. ("Gulf Coast") argued that the calls fell within a statutory exception for "prior express consent," as interpreted in a 2008 declaratory ruling from the Federal Communications Commission (the "FCC" or "Commission"). See In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 (2008 FCC Ruling), 23 FCC Rcd. 559, 564. The district court granted Mais partial summary judgment against Gulf Coast for alternative reasons: the FCC's interpretation was inconsistent with the language of the TCPA and, regardless, the 2008 FCC Ruling did not apply on the facts of this case.

Nothing particularly noteworthy except the district court judge threw out the FCC interpretation and ruling. This was surprising when the decision came out.

I think the Eleventh Circuit was surprised also....

As we see it, 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. In the Hobbs Act, 28 U.S.C. § 2342, Congress unambiguously deprived the federal district courts of jurisdiction to invalidate FCC orders by giving exclusive power of review to the courts of appeals. See Self v. Bellsouth Mobility, Inc., 700 F.3d 453, 461 (11th Cir. 2012). And Mais's claim falls squarely within the scope of the FCC order, which covers medical debts. The 2008 FCC Ruling "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." 23 FCC Rcd. at 564. There is no dispute that Mais's wife listed his cell phone number on a hospital admissions form and agreed to the hospital's privacy practices, which allowed the hospital to release his health information for billing to the creditor. As a result, the TCPA exception for prior express consent — as interpreted in the 2008 FCC Ruling — entitles Gulf Coast to judgment as a matter of law. Accordingly, we reverse the district court's grant of partial summary judgment to Mais and remand with instructions to enter final summary judgment for Gulf Coast.

This is a nice summary of what the court held -- some of the details of this lengthy opinion will come below.

Before the district court considered the question of class certification, the Defendants moved for summary judgment on the affirmative defense that the calls could not and did not violate the TCPA because Mais provided "prior express consent" to receive them when his wife completed in writing the Hospital admissions forms. See 47 U.S.C. § 227(b)(1)(A)(iii). The Defendants relied on a 2008 FCC Ruling, which concluded 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." 23 FCC Rcd. at 564. Defendants further argued that, because the Hospital had consent to use and disclose Mais's cell phone number under the Health Insurance Portability and Accountability Act (HIPAA), Pub. L. No. 104-191, 110 Stat. 1936 (1996), the TCPA prior express consent exception was satisfied. Florida United and Sheridan also separately argued that they could not be held vicariously liable for Gulf Coast's calls because § 227(b)(1)(A) of the TCPA only reaches those who "make any call" to a cell phone using automatic dialing or a recorded voice. Mais likewise moved for partial summary judgment, arguing that he had not given prior express consent for the calls because the 2008 FCC Ruling did not apply to medical debt and because his cell phone number had been given to the Hospital, not the creditor, Florida United.

All I can say it is creative to argue medical debt is not subject to the 2008 FCC Ruling.

The district court found that Mais, not the Defendants, was entitled to summary judgment on the prior express consent defense mounted by Gulf Coast, Florida United, and Sheridan. The court began by explaining that satisfaction of HIPAA did not automatically ensure compliance with the TCPA, "a separate statute that imposes separate requirements." Mais, 944 F. Supp. 2d at 1234. The district court also determined that Defendants could not prevail on the basis of the 2008 FCC Ruling. While acknowledging that the Hobbs Act gave the federal courts of appeals exclusive jurisdiction to review final FCC orders, the district court determined that it had jurisdiction to examine the FCC's interpretation of the TCPA because the central purpose of Mais's suit was to obtain damages for violations of the statute, not to collaterally attack or invalidate the 2008 FCC Ruling. The court concluded that the Federal Communication Commission's interpretation of "prior express consent" embodied in its 2008 rule was not entitled to any deference because it conflicted with the clear meaning of the TCPA. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843 n.9 (1984) ("The judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent."). According to the district court, implying consent from the provision of a cell phone number to a creditor impermissibly expanded the statutory exception to cover "prior express or implied consent." Mais, 944 F. Supp. 2d at 1239. Compare Black's Law Dictionary 346 (9th ed. 2004) (defining "express consent" as "[c]onsent that is clearly and unmistakably stated"), with id. (defining "implied consent" as "[c]onsent inferred from one's conduct rather than from one's direct expression"). Cut loose from any FCC rulemaking concerning the meaning of prior express consent, and thus interpreting the language found in the Act afresh, the district court concluded that listing Mais's cell phone number on the Hospital admissions documents alone did not evince prior express consent to receive autodialed or prerecorded calls. In the alternative, the district court also ruled that, even if the FCC's interpretation of the meaning of prior express consent found in the 2008 FCC Ruling was valid and binding, the rule would not apply under the facts of this case because it was designed to cover consumer and commercial contexts and did not reach medical settings. Moreover, the district court determined, the FCC's 2008 rulemaking would not apply here because Mais's wife gave his number only to the Hospital and not to the creditor, Florida United.

On the issue of the FCC, we won't include anymore on this. The Court found the FCC rules matter. We'll now turn to the consent issue as this is a more common issue in these cases. But first a bit of history on the regulations from the FCC.

