Eleventh Circuit: TCPA Prior Express Consent Exception Applies to Medical Creditors

Practical Law Legal Update 1-583-2666 (Approx. 6 pages)

Eleventh Circuit: TCPA Prior Express Consent Exception Applies to Medical Creditors

by Practical Law Commercial

Background

After receiving medical treatment at a hospital from Florida United Radiology, L.C. (United), Mark Mais sued United and its debt collection agency, Gulf Coast Collection Bureau, Inc. for violating the TCPA. He alleged that when they attempted to collect money he owed United, they violated the TCPA by making autodialed or prerecorded calls to his phone without his prior express consent. Prior to Mais' admission to the hospital, his wife signed and completed a hospital admission form. As part of the form, she provided Mais' phone number and agreed to the hospital's privacy notice, which stated that the hospital or other health professionals who treat patients there may use and disclose a patient's information to bill and collect payments.

Gulf Coast claimed that its calls fell within a statutory exception to the TCPA's rule against making autodialed or prerecorded calls to cell phones, as interpreted by a 2008 FCC declaratory ruling (2008 FCC Ruling) (Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 23 FCC Rcd. 559 (2008)). Under the 2008 FCC Ruling, when a person provides his cell phone number to a creditor (for example, as part of a credit application), this reasonably evidences his prior express consent to receive autodialed and prerecorded calls at that number regarding his debt.

However, the district court granted partial summary judgment to Mais and held, among other things, that Gulf Coast violated the TCPA because:

The FCC's interpretation of prior express consent was inconsistent with the TCPA's language.
The 2008 FCC Ruling did not apply to the facts of this case.

For more background information on the facts of this case and the district court's decision, see Legal Update, TCPA Do-not-call Provisions Require Express Consent, No Vicarious Liability for Violations: S.D. Florida.

Outcome

The Eleventh Circuit reversed the district court's decision and held that Gulf Coast's calls fell within the exception created by the 2008 FCC Ruling. Particularly, the Eleventh Circuit found that the district court:

Did not have the power to rule the 2008 FCC Ruling invalid (see District Court Exceeded Its Judicial Authority).
Was wrong to hold, in the alternative, that the 2008 FCC Ruling did not apply to the facts of this case (see Scope of the 2008 FCC Ruling).

The court remanded the case and ordered the district court to enter summary judgment in favor of Gulf Coast on its prior express consent defense.

District Court Exceeded Its Judicial Authority

In its 2013 decision, the district court held that the 2008 FCC Ruling's interpretation of the term "prior express consent" could not be reconciled with the TCPA's statutory language, and therefore refused to enforce it.

The Eleventh Circuit held, however, that the district court did not have the power to rule that the 2008 FCC Ruling is invalid or wrong. Under the Hobbs Act (28 U.S.C. § 2342), only federal courts of appeals have jurisdiction to enjoin, set aside, suspend or determine the validity of FCC orders. Therefore, district courts lack jurisdiction to consider claims to the extent that they depend on establishing that some or all of an FCC order subject to the Hobbs Act is wrong as a matter of law or otherwise invalid. By refusing to enforce the FCC's interpretation of the prior express consent rule, the district court made a judgment about the validity of the 2008 FCC ruling and exceeded its authority under the Hobbs Act.

Scope of the 2008 FCC Ruling

The district court held that even if the 2008 FTC Ruling were valid, it did not apply to the facts of this case because it addressed only consumer and commercial creditors, not medical creditors. However, the Eleventh Circuit found that the 2008 FTC Ruling did not distinguish or exclude medical creditors from its scope. In fact, the 2008 FTC Ruling's language covers a wide range of creditors, including those pursuing medical debts.

The Eleventh Circuit also rejected Mais' argument that he did not provide his number to the creditor because he did not give it directly to United or Gulf Coast. The court found that Mais' reading of the 2008 FTC Ruling is too narrow and that this exception should apply whenever a person makes his number available to a creditor regarding his debt, either by:

Directly giving his number to the creditor.
Authorizing an intermediary to disclose his number to the creditor for debt collection.

Mais' wife made his number available to United and Gulf Coast when she signed the hospital admission forms and gave the hospital permission to disclose his information in connection with billing issues.

Practical Implications

The TCPA generally prohibits autodialed and prerecorded calls to wireless phones, unless the calls are made with the recipient's prior express consent. As the Eleventh Circuit noted in this decision, this prior express consent exception applies to a broad range of creditors and debt collectors that receive cell phone numbers from debtors.

When a person provides his number to a creditor, for example on a credit application, this serves as reasonable evidence that he has provided prior express consent to be contacted at that number regarding the debt. However, as this decision and the 2008 FCC Ruling note, this applies only when the debtor provided the number:

To the creditor, either directly or through an intermediary who the debtor has authorized to disclose the number.
During the transaction that resulted in the debt owed.

For more general information on complying with the TCPA, see Practice Notes, Advertising: Overview: The Federal Communications Commission Act and Direct Marketing: Telephone Consumer Protection Act.

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