Ninth Circuit Agrees with the Seventh and Eleventh Circuits in Holding That Consent from the Intended Recipient of a Call Is Not Sufficient to Avoid TCPA Liability

Business Litigation Update

June 2020

Ninth Circuit Agrees With the Seventh and Eleventh Circuits in Holding That Consent From the Intended Recipient of a Call Is Not Sufficient to Avoid TCPA Liability

Introduction Credit One asked the district court to instruct the jury that Credit One could not be liable under the TCPA if it had a In a decision issued on June 3, 2020, the Ninth Circuit good faith belief that it had consent to call the phone weighed in on who constitutes the “called party” under the number. The district court refused and, instead, instructed Telephone Consumer Protection Act (TCPA) and agreed the jury that for there to be consent under the TCPA, Credit with the Seventh and Eleventh Circuits in holding that One must have had the consent of the current subscriber consent from the intended recipient of a call, as opposed to (Lemos) or the nonsubscriber customary user of the phone the party actually reached, is insufficient to avoid liability (N.L.), and that consent from the intended recipient (Credit under the TCPA. The decision in N.L. v. Credit One Bank, One’s customer) was not enough. The jury returned a N.A. is certain to be used by the plaintiffs’ bar in support of verdict in favor of N.L. of $94,500 on the TCPA claim, and “wrong number” TCPA cases. Credit One appealed to the Ninth Circuit.

Background Ninth Circuit Decision

The TCPA prohibits callers from calling individuals using an The Ninth Circuit affirmed the district court’s jury automatic telephone dialing system (ATDS) without the instruction, holding that the consent of the intended express consent of the “called party,” and provides for recipient was not a defense to liability under the TCPA. The statutory damages of $500 to $1,500 per call. court noted that both the Seventh and Eleventh Circuits had already rejected the argument that consent from the To collect past-due payments from a customer, a vendor for intended recipient is a defense, and that the D.C. and Third Credit One Bank, N.A (Credit One) made 189 automated Circuits have voiced support for this approach. calls to the phone number listed in Credit One’s system for its customer. Unfortunately for Credit One, the customer’s The court then reasoned that the ordinary and natural phone number had been reassigned to Sandra Lemos meaning of “called party” as used in the TCPA supported (Lemos), who in turn let her 11-year-old son N.L. use the the interpretation that “called party” refers to the current phone as his own. Although Credit One had previously subscriber or customary user of the cell phone. For obtained consent to call the number from its customer, it example, the TCPA refers to the party “charged for the call” did not have consent from N.L. or Lemos. N.L. sued Credit which could not plausibly be an intended recipient that was One in the U.S. District Court for the Eastern District of never reached. California, claiming that Credit One violated the TCPA by calling him using an ATDS without his consent. The court also noted that previous Federal Communications Commission (FCC) orders weighed against Credit One’s

ATLANTA CHICAGO CINCINNATI CLEVELAND COLUMBUS DAYTON NEW YORK WASHINGTON, D.C. ATTORNEY ADVERTISING Business Litigation Update June 2020 position. For example, if the caller’s intent could defeat FOR MORE INFORMATION TCPA liability then FCC-adopted safe harbors for callers who rely on comprehensive reassigned number databases would For more information, please contact: become unnecessary. Jessica E. Salisbury-Copper The court rejected Credit One’s argument that callers would 937.443.6854 be helpless if “consent” did not include the consent of the [email protected] “intended recipient.” The Ninth Circuit noted that “caller Scott A. King best practices” can facilitate detection of reassigned phone 937.443.6560 numbers, and that there are marketplace resources to [email protected] better inform callers of reassigned phone numbers. The court also suggested that callers could first manually dial Doori Song the number (such that the TCPA would not apply) to 216.566.5648 confirm that it still belonged to their customer before [email protected] allowing the number to be called with an autodialer. This advisory bulletin may be reproduced, in whole or in Finally, while holding that consent from the intended part, with the prior permission of Thompson Hine LLP and recipient is insufficient and repeatedly suggesting that the acknowledgment of its source and copyright. This TCPA’s language suggested that consent must come from publication is intended to inform clients about legal matters the subscriber (i.e., the person who pays the bill and is thus of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it “charged for the call”), the court was careful, albeit in a without professional counsel. footnote, not to decide whether consent must come from the subscriber, or whether the customary user of the phone This document may be considered attorney advertising in some jurisdictions. would be sufficient. © 2020 THOMPSON HINE LLP. ALL RIGHTS RESERVED. Conclusion

In March 2019, the FCC issued a Final Rule amending the TCPA to create a comprehensive database for reassigned numbers (see our previous client update on that topic), but that database is not yet operational (and may not be any time soon). As a result, the Ninth Circuit’s decision provides a stern warning to those who autodial—that at least in the Seventh, Ninth and Eleventh Circuits, a caller’s good faith belief that it has consent to call is not enough to avoid TCPA liability if the number has been reassigned. With the continued rise of TCPA cases, including an increased number of “wrong number” class actions, callers should be certain that the number they are dialing belongs to the person from whom they have consent before placing a call with an ATDS.