Good Faith as a TCPA Defense?

16 December 2013 Consumer Class Defense Counsel Blog

Good faith might be a defense to a TCPA claim according to Judge Roger T. Benitez of the U.S. District Court for the Southern District of California. In Chyba v. First Financial Asset Management, Inc. plaintiff Pamela Chyba sued First Financial Asset Management, Inc. under the Telephone Consumer Protection Act. She claimed that First Financial called her cell phone multiple times without her express consent.

First Financial responded that it was a debt collector acting on behalf of Enterprise Rent-A-Car. Enterprise claimed that Chyba owed it money due to damage to a car she rented. Chyba said she did not rent the car and even if she did she never gave her telephone number to Enterprise.

The parties disagreed about whether First Financial had prior consent to call plaintiff’s cell phone number. First Financial filed a motion for summary judgment. The Court noted that if Enterprise had consent then First Financial did too. Third party debt collector calls on behalf of a creditor are treated as if the creditor had placed a call itself.

Chyba disputed ever giving her consent to Enterprise. The court found that a reasonable fact finder could conclude that Chyba never gave express consent because she never gave her phone number to Enterprise.

However, in a singular, unique analysis, the Court concluded that First Financial had a good-faith belief that Chyba had provided consent to Enterprise on whose behalf it was seeking to collect. The Court stated, “Even if plaintiff is correct in stating that she never gave defendant or Enterprise consent to call, and there was no actual prior consent from plaintiff, defendant is not liable for acting in good faith upon the information provided to it.”

The Court’s rationale was based largely on two things. First, the Federal Communications Commission has stated that a creditor bears responsibility for violations of FCC Rules for calls made on its behalf. Second, in the context of the Fair Debt Collection Practices Act, the U.S. Court of Appeals for the Ninth Circuit has found that a debt collector is entitled to rely on a creditor’s statement to verify debt as long as the collector has a good-faith belief that the statement is true. In this case Enterprise provided a rental agreement which contained telephone number which Chyba presumably provided. First Financial has no duty to independently investigate. The Chyba court essentially imported the good-faith defense found in the FDCPA jurisprudence to be the TCPA issue before it.

The Chyba court analysis could be limited to debt collectors only. However, one might argue that a creditor is entitled to rely in good faith on its own business records to show consent, even if they turn out to be incorrect. The injection of a good-faith defense into TCPA jurisprudence, at least in this court, is welcome news. It will be interesting to see whether other courts embrace the new concept.

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