The U.S. Court of Appeals for the Sixth Circuit recently held that, under the federal Telephone Consumer Protection Act, a called party gives his “prior express consent” to be called on a cellular telephone number with an automatic telephone dialing system (ATDS) when that person gives his creditor his cellular telephone number in connection with a debt owed, even where the person provides his cellular telephone number after the transaction is originally entered into, so long as the number is provided in connection with the debt.

The Sixth Circuit further ruled that a person need only provide general consent to be called on a cellular telephone, and not consent to be called using an ATDS specifically.

A copy of the opinion is available at: Link to Opinion.

A borrower alleged he received well over 100 telephone calls placed to his cellular telephone from his creditor in connection with a mortgage loan. The borrower provided his home and work numbers on the application for the loan. Three years later, he cancelled his home phone and replaced it with a cellphone.  After his loan transferred to the creditor, he contacted the creditor to advise it that his primary phone number had changed.  The creditor then replaced the borrower’s obsolete home number with his cellphone number in its records.

After the borrower fell behind on his payments, the borrower and creditor worked out a loan modification. The borrower provided the creditor with his cellular telephone number. When the borrower continued to fail to pay his mortgage payments on time, the creditor called him to collect its payments. In July 2010, the borrower told creditor not to call him at work anymore, instructing creditor to call his cellphone instead. This left his cellphone number as the only number listed in his records with the creditor.

After defaulting on his mortgage, from May 2011 through January 2013, the borrower filled out at least 10 forms with the creditor to try to mitigate his losses. He provided his cellphone number on all these forms. He also provided express written consent for the creditor to call his cellphone (“I consent to being contacted concerning this request for mortgage assistance at any cellular or mobile telephone number I have provided[,] . . . includ[ing] . . . telephone calls to my cellular or mobile telephone.”).  To collect from the borrower, the creditor called the borrower on the number he provided: his cellphone. In all, creditor called the borrower an alleged 482 times from 2009 to 2013.

The borrower filed suit against creditor in federal court, alleging that creditor’s calls constituted either knowing or negligent violations of the TCPA.  After discovery, each side moved for summary judgment, but the district court denied each motion. It held that two genuine issues of material fact existed: (1) whether creditor used an “automatic telephone dialing system” (ATDS) to call the borrower; and (2) whether the borrower offered his cellphone number to creditor, or whether creditor “captured” the borrower’s number and called the borrower outside the scope of his consent.

Prior to trial, the borrower attempted to subpoena a creditor witness to testify at deposition.  The creditor succeeded in quashing the subpoena on the basis that it failed to comply with the Federal Rules of Civil Procedure.  The jury returned a general verdict for the creditor. The district court accepted the verdict and issued judgment.

On appeal, the borrower made three arguments: (1) the district court should have granted his summary-judgment motion because the record showed that the creditor used an ATDS to call his cellphone without his prior express consent; (2) the jury instruction on “prior express consent” was too broad; and (3) the district court should have compelled a creditor witness to testify at trial.

The Sixth Circuit first noted that the borrower’s post-trial appeal from the district court’s denial of his pretrial summary-judgment motion cannot succeed, because a losing party may not “appeal an order denying summary judgment after a full trial on the merits.” Ortiz v. Jordan, 562 U.S. 180, 184 (2011); accord Jarrett v. Epperly, 896 F.2d 1013, 1016 (6th Cir. 1990).

Accordingly, the Sixth Circuit held it lacked appellate jurisdiction over this portion of the borrower’s appeal.  The borrower lost his summary-judgment motion in August 2014 but did not appeal it until November 2014—after he lost at trial.  The Sixth Circuit held that the borrower’s failure to make a Rule 50(a) motion, renew that motion after the jury verdict under Rule 50(b), and then appeal the denial of the Rule 50(b) motion was fatal to his appeal on this issue. See Maxwell v. Dodd, 662 F.3d 418, 421 (6th Cir. 2011).

The Sixth Circuit next addressed whether the district court’s jury instructions on “prior express consent” were overly broad.  As you may recall, an appellate court’s role in reviewing these instructions is merely to ensure they “adequately informed the jury of the relevant considerations” of the law. United States v. Kuehne, 547 F.3d 667, 679 (6th Cir. 2008) (citations omitted).  A district court has discretion to refuse proposed instructions, so the Sixth Circuit reviewed this challenge “for abuse of discretion.”

As you may recall, Congress passed the TCPA in response to “[v]oluminous consumer complaints about abuses of telephone technology—for example, computerized calls dispatched to private homes.” Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 744 (2012). The TCPA accordingly “restricts certain kinds of telephonic and electronic” communications. Sandusky Wellness Ctr., LLC v. Medco Health Solutions, Inc., 788 F.3d 218, 221 (6th Cir. 2015). For example, the TCPA prohibits any person from making “any call” to someone’s cellphone “(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.” 47 U.S.C. § 227(b)(1)(A)(iii).

