District Court (Fla.) Refuses to Follow FCC’s TCPA Rulings on “Prior Express Consent” that Would Have Helped the Defendant

This one’s got it all, TCPA fans.   In Mais v. Gulf Coast Collection Bureau, Inc., — F.Supp.2d —-, 2013 WL 1899616 (S.D.Fla. 2013), Judge Scola decided not to follow any of the FCC regulations on the TCPA that otherwise apparently would have barred Plaintiff’s TCPA claims. The facts were as follows:

 In 2009, Plaintiff Mark Mais went to the emergency room at Westside Regional Hospital (the “Hospital” or “Westside”) in Broward County, Florida to obtain treatment. Because Plaintiff was ill, his wife, Laura Mais, interacted with the Hospital admissions staff on his behalf. During the admissions process, Plaintiff’s wife provided Plaintiff’s cellular telephone number to the Hospital’s admissions representative, although the number was identified as a residential line. Plaintiff’s wife also signed the admissions documents on Plaintiff’s behalf, including a form entitled “Conditions of Admission.” ¶ . . . McKesson, also known as Per–Se Technologies, was the billing company used by Florida United at the time Plaintiff received care. McKesson, as Florida United’s agent, was permitted to access demographic information from the Hospital and to send out bills on its behalf. Plaintiff never provided his number to Florida United, the party to whom the debt was owed. Instead, McKesson, Florida United’s billing vendor, electronically retrieved Plaintiff’s phone number and other information from the Hospital. Thereafter, Plaintiff was billed $49.03 for the treatment he received from Florida United, but failed to pay the debt. Consequently, the account was forwarded to Gulf Coast Collection Bureau, Inc. (“Gulf Coast”) for collection pursuant to a written agreement between Sheridan, as Florida United’s parent, and Gulf Coast.  ¶  Gulf Coast is a debt collector that uses a predictive dialer to dial telephone numbers through automated technology without human involvement. Using its predictive dialer, Gulf Coast placed calls to the Plaintiff and other putative class members in an effort to collect medical debts owed to Florida United. With respect to Plaintiff’s $49.03 debt, Gulf Coast attempted between 15 and 30 debt collection calls to Plaintiff’s cell phone and left four messages relating to the debt, allegedly in violation of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C § 227(b)(1)(A)(iii). See First Am. Compl. ¶ 24. ¶  Gulf Coast, Florida United, and Sheridan (collectively, the “Defendants”) move for summary judgment, arguing that Plaintiff provided “prior express consent” to be called and, therefore, they are not liable for violating the TCPA, section 227(b)(1)(A)(iii). Florida United and Sheridan also argue that they cannot be held vicariously liable for Gulf Coast’s calls, even assuming that Gulf Coast violated the statute. Plaintiff moves for partial summary judgment, advancing arguments that largely mirror the Defendants’ contentions.

Judge Scola found the FCC’s ruling on prior express consent to be inconsistent with the TCPA.

