Stellar Recovery, LiveVox Win Major TCPA Victory

In a decision filed just prior to Labor Day weekend, the US District Court for the Middle District of Florida ruled in favor of the defendant, Stellar Recovery Collection Agency, Inc. in a Telephone Consumer Protection Act (TCPA) case involving an alleged Automatic Telephone Dialing System (ATDS).

In the case, Pozo v. Stellar Recovery Collection Agency, Inc. (Case No. 8:15-cv-929, United States District Court, Middle district of Florida, September 2, 2016), the Plaintiff alleged that Stellar violated the TCPA when the agency used an Automatic Telephone Dialing System (ATDS) to communicate with him without his consent. The court did not agree. Issuing a ruling packed with citations, including the recent Strauss v. CBE case, United States Magistrate Judge Anthony E. Porcelli ruled that the system Stellar used to call Pozo, a manual clicker app from LiveVox, is not an ATDS under the TCPA.

Case details

The case involves a debt Stellar attempted to collect on behalf of Dish Network. Stellar performed several cell phone scrubs and believed that customer they were looking for could be reached at a specific telephone number. However, when Stellar called that number, Plaintiff Eduardo Pozo began receiving the calls meant for the debtor. The parties involved in the case do not agree over just how many calls he received. Documents from Stellar suggest 16 calls; the Plaintiff insisted that he received “over 40.”

The Plaintiff also asserts that Stellar left prerecorded messages for him at that number.

In March of 2015, the Plaintiff sent a letter to Stellar claiming that he did not owe any debt. The following month, he sent a cease and desist letter. Stellar ceased calling.

ATDS or not?

Stellar made the calls using a manual clicker app from LiveVox, Human Call Initiator (“HCI”). LiveVox provides both auto-dialing systems and systems that require input from a person. The system Stella used requires human intervention. I.e., the system will not initiate the call unless an agent confirms that the call should be made by clicking the dialogue box. If the call is answered, the agent sends the call to a different agent who actually speaks to the client. The system will not allow outbound calls unless there are agents available and ready to take those calls.

In addition, this particular LiveVox app is stored on separate servers, does not use any statistical algorithm to minimize agent wait time between calls, and does not incorporate any random or sequential number generator. There is no way for Stellar to use this app to enable automated dialing.

The Plaintiff claims that Stellar left him prerecorded messages were also rebutted by Steller. The LiveVox app does not allow users to leave prerecorded messages. So, since the LiveVox application cannot leave prerecorded messages, the court concluded that any TCPA claims in this case can only hinge on a single question: is LiveVox’s application an ATDS?

The Plaintiff’s attorneys argued, based on expert testimony, that the app must be an ATDS because it had the “capacity” to generate automated calls, and because the “Defendant’s list generation and call placement systems undoubtedly fit the FCC’s definition of an ATDS.” The court didn’t buy it. In short, just because LiveVox could have sold Stellar an ATDS, doesn’t mean that what Stellar used was an ATDS.

“LiveVox offers multiple telephone dialing systems,” the ruling states. “There is no indication that Parker [the Plaintiff’s expert witness] actually examined the HCI system. Parker’s affidavit does not controvert the simple fact that HCI required human intervention to place all calls.”

And, since the court found that LiveVox’s app was not an ATDS, there was no TCPA violation.

“In sum, because Stellar’s HCI system required its representatives to manually dial all calls and was not capable of making any calls without human intervention, Stellar did not employ an autodialer,” the court concludes. “Because Stellar did not make autodialed calls, Stellar cannot be liable under the TCPA.”

The court cited multiple cases in coming around to this conclusion, including, most notably, Strauss v. CBE Group, Inc.

“The Strauss court examined a telephone dialing system which required the representative to ‘click to initiate a call.’ The system was not capable of making automated calls, did not dial predictively, and did not use a random or sequential number generator. The Strauss court granted summary judgment in favor of the defendant, noting that “human intervention is essential at the point and time that the number is dialed.”

The case also involved claims under the FDCPA.  For those claims, the Court found that there was a genuine dispute of material fact, and denied Stellar’s summary judgment motion with respect to the FDCPA claims.

insideARM Perspective

The industry got a significant victory in this ruling, one that is particularly rich with common sense. Judge Porcelli did not rule based on possibility, but rather on the specifications of the system Stellar actually used.

“Of course, Stellar could hypothetically hire a team of programmers to modify and rewrite large portions of HCI’s code to enable HCI to make autodialed calls, eliminating clicker agents, the dashboard, and all human input,” Porcelli notes. “However, the fact that Stellar might be able to undertake such a pointless endeavor does not mean that HCI has the ‘capacity’ to be an autodialer or that it has the ‘potential functionality’ to be an autodialer within the meaning of the TCPA and the 2015 Order.”

This case, like Strauss v. CBE before it, is one that should be reviewed closely by the industry.

“We are very pleased with the outcome of this case,” said Mark Mallah, General Counsel for LiveVox. “It confirms what we believed and it has positive implications for the industry as a whole.”