In 2008, in response to a Petition for Expedited Clarification and Declaratory Ruling filed by ACA International, a trade organization of credit and collection companies,[3] the FCC after notice and comment issued a Declaratory Ruling "clarify[ing] 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." 2008 FCC Ruling, 23 FCC Rcd. at 559. Specifically, 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." Id. at 564. The FCC "emphasize[d] 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." Id. at 564-65. The Commission concluded that "the burden will be on the creditor to show it obtained the necessary prior express consent" because "creditors are in the best position to have records kept in the usual course of business showing such consent." Id. at 565. As in the 1992 FCC Order, the Commission found support for its interpretation of prior express consent from the legislative history of the TCPA, including the House Report, which stated that "[t]he restriction on calls to emergency lines, pagers, and the like does not apply when the called party has provided the telephone number of such a line to the caller for use in normal business communications." Id. at 564 (quoting H.R. Rep. No. 102-317, at 17).

In 2012, the FCC issued still another Report and Order that further interpreted the meaning of the prior express consent exception embodied in § 227(b)(1)(A) of the statute, though the Commission did not change the standard for debt collection calls made to cell phone numbers. See In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 (2012 FCC Order), 27 FCC Rcd. 1830. The 2012 FCC Order required written prior express consent for autodialed or prerecorded calls to wireless or residential numbers that deliver a telemarketing message. Id. at 1838. It "eliminate[d] the established business relationship exemption for prerecorded telemarketing calls to residential lines" created by the FCC in 1992. Id. at 1845. And the Commission added an exemption for "all prerecorded health care-related calls to residential lines that are subject to HIPAA." Id. at 1852.

The FCC is concerned about consent. In essence, consent is an affirmative defense that the defendant bears the burden of proving after the plaintiff shows auto dialed/computer calls were made to plaintiff's cell phone.

While the 2008 FCC Ruling listed the completion of "a credit application" as an example of the provision of a cell phone number to a creditor, the Commission did so illustratively, not exclusively. 23 FCC Rcd. at 564. Similarly, the fact that the FCC's interpretation often is invoked in the context of consumer or commercial creditors does not lessen its application to medical debt collection. See Mitchem v. Ill. Collection Serv., Inc., No. 09 C 7274, 2012 WL 170968, at *1-2 (N.D. Ill. Jan. 20, 2012) (unpublished); Moise v. Credit Control Servs., Inc., 950 F. Supp. 2d 1251, 1253 (S.D. Fla. 2011) ("Based on the plain language of the TCPA and the [2008] FCC order, it is clear that if Plaintiff gave his cell phone number directly to [a medical laboratory], that would constitute express consent."); Pollock v. Bay Area Credit Serv., LLC, No. 08-61101-CIV, 2009 WL 2475167, at *1 (S.D. Fla. Aug. 13, 2009) (unpublished) (applying the 2008 FCC Ruling to calls made by a defendant "attempting to collect a debt . . . that arose from personal medical care").

When it comes to expectations for receiving calls, we see no evidence that the FCC drew a meaningful distinction between retail purchasers who complete credit applications and medical patients who fill out admissions forms like the Hospital's. A patient filling out a form from a healthcare provider may very well expect to be contacted about his health and treatment. But if the form explicitly states that the provided information will be used for payment and billing, the patient has the same reason to expect collection calls as a retail consumer. Though Mais might prefer a different rule, the FCC in no way indicated that its 2008 order distinguishes medical debtors. Florida United, which sought payment for medical services performed for Mais, qualifies as creditor under the 2008 FCC Ruling.

The lesson here is the type of debt does not matter under the 2008 FCC Ruling -- credit card, auto, medical, etc. The Ruling, just like in most case law contexts, gives us concepts that are then adapted to a specific situation. The plaintiff made another argument that the court dealt with as follows:

Mais also suggests that the 2008 FCC Ruling does not affect his claim because he did not "provide" his number to "the creditor" — neither he nor his wife personally transferred his cell phone number to Florida United or its collection agent, Gulf Coast. After all, his wife submitted the admissions forms and the cell phone number to a representative of the Hospital, an entity separate from Florida United and Gulf Coast, and the 2008 FCC Ruling "emphasize[d] 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." 23 FCC Rcd. at 564-65 (emphasis added). Boiled down, Mois's argument turns on whether, under the FCC's interpretation of prior express consent, a called party "provides" his cell phone number to a creditor when (during the transaction creating the debt) he authorizes an intermediary to disclose his number to the creditor for debt collection.

This is interesting and it is not something that is explained in the 2008 Ruling. Notice how the court handles this:

The 2008 FCC Ruling does not offer an explicit answer to this question because it does not spell out in detail the meaning of "provide." Based on the regulatory and statutory context, however, we reject Mais's argument that the 2008 FCC Ruling only applies when a cell phone number is given directly to the creditor. Mais's narrow reading of the 2008 FCC Ruling would find prior express consent when a debtor personally delivered a form with his cell phone number to a creditor in connection with a debt, but not when the debtor filled out a nearly identical form that authorized another party to give the number to the creditor. Mais offers no functional distinction between these two scenarios, and we see no sign that the FCC thought a cell phone number could be "provided to the creditor" only through direct delivery. To the contrary, the 2008 FCC Ruling indicated that prior express consent existed when a cell phone subscriber "made the number available to the creditor regarding the debt." 23 FCC Rcd. at 567. Plainly, Mais's wife made his number available to Florida United by granting the Hospital permission to disclose it in connection with billing and payment.

In addition, the FCC recently ruled "that the TCPA does not prohibit a caller from obtaining consent through an intermediary." In re GroupMe, Inc./Skype Commc'ns S.A.R.L. Petition, 29 FCC Rcd. 3442, 3447 (2014). A provider of text messaging services asked the Commission to "clarify that for non-telemarketing voice calls or text messages to wireless numbers . . . the caller can rely on a representation from an intermediary that they have obtained the requisite consent from the consumer." Id. at 3444. The FCC after notice and comment issued a Declaratory Ruling that found "the TCPA is ambiguous as to how a consumer's consent to receive an autodialed or prerecorded non-emergency call should be obtained." Id. Exercising its interpretive discretion, the FCC explained that "allowing consent to be obtained and conveyed via intermediaries in this context facilitates these normal, expected, and desired business communications in a manner that preserves the intended protections of the TCPA." Id. at 3445. Of particular note here, the FCC said that, though the 2008 FCC Ruling "did not formally address the legal question of whether consent can be obtained and conveyed via an intermediary," the earlier order "did make clear that consent to be called at a number in conjunction with a transaction extends to a wide range of calls `regarding' that transaction, even in at least some cases where the calls were made by a third party." Id. at 3446. The FCC's recognition of "consent obtained and conveyed by an intermediary," id., strongly supports our conclusion that Mais's wife "provided" the cell phone number to the creditor through the Hospital.

Other FCC explications of the prior express consent exception also show that the appropriate analysis turns on whether the called party granted permission or authorization, not on whether the creditor received the number directly. See 2012 FCC Order, 27 FCC Rcd. at 1839 ("[R]equiring prior written consent will better protect consumer privacy because such consent requires conspicuous action by the consumer — providing permission in writing — to authorize autodialed or prerecorded telemarketing calls . . . ."); 1992 FCC Order, 7 FCC Rcd. at 8769 ("[P]ersons 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."). This conclusion is consistent with the legislative history: the House and Senate Reports explain that the TCPA imposes liability for calls made without the called party's "prior express invitation or permission." H.R. Rep. No. 102-317, at 2, 3, 13; S. Rep. No. 102-177, at 16 (1991). Thus, under the 2008 FCC Ruling a cell phone subscriber like Mais could provide his number to a creditor like Florida United — and grant prior express consent to receive autodialed or prerecorded calls — by affirmatively giving an intermediary like the Hospital permission to transfer the number to Florida United for use in billing.

This is a common sense approach. Sometimes we see companies try to make "consent" so broad that it loses all meaning. "Any number you have now or will in the future can be given to any company that we choose and you agree to never revoke consent."

Things like this are absurd. But in the Mais case the court found the "intermediary" was a reasonable business practice -- no evidence it was any company trying to get "too cute" to shield unrelated companies from TCPA liability.

Mais points out that the FCC concluded in its 2008 Ruling that "prior express consent provided to a particular creditor will not entitle that creditor (or third party collector) to call a consumer's wireless number on behalf of other creditors, including on behalf of affiliated entities." 23 FCC Rcd. at 565 n.38. Here, however, the Hospital did not call Mais on behalf of Florida United. Nor did the Hospital give Mais's number to a debt collector to make unauthorized calls on behalf of other creditors. Instead, with explicit permission from Mais's wife, the Hospital passed his cell phone number to Florida United, the creditor who provided radiology services to Mais during his hospitalization. Because Mais's wife specifically authorized that transfer of health information for billing purposes, "the wireless number was provided by the consumer to the creditor" in satisfaction of the prior express consent exception. Id. at 564.

Bottom line is consent can be passed to other companies if it is done in a reasonable way that is fully disclosed.

Also, while it is not expressly discussed in detail, the wife gave the husband's cell phone number when he presumably could not as he was admitted to the ER. No evidence he disapproved of this or revoked consent. This was not a spouse stealing an identity to get a cell phone, credit card, etc. This was one spouse taking another into an emergency room. It is unclear from Mais what the result would be if the wife, for example, for her own treatment listed her husband's cell phone number.

But at least in this situation, it was proper consent.

If you have questions about the TCPA and you live in Alabama, give us a call at 205-879-2447 or you can learn more about the TCPA on this blog or on our main consumer protection website.

November 19, 2014

TCPA Decision: Can You Revoke Consent For Calls To Your Cell Phone?

The TCPA is a hot legal issue as it can result in tens of thousands and even hundreds of thousands of dollars in damages for individual plaintiffs all related to computerized calls to cell phones. A big issue has been "Can you revoke consent to call your cell phone?"

The Eighth Circuit answered this "Yes" on September 26, 2014, in Brenner v. American Education Services (AES). Yes that is the AES that those with student loans often know too well....

The opinion is very short so we will include it all with our commentary below each quote.

Joshua Seth Brenner appeals the district court's adverse grant of summary judgment in his action against American Education Services (AES), brought pursuant to the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227. On de novo review, this court reverses and remands for further proceedings. See Butler v. Crittendon Cnty., Ark., 708 F.3d 1044, 1048-49 (8th Cir. 2013).

Brenner complained that AES violated the TCPA when it repeatedly called his cell phone number about his student loan debt, using an automatic telephone dialing system and prerecorded or artificial voice, without his consent, and continued to make such calls after he provided written notice to AES in July 2012, to stop calling him about his loan debt.

