In this week’s Alabama Law Weekly Update, we review one opinion from the United States Court of Appeals for the Eleventh Circuit dealing with the definition of the term “called party” under the Telephone Consumer Protection Act (TCPA), and one from the Supreme Court of Alabama dealing with the Circuit Court’s lack of authority to appropriate escheated funds.

Breslow v. Wells Fargo Bank, N.A., _____ Fd.3d _____, 2014 WL 2523091 (C.A.11 (Fla.)) (holding that the term “called party” under the Telephone Consumer Protection Act (TCPA) refers to the cell phone subscriber or party who answers the cell phone, and not the intended recipient).

The Telephone Consumer Protection Act (TCPA) of 1991 made it unlawful to call a cell phone using an automatic telephone dialing system without the express consent of the “called party.”  The issue arose in this case when Wells Fargo made several calls using an automatic telephone dialing system to a cell phone number.  Lynn Breslow was the account holder for the cell phone number, but the primary user of the phone was her minor child, “R.B.” neither of whom consented to the use of the automatic dialing system by Wells Fargo.  Breslow filed suit alleging that Wells Fargo violated the TCPA when it used an automatic telephone dialing system to contact the number belonging to her minor child without express consent of either her or her minor child.  Wells Fargo stated that it had previously contacted the number used by R.B. to collect a debt from a former customer who had consented to the use of the automatic telephone dialing system.  Wells Fargo argued that the “called party” was not Breslow or her minor child, but instead was the intended recipient of the cell phone call.  The issue became the definition of “called party” for the purposes of §227.

The District Court determined that the “called party” was not the former customer, whom Wells Fargo was attempting to contact, but the Plaintiffs.  The District Court then granted partial summary judgment in plaintiff’s favor which Wells Fargo appealed.  In analyzing the meaning of the term “called party,” the Court first looked at the plain meaning of the term but discovered that there were multiple reasonable interpretations such as the cell phone subscriber, user of the cell phone, recipient of the phone call, or the intended recipient of the phone call.  Next, the Court looked at the broader context of §227 to determine if it offered any clarity, but the Court found that the term was found seven times throughout the statute and was used in seemingly different ways.  The Court found that when looking beyond the instances where the term appears in the statute, the private right of action provision of the statute lends support to the meaning of the term not being the intended recipient of the call.  The Court then analyzed the legislative history of the statute but also found it used in different ways.  However in the Senate Report, it appears that the term “called party” is meant to refer to the person who answers the phone, but despite this inkling of clarity, no definitive definition was found.  The only other court which has addressed this issue was the Seventh Circuit which found that “called party” referred to the person subscribing to the number which was called at the time the called was made.  Based on this decision and the legislative history of the statute, the Court concluded that the “called party” referred to the person who answered the phone or subscribed to the number, and, therefore, Wells Fargo had violated the Telephone Consumer Protection Act (TCPA).

State of Alabama et al. v. Estate of Frances Ann Yarbrough, deceased, et al., No. 1130114 (Ala. June 6, 2014) (holding that the Circuit Court exceeded its authority in attempting to appropriate escheated funds to a specific state agency as that power rests solely with the legislature).

Mrs. Frances Ann Yarbrough died intestate without any heirs to receive her assets.  As a result, her assets escheated to the State of Alabama.  The Circuit Court originally issued an order on March 19, 2012 requiring the Estate to pay the expenses to the State of Alabama which also ordered the State to pay the funds to the St. Clair County’s Circuit Clerk’s office.  The Assistant Attorney General then contacted the Estate’s counsel to receive assistance in seeking a modification to the March 19th order due to the fact that the State Constitution requires that the funds be used in furtherance of education.  The Estate then moved the Court to alter, amend, or vacate its March 19th order and direct the State to pay the funds to the Pell City Board of Education and the St. Clair County Board of Education.  The court granted this motion and issued an amended order on May 22, 2012, allocating the fund to the two boards of education.

The State objected, via letter, to the Court’s order and the Court treated the letter as a motion to alter, amend, or vacate and filed it with the Circuit Clerk.  The State’s objection was set for a hearing, and the Court then denied the relief requested by the State when the State did not appear.  The State appealed.  The Supreme Court dismissed the State’s appeal without prejudice, stating, however, that the State could intervene in the underlying action and that the State could timely appear after the St. Clair Circuit Court issues an order granting the State’s motion to intervene. However, the St. Clair Circuit Court issued an order denying the State’s motion to intervene because the Court determined that they had not “timely” sought intervention.

The Supreme Court once again took up the matter on the State’s appeal after the Circuit Court’s denial.  The State argued that the Circuit Court’s order violated the Supreme Court order which allowed the State to intervene in the matter.  The State argued that the Circuit Court was without discretion to deny the State’s motion to intervene in the matter, but the Estate argued that the order was not a mandate and just required the Circuit Court to consider such a motion if it was filed by the State.  The Supreme Court agreed with the State because the order stated that the appellants may make a timely appeal “after the St. Clair Circuit Court issues an order granting the appellants’ motion to intervene in the underlying action.”  The Supreme Court found that the previous order issued by the Supreme Court did not allow the Circuit Court discretion to deny the State’s motion to intervene in the matter.

The Supreme Court then also addressed the merits of the underlying action.  The State argued the circuit court’s May 22nd order, which allocated the funds to the Pell City Board of Education and the St. Clair County Board of Education, violated the separation-of-powers doctrine.  There was no doubt that the funds must be applied to further education but because the Circuit Court directly allocated the funds to certain State agencies, the Alabama Supreme Court stated that the order violated the separation-of-powers.  The Constitution states that “no order of a state court, which requires disbursement of state funds, shall be binding on the state or any state official until the order has been approved by a simple majority of both houses.”  The Court stated that the power to designate the funds to a specific State agency rests solely with the legislature, and since this order had not been approved by a majority of both houses it usurped the Legislatures power and must be overturned.

The Estate then argued that since the assistant attorney general approved the plan of the estate’s counsel to ask the Circuit Court to amend the motion and order the funds be distributed to the St. Clair County and Pell City Boards of Education, the State effectively waived the application of the separation-of-powers doctrine in this case.  The Estate did not cite any authority to support this position, so the Court did not consider this argument.  The Court did state, however, that the separation-of-powers doctrine is not an affirmative defense that can be waived but a command.  The Alabama Supreme Court reversed the Circuit Court’s order which denied the State’s motion to intervene, and then vacated the Circuit Court’s May 22nd order which purported to order the disbursement of the funds because the Circuit Court was without authority to do this based on the separation-of-powers doctrine.