 Defendants argue that this [the FCC’s – Ed.] interpretation of “prior express consent” defeats Plaintiff’s claims because Plaintiff’s wife, acting on his behalf, provided his phone number to the Hospital at the time of admission. They also point out that his wife signed the Conditions of Admission form acknowledging receipt of the Notice of Privacy Practices, which indicated that Plaintiff’s personal information could be disclosed and used for, among other things, payment purposes. Defendants maintain that their actions in using and disclosing Plaintiff’s information, including his cell phone number, were fully consistent with the Health Insurance Portability and Accountability Act (“HIPAA”). According to Defendants, because they had consent to use and disclose Plaintiff’s phone number under HIPAA, they also had consent to call him under the TCPA. Plaintiff disagrees, arguing that the 2008 FCC Ruling spoke to consumer credit transactions and other commercial transactions, but not to transactions involving the provision of medical care. He further contends that even if generally applicable to transactions involving medical treatment, the 2008 FCC Ruling does not defeat his claims because his wife provided his number to the Hospital, not to Florida United, which is the actual creditor. Plaintiff also argues that both HIPAA and the TCPA must be complied with and that consent to use and disclose personal information under HIPAA does not, ipso facto, equate to consent under the TCPA. ¶  While the parties spend many pages arguing about whether Defendants had consent under HIPAA to use and disclosure Plaintiff’s personal information, including his cell phone number, the Court finds that issue largely irrelevant. . . .The issue in this case is whether Defendants complied with the TCPA, the only statute under which Plaintiff has sued. Even if Defendants fully complied with HIPAA and had consent to use and disclose his cell phone number for payment purposes, it does not follow that they automatically, and without more, had “prior express consent” to call that number for debt collection purposes under the TCPA. The TCPA is a separate statute that imposes separate requirements. If Defendants had consent to use and disclose Plaintiff’s phone number under HIPAA, then they were free to use and disclose it in any manner that does not violate the TCPA. For example, they could call his cell phone without using an automatic telephone dialing system or artificial prerecorded voice in order to collect the debt. But they were not free to just ignore the TCPA’s separate strictures merely because they had consent under HIPAA. ¶  The Court also rejects the suggestion that Plaintiff expressly consented to be called merely because his wife provided his phone number to the Hospital at the time of admission. This argument is based on the 2008 FCC Ruling, which found that “the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt.” See 2008 FCC Ruling at 564. Gulf Coast contends that this Court is bound by the 2008 FCC Ruling and without the authority or jurisdiction to review it for consistency with the statute. Some district courts, in addressing claims under the TCPA, have held that they are bound by the 2008 FCC Ruling because the Hobbs Act vests the federal courts of appeals with exclusive jurisdiction to pass on the validity of the FCC’s final orders.

Judge Scola rejected the FCC’s interpretation of the TCPA, finding the Hobbs Act to be no impediment to doings so and find that the FCC’s interpretation of the TCPA was inconsistent with the plain language of the TCPA.

The 2008 FCC Ruling says that “the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt.” See 2008 FCC Ruling at 564–65. It should be clear from the above definitions, however, that the FCC is not talking about “express consent,” but is instead engrafting into the statute an additional exception for “implied consent”—one that Congress did not include. Although it may be reasonable to presume that an individual, in providing a cell phone number on a credit application, consents to be called at that number by the creditor, such consent is “implied” through the individual’s conduct—that is, his act of writing down his number on the application. He has not directly, clearly, and unmistakably stated that the creditor may call him, and so he has not given “express consent.” The FCC’s construction is inconsistent with the statute’s plain language because it impermissibly amends the TCPA to provide an exception for “prior express or implied consent.” Congress could have written the statute that way, but it didn’t. And because it didn’t, the FCC’s contrary construction is not entitled to deference. ¶  Defendants’ consent argument upon which they seek summary judgment is based on the 2008 FCC Ruling. And because Defendants’ argument, like the 2008 FCC Ruling, is inconsistent with the statute’s plain language, the Court rejects it. They contend that Plaintiff consented to be called by Gulf Coast on his cell phone solely because his wife provided that number to the Hospital admissions clerk. In other words, Defendants ask the Court to imply consent from Plaintiff’s wife’s conduct. They do not argue that Plaintiff, or his wife, expressly told the Hospital that it, or any of its agents or affiliates, could call Plaintiff on his cell phone using an automatic telephone dialing system or artificial prerecorded voice for debt collection or payment purposes. And nowhere in the Conditions of Admission form or Notice of Privacy Practices does it expressly state that Plaintiff agreed to such calls. The TCPA plainly requires such “prior express consent” before a party may be called; mere “implied consent” will not do.

Then, Judge Scola said that, if the Judge’s argument on that point didn’t work, then he’d just hold that the FCC’s interpretation did not apply to medical debts, but only to credit transactions.

