Previously, we reported on the Soppett v. Enhanced Recovery Appeal before the Court of Appeals for the Seventh Circuit.  (http://www.calautofinance.com/?p=2652)  The Court issued its decision today. In Soppett v. Enhanced Recover Company, LLC, here, the Court of Appeals for the Seventh Circuit held that ‘consent’ under the TCPA to call cellular telephones by autodialer means consent from the person subscribing to the called number at the time the call is made.   Thus, the Court of Appeals found that consent from the original customer who was the prior subscriber to the cellular telephone number called does not transfer to the current subscriber of that telephone number.

The situation is this: Customer incurs a debt and does not pay. Creditor hires Bill Collector to dun Customer for the money. Bill Collector puts a machine on the job and repeatedly calls Cell Number, at which Customer had agreed to receive phone calls by giving his number to Creditor. See In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 23 FCC Rcd. 559 ¶¶ 9, 10 (Jan. 4, 2008) (2008 TCPA Order). The machine, clled a predictive dialer, works autonomously until a human voice comes on the line. If that happens, an employee in Bill Collector’s call center will join the call. But Customer no longer subscribes to Cell Number, which has been reassigned to Bystander. A human being who called Cell Number would realize that Customer was no longer the subscriber. But predictive dialers lack human intelligence and, like the buckets enchanted by the Sorcerer’s Apprentice, continue until stopped by their true master. Meanwhile Bystander is out of pocket the cost of the airtime minutes and has had to listen to a lot of useless voicemail. (We use Bill Collector as the caller, but this simplified description could as easily use an advertiser that relies for consent on earlier transactions with Customer, or a box that Consumer checked on a vendor’s web site.) In this litigation, Teresa Soppet and Loidy Tang play the roles of Bystander; AT&T plays Creditor; Enhanced Recovery Co. plays the role of Bill Collector. Neither Soppet nor Tang ever consented to receive automated or recorded calls from Enhanced Recovery—but the two Customers did agree to receive calls at the numbers later assigned to Soppet and Tang. Enhanced Recovery called Soppet’s number 18 times and Tang’s 29 times. By the time it started calling, at least three years had passed since the two Customers furnished the Cell Numbers to AT&T as a way to contact them.

The Court of Appeals found that the debt collector could not rely on the original customer/subscriber’s consent to defeat the TCPA claim filed by Soppett, explaining

Of course, the trade association already may have tried and failed to persuade Congress to replace “called party” with “intended recipient of the call.” That substitution would expose new subscribers to unwanted calls and unjustified expense. Congress might have thought the current approach preferable, as a safeguard of persons assigned to recycled numbers, even though this protection comes at some cost to bill collectors. Bill collectors need not abandon predictive dialers. Other options remain: • Have a person make the first call (§227(b)(1) is limited to automated calls), then switch to a predictive dialer after verifying that Cell Number still is assigned to Customer. • Use a reverse lookup to identify the current subscriber to Cell Number. • Ask Creditor, who obtained Customer’s consent, whether Customer still is associated with Cell Number—and get an indemnity from Creditor in case a mistake has been made. (Indemnity may be automatic under ¶10 of the 2008 TCPA Order, which states that calls placed by a third-party collector on behalf of a creditor are treated as having been made by the creditor itself.) The third of these options is especially attractive when Creditor is a phone company—though perhaps knowing that Creditor is a telecommunications provider should itself alert Bill Collector that Cell Number no longer is assigned to Customer. If you don’t pay your phone bill, the phone company cuts off service and assigns the number to someone else. Knowing that Creditor is a phone company, and inferring that Customer’s service will have been discontinued, does not necessarily solve Bill Collector’s problem, however. Customer may have agreed to be reached at more than one number. For example, Customer might subscribe to landline service from AT&T and cell service from Verizon, and give both numbers. If AT&T assigns an overdue account, Debt Collector might infer that Customer no longer can be reached at the number on AT&T’s network, but Customer might still be the subscriber to the number on Verizon’s network. One more argument requires brief discussion. Several parts of the Act require or permit the FCC to issue regulations, and the Commission also declares its understanding of provisions on which it is not authorized to issue regulations. As we’ve mentioned, the FCC has some authority to allow exceptions to §227(b). In 2005 ACA International asked the Commission to exempt bill collection from the statutory system. The 2008 TCPA Order addresses this subject and some others. The Commission concluded that the bill-collection industry does not need an exception because §227(b)(1)(A) already allows calls with the “express consent” of the called party. The FCC opined that “the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt.” 2008 TCPA Order at ¶9. Both Enhanced Recovery and ACA International contend that this language is conclusive in their favor. The FCC said that providing a number gives “express consent by the cell phone subscriber to be contacted at that number regarding the debt.” (Emphasis added.) We don’t get the argument. Of course a subscriber’s consent to be called at a given number is consent “to be contacted at that number.” The FCC was addressing the meaning of the statutory words “express consent”. It was not addressing the meaning of the statutory words “called party” or stating a view about what happens if a number is reassigned after a subscriber gives consent. This litigation concerns the meaning of “called party.” The FCC did not define that term in the 2008 TCPA Order or, as far as we know, anywhere else. We conclude that “called party” in §227(b)(1) means the person subscribing to the called number at the time the call is made.

Perhaps the only bright part of the case is the dicta that the TCPA affords indemnity rights.