So in this opinion there is no dispute about whether an ATDS (automatic telephone dialing system) was used. Instead the issue centers on revoking consent.

The district court granted summary judgment to AES, finding that Brenner voluntarily provided his cell phone number to AES on numerous occasions, and expressly agreed to receive the type of calls made. This court agrees that Brenner gave express consent to receive calls from AES to his cell phone number by providing that number on multiple forbearance requests and he specifically authorized AES to use an automatic telephone dialing system to contact him at that number before the complained-of calls began. See Meyer v. Portfolio Recovery Assocs., LLC, 707 F.3d 1036, 1042 (9th Cir. 2012) (prior express consent is consent to call particular telephone number in connection with particular debt that is given before call in question is placed).

The timing of giving a cell phone number is still in dispute among courts -- the majority rule appears to be the number must be provided at the time of the transaction -- here the student loan application. This court, however, allows that numbers provided before the calls begin with specific authorization to use an auto dialer counts as prior express consent also.

The district court did not address Brenner's argument that he revoked his consent in July 2012. It is undisputed that AES continued to make calls to Brenner's cell phone after this date.

There have been some courts, primarily in the Western District of New York, that feel once consent has been given, it is either impossible or very difficult to take it away.

Thus, if Brenner effectively revoked his consent, summary judgment was not proper. While this court has not yet addressed the issue of revocation, two other circuit courts have concluded that prior consent to call one's cell phone may be revoked under the TCPA. See Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, 1255-56 (11th Cir. 2014); Gager v. Dell Fin. Servs., LLC, 727 F.3d 265, 270-72 (3d Cir. 2013).

To my knowledge NO federal appellate court has taken the odd (well actually absurd) position that consent cannot be revoked. In what other areas of the law can you NEVER revoke consent -- just not a well thought out position. So Brenner recognizes this obvious truth that consent can be revoked.

The grant of summary judgment for AES is vacated and the case is remanded to the district court to consider whether Brenner's evidence supporting his contention that he revoked consent was sufficient to preclude summary judgment for AES, and for further proceedings as appropriate.

It will be interesting to see what the district court (trial court) rules is sufficient evidence of revoking. Some courts hold verbal is sufficient and some say written is required. In Brenner it looks like he did revoke it in writing but this is an issue to keep an eye on.

Take away lesson is consent can be revoked. We recommend that it be done in writing, by certified mail, and that language similar to this be used:

"Don't ever call my cell phone number of ______________. If you think I ever gave consent for this number to be called, I'm revoking it now."

If you have questions about the TCPA and you live in Alabama, give us a call at 205-879-2447 or you can learn more about the TCPA on this blog or on our main consumer protection website.

November 17, 2014

Decision on TCPA: Vicarious Liability For Text Messages

The TCPA (Telephone Consumer Protection Act) prohibits many types of auto dialed/computer dialed calls to cell phones unless prior express permission was granted by the person called at the time of the financial transaction. Text messages are considered to be computerized calls under the TCPA. This is so important to consumers and businesses as the damages are $500 per call and this can actually increase to $1500 per call or text. Damages can be enormous.

There have been issues and arguments related to what liability is there when one company hires another company to actually make the calls or send the text messages.

One of the more recent opinions on this subject is from the Ninth Circuit Court of Appeals on September 19, 2014, in the case of Gomez v. Campbell-Ewald Company (link is to Google Scholar listing for this case).

It is a rather lengthy opinion so I'll only include the relevant parts in quotations and then offer my thoughts on it.

Plaintiff Jose Gomez appeals adverse summary judgment on personal and putative class claims brought pursuant to the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227(b)(1)(A)(iii) (2012). Gomez alleges that the Campbell-Ewald Company instructed or allowed a third-party vendor to send unsolicited text messages on behalf of the United States Navy, with whom Campbell-Ewald had a marketing contract. Because we conclude that Campbell-Ewald is not entitled to immunity, and because we find no alternate basis upon which to grant its motion for summary judgment, we vacate the judgment and remand to the district court.

It is common for more than one company to be involved in the "campaign" or "broadcast" of calls and texts. We won't focus on the immunity issue but if that is important in one of your cases there is a good discussion of this in the opinion.

The facts with respect to Gomez's personal claim are largely undisputed. On May 11, 2006, Gomez received an unsolicited text message stating:

Destined for something big? Do it in the Navy. Get a career. An education. And a chance to serve a greater cause. For a FREE Navy video call [number].
The message was the result of collaboration between the Navy and the Campbell-Ewald Company,[1] a marketing consultant hired by the Navy to develop and execute a multimedia recruiting campaign. The Navy and Campbell-Ewald agreed to "target" young adults aged 18 to 24, and to send messages only to cellular users that had consented to solicitation. The message itself was sent by Mindmatics, to whom the dialing had been outsourced. Mindmatics was responsible for generating a list of phone numbers that fit the stated conditions, and for physically transmitting the messages. Neither the Navy nor Mindmatics is party to this suit.

There is no explanation for why the Navy and Mindmatics are not parties and it is not important for our discussion.

In 2010, Gomez filed the present action against Campbell-Ewald, alleging a single violation of 47 U.S.C. § 227(b)(1)(A)(iii), which states:

It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States—
(A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice— ...
(iii) to any telephone number assigned to a paging service [or] cellular telephone service. ...
Gomez contends that he did not consent to receipt of the text message. He also notes that he was 40 years old at the time he received the message, well outside of the Navy's target market. It is undisputed that a text message constitutes a call for the purposes of this section. See Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 952 (9th Cir. 2009) ("[W]e hold that a text message is a `call' within the meaning of the TCPA.").

