June 8, 2020

Ninth Circuit rejects “intended recipient” defense to TCPA liability

On June 3, 2020, the Ninth Circuit affirmed a decision of the US District Court for the Eastern District of California awarding nearly $100,000 in damages to an unintended recipient of 189 debt collection calls under the Telephone Consumer Protection Act (“TCPA”).  The TCPA makes it unlawful to call a cell phone using an automated dialing system without the “prior express consent of the called party.” 47 USC § 227(b)(1)(A).  

According to the facts elicited at trial, the plaintiff is an eleven year old boy whose cellphone number was called 189 times in four months by vendors hired by Credit One Bank, N.A. to make collection calls on its behalf.  The calls were made using dialing systems that store numbers and dial them, and were intended for a credit cardholder who had abandoned that telephone number two years earlier.  The number had been reassigned to the plaintiff’s mother, who in turn gave the phone to her son.  The plaintiff, through his mother, sued Credit One and the three debt collection agencies* under the TCPA and California fair debt collection and privacy laws.  At trial, the court instructed the jury that the TCPA “requires the consent of the current subscriber of the called phone… Consent from the intended recipient of the call … is not sufficient.”  The plaintiff was awarded $94,500 in statutory damages ($500 for each call) but was denied the discretionary treble damages for willing or knowing violations permitted under the TCPA.

The primary issue on appeal, as enunciated by the court, was whether Credit One may “escape liability under the TCPA because the party it intended to call (its cardholder) had given consent to be called, even though the party it actually called had not.”  Noting that the Ninth Circuit had not previously addressed that question, the court aligned itself with the Seventh and Eleventh Circuits, which, in Soppet v. Enhanced Recovery Co., 679 F.3d 637 (7th Cir. 2012) and Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014) respectively, have rejected the “intended recipient” argument asserted by Credit One.  Interpreting the statute in accordance with its “ordinary and natural meaning,” the court concluded that the term “called party” as used in the statute could not reasonably be interpreted to mean a third person “whom the caller had not in fact called, but who had previously given consent to be called.”  The court also rejected Credit One’s argument that the dialing systems used by Credit One’s vendors were not automatic telephone dialing systems within the meaning of the statute.  
*Plaintiff settled with the debt collectors, leaving only Credit One at trial.