Consumer Finance Litigation

Amending its prior opinion and broadening its interpretation of the standard for "prior consent" under the Telephone Consumer Protection Act ("TCPA"), the Ninth Circuit Court of Appeals recently held that "[p]ursuant to the FCC ruling, prior express consent is consent to call a particular telephone number in connection with a particular debt that is given before the call in question is placed." In January 2008, the FCC issued a declaratory ruling stating that "prior express consent is deemed to be granted only if the wireless number was provided by the consumer to the creditor, and that such number was provided during the transaction that resulted in the debt owed." Pursuant to the FCC ruling, prior express consent was given during the transaction resulting in the debt; for example, prior express consent could be provided by the consumer as part of the credit application. Thus, consumers that provided their cell phone numbers after the original transaction was complete were not considered to have given consent. In Meyer v. Portfolio Recovery Associates, LLC, 696 F.3d 943 (9th Cir. 2012), a consumer brought a putative class action against a debt collector seeking a preliminary injunction and alleging that the debt collector violated the TCPA, 47 U.S.C. § 227. The lower court granted the consumer's motion for a preliminary injunction and provisional class certification. The debt collector appealed. In an opinion on October 12, 2012, the Ninth Circuit gave a very limited interpretation of "prior consent," finding that it must occur in the transaction that resulted in the debt owed. However, the Ninth Circuit amended this language in an opinion on December 28, 2012, see Meyer v. Portfolio Recovery Associates, LLC, --- F.3d ----, 2012 WL 6720599 (9th Cir. Dec. 28, 2012). Regarding the standard for "prior consent," the court amended its prior opinion to include consent that is given before the call in question is placed. While the court broadened the standard, it affirmed the lower court's ruling that the debt collector did not show that it obtained express consent before the call was placed. The court first addressed the lower court's decision to grant provisional class certification. In support of its appeal, the debt collector argued that some consumers may have consented to be contacted at any telephone number, including those that were obtained after the original transaction. Thus, the debt collector argued that individualized issues of consent barred a finding of commonality or typicality. Rejecting this argument, the court found that the debt collector failed to show that it obtained express consent before it made any call. The court also rejected the debt collector's argument that the class was overbroad, as the debt collector could have obtained consent for some numbers that were also found through skip-tracing, finding that the debt collector did not show that any cell numbers that were given to the original debtor were also found via skip tracing. Turning to the preliminary injunction issue, the court found that the consumer sufficiently demonstrated that he was entitled to a preliminary injunction. The court held that to state a claim under the Section 227 of the TCPA, the consumer must show (1) the defendant called a cellular telephone; (2) using an automatic telephone dialing system; (3) without the recipient's prior express consent. The court determined that the debt collector's dialers fell within the FCC's definition of "automatic telephone dialing system" and, thus, the consumer demonstrated a likelihood of success on the merits in stating a claim under the TCPA. Further, the court determined that the debt collector called tens of thousands of cell phone numbers obtained through skip tracing, which constituted an invasion of privacy, and that the consumer sufficiently showed that the class would suffer irreparable harm without injunctive relief. Accordingly, the court affirmed the lower court's decision. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.