After the court denied the motion, Campbell-Ewald moved for summary judgment, seeking derivative immunity under Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940). In opposition to the summary judgment motion, Gomez presented evidence that the Navy intended the messages to be sent only to individuals who had consented or "opted in" to receive messages like the recruiting text. A Navy representative testified that Campbell-Ewald was not authorized to send texts to individuals who had not opted in. The district court ultimately granted the motion, holding that Campbell-Ewald is "immune from liability under the doctrine of derivative sovereign immunity." Gomez v. Campbell-Ewald Co., No. CV 10-2007 DMG CWX, 2013 WL 655237, at *6 (C.D. Cal. Feb. 22, 2013). Gomez filed a timely appeal, arguing that the Yearsley doctrine is inapplicable.

The motion to dismiss involved whether the claims were "moot" by an offer of judgment. Again we are skipping the immunity issues and going to the more applicable discussion of liability when someone else actually sent the texts or calls.


Campbell-Ewald nevertheless argues that it cannot be held liable for TCPA violations because it outsourced the dialing and did not actually make any calls on behalf of its client. See 47 U.S.C. § 227(b)(1)(A)(iii) (rendering it unlawful "to make any call" using an automated dialing system). Gomez, in fact, concedes that a third party transmitted the disputed messages. Even so, Campbell-Ewald's argument is not persuasive.

There have been different viewpoints on this issue and this decision gives us some practical guidelines.

Although Campbell-Ewald did not send any text messages, it might be vicariously liable for the messages sent by Mindmatics. The statute itself is silent as to vicarious liability. We therefore assume that Congress intended to incorporate "ordinary tort-related vicarious liability rules." Meyer v. Holley, 537 U.S. 280, 285 (2003). Accordingly, "[a]bsent a clear expression of Congressional intent to apply another standard, the Court must presume that Congress intended to apply the traditional standards of vicarious liability. ..." Thomas v. Taco Bell Corp., 879 F. Supp. 2d 1079, 1084 (C.D. Cal. 2012), aff'd, ___ F. App'x ___, 2014 WL 2959160 (9th Cir. July 2, 2014) (per curiam). Although we have never expressly reached this question, several of our district courts have already concluded that the TCPA imposes vicarious liability where an agency relationship, as defined by federal common law, is established between the defendant and a third-party caller.[5]

This interpretation is consistent with that of the statute's implementing agency, which has repeatedly acknowledged the existence of vicarious liability under the TCPA. The Federal Communications Commission is expressly imbued with authority to "prescribe regulations to implement the requirements" of the TCPA. 47 U.S.C. § 227(b)(2). As early as 1995, the FCC stated that "[c]alls placed by an agent of the telemarketer are treated as if the telemarketer itself placed the call." In re Rules and Regulations Implementing the TCPA of 1991, 10 FCC Rcd. 12391, 12397 (1995). More recently, the FCC has clarified that vicarious liability is imposed "under federal common law principles of agency for violations of either section 227(b) or section 227(c) that are committed by third-party telemarketers." In re Joint Petition Filed by Dish Network, LLC, 28 FCC Rcd. 6574, 6574 (2013). Because Congress has not spoken directly to this issue and because the FCC's interpretation was included in a fully adjudicated declaratory ruling, the interpretation must be afforded Chevron deference. Metrophones Telecomms., Inc. v. Global Crossing Telecomms, Inc., 423 F.3d 1056, 1065 (9th Cir. 2005) (citing Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 980-85 (2005)) (other citations omitted), aff'd, 550 U.S. 45 (2007); see also Chevron, U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 843 (1984) ("If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation." (footnote omitted)).

A pretty common sense approach and this is fairly well settled now. But the defendant had a clever argument -- turns out "too clever" but still give it credit for making this argument which you will see next.

Campbell-Ewald concedes that the FCC already recognizes vicarious liability in this context, but argues that vicarious liability only extends to the merchant whose goods or services are being promoted by the telemarketing campaign.

So it argues that as a "marketing" company not actually selling the goods or services, it cannot be responsible when it hires a company to do the actual calling or texting. The court did not buy this.

Yet the statutory language suggests otherwise, as § 227(b) simply imposes liability upon "any person"—not "any merchant." See Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 221 (2008) (interpreting the use of "any" as "allencompassing"); 47 C.F.R. § 64.1200 (interpreting the phrase "any person" to reach individuals and entities). And although the FCC's 2013 ruling may emphasize vicarious liability on the part of merchants, the FCC has never stated that vicarious liability is only applicable to these entities.[6] Indeed, such a construction would contradict "ordinary" rules of vicarious liability, Meyer, 537 U.S. at 285, which require courts to consider the interaction between the parties rather than their respective identities. See RESTATEMENT (THIRD) OF AGENCY (2006) §§ 2.01, 2.03, 4.01 (explaining that agency may be established by express authorization, implicit authorization, or ratification).

