The United States Court of Appeals for the 11th Circuit issued a decision in Osorio v. State Farm Bank aligning that court with the 7th Circuit on how Telephone Consumer Protection Act (TCPA) restrictions on automated and/or prerecorded calls and texts to cell phones can effectively impose strict liability, even if a calling party believed it had consent for the calls.

As reported in Spring 2012, