This updates our report last summer on a Federal Communications Commission (FCC) letter brief filed at the invitation of the U.S. Court of Appeals for the Second Circuit in Nigro v. Mercantile Adjustment Bureau, which observed the FCC taking a noticeably less generous view of its then-recent declaratory rulings on whether consumer provision of a cell number is deemed consent to autodial it under the Telephone Consumer Protection Act (TCPA). We noted at that time that, “It would be a shame if, in the FCC’s view, calls in the course of ‘normal, expected and desired business communications’ are permissible only if no one objects after-the-fact.” The Second Circuit has now issued an opinion adopting the view in the FCC’s letter brief, holding that because Nigro did not provide his phone number directly to the creditor in the context of the debt incurred (in respect to which Mercantile called), the TCPA prohibited the calls.

To recap, when Nigro contacted his recently deceased mother-in-law’s electric utility to stop service, he gave them a cell number, which Mercantile later called using an automatic dialing system to collect a remaining balance on the mother-in-law’s account. Nigro sued on grounds the calls violated the TCPA’s ban on autodialed and/or prerecorded calls to cells without prior express consent. The trial court dismissed based on FCC guidance from 1992 imputing express consent based on a person’s knowing release of his cell number to a company, and from 2008 deeming prior express consent to exist for autodialed/prerecorded debt collection calls where debtors give cell numbers to creditors during transactions giving rise to debt. The FCC had itself relied on this prior guidance, not long before its Nigro letter brief, to issue rulings in GroupMe and Cargo Airline that included broad, business-friendly interpretations of the TCPA, including that “Congress did not expect the TCPA to be a barrier to normal, expected, and desired business communications.”

The FCC’s letter brief construed the 2008 debt collection ruling and 1992 precedent narrowly, in something of a break from its GroupMe and Cargo Airline decisions, opining that as the utility’s customer was the mother-in-law, not Nigro, he did not give the company his cell number during the transaction leading to the unpaid balance on which Mercantile called to collect. The Second Circuit’s decision reversing the trial court’s dismissal of the case mirrors the reasoning in the FCC’s letter brief, and concludes with the observation that the FCC “agrees” with the appellate court’s view.

The court rejected Mercantile’s argument – despite finding “some support” for it in FCC rulings – that Nigro voluntarily gave his cell number to the utility in connection with his mother-in-law’s account, did not expressly limit the purposes for which the number could be used, and thus consented to automated debt-collection calls. Rather, the court held, Nigro did not provide his number “during the transaction that resulted in the debt owed,” but only “long after the debt was incurred and was not in any way responsible for – or even fully aware of – the debt,” and was in that respect not even the “consumer,” but a “third party.” The court even used the fact that the automated calls recited, as required of debt collection, that the called party should disconnect if someone other than the mother-in-law had been reached.

As we noted previously, the leeway the FCC has recently provided in such matters as its debt-collection, GroupMe and Cargo Airline rules is of little value if it is available only if no one objects after-the-fact, which offers an implausible foundation for compliance efforts. With a significant number of TCPA-related declaratory-ruling requests pending before the FCC, and an ongoing landslide of expensive TCPA class-action and other litigation continue to rage, the FCC’s next steps in this area stand to be critical.