In Osorio v. State Farm Bank, F.S.B.— F.3d —-, 2014 WL 1258023 (11th Cir. 2014), the Court of Appeals for the 11th Circuit reversed the district court’s finding that State Farm did not violate the TCPA when it called its credit card holder on a cell phone that she shared with her housemate.
This is a consumer-protection case arising from the unwanted receipt of autodialed debt-collection calls to a cell phone. It began when Clara Betancourt applied for a car-insurance policy with State Farm in 2007. At the conclusion of the car-insurance application process, the State Farm agent suggested that Betancourt open a State Farm credit-card account so that the policy premium could be charged to the credit card. During the application process, Betancourt gave State Farm the phone number 754–244–8626 (No. 8626). Betancourt contends that she gave this number only as an emergency-contact number that belonged to her housemate Fredy D. Osorio, with whom she shares a cell-phone plan. State Farm, on the other hand, maintains that Betancourt gave the number as her work-phone number and that it does not collect emergency-contact information from policyholders. In 2010, Betancourt failed to timely pay the minimum balance due on her credit card. This caused State Farm’s agent to place 327 autodialed calls to No. 8626 over a six-month span in an attempt to collect the balance due. Osorio sued State Farm under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, which provides a damages remedy for cellular-phone subscribers who receive autodialed phone calls without having given prior express consent to receive such calls. State Farm, in turn, sued Betancourt for the balance due (plus legal expenses) on her delinquent credit-card account and for its legal expenses in defending itself against Osorio’s TCPA lawsuit, the latter claim being based on Betancourt’s alleged negligent misrepresentation regarding the telephone number that she had provided to State Farm. On cross-motions for summary judgment, the district court ruled for State Farm with regard to both complaints. The court first held that Betancourt had consented to Osorio receiving calls from State Farm and that neither Betancourt nor Osorio had effectively revoked this consent because they did not do so in writing. Second, on State Farm’s breach-of-contract claim, the court held that Betancourt was delinquent on her credit-card debt. The court’s final ruling was that Betancourt had negligently misrepresented that No. 8626 was her phone number, thereby causing State Farm to incur approximately $132,000 in legal fees defending itself against Osorio’s action.
The Court of Appeals found its previous Meadows decision of little value, and, instead, followed the 7th Circuit’s Soppett decision:
But, as Judge Easterbrook explained [in Soppett], “The presumption that a statute uses a single phrase consistently, at least over so short a span, see Mohasco Corp. v. Silver, 447 U.S. 807, 100 S.Ct. 2486, 65 L.Ed.2d 532 (1980), implies that the consent must come from the current subscriber.” Soppet, 679 F.3d at 639–40. We agree. . . . We find this logic persuasive. Although State Farm argues that Betancourt could consent to the debt-collection calls (she being the equivalent of the Customer in Soppet ), it also concedes that Osorio could revoke Betancourt’s consent (he being the equivalent of the Bystander in Soppet ). In tune with Judge Easterbrook’s analysis, we believe this really means that Betancourt had no authority to consent in her own right to the debt-collection calls to No. 8626 because one can consent to a call only if one has the authority to do so, and only the subscriber (here, Osorio) can give such consent, either directly or through an authorized agent. We accordingly reject State Farm’s argument that the “intended recipient” is the “called party” referred to in 47 U.S.C. § 227(b)(1)(A). Determining the meaning of the term “called party” is, however, only half of our challenge. We must still decide how one obtains the “prior express consent” of the called party. For purposes of this appeal only, we accept as valid the FCC’s regulation to the effect that “autodialed … calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt are permissible as calls made with the ‘prior express consent’ of the called party.” In re Rules & Reg. Implementing the Tel. Consumer Prot. Act of 1991, 23 F.C.C. Rcd. 559, 559 (2007). We do so because counsel for Betancourt and Osorio have disclaimed any intent to challenge the regulation. But even accepting arguendo the regulation’s validity, we must still determine whether Osorio, directly or indirectly, gave No. 8626 to State Farm as a number to call in connection with Betancourt’s debt. As applied to the facts of the present case, we must therefore decide whether Betancourt had the authority to consent to Osorio receiving the calls, and whether she in fact did so. The district court held that Betancourt could provide the requisite consent because she had “common authority” over No. 8626. It based this decision on the ruling in Guitierrez v. Barclays Group, No. 10cv1012, 2011 WL 579238 (S.D. Cal. Feb 9, 2011). In Guitierrez, the plaintiff Ramon listed the cell-phone number of his wife, Clariza, on a credit-card application. He eventually defaulted on the payments, provoking collection calls from the defendant. The district court held that Ramon could consent to Clariza receiving the debt-collection calls, id. at *3, relying on a Supreme Court decision issued in the Fourth Amendment context holding “that permission to search [may be] obtained from a third party who possessed