Alternatively, the Court finds that the 2008 FCC Ruling does not apply to the medical care setting, at least under the facts of this case. The FCC opined on consent in the context of consumer credit transactions, when a cell phone number is provided to a creditor “as part of a credit application,” for example. See 2008 FCC Ruling at 564. There is no indication that the FCC intended its ruling to apply to medical care transactions. Significantly, the cases applying the 2008 FCC Ruling principally involve the provision of a cell phone number on a credit application or in the course of obtaining retail items or things like cable service. . . . ¶  In the context of retail purchases, consumer credit transactions, and the like, a debtor might reasonably expect a creditor to call the cell phone number he provided at the time of the debt-creating transaction, if he fails to pay his bill. But provision of a phone number to a medical care provider appears to be of a different character. When a person gives his number to a doctor or hospital, he would expect that number to be used to inform him of issues relating to his health and treatment, first and foremost. Under relevant case law and the FCC’s order, the burden to establish consent under the TCPA is on the Defendants and they must show that Plaintiff in fact gave “prior express consent” to be called —something that they cannot do merely by pointing out that Plaintiff’s wife gave the Hospital his cell phone number at the time of admission and that she received the Notice of Privacy Practices and like forms. There could be many reasons that a person would give his phone number to a healthcare provider and most of them likely relate to treatment, care, and insurance. To receive automated debt collection calls is not necessarily or obviously one of the reasons a person would do so. Accordingly, “prior express consent” cannot be readily inferred in this context.

Finally, Judge Scola said that if readers rejected his previous two premises, then he’d just hold that the consent was given to the Hospital, not to its debt collectors – the latter of whom could not rely on the consent given to the Hospital.

Even assuming the 2008 FCC Ruling does apply in this context, the Court alternatively finds that Defendants have failed to show Plaintiff consented to be called by the relevant creditor. Plaintiff’s wife provided his phone number to the admissions clerk when Plaintiff was admitted to the Hospital. Plaintiff was then treated by Florida United, the creditor at issue in this case. McKesson billed Plaintiff for the services provided by Florida United, and Plaintiff failed to pay the bill. The account was thereafter forwarded to Gulf Coast for collection. The 2008 FCC Ruling says that “prior express consent is deemed to be granted only if the wireless number was provided by the consumer to the creditor, and that such number was provided during the transaction that resulted in the debt owed.” See 2008 FCC Ruling at 564–65 (emphasis supplied).  ¶  Here, Plaintiff’s wife provided his phone number to the Hospital, not to Florida United, which is the creditor in this case. While Defendants make a number of related arguments concerning agency and affiliation between the Hospital and Florida United, these arguments fail to persuade because the FCC has ruled that “prior express consent” is found “only if the wireless number was provided by the consumer to the creditor” in question. See id. Since Florida United is the creditor in question and Plaintiff did not provide his number to Florida United, there is no consent under the plain language of the 2008 FCC Ruling. Compare Mitchem, 2012 WL 170968, at * 1 (cell number given to medical provider where that medical provider was the creditor to whom the debt was owed). While the Hospital may have been permitted to disclose Plaintiff’s information to affiliated entities and agents, that has nothing to do with whether Plaintiff gave consent to Florida United, a separate creditor. The FCC did not say that consent is found for all agents and affiliates of the creditor to whom an individual has given his number. The FCC did not write the exception that way, and this Court will not expand on what the agency has done.

Oh, and refusing to find an agency theory that would permit the consent given to creditor to transfer to the creditor’s debt collector, Judge Scola at least was consistent in rejecting the FCC’s imposition of vicarious liability – finding it inconsistent with the TCPA’s plain language.

As just outlined, Congress chose to employ “on behalf of” liability under one part of the statute, but not under the provision relevant in this case, section 227(b)(1)(A). There, Congress chose to provide liability only for those who “make” calls in violation of the TCPA. “Where the court finds that the statute is clear, as it does here, no deference is accorded to the agency’s interpretation.” Koch Foods, 2013 WL 869645, at *3. With respect to section 227(b)(1)(A), the FCC has provided for vicarious liability where Congress did not. The FCC cites no authority or support for its determination that creditors are liable for calls placed by third-party debt collectors and, for the reasons above, that ruling appears inconsistent with the statutory scheme. Therefore, the Court will not defer to the FCC’s determination. Instead, it will employ the statute as written and find that only those who make calls in violation of section 227(b)(1)(A) may be held liable. Because neither Sheridan nor Florida United made any calls to the Plaintiff, the Court finds they are entitled to summary judgment.