TCPA Decision: No need to “stay” case while waiting on FCC to rule on who is a “called party”


On November 3, 2014, one of our newer judges — Judge John H. England, III, in the Northern District of Alabama, issued a very well reasoned decision explaining why a lawsuit against Wells Fargo does not need to be “stayed” or “frozen” while the FCC considers how to interpret the Telephone Consumer Protection Act (TCPA).

The Plaintiff sued Wells Fargo claiming that Wells Fargo had auto dialed his cell phone. Wells did not dispute this but claims it was trying to reach someone else who used to have the cell phone number and gave permission for Wells to call it.

As an aside, this has been an area we have argued with defendants on for years. They tend to think once they had permission, they can call that number for all eternity. See if that works if you get permission to walk in someone’s house and then years later the house is sold. I don’t think that former permission of the former homeowner does you much good when you stroll in the new owner’s house!

Anyway, back to this case — here is the argument by Wells:

Wells Fargo now seeks to stay this action based on the doctrine of primary jurisdiction pending the resolution of two petitions recently submitted to the FCC for consideration. (Doc. 17). The first petition was filed by United Healthcare Services, Inc. on January 16, 2014 (“UHS Petition”) and asks the FCC to clarify the applicability of the TCPA as to calls “to wireless numbers for which valid prior express consent has been obtained but which, unbeknownst to the calling party, have subsequently been reassigned from one wireless subscriber to another.” (Doc. 17-1 at 1). The second petition, brought by ACA International, seeks formal rulemaking by the FCC (“ACA Petition”). (Doc. 17-2). The ACA requests the FCC, among other things, establish a “safe harbor for non-telemarketing calls when the debt collector had previously obtained appropriate consent and had no intent to call any person other than the person who had previously provided consent to be called.” (Doc. 17-2 at 15).

Judge England analyzes as follows:

The primary jurisdiction doctrine is concerned with protecting the administrative process from judicial interference. See Boyes v. Shell Oil Prods. Co., 199 F.3d 1260, 1265 (11th Cir. 2000) (citing United States v. W. Pac. R.R. Co., 352 U.S. 59, 63 (1956)). Primary jurisdiction “is a doctrine specifically applicable to claims properly cognizable in court that contain some issue within the special competence of an administrative agency. It requires the court to enable a `referral’ to the agency, staying further proceedings so as to give the parties reasonable opportunity to seek an administrative ruling.” Reiter v. Cooper, 507 U.S. 258, 268 (1993). “[T]he main justifications for the rule of primary jurisdiction are the expertise of the agency deferred to and the need for a uniform interpretation of a statute or regulation.” Boyes, 199 F.3d at 1265 (quoting Cnty. of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1310 (2d Cir. 1990)); see also W. Pac. R.R. Co., 352 U.S. at 64 (internal quotation marks omitted). Primary jurisdiction “is a discretionary tool, [it is] a flexible concept to integrate the regulatory functions of agencies into the judicial decision making process by having agencies pass in the first instance on technical questions of fact uniquely within the agency’s expertise and experience, or in cases where referral is necessary to secure uniformity and consistency in the regulation of business, such as issues requiring the exercise of administrative discretion.” Columbia Gas Transmission Corp. v. Allied Chemical Corp., 652 F.2d 502, 520 n.14 (5th Cir. 1981) (citations omitted).[2]

So, what should be done in this situation?

The primary factors a court considers when determining whether to stay an action based on primary jurisdiction grounds are (1) whether the specialized knowledge of the FCC is needed to answer the questions before the court and (2) whether referral is necessary for a uniform interpretation of the statute at issue. W. Pac. R.R. Co., 352 U.S. at 64. As to the first factor, the issues raised by the UHS and ACA Petitions do not implicate the FCC’s specialized expertise or fact-finding abilities. The “called party” issue is purely a matter of statutory construction (of a non-technical term), which courts are well-equipped to undertake, not a matter requiring administrative expertise. It is not a technical question or factual inquiry uniquely within the agency’s expertise. See e.g., Loggerhead Turtle v. County Council of Volusia Cnty., Fla., 148 F.3d 1231, 1259-60 (11th Cir. 1998) (discussing, in dicta, the question of whether artificial beachfront lighting “takes” sea turtles as being within the special competence of the U.S. Fish and Wildlife Service); Columbia Gas Transmission Corp., 652 F.2d at 520 n.14 (explaining the court’s determination regarding enforcement of a payback obligation for diversions prior to a certain date would be materially facilitated by FERC’s informed evaluation of a Representative’s enforcement caution and how the facts of the case fit within that caution).

The meaning of “called party” is pretty simple — who owned the phone number or used the phone that you made ring? Not sure why this is so “complicated” for defendants. Especially here in the Eleventh Circuit (Alabama, Florida and Georgia) as we have a decision on this:

The Eleventh Circuit answered this question in Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, 1251-52 (11th Cir. 2014), rejecting the argument the “intended recipient” is the “called party” for purpose of § 227 and explaining a “called party” means “the subscriber to the cell phone service.” Breslow v. Wells Fargo Bank, N.A., ___ F.3d ___, 2014 WL 2565984, *1 (11th Cir. June 9, 2014) (quoting id.). Likewise, while Wells Fargo submits the ACA Petition “asks the FCC to . . . establish a `safe harbor for non-telemarketing calls when the debt collector had previously obtained appropriate consent and had no intent to call any person other than the person who had previously provided consent to be called,'” (doc. 17-2 at 2), the Eleventh Circuit foreclosed such a defense in Osorio. 746 F.3d at 1242, 1253.

Therefore, the following is the death blow to the “stay” argument:

As to the second factor, the Eleventh Circuit has spoken directly to this issue,[3] providing direct guidance for a uniform interpretation of the statute throughout the Circuit. Wells Fargo has not provided, and the undersigned has not found, any other circuit court that has interpreted “called party” differently or that has created an exception to the rule. It appears the only other circuit court to have addressed the issue follows the same interpretation as the Eleventh Circuit. See Soppet v. Enhanced Recovery Co., LLC, 679 F.3d 637, 640 (7th Cir. 2012). Furthermore, the interpretation of the statutory term “called party” is not an issue requiring the exercise of administrative discretion. See Columbia Gas Transmission Corp., 652 F.2d at 520 n.14 (explaining referral is necessary to secure uniformity and consistency in the regulation of business when the issue requires the exercise of administration discretion).

So we have two appellate courts that have ruled on this and say the one who has the number now is the called party. Wells Fargo called the Plaintiff’s cell phone without permission. Pretty straightforward.

We’ll see what the FCC does and whether it matters and this is the point made by the court:

Wells Fargo contends the FCC is “likely to rule on the petitions shortly” because it expects “concrete movement on both [petitions] . . . within the next six months,” (doc. 27 at 1 (citing doc. 20 at ¶ 11)). Although Wells Fargo expects the FCC to “move on the petition,” there is no indication the FCC will make any kind of ruling in the near future or at all. If the FCC does issue a ruling providing a different interpretation of “called party” or creating an exception applicable to this case, the court will address whether that ruling has retroactive application and what level of deference is due. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 476 U.S. 837 (1984) (discussing the appropriate level of deference); Heimmermann v. First Union Mort. Corp., 305 F.3d 1257, 1260 (11th Cir. 2002) (discussing when retroactivity applies to agency interpretation and rules).

Bottom line is in the Eleventh (and Seventh) Circuits at a minimum this issue has been resolved in favor of the consumer by applying the plain language of the rule — you make a telephone ring with an autodialer then make sure you have permission from the owner of that phone.

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.

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