Given Campbell-Ewald's concession that a merchant can be held liable for outsourced telemarketing, it is unclear why a third-party marketing consultant shouldn't be subject to that same liability. As a matter of policy it seems more important to subject the consultant to the consequences of TCPA infraction. After all, a merchant presumably hires a consultant in part due to its expertise in marketing norms. It makes little sense to hold the merchant vicariously liable for a campaign he entrusts to an advertising professional, unless that professional is equally accountable for any resulting TCPA violation. In fact, Campbell-Ewald identifies no case in which a defendant was exempt from liability due to the outsourced transmission of the prohibited calls.

Moreover, our own precedent belies any argument that liability is not possible. In our seminal case regarding text messages and the TCPA, we allowed a case to proceed against an analogous marketing consultant who was not "responsible for the actual transmission of the text messages." See Satterfield, 569 F.3d at 951. In Satterfield, a publisher had instructed a marketing consultant to create a text message campaign advertising a new Stephen King novel. Id. at 949. The consultant in turn outsourced the recipient selection and message transmission to two other subcontractors. Id. A recipient sued both the publisher and the marketing consultant for alleged violations of the TCPA. Id. at 950. The district court entered summary judgment in favor of both defendants, holding that the cellular user had consented to receive advertisements when it signed its cellular service contract. Id. We ultimately reversed and remanded the case, holding (inter alia) that the cellular service agreement did not constitute "express consent" to receive the advertisement in dispute. Id. at 955. So although we did not explain the basis of the defendants' potential liability, we implicitly acknowledged the existence of that basis. The present case affords an opportunity to clarify that a defendant may be held vicariously liable for TCPA violations where the plaintiff establishes an agency relationship, as defined by federal common law, between the defendant and a third-party caller.

So what is the take home lesson from Gomez? That not only the company that actually makes the calls or sends the texts can be responsible, but also the companies that hire the actual callers can be liable as well.

From a defense standpoint, lawyers need to advise "merchants" and marketing companies that they cannot simply shield themselves by having someone else "do the deed" of making the calls.

And from the consumer standpoint where I live, we want to always look to suing not only the company that made the calls or sent the texts but find out who is behind that company. And then who is behind that one?

Defendants like to play "shell games" with this area of the law and we have to keep digging to find all of the parties that are responsible for what happened.

If you have questions about the TCPA and you live in Alabama, give us a call at 205-879-2447 or you can learn more about the TCPA on this blog or on our main consumer protection website.

September 20, 2014

Complete 24 minute video on your 5 options when sued by debt collector in Alabama

You can now watch the above video which gives you the complete overview and discussion of the 5 options you have when you are sued by any debt collector or debt buyer in Alabama including Cavalry, LVNV Funding, Midland Funding, Portfolio Recovery, Unifund, etc.

Even if you believe you know what you want to do, I suggest you go through the process of watching this video to make sure that you have thought about each of the five options.

Those options are:

1. File Bankruptcy
2. Fight the case on your own
3. Settle the case on your own
4. Hire a lawyer to fight the case for you
5. Hire a lawyer to settle the case for you

Let's chat about these briefly.

Bankruptcy is an extreme option we do not often recommend. When necessary, it works, but it "has a lot of side effects" -- credit damage, harms your ability to get financing in the future even outside your credit score, you can't file chapter 7 again for 8 years, etc.

The next two options are do it yourself options. You can fight the case on your own -- you'll save money and you'll need to spend time to make this work. Or you can settle the case on your own -- normally about 50% in a lumpsum or 100% paid over 2-3 years.

The final two options involve hiring a lawyer. We combine these as normally we give the collector a simple choice.

1. Let's fight the case and if we win we will look at suing the debt collector in federal court as we have done dozens and dozens of times.

OR

2. Let's settle the case where everybody walks away. Delete the credit reporting. No one is paid any money. The case is over.

If you have questions about your options when sued in Alabama, please feel free to get in touch with us by calling us at 205-879-2447 or contacting us through our website AlabamaConsumer.com.

John G. Watts
Watts & Herring, LLC
Birmingham, Alabama

ps -- click here if you want to read a more indepth article which also has the video.

August 20, 2014

Video: 5 options when sued by collector in Alabama -- Hire lawyer to settle the case

Hiring a lawyer to settle the case is a valid option. The objective here is to resolve the case and to get the best deal possible, including getting rid of any credit reporting by the debt collector who sued you.

By way of reminder, the five options you have when sued by a debt buyer (such as LVNV, Midland, Portfolio, etc) are:

1. Bankruptcy
2. Fight the case on your own
3. Settle the case on your own
4. Hire a lawyer to fight the case
5. Hire a lawyer to settle the case

Each option has advantages and disadvantages (particularly bankruptcy which we rarely recommend).

When looking at hiring a lawyer to settle the case, you need to know what amount will it cost you (if anything) to pay the collector and how much the lawyer fee will be. Also, what else will you receive in the deal? Will you get credit reporting deleted? Will a 1099 be issued for "debt forgiveness?"

The lawyer may also file an answer for you -- you need to verify exactly what you are hiring the lawyer to do for you and what will happen if the lawyer can't get the case settled.

We'll be glad to help you think through your options and figure out which option is best for you.

If you have questions about your options when sued in Alabama, please feel free to get in touch with us by calling us at 205-879-2447 or contacting us through our website AlabamaConsumer.com.

