ARM Firms Should Not Be Deceived by TCPA Victories

Winston McGregor

Debt collectors breathed a collective sigh of relief after the Eleventh Circuit reversed a district court ruling in the case of Mais v. Gulf Coast Collection Bureau Inc.¹ This case coupled with the FCC’s seemingly business-friendly declaratory rulings of GroupMe² and Cargo Airline Association³ make matters appear to be on the upswing for creditor representatives with regard to the TCPA.

But don’t be deceived: the relief brought by the positive developments must be tempered by the amicus curiae brief filed by the FCC in Nigro v. Mercantile Adjustment Bureau, LLC.⁴ A quick overview of the various matters may shed light on where the FCC and courts are headed.

The Mais Saga

In 2009, the plaintiff Mark Mais sought emergency room treatment where he was admitted and treated at a hospital based radiology provider. On behalf of her ill husband, Laura Mais completed and signed the admission forms providing personal information, including a cell number. The hospital forms contained notice statements that the information provided may be used by others in circumstances like further medical care and bill payment issues.

When Mais did not pay the medical bill, Gulf Coast was hired to collect the debt. Gulf Coast used an automated dialer to call Mais at the cell phone number provided. Mais then sued the collection agency citing violations of the TCPA for using the automated dialer without prior express consent.

In the face of the FCC 2008 ruling, when a consumer on a credit application provides a cell phone number to a creditor and a third-party collector calls the consumer, the third party collector is treated as the creditor. Thus, the use of auto-dialed and pre-recorded calls are considered to have prior express consent and permissible under TCPA.

But the Southern District of Florida denied dismissal declining to apply the FCC’s interpretation of prior express consent in a TCPA matter, and of extreme importance, “discarded the administrative agency’s rulemaking determination.”⁵ Ultimately, the Eleventh Circuit Court of Appeals reversed and remanded the case finding that under these facts the creditor had “prior express consent” pursuant to the FCC 2008 ruling.  This brings consistency among the Circuit Courts.

The FCC’s GroupMe Declaratory Ruling

Regarding GroupMe, the FCC wrote in a declaratory ruling, “Specifically, we clarify that a consumer’s prior express consent may be obtained through and conveyed by an intermediary, such as the organizer of a group using GroupMe’s service.”⁶

The 1992 TCPA Order is clear that “that consent to be called at a number in conjunction with a transaction extends to a wide range of calls “regarding” that transaction, even in at least some cases where the calls were made by a third party.”⁷

Based on GroupMe, it appears that providing a number even to cancel an account with a remaining balance should qualify as prior express consent for calls to collect on the remaining balance.

The FCC’s Brief in Nigro v. Mercantile Adjustment Bureau

Albert Nigro, on behalf of his deceased mother-in-law, contacted the Niagara Mohawk/National Grid in New York to discontinue her service. During the call he provided his cell phone number. About a year and a half later, a debt collector (acting on behalf of the power company) called Nigro 72 times over a nine month period to collect the outstanding balance on his mother-in-law’s account of $67.⁸

In the Western District of New York, Nigro brought suit alleging that the debt collector did not get his “prior express consent” to contact him as such violated the TCPA.  The court thought otherwise and granted the debt collector’s motion for summary judgment, based partly on the 1992 TCPA Order, which states that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.”⁹

Nigro appealed and the Second Circuit requested the FCC’s view on the question: Does a person, who is not a ‘consumer’ and is not responsible for the debt, consent to autodialed debt collection calls within the meaning of 23 F.C.C.R. 559 when he agrees to be called in connection with the termination of a deceased debtor’s account, and the consent did not occur “during the transaction that resulted in the debt owed?”¹⁰

The FCC’s brief concluded the district court’s analysis was incorrect. The 2008 Clarification Order held 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”. The FCC concluded that in this situation, Nigro did not give his prior express consent because the cell number was not provided during the transaction that incurred the debt but after his mother-in-law incurred the debt at issue.

Although the Mais decision brings some TCPA consistency among the courts and business friendly rulings in GroupMe and Cargo Airline Association also provide some regulatory relief, the Nigro brief clearly exposes creditor representatives to risk and the burden to investigate the nuances of each situation.

In this digital age of ubiquitous cell phones, an analog law still appears to dominate. If as stated in the GroupMe ruling, the TCPA is not to be a “barrier to normal, expected, and desired business communications,”¹¹ then further clarification will be required as well as a practical recognition of technological updates by the FCC and courts.

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1. Mark S. Mais v. Gulf Coast Collection Bureau Inc., U.S. Court of Appeals, Eleventh Circuit Sept 29, 2014

2. GroupMe, Inc./Skype Communications S.A.R.L, CG Docket No. 02-278
Petition for Expedited Declaratory Ruling (Released: March 27, 2014)

3. Cargo Airline Association, CG Docket No. 02-278 Petition for Expedited Declaratory Ruling Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 (Released: March 27, 2014)

4.  Albert A. Nigro v. Mercantile Adjustment Bureau, LLC, No. 13-1362 (FFC amicus curiae brief)

5.  Mark S. Mais v. Gulf Coast Collection Bureau Inc., U.S. Court of Appeals, Eleventh Circuit Sept 29, 2014 [page 17]

6.  GroupMe, Inc./Skype Communications S.A.R.L, CG Docket No. 02-278 Petition for Expedited Declaratory Ruling [page 3, paragraph 6]

7.   See Request of ACA International for Clarification and Declaratory Ruling, CG Docket No. 02-278, Declaratory Ruling, 23 FCC Rcd 559, 564-65, paras. 9-10 (2008) (ACA Order)

8.  Albert A. Nigro v. Mercantile Adjustment Bureau, LLC, No. 13-1362 (FCC amicus curiae brief page 6)

9.  See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CC Docket No. 92-90, Report and Order, 7 FCC Rcd 8752, 8769, para. 31 (1992) (1992 TCPA Order).

10.  Albert A. Nigro v. Mercantile Adjustment Bureau, LLC, No. 13-1362 (FCC amicus curiae brief)

11.  GroupMe, Inc./Skype Communications S.A.R.L, CG Docket No. 02-278 Petition for Expedited Declaratory Ruling [page 3].

Winston McGregor, JD, MBA, CAMS has worked for over 20 years with fortune 100 companies on compliance, legal drafting, and negotiating.  As a compliance and operational consultant, he bridges the gap between legal requirements and practical business operations, as his recommendations emphasize clarity, practicality and understandability.  He has led design compliance/regulatory reviews, draft policies, procedures and template documents, as well as database development and implementation for companies like Wells Fargo Bank, American Express, and Franklin Templeton. In addition, he is a published author in the acclaimed The Banking Law Journal. Please feel free to contact Winston at wfmcgregor@gmail.com or 702-325-9434.