Manually Dialed Call May Violate TCPA

Generally, the Telephone Consumer Protection Act (TCPA) applies to calls using an autodialer, but the landscape has changed following the decision in Nelson v. Santander Consumer USA, Inc., 931 F. Supp. 2d 919 (W.D. Wis. 2013).  The plaintiff in this case alleged that Santander called her cell phone more than 1,000 times and left over 100 pre-recorded messages over the course of a year using an autodialer, in an attempt to collect an outstanding debt on two vehicles.  The Court granted the plaintiff’s summary judgment motion, finding that the defendant violated the TCPA and awarding the plaintiff $571,000.

The court found that it was sufficient that the telephone equipment used by the defendant had the capacity to produce, store and call telephone numbers.  Specifically, the Court found that in making these calls, Santander used the Aspect telephony system, a computer telephone software system that routes and places inbound and outbound calls. Aspect has the capacity to (1) store telephone numbers and then call them; and (2) perform “predictive dialing” and “preview dialing.”

Predictive dialing is where the system times the dialing of numbers using an algorithm to predict when an agent will become available to receive the next call. To facilitate that method of dialing, Santander created lists of customer telephone numbers to be called on a particular day. Preview dialing is where an employee chooses a telephone number by clicking on a computer screen and the system calls it.

Santander argued that the calls to the plaintiff were made by a live person using the preview dialing function of the Aspect telephony system, which it claimed are not autodialed calls within the meaning of the TCPA.  The Court disagreed, relying on the FCC’s expansive interpretation of the term “automatic telephone dialing system” in finding that “the question is not how the defendant made a particular call, but whether the system it used had the ‘capacity’ to make the automated call.”  

So, if you receive a call from a telemarketer or debt collector to your cell phone, it is most likely that regardless of whether a human punched in the numbers, the call would fit within the definition of an autodialed call under the TCPA.

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Supreme Court Rules that Offer of Judgment Does not Moot Class Action

On January 20, 2016, the Supreme Court issued its decision in Campbell-Ewald Co. v. Gomez. Six of the Justices, for differing reasons, held that an unaccepted offer of complete relief does not in and of itself deprive a court of Article III jurisdiction by mooting a plaintiff’s claim.  The Court did, however, leave the door open to find that a fully funded offer of judgment could moot a potential class action by depriving the court of jurisdiction.

The Majority Opinion

Justice Ginsburg's majority opinion adopted the reasoning of Justice Kagan’s dissent in Genesis HealthCare Corp. v. Symczyk, reasoning that, under the language of Rule 68(b) and “basic principles of contract law,” an unaccepted offer of judgment, like an unaccepted offer to contract, is a legal nullity that “creates no lasting right or obligation” and has “no continuing efficacy.” The fact that the offer was unaccepted was critical to the majority’s reasoning because it meant that the plaintiff’s claim “stood wholly unsatisfied.” The opinion noted several times that the plaintiff “gained no entitlement to the relief” previously offered and had not received the relief previously sought, and thus retained a personal stake in the outcome of the litigation. See Campbell-Ewald v. Gomez, No. 14-857, slip op. at 8-12 (Jan. 20, 2016).

This is a norrow opinion, however.  It does not speak to a situation where a defendant makes an offer of judgment that completely satisfies all of the plaintiff's demands and then make a payment to satisfiy the offer.

A Fair Opportunity to Show Class Certification is Warranted

The court noted that “a would-be class representative with a live claim must be accorded a fair opportunity to show that certification is warranted.”  The Court went on to analogize an unaccepted offer of judgment to an unaccepted settlement offer, finding that as is the case of an unaccepted settlement offer, and unaccepted offer of judgment could not kick a plaintiff out of court.

Going Forward

It will be interesting going forward to see how defendants react to this ruling.  I predict we will begin to see offers of judgment with payment either accompanying them or paid into court.  We most certainly will see the issue of wheter such payment moots a claim litigated in near future.

henry-legal.com   866-279-9721

5 Mistakes Consumers Make When Dealing with Debt Collectors

Debt collectors have a seemingly unending bag of tricks when trying to get payment from consumers.  Most consumers, on the other hand, have little if any experience dealing with debt collectors.  Generally, consumers commonly make one or more of 5 mistakes when confronted by a debt collector.  These include (1) Failing to Get Debt Validation; (2) Failing to Find Out When the Last Payment on the Debt was Made: (3) Agreeing to a Payment Plan; (4) Not Registering Their Cell Phone on the National Do Not Call Registry: and (5) Not Seeking Legal Counsel.

1.  Failing to Get Debt Validation

Getting debt validation is almost always a good idea.  It is possible that the debt may not be yours.  In addition you may not recall the debt or the original creditor.  The debt collector may also be trying to recover unlawful interest.  The list goes on and on.

2.  Failing to Find Out When the Last Payment on the Debt was Made

Finding out when the last payment on the debt was made is critical because this tells us when the statute of limitations clock started ticking.  For instance, in Kentucky the statute of limitations is 5 years from the date of the last payment (default), and in Tennessee the SOL is 6 years.  Statutes of limitations vary from state-to-state, but nearly all run from the date of the last payment.

If the statute of limitations has expired, then the debt collector cannot file suit to recover the debt, and if it does, it violates the Fair Debt Collection Practices Act.

3.  Agreeing to a Payment Plan

Many times a debt collector will seem willing to work with a consumer to establish a payment plan.  Often, this is because the statute of limitations has expired, and when the consumer enters into a payment agreement with the debt collector, the SOL is reset.  Then if the consumer defaults on the payment plan, the debt collector can sue on the entire debt.

4.  Not Registering Their Cell Phone on the National Do Not Call Registry

If a consumer registers his cell phone on the National Do Not Call Registry and a debt collector calls, the debt collector has violated the Telephone Consumer Protection Act and the Fair Debt Collection Practices Act.  The statutory damages under the TCPA are $500 to $1500 per call.  And, the statutory damages under the FDCPA are up to $1000 or actual damages plus attorney fees.

5.  Not Seeking Legal Counsel

Most, if not all, consumer lawyers do not charge for an initial consultation,  So, why not take advantage if you think your rights under the TCPA or the FDCPA have been violated?

Debt collectors have a range of tricks and tactics to separate consumers from their money.  Be smart and don't make the 5 common mistakes above.

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