common authority over or other sufficient relationship to the premises or effects sought to be inspected.” Id. (quoting United States v. Matlock, 415 U.S. 164, 171, 94 S.Ct. 988, 39 L.Ed.2d 242 (1974)). The Fourth Amendment analogy, however, predates the cellphone era, and the equivalency that the Guitierrez court sought to draw is otherwise lacking in authority. We therefore decline to adopt Guitierrez’s Fourth Amendment “common authority” analogy. The Third Circuit’s recent decision in Gager v. Dell Financial Services, LLC, 727 F.3d 265 (3d Cir.2013), offers a more compelling approach. Gager concerned the same type of § 227(b)(1)(A)(iii) claim as presented here. The case considered “whether the TCPA allows a consumer to revoke her ‘prior express consent’ to be contacted via an automated telephone dialing system on her cellular phone.” Id. at 268. Critically, the Third Circuit resolved this question based on “the common law concept of consent.” Id. at 270. The Third Circuit also reasoned that, “in light of the TCPA’s purpose, any silence in the statute as to the right of revocation should be construed in favor of consumers.” Id. These considerations provide us with a useful roadmap for deciding whether Betancourt had the authority to consent to Osorio receiving autodialed calls from State Farm. . . . One way for State Farm to do so would be by demonstrating that Betancourt had an agency relationship with Osorio that permitted her to consent to Osorio receiving the calls, and by showing that she exercised that authority in this case by giving No. 8626 to State Farm in connection with her debt. “It is settled law that the acts of an agent, within the scope of his real or apparent authority, bind the principal.” Peninsula Land Co. v. Howard, 149 Fla. 772, 6 So.2d 384, 388 (Fla.1941). Agency can be viewed as having some overlap with Guitierrez’s notion of “common authority” but, unlike the “common-authority” concept connected with criminal law search and seizures, agency law developed in a civil context to handle commercial and tort disputes more analogous to the TCPA. . . . As applied to Osorio’s case, the key facts regarding agency are clearly in dispute. Betancourt and Osorio testified in their respective depositions that they have never given each other authority to consent to phone calls from third parties. State Farm nevertheless contends that the court should infer such authority because Osorio and Betancourt have an adult son and shared both a home and a cell-phone plan. But State Farm’s argument, if accepted, proves too much. Parents and cohabitants everywhere would be shocked to learn that every adult in their household is legally entitled to consent to having autodialing debt collectors call any of their cell phones. This is not to say that in some cases one adult might authorize another adult to do so, but we cannot say that all cohabitants possess such authority as a matter of law. Moreover, if, as Betancourt claims, she told State Farm that No. 8626 was to be used only for emergencies, a jury could find that she was exercising only a limited scope of agency, not the agency to consent to 327 autodialed debt-collection phone calls to Osorio’s cell-phone number. A genuine dispute of material fact therefore exists as to whether Betancourt acted as Osorio’s agent when she gave State Farm No. 8626 as a contact number. Accordingly, this is not an issue that can properly be decided on summary judgment. The issue must instead be submitted to a factfinder.
The Court of Appeals also found no revocation of consent.
On a related topic, the district court ruled that once Betancourt consented to receiving autodialed calls on No. 8626, that consent could be revoked only in writing. The court relied on four cases from the Western District of New York in support of its ruling. Like the district court, those cases read the TCPA as subordinate to the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., which requires a consumer to notify a debt collector in writing if the consumer desires to stop further communication. See id. § 1692c(c). The district court quoted from one such case, Starkey v. Firstsource Advantage, LLC, No. 07–CV–662A, 2010 WL 2541756 at *5 (W.D.N.Y. Mar.11, 2010), which held that “as clearly stated in the December 28, 2007 FCC Declaratory Ruling, calls regarding debt collection or to recover payments are not subject to the TCPA’s separate restrictions on ‘telephone solicitations.’ “ (quoting Starkey, No. 07–CV–662A, 2010 WL 2541756 at *5). . . . We instead presume from the TCPA’s silence regarding the means of providing or revoking consent that Congress sought to incorporate “the common law concept of consent.” See Gager v. Dell Fin. Servs., LLC, 727 F.3d 265, 270 (3d Cir.2013); see also Neder v. United States, 527 U.S. 1, 21, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999) (“[W]here Congress uses terms that have accumulated settled meaning under … the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms .”) (second alteration in original) (internal quotation marks omitted). The statement of Senator Ernest “Fritz” Hollings, who introduced the TCPA, indicates as much. Senator Hollings noted that the bill “allows consent to be given orally, in writing, electronically, or by any other means, as long as the consent is expressly given to the particular entity making the call.” 137 Cong. Rec. 30,822 (1991). From this statement, one can infer that Congress intended for the TCPA to incorporate the common-law meaning of consent, including its revocation. Common-law notions of consent generally allow oral revocation.