11th Circuit Rules that Calls to Reassigned Numbers can create TCPA Liability

One of the more troubling issues to arise in Telephone Consumer Protection Act litigation involves calls to reassigned cellphone numbers. Almost 37 million phone numbers get recycled each year, a 16 percent increase since 2007, according to the most recent figures from the Federal Communications Commission. While consent is a defense to a TCPA claim, that consent must come from the "called party." When a telephone number is reassigned from one person to another, and a company dials the number of the first person (who consented to receive calls at that number) but the phone is answered by a different person (who now uses a cellphone with the same number), who is the called party?

The TCPA itself doesn't answer this question. Though it uses the term "called party" seven times, the statute never defines the term, and doesn't address the issue of reassignment of cellphone numbers.

In Breslow v. Wells Fargo Bank NA, an opinion issued on June 5, 2014, the Eleventh Circuit joined the Seventh Circuit in ruling that the TCPA is essentially a "strict liability" statute, and that the "called party" "for purposes of § 227(b)(1)(A)(iii) means the subscriber to the cell phone service or user of the cell phone called." The Seventh Circuit had earlier reached the same conclusion in Soppet v. Enhanced Recovery Company LLC.

Both Breslow and Soppet relied on legislative history, the purpose of the TCPA, and the fact that the statute's provision of treble damages for "willful" violations means that a violation with no knowledge or intention was still actionable. In the end, both courts clearly felt that as between protecting consumers from unwanted cellphone calls and businesses that acted in good faith, consumers prevail.

On Jan. 16, 2014, United Healthcare Services Inc. filed a petition for an expedited declaratory ruling with the FCC, seeking "clarification" of the applicability of the TCPA to "informational, non-telemarketing autodialed and prerecorded calls to wireless numbers for which valid prior express consent has been obtained but which, unbeknownst to the calling party, have subsequently been reassigned from one wireless subscriber to another." In its petition, United Healthcare takes the position that "organizations cannot always know whether a telephone number has been reassigned."

The U.S. Chamber of Commerce weighed in on March 10, 2014, with a letter in support of United Healthcare's petition in which the Chamber of Commerce took the position that there is no practical way for businesses to protect themselves against the possibility of calling a number that has been reassigned to someone new. "There is no single, authoritative wireless telephone number directory or currently available tool that can prevent all calls to phone numbers that once belonged to a client, customer, or other contact but have been reassigned without the knowledge of the caller."

In Soppet, the Seventh Circuit expressed little concern for businesses or sympathy for the positions taken by the U.S. Chamber of Commerce and United Healthcare. The court offered several suggestions for how defendants might ensure they do not call persons to whom cellphone numbers were recently reassigned:

• 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.[8]

These suggestions are impractical and suggest that the court is somewhat out of touch with the everyday reality of the kind of volume calling at issue in most TCPA cases. As the U.S. Chamber of Commerce put it in its comment on the United Healthcare petition: "such a solution is impractical and prohibitively expensive, especially for informational, non-telemarketing calls."

The TCPA desperately requires revision and updating, and only Congress or the FCC can do it. It is unlikely, however, that the FCC will act in a way inconsistent with the positions taken by the Seventh and Eleventh Circuits, and Congress seems to have little appetite for fixing the TCPA.

TCPA litigation is virtually out of control. An update is desperately needed. A damage cap in the style of those found in other consumer protection statutes such as the Fair Debt Collection Practices Act and Truth in Lending Act would fix the problem, along with some common sense decisions from the FCC and the courts. While the first battles over the issue of reassigned cellphone numbers have gone in favor of the plaintiffs' class action bar, it remains to be seen whether classes can be ascertained and certified in cases involving this issue, or if they can, whether they will be of any consequential size.

Categories: Technology & Privacy