Three Federal Courts Rule that the Intended Target, Rather Than the Actual Recipient, Can Govern Whether "Robocall" Liability Lies for Calls to Wrong Numbers

By Ryan Gist and Ronnie London.   In separate cases in different jurisdictions, one federal appeals court and two district courts recently held that, just because companies using autodialers reach someone other than their intended target, they do not lose the protection of exceptions in the law that depend on the relationship between the company and the person it is attempting to call. Since impermissible automated calls can lead to statutory damages of up to $1500 per call (as well as fines by federal agencies), the decisions are good news for companies that rely on autodialed and prerecorded calls but may not always be in a position to know when current or former customers’ phone numbers are reassigned, and/or if they have moved from a previous address. It is also particularly good news for those who may need to place such automated calls to cell phones, where the federal prohibition is tightest and the exceptions to it are narrowest. The recent cases arise under the Telephone Consumer Protection Act (TCPA) and Federal Communications Commission (FCC) rules implementing it, which together prohibit automated and prerecorded calls, with certain exceptions. With respect to cell phones, the TCPA and rules prohibit automated/prerecorded calls unless there is prior express consent from the called party (or the call is for emergency purposes). As to residential (land) lines, they impose the same prohibition, but the statute also specifically allows the FCC to create categorical exemptions for some calls. Under that allowance, the FCC has exempted from the autodialed/prerecorded-call prohibition calls made for a non-commercial purpose, calls by or on behalf of tax-exempt nonprofits, calls that have a commercial purpose but do not attempt to sell or advertise goods or services, and calls to recipients with whom callers have established business relationships (or “EBRs”). Apropos the recent TCPA decisions in particular, the FCC has repeatedly held that because debt collection calls involve an “existing business relationship” and do not include “unsolicited ads,” they satisfy both of the latter two exemptions above. The FCC also, more recently, issued a ruling that, though not implicated in the recent court cases, allows autodialed/prerecorded debt collection calls to cell phones if they are for purposes of collecting on a debt still outstanding, from a transaction in which the called party gave the cell phone number that the creditor wishes to call in order to collect. In such cases, the FCC determined, the customer effectively gives his or her prior express consent to be called at that number in connection with the transaction. However, the FCC has not specified whether these exemptions and allowances apply to debt collection (or other) calls that, by chance or mistake, reach someone other than the intended recipient. As a result, recipients of “wrong number” debt collection calls have continued to sue collection agencies and creditors under the TCPA. Three federal courts have, however, recently concluded that the exemption applies to all debt collection calls at residential telephone lines regardless of whether the call reaches the intended recipient/debtor. Most recently, Anderson v. AFNI, Inc., decided by a district court in Pennsylvania, involved a plaintiff who was victimized by an identity thief who used her personal information to open various accounts that eventually went into default. AFNI, a collection agency, placed automated collection calls to plaintiff’s residential telephone line to collect on these debts. Although the court found the plaintiff had standing to sue under the TCPA, it dismissed the claims. It held that even if calls to a phone number provided by a debtor actually reach someone else, and thus may not fall within the EBR exemption (an issue the court opted not to decide), debt collection is covered by the exemption for commercial calls that do not seek to sell goods or services, regardless whether “made to a debtor or non-debtor.” This continues a recent trend, which included Meadows v. Franklin Collection Service, Inc., where the Eleventh Circuit affirmed a district court’s dismissal of TCPA claims for mistaken debt collection calls to non-debtors on their residential line. Plaintiffs had complained of collection calls intended for their daughter and the previous owners of plaintiffs’ phone number. The district court dismissed, noting that “all debt collection circumstances are excluded from the TCPA’s coverage” including calls to a non-debtor. On appeal, the Eleventh Circuit affirmed, holding that collection calls fall within the FCC’s exception for commercial calls that do not seek to sell goods or services, and that the collection agency’s EBR with the intended recipient of the calls precluded liability for calls that mistakenly reached non-debtors. Otherwise, the court noted, a debt collector would violate the TCPA “if it called the debtor’s number and another member of the debtor’s family answered. Similarly, in Santino v. NCO Financial Systems, Inc., decided by a district court in New York, plaintiffs mistakenly received calls on their residential line from NCO, a collection agency, that was attempting to collect debts of a third party. Relying on the same FCC rulings that debt collection calls are protected under the TCPA’s exemptions for commercial calls which do not transmit an unsolicited ads and for EBRs, the court dismissed plaintiffs’ claims, holding NCO’s debt collection calls “fit[ ] squarely” within the exemption. The three decisions add to the critical mass of cases that, while authority was initially split on the question, are beginning to firmly establish that the caller’s intent at a time a call is placed – including the identity of the person whom the caller was trying to reach – governs whether TCPA exemptions apply. While these three cases are in the context of debt collection, there is no reason their logic should not extend to non-debt-collection calls that, nevertheless, fall within the EBR or commercial-but-not-sales exemptions (or, for that matter, the cellular debt-collection exemption). Assuming the trend continues, this line of cases should form an important bulwark against would-be plaintiffs who seek to leverage the TCPA’s generous statutory-damage provision to seek to impose liability against (or extract nuisance settlements from) companies who, due to reasons outside their control or even, potentially, simple inadvertence, place calls to wrong numbers, or otherwise reach someone other than the intended call recipient.