On March 28, 2014, the US Court of Appeals for the 11th Circuit held in Osorio v. State Farm Bank that only the current subscriber to a telephone number has authority to provide express consent under the Telephone Consumer Protection Act (TCPA) to auto-dialed and pre-recorded voice calls and texts (No. 13-10951, (11th Cir., Mar. 28, 2014)).

The controlling precedent in both the 7th and 11th circuits now holds that companies using auto-dialed calls, texts or pre-recorded voice messages to dial cell phones may be held strictly liable for violations of the TCPA. These precedents indicate that such callers risk liability for:

For more information on liability under the TCPA, see Practice Note, Direct Advertising: Regulation of Unsolicited Commercial Communications.

In 2007 Clara Betancourt applied for a car insurance policy with State Farm Mutual Automobile Insurance Company. She simultaneously applied for a credit card from State Farm Bank to pay for the car insurance policy.

During the application process for the insurance policy Betancourt gave State Farm:

The credit card application, which a State Farm agent completed with the information from the insurance application, listed the 8626 number as Betancourt's cell phone. However records from defendant Fredy D. Osorio's phone company show that the 8626 number (along with two others) were connected to a single individual account that belonged to Osorio. Betancourt and Osorio share an adult son and lived together for many years, including at all times relevant to the case.

When Betancourt fell behind on her credit card payments, State Farm authorized a collection agency to attempt to collect the debt as State Farm's agent. State Farm gave the collection agency two phone numbers for Betancourt, one of which was the 8626 number. The collection agency made calls to the 8626 number over the course of approximately six months, including 327 auto-dialed calls. Osorio testified that he twice told the agent to stop calling when he received calls on the 8626 number.

In 2011 Osorio sued State Farm alleging violations of the TCPA. State Farm filed a third-party complaint against Betancourt for, among other things:

The district court granted State Farm summary judgment on Osorio's claims and on four of its claims against Betancourt. Betancourt and Osorio appealed the district court's decisions on the TCPA claim and the negligent misrepresentation claim.

The 11th Circuit reversed and remanded holding that:

Under the TCPA it is illegal to make any auto-dialed or pre-recorded voice telephone calls or texts to a number assigned to a cell phone unless the caller receives the prior express consent of the called party (47 U.S.C. § 227(b)(1)(A)(iii)).

Relying on Soppet v. Enhanced Recovery Co., the 11th Circuit held that under section 227 of the TCPA, consent to receive calls on a given cell number must come from the number's current subscriber. In Soppet a customer's authority to give consent, and any consent previously given, lapsed when the customer's cell number was reassigned to a new subscriber. (679 F.3d 637, 640-41 (7th Cir. 2012).) Based on this reasoning the 11th Circuit held that Betancourt had no authority to consent to the debt collection calls made to the 8626 number because only Osorio, the subscriber, had the authority to do so.

State Farm asserted that the debt collection agency did not violate the TCPA because it had an established business relationship with the intended recipient, Betancourt. Its argument was based on a 1992 regulation promulgated by the FCC that exempts calls made to any person with whom the caller has an established business relationship (47 C.F.R. § 64.1200(a)(2)(iv)). The 11th Circuit rejected this assertion, pointing out that the 1992 regulation does not apply to section 227(b)(1)(A)(iii).

State Farm argued that Osorio and Betancourt had an agency relationship, implied by the fact that they are co-habitants and share an adult son, that permitted Betancourt to consent to Osorio receiving calls on the 8626 number.

The 11th Circuit relied on common law agency principles under Florida law, holding that adult co-habitants do not automatically possess agency authority over one another. A jury could find that Betancourt only exercised a limited scope of agency, not the agency to consent to 327 auto-dialed calls, because she told State Farm that the 8626 number was for emergencies only.

The 11th Circuit held that, in the absence of any contractual restriction to the contrary, prior express consent under section 227 may be orally revoked. This holding was based on:

The 11th Circuit remanded the question of whether Osorio orally revoked any previously given consent to a fact finder.