A recent decision of the U.S. District Court for the Northern District of Illinois holds that someone who receives prerecorded debt collection calls to his or her cellular phone has standing to assert a claim under the Telephone Consumer Protection Act (TCPA), even if not the person the debt collector intended to call.
The TCPA prohibits non-emergency prerecorded calls to a cellular telephone unless the call is “made with the prior express consent of the called party.” In Tang v. William W. Siegel & Associates , decided on June 14, 2011, the district court rejected the debt collection firm’s argument that the plaintiff did not have standing because the plaintiff was not the “called party.”
The court found that because the term “called party” is used only in the exception to the statutory prohibition, the term does not define who may sue under the TCPA. Furthermore, the court found, the plaintiff was such a “called party” because the collection firm intended to call the plaintiff’s cellular phone number and the plaintiff was the regular user and carrier of the phone.
The court also refused to dismiss the plaintiff’s claim that the debt collection firm had violated the Fair Debt Collection Practices Act (FDCPA) because its voice message did not state the caller’s identity or that the caller was attempting to collect a debt.
A separate provision of the TCPA prohibits non-emergency prerecorded calls to a residential telephone line without the called party’s consent. However, that prohibition, unlike the cellular phone prohibition at issue in Tang, is subject to exemptions under orders or rules of the Federal Communications Commission (FCC).
The FCC has taken the position that one such exemption for calls made for a commercial purpose other than an unsolicited advertisement or a telephone solicitation covers debt collection calls. Several cases have relied on that exemption, as well as another exemption for calls made to a person with whom the caller has an established business relationship, to hold that even auto-dialed debt collection calls made to an individual who did not owe the debts at issue do not violate the TCPA. (Earlier legal alerts have summarized such decisions by the U.S. Court of Appeals for the 11th Circuit and the U.S. District Court for the Western District of New York .)
We continue to see an avalanche of class actions against companies alleging TCPA violations. In part, this is because penalties are draconian. Violations can yield damages equal to a minimum of the greater of $500 or actual damages, triple damages for willful violations, and unlimited class action liability. (Click here to read an earlier legal alert on the U.S. Supreme Court’s grant of certiorari in a case where the Ninth Circuit held that a plaintiff has standing under Article III of the U.S. Constitution to sue for an alleged violation of the Real Estate Settlement Procedures Act that caused no actual injury. The viability of TCPA “gotcha” litigation seeking only statutory damages might be undermined if the Supreme Court reverses the Ninth Circuit.)