Eleventh Circuit Hears Oral Argument in Landmark TCPA Case

22 September 2014 Consumer Class Defense Counsel Blog

Industry now waits as the Eleventh Circuit considers whether to overturn a Florida district court decision rejecting the Federal Communications Commission’s definition of prior express consent under the Telephone Consumer Protection Act. On September 18, 2014, the United States Court of Appeals for the Eleventh Circuit heard argument in the Mais v. Gulf Coast Collection Bureau case. At issue is whether this long standing principle survives: If you give me your number, I can call it, however I want. 

In 2009, Mark Mais went to the Westside Regional Hospital emergency room in Broward County, Florida for treatment. His wife Laura completed the admission paperwork and provided his cell phone number to the hospital admitting staff. Florida United Radiology provided services for Mais that day.  It later sent Mais a bill for $49.03. Mais did not pay. His debt was referred to the Gulf Coast Collection Agency. Gulf Coast uses an automatic telephone system to call debtors. It called Mais somewhere between 15 and 30 times with an automatic telephone dialing system in an effort to collect.

Mais filed suit under the TCPA on behalf of himself and others arguing that Gulf Coast did not have prior express consent to call him using an automatic telephone dialing system. U.S. District Court Judge for the Southern District of Florida, Robert Scola, agreed and granted Mais’s motion for summary judgment. To decide this prior express consent issue the Court had to jump some thorny hurdles. First and foremost, the FCC has long held that “telephone subscribers who knowingly release their phone numbers to a business will be deemed to have given their invitation or consent to be called at [that number], absent instructions to the contrary.” Given that Mais’s wife provided the number on Mais’s admitting papers, it no doubt seemed to defendant that it had a strong position.

But the Court refused to defer to the FCC. It acknowledged that the Hobbs Act vests in the Federal Courts of Appeal the exclusive jurisdiction to enjoin, set aside, suspend or determine the validity of final orders of the FCC. However, Plaintiff had not filed any proceeding to enjoin, set aside, annul or suspend an FCC order. Instead he was seeking damages for illegal debt collection calls. Because the central purpose of the lawsuit was not to set aside an FCC order, the Court found the Hobbs Act did not apply.

Having found the Hobbs Act inapplicable, the Court concluded it was free to consider whether the FCC’s order was entitled to Chevron deference. According to the Court, no deference was required because when Congress passed the TCPA, it mandated express consent before calls with an automatic telephone dialing system were permitted. The Court held that simply putting your number on a form is not saying call me with a ATDS unless the form says so. Laura Mais’s provision of her husband’s telephone number to the hospital, upon admission for medical purposes, was not express consent for some debt collector to call him months later about a bill.

However, even if the Court was precluded from considering the validity of the FCC order, the defense still could not prevail. Laura Mais providing her husband’s number to one creditor (the hospital) did not amount to consent for a collection agency working on behalf of an unrelated creditor (Florida United Radiology) to call.

During oral argument, Counsel for Gulf Coast, Ernest Kolhmeyer, insisted that the Hobbs Act was the primary concern on appeal. He focused his arguments on whether the district court had acted outside its jurisdiction. The Court sounded interested in this point, with Judge Frank Hull asking Mais’s counsel, “What authority did [the district court judge] have to challenge the FCC’s interpretation?” “Where did he get the power to do it?” Even Counsel for Mais, John Taylor, was at a loss to provide a basis for the Court’s authority.

Rather than attempt to defend the lower court’s opinion, Mais asserted the result, not the analysis, was what mattered. He noted that the FCC’s 2008 ruling expressly stated, “[P]rior express consent provided to a particular creditor will not entitle that creditor (or third party collector) to call a consumer’s wireless number on behalf of other creditors, including on behalf of affiliated entities.” 18 FCC Red. at 565 n. 38.

Using this as authority, Mais argued that providing his cell phone number to the hospital could not be construed as consent for the radiology company to call even under the broadest definition the FCC has ever propounded. Mais argued consent cannot be transferred from one creditor to another or from one party to another except in the limited circumstances where a creditor is transferring consent to his own debt collector. This argument seemed to have traction. Judge James C. Hill asked, “Can you provide consent through an intermediary?”

While it is hard to say what the court will do in Mais one thing does seem certain. To decide this case, the Court is not required to gut the long-standing definition of prior express consent that thousands of businesses have relied upon for more than 20 years. Instead the Court can focus on whether a consent given to one party can ever serve as prior express consent for another.

As a final note, three days before the Mais oral argument, Federal Judge Jed S. Rakoff, U.S. District Court, Southern District of New York in a decision on class certification agreed with Mais and that “[t]he 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.Zyburo v. NCS PLUS, Inc., 12-cv-6677, p. 6. Despite what happens in Mais, the FCC’s prior express consent orders will continue to be challenged.

Special thanks to my associate Sharon McDonald for sitting in and reporting on the oral argument.

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