The court’s jury instruction on this issue read, in full: “‘Prior express consent’ means that before Defendant made a call to Plaintiff’s cellular telephone number, Plaintiff had given an invitation or permission to receive calls to that number. 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.” R 54 at 75.

The Sixth Circuit held that this language adequately reflects the legal definition of prior express consent promulgated by the Federal Communications Commission. It was taken directly from the FCC’s rulings—which shape the law in this area, see 47 U.S.C. § 227(b)(2). The instructions paraphrased the FCC’s original definition on “prior express consent”—that a party who gives an “invitation or permission to be called at [a certain] number” has given its express consent with respect to that number. In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 7 F.C.C. Rcd. 8752, 8769 (1992). And the instructions quote verbatim the FCC’s later clarification of that definition in the debtor–creditor context—that a creditor does not violate the TCPA when it calls a debtor who has “provided [his number] in connection with an existing debt.” In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23 F.C.C. Rcd. 559, 564 (2008).

The borrower argued that the instruction leaves out a small excerpt from these rulings— that “prior express consent is . . . granted only if the wireless number was provided . . . during the transaction that resulted in the debt owed.” According to the borrower, that would be in 2003 when the mortgage loan was made—before creditor obtained its interest in the mortgage and before the borrower even had a cellphone.

The Sixth Circuit stated the FCC never uses the words initial or original before “transaction.” It instead says that the debtor has given his consent when he gives his number “during the transaction” that involves the debt (i.e., “regarding the debt”). 23 F.C.C. Rcd. at 564–65, 567 (emphasis added). This language does not change the general definition of express consent; it instead “emphasize[s]” that creditors can call debtors only “to recover payment for obligations owed,” not on any topic whatsoever. See id. at 564, 565 n.36.  Thus, the Sixth Circuit noted, this rule ensures that a debtor who gives his number outside the context of the debt has not given his consent to be called regarding the debt. FCC’s Letter Brief, Re: Nigro v. Mercantile Adjustment Bureau, LLC, 2014 WL 3612689 (C.A.2), at *8–*9.

The Sixth Circuit acknowledged that the FCC has not explicitly addressed the issue, but that other courts have agreed with the Sixth Circuit’s position.  See Moore v. Firstsource Advantage, LLC, No. 07-CV-770, 2011 WL 4345703, at *10 (W.D.N.Y. Sept. 15, 2011); Mais v. Gulf Coast Collection Bureau, Inc., 768 F.3d 1110, 1122 (11th Cir. 2014).

‘Prior Express Consent’ Sufficient to Allow ATDS

The Sixth Circuit held that a debtor does not need to give his consent to be called using an ATDS specifically; his general consent to being called on a cellphone constitutes “prior express consent” sufficient to be called using an ATDS.

The FCC’s regulations for telemarketers now require a more specific type of consent—namely, that the called party consents, in writing, to being called by an auto-dialer. E.g., 47 C.F.R. 64.1200(f)(8). But these telemarketer regulations do not apply in the debtor–creditor context. 23 F.C.C. Rcd. at 565. In the debt collection context, once the debtor gives his consent to be called on his cellphone, the creditor can use automated calls to that number. See id. at 564.

Accordingly, the Sixth Circuit held the district court’s instructions adequately informed the jury of the law and did not confuse or mislead them.

Finally, the Sixth Circuit addressed the borrower’s argument that the district court erred in denying his request to compel the creditor’s representative to testify at trial.

The Sixth Circuit found borrower’s subpoena failed several aspects of Federal Rule of Civil Procedure 45, so the district court did not abuse its discretion in quashing it. Rule 45 requires, among other things, that the party serving it to tender certain fees, Fed. R. Civ. P. 45(b)(1), comply with geographical limitations, id. at 45(c), and allow a reasonable time to comply, id. at 45(d)(3)(A)(i). Borrower’s subpoena did none of these things. Therefore, court was thus within its discretion to quash it.

The Sixth Circuit also held that the district court was right to deny borrower’s unusual request— made after his subpoena failed—to take a “deposition” on new topics at trial because the Federal Rules of Civil Procedure do not allow for it.

The Sixth Circuit found that the district court also correctly rejected the borrower’s motion to compel. When all else failed—on the Friday before the Monday trial—the borrower moved the district court to compel the creditor to bring a witness to trial. The Sixth Circuit recognized there is no procedure for this request in the Rules.

Accordingly, the Sixth Circuit affirmed the district court’s rulings.

The concurring opinion agreed with the majority’s ruling to the extent that “a debtor does not need to give his consent to automated calls specifically” because the FCC regulations say as much.  The concurring opinion questioned whether the FCC correctly interpreted the TCPA when it promulgated its regulations.  Specifically, according to the concurrence, the notion that a debtor gives his prior express consent to receiving calls from a creditor using an ATDS or prerecorded voice simply by giving his cellphone number to the creditor appears contrary to both the plain language of the TCPA and the underlying legislative intent.   However, the concurrence noted that the borrower did not challenge the FCC regulation itself.