Court Rules in Favor of Collection Agency's "Good Faith" in TCPA Case

David Kaminski
Carlson & Messler LLP

Spoiler Alert – Common sense prevails in a TCPA case – nation in shock – National Guard quells riots.  (Ok, so I exaggerate a bit, but you’re paying attention).

Things constantly change in the Telephone Consumer Protection Act world, sometimes for the good of the industry;  sometimes, though, not.  This time, however, common sense has prevailed and may help to shape future TCPA defense arguments.

Quasi Prolific lawsuit filer/plaintiff, Pamela Chyba, representing herself, brought a TCPA action against First Financial Asset Management, Inc., for calls made to her cell phone, allegedly without consent.  There was no dispute as to whether defendant used a dialer under the TCPA.  The sole issue was whether defendant had prior express consent to call the cell phone number at issue.  Defendant claimed that:

• plaintiff voluntarily gave her cell phone number to Enterprise Rent-A-Car in writing and that

• defendant, collecting on Enterprise’s behalf, had a good faith belief that it had the right to call the number at issue.

The Court held as follows:

1. Pursuant to the FCC’s 2008 Ruling, if Enterprise had consent to call the plaintiff’s cell phone number, so did defendant debt collector who was collecting on behalf of creditor Enterprise.
2. That FFAM produced evidence that plaintiff provided her cell phone in the home phone number field in a document provided to Enterprise.
3. That there was an issue of material fact as to whether plaintiff gave consent to Enterprise to call her cell phone number.
4. That in Clark v. Capital Credit & Collection Services, 460 F.3d 1162, 1174 (9th Cir. 2005), the Ninth Circuit held that a debt collector was entitled to rely on information provided by a creditor for purposes of “verification” of a debt, and that it would be “incongruous” to hold a debt collector liable (under the TCPA) for acting on information when it had a good faith basis for doing so.
5. That FFAM had a “good faith” belief that plaintiff provided “express” consent to creditor Enterprise to call her cell phone as the Enterprise documents defendant relied upon (in good faith) contained her cell phone number. Defendant is therefore entitled to summary judgment on the TCPA claim.

Comment – This is the first time, to my knowledge, a court relied on a “good faith” exception to a TCPA consent dispute based on a debt collector’s reliance on documents provided to it by a creditor.  In support of its “good faith” holding, the district court relied on the 9^th Circuit decision in Clark v. Capital Credit.  In Clark, the 9^th Circuit held that with regard to “verification” of a debt, a debt collector can rely on information provided to it by the creditor and has no independent duty to verify the accuracy of the information.  However, Clark  also held that with regard to the amount of the debt claimed to be owed, a debt collector may still be subject to strict liability for any material errors, subject to a bona fide error defense.

The question remains:  Will other courts in TCPA actions conclude that Clark extends a “good faith” defense to debt collectors when they reasonably rely on information contained in documents provided by a creditor?

I think the Judge’s decision here was a bold and sound call, especially since there were documents provided by the Creditor to the debt collector reflecting plaintiff had voluntarily given her phone number to Enterprise.  What could the defendant debt collector have done under the circumstances to avoid calling without consent?  Could the defendant have scrubbed the phone numbers to determine which numbers in the Enterprise document were cell phone numbers?  Sure, but even if it did, since the number appeared to have been voluntarily provided by the plaintiff in a written document given to the creditor, the debt collector would have presumed it had express consent to call the numbers therein per the FCC’s 2008 Ruling.  In the context of debt collection and the documents provided by the creditor at issue, the decision appears to be the right decision.

Questions remain:  Would this decision have had a different outcome if plaintiff “in pro per” were represented by an attorney?  Are the TCPA and FDCPA independent statutes?  Does this decision have broader application, or is it confined to these unique facts where the phone number at issue was contained in the creditor’s records which the debt collector relied upon in connection with debt collection?  The court seems to limit its ruling to the creditor-debt collection circumstance.  What is clear is this:  This court has now paved the way for the assertion of broader good faith defense arguments in the TCPA arena.  Let the games begin!

The decision can be read here.