John G. Watts
Watts & Herring, LLC
Birmingham, Alabama

August 17, 2014

Video: 5 options when sued by collector in Alabama -- Hire lawyer to fight the case

Hiring a lawyer to fight the case is a valid option. The objective here is to win the case so you owe the debt buyer nothing and you may be entitled to sue the debt collector for filing a bogus suit against you.

By way of reminder, the five options you have when sued by a debt buyer (such as LVNV, Midland, Portfolio, etc) are:

1. Bankruptcy
2. Fight the case on your own
3. Settle the case on your own
4. Hire a lawyer to fight the case
5. Hire a lawyer to settle the case

Each option has advantages and disadvantages (particularly bankruptcy which we rarely recommend).

When looking at hiring a lawyer to fight the case, the biggest disadvantage is having to pay the lawyer fee. This fee can range from $1,000 in small claims case, $2,000-$4,000 in district court, and (based upon the amount sued on) several thousand to as much as ten thousand in circuit court. So you have to investigate to see if the advantages justify paying a lawyer fee.

The lawyer will file an answer for you and handle the case for you up to and including trial.

The advantages are you will save time (as you are spending money), you would expect to have a better chance of success with a lawyer who knows what he or she is doing, and you may be able to sue the debt collector/debt buyer for suing you and credit reporting on you.

So does it make sense for you to hire a lawyer?

It depends.

If you want absolute certainty, then you file bankruptcy or settle the case. But if you want to try to win the case then hiring a lawyer may be a very smart move as we know the rules of evidence and how to fight these guys as we have been specifically fighting debt collection lawsuits for many years and trying cases in state and federal court for almost two decades. There is more reward to go with the higher risk.

We'll be glad to help you think through your options and figure out which option is best for you.

If you have questions about your options when sued in Alabama, please feel free to get in touch with us by calling us at 205-879-2447 or contacting us through our website AlabamaConsumer.com.

John G. Watts
Watts & Herring, LLC
Birmingham, Alabama

August 13, 2014

Video: 5 options when sued by collector in Alabama -- Settle case on your own

Settling the lawsuit on your own (without hiring a lawyer) can often be a good option when you are sued by a debt collector in Alabama.

By way of reminder, the five options you have when sued by a debt buyer (such as LVNV, Midland, Portfolio, etc) are:

1. Bankruptcy
2. Fight the case on your own
3. Settle the case on your own
4. Hire a lawyer to fight the case
5. Hire a lawyer to settle the case

Each option has advantages and disadvantages (particularly bankruptcy which we rarely recommend).

When looking at settling the case on your own (also called being "pro se"), the main advantage is there is no lawyer fee. So you save money. And you control the case -- if you pay the money agreed to, the case is over.

The main disadvantage is you don't have a lawyer so you are on your own in negotiating with the debt collector and in signing the paperwork settling the case. You don't spend money but you will need to spend time to prepare yourself. Also, the account will normally stay on your credit report and you will likely get a 1099 for debt forgiveness the following January after settling the debt.

Normally you will be looking at paying about 50% of the amount sued for in a lump sum. Occasionally less and sometimes more but 50% is a good rule of thumb for a lump sum.

Or you can pay the whole amount over time -- usually 1-3 years.

We'll be glad to help you think through your options.

If you have questions about your options when sued in Alabama, please feel free to get in touch with us by calling us at 205-879-2447 or contacting us through our website AlabamaConsumer.com.

John G. Watts
Watts & Herring, LLC
Birmingham, Alabama

August 10, 2014

Video: What is the 5 year "look back" rule Alabama Medicaid uses for giving away assets?

If you have questions about qualifying for Alabama Medicaid or you are concerned about the five (5) year "look back" rule or the penalty period, then the video above can help you or you can read below.

Here's the basic gist.

When you apply for -- and qualify for -- Alabama Medicaid, then you must take a "box" or "folder" with all of your financial transactions for the last five years. Bank records, property transfers, etc.

Medicaid is looking for "gifts" -- that's where you received nothing back, or something less than the full fair market value back for whatever it is you gave or sold.

For example, if you sold your house worth $250,000 to your son for $100,000, then there would normally be a gift of $150,000.

If you gave away stock worth $50,000 to your daughter, then the gift is $50,000.

Medicaid then says "OK, you gave away assets during the last five years. Let's add them up, divide them by $5500 [amount Medicaid says the typical nursing home costs per month] and the answer is the number of months going forward that you must pay your own nursing home bill."

So for example if you gave away $55,000 worth of assets during the last five years, then the penalty is about 10 months that you must privately pay the nursing home bill.

The key is being smart about what to give away and when. And knowing WHEN to apply for Medicaid. Applying one month "too early" can cost a family hundreds of thousands of dollars.

Let us help you think through your options on what to transfer, when to transfer it, and when to apply for Alabama Medicaid.

If you live in Alabama or your loved one lives in Alabama, feel free to give us a call at 205-879-2447 or fill out our contact form at AlabamaElderLawyer.com and we will get back with you to help you understand your family’s options on using Medicaid to pay for long term care costs in a nursing home.

John G. Watts
Watts & Herring, LLC
Birmingham, Alabama

August 10, 2014

Video: 5 options when sued by collector in Alabama -- Fight case on your own

Fighting the lawsuit on your own (without hiring a lawyer) can often be a good option when you are sued by a debt collector in Alabama.

