California court vindicates HCI (once again) as not covered by TCPA, but finds 70 calls over four months potentially harassing

A recent California decision touched upon two recurring sources of lawsuits against debt collectors: whether calls are subject to the Telephone Consumer Protection Act and whether the sheer number of calls can constitute harassment barred by debt collection laws. The Court gave a mixed result, ruling that the debt collector’s telephony system was not subject to the TCPA, but finding that 70 calls could be found to be harassing. A copy of the Court’s opinion is available here.

Plaintiff Michelle Ammons sued Diversified Adjustment Service (“DAS”), contending that the collector violated the TCPA, the Fair Debt Collection Practices Act, and the California Rosenthal Fair Debt Collection Practices Act (“Rosenthal Act”), and that DAS’s conduct constituted intrusion upon seclusion. According to Ammons, DAS called her cellular telephone approximately 70 times between February and May 2018 in an attempt to collect on a delinquent account. Ammons alleged that DAS contacted her up to five times per day and that the collection calls exacerbated her existing stress. Of the calls she received, Ammons answered five. She twice told DAS to stop calling and once told its agents that she was experiencing financial difficulties. She sought statutory and actual damages, as well as punitive damages.

DAS moved for summary judgment on all of Ammons’s claims, contending that its telephony did not constitute an ATDS and that its collection activities did not show intent to harass or annoy. With regard to its TCPA argument, DAS argued that its LiveVox HCI system is not an ATDS because it requires a human to initiate each call and is incapable of automated calling. Ammons countered that the system is an ATDS because it can store a list of numbers to be called. The Court sided with DAS, finding that the system “goes far beyond merely triggering a system to run automatically. It requires human interaction to initiate each call.” The LiveVox HCI system has been held repeatedly by different courts not to be an ATDS, as reported here.

DAS did not fare as well on its debt collection claims, however, with the Court concluding that it was not entitled to summary judgment. The Court noted that DAS never threatened Ammons or used abusive language and, on the days when DAS spoke with Ammons, it did not place any further calls on the same day. However, the Court found that a reasonable juror could conclude that the volume and pattern of calls indicated an intent to harass, abuse, or annoy or, alternatively, could constitute unfair or unconscionable conduct, precluding summary judgment on both the FDCPA and Rosenthal Act claims. This decision joins many other courts which have applied the general concept of debt collection harassment to call frequencies, both in terms of sheer number of calls and the number of calls in a given day, with mixed results. The Consumer Financial Protection Bureau’s pending debt collection rule would provide a bright-line rule capping calls to seven calls in a seven day period, and one conversation in a seven day period, as discussed here.

The Court, however, granted DAS’s motion for summary judgment as to Ammons’s claim for intrusion upon seclusion and punitive damages. Though much of the same evidence was at issue in the intrusion upon seclusion claim as the debt collection claims, the Court noted that DAS agents were “objectively professional,” that they did not make threats or use abusive language, and that the calls were for the purpose of collecting a debt. This evidence demonstrated “no material dispute of fact regarding the content of the conversations,” and the calls alone were insufficient to support Ammons’s claim for intrusion upon seclusion. The Court further found that Ammons offered no evidence that DAS acted “despicably” or otherwise intentionally misrepresented any material fact with intent to deprive her of property or to cause her injury.