Consumer Finance Litigation

It would be difficult to identify a federal circuit court of appeals that has released a larger number of influential consumer finance decisions in the last year than the Eleventh Circuit. And last week, the court continued its recent consumer finance trend. Before Friday's landmark FDCPA decision in Davidson v. Capital One (covered in a separate blog post), the court again waded into the turbulent waters of the TCPA. On Thursday, the Eleventh Circuit issued its decision in Murphy v. DCI Biologicals Orlando, LLC, --- F.3d ---, No. 14-10414 (11^th Cir. Aug. 20, 2015), in which another plaintiff challenged the validity of the Federal Communication Commission's 1992 interpretation of "prior express consent." The facts in Murphy are straightforward. In the spring of 2010, the plaintiff visited the defendant's offices to make several blood plasma donations. Before donating, the plaintiff filled out medical release and acknowledgement forms, as well as a "New Donor Information Sheet," which asked for information required by federal law and for a personal telephone number. The plaintiff provided his cell phone number within the documents. Two years later, the plaintiff received two text messages, forty minutes apart, with the second text message containing an offer for increased compensation for plasma donations. Plaintiff's disproportionate response to the two text messages was to file a nationwide TCPA class action. The plaintiff pleaded that he had provided his cell phone number on the relevant documentation and, as a result, was required to argue that this act was insufficient to demonstrate the "prior express consent" required for a caller to send him text messages under the TCPA. This argument required the plaintiff to contend that the FCC's numerous interpretations of "prior express consent"--the earliest being contained in the FCC's first interpretation of the TCPA, see In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991 ("1992 Order")--were out of step with the TCPA and should not be followed by the Court. The Eleventh Circuit affirmed the district court's dismissal of Plaintiff's TCPA claim. Citing its own 2014 decision Mais v. Gulf Coast Collection Bureau, Inc., 768 F.3d 1110, 1120-21 (11^th Cir. 2014), the Eleventh Circuit again held that the Hobbs Act prohibits a district court from determining the validity of FCC orders, including by refusing to enforce an FCC interpretation, because "[d]eeming agency action invalid or ineffective is precisely the sort of review the Hobbs Act delegates to the courts of appeals in cases challenging final FCC orders." Murphy, No. 14-10414, at 9. And because the courts of appeals may only review FCC orders on direct appeals, not through civil litigation, the court concluded, again, that the FCC's interpretation of the TCPA was binding. After determining that the FCC's interpretations were valid, the court concluded that the facts as alleged in the plaintiff's complaint were insufficient to state a TCPA claim. The court found that the plaintiff's provision of his cell phone number on an intake form constituted prior express consent for the defendant to send him marketing text messages. (At this point it is worth noting that if the text messages had been sent after the FCC's 2012 order requiring "prior express written consent" for telemarketing messages, they likely would have violated the TCPA). Thus, the Court affirmed the district court's dismissal of the plaintiff's TCPA claims. All told, the ramifications of the Murphy decision are limited. The Eleventh Circuit had already upheld the FCC's TCPA interpretations in Mais and has addressed "prior express consent" on several occasions. But Murphy does provide additional support for creditors and debt collectors who continue to defend TCPA claims in which the plaintiffs admit that they provided the subject numbers in credit applications and on other documents (or in phone conversations). While the plaintiffs' bar may continue to argue that the FCC's interpretation of "prior express consent" seems more like "prior implied consent," these arguments are likely to continue falling on deaf ears.