By way of reminder, the five options you have when sued by a debt buyer (such as LVNV, Midland, Portfolio, etc) are:

1. Bankruptcy
2. Fight the case on your own
3. Settle the case on your own
4. Hire a lawyer to fight the case
5. Hire a lawyer to settle the case

Each option has advantages and disadvantages (particularly bankruptcy which we rarely recommend).

When looking at fighting the case on your own (also called being "pro se"), the main advantage is there is no lawyer fee. So you save money.

The main disadvantage is you don't have a lawyer so you are on your own. You don't spend money but you will need to spend time to prepare yourself.

Typically if you have been sued in Circuit Court you don't want to choose this option as the level of complexity can be too much to handle on your own.

But if you are sued in District or Small Claims court, and you are willing to spend time instead of spending money, then this may be a good choice for you. We have lots of clients who handled their case on their own, won, and then came to us to sue the debt buyer in federal court for filing an illegal suit against the consumer.

We'll be glad to help you think through your options.

If you have questions about your options when sued in Alabama, please feel free to get in touch with us by calling us at 205-879-2447 or contacting us through our website AlabamaConsumer.com.

John G. Watts
Watts & Herring, LLC
Birmingham, Alabama

August 6, 2014

5 Options When Sued By A Debt Collector: File Bankruptcy Option

To review, your five options when sued include the option of bankruptcy to wipe the debt out.

You can:

1. File bankruptcy
2. Fight the case on your own without hiring a lawyer
3. Settle the case on your own without hiring a lawyer
4. Hire a lawyer to fight the case for you
5. Hire a lawyer to settle the case for you

Filing for bankruptcy is an extreme solution. When needed, it is extremely effective.

But when not needed -- it is way too much "overkill."

Use bankruptcy when no other options are available or will work for you. When your world is crashing down on you financially and you have no other good choice.

The advantage of bankruptcy is it will (in a chapter 7) wipe out the debt. You also will be done with the lawsuit.

The disadvantages include damage to your credit reporting, having to say "Yes I have filed bankruptcy" when asked on a loan application, and potentially losing your home, an inheritance that might come, etc. as the court gathers your assets and compares your assets to your liabilities.

When it makes sense, bankruptcy is the "do over" button that lets you restart your life.

But make sure you look at your other options before choosing bankruptcy.

If you have questions about bankruptcy or the other options you have when sued in Alabama, give us a call at 205-879-2447 and we can set up a time to chat by phone or person. Or you can contact us through our website AlabamaConsumer.com and we will get right back to you.

Best wishes as you evaluate your choices!

John Watts
Birmingham, Alabama

July 4, 2014

Video: Overview of 5 options when sued by a debt collector in Alabama

Discover the 5 options that you have when sued by a debt collector (such as Midland Funding, Portfolio Recovery, etc) in Alabama.

Here are the five options:

First, file bankruptcy.

Second, fight the lawsuit on your own.

Third, settle the case on your own.

Fourth, hire a lawyer to fight the case for you.

Finally, hire a lawyer to settle the case for you.

We'll have follow up videos and posts about each of these options but we hope this overview has been helpful.

Call us anytime at 205-879-2447 or contact us through our website and let us know how we can help you.

John Watts

June 2, 2014

My odd office experience with Bank of America's loss mitigation

As you probably know, my law firm represents many Alabama consumer who sue mortgage companies such as Bank of America. Well, today I received a letter from Bank of America.

I opened it up and it was addressed to me and said that BoA recognized that I represented my client and they wanted to send the letter to me.

I was puzzled as there was no "consumer" or "homeowner" name listed.

So who was this person I supposedly represented?

While I occasionally represent families outside of litigation when dealing with their mortgage company (primarily using the new RESPA rules to help them), most of my clients involving mortgages are in federal court.

I didn't recognize the street address.

This was all I had as the geniuses at BoA didn't give me a name.

So I had my secretary call the person and number on the letter to find out who our client was so we could respond to the letter if we needed to respond.

BoA said we had to give them the client name.

"We don't know the name as you didn't give it to us."

BoA says, "Well, we have to know the name to look up the person to see if we are allowed to talk to you."

My secretary says, "You sent us the letter so obviously you think we represent this person so tell us who it is."

BoA refused.

Then it wanted to know what kind of business we are in.

"A lawfirm."

Well, who is this "John Watts" guy?

"He's a partner in the firm."

Then they wanted to know what kind of law we practice. A long pause and then the representative says "We sent you the letter in error -- ignore it."

Quite reasonably my secretary says "Please send us a letter that we can ignore the previous one (it had deadlines in it)" which caused the BoA folks to go into a tizzy.

They thought this was outrageous.

I still don't know who the letter was for but this was simply a small illustration of the insanity of dealing with these mortgage companies. This is why we have finally changed our procedure and have agreed to represent clients before a lawsuit with their mortgage company -- to help them write letters, understand (if possible!) what the mortgage company means with its letters and requests for more documents, and then ultimately get the client a loan modification and see if the mortgage company has violated the law and needs to be sued in federal court.

So for whatever it is worth, these mortgage companies treat everyone bad and with a lack of any skill. Doesn't make you feel better but maybe at least you'll have some comfort in knowing it is not just you.

If you are in Alabama and having issues with Bank of America or any other mortgage company, we will be glad to chat with you about some options you may have -- there is normally hope to save your home if you act quickly. You can reach us at 205-879-2447 or you can fill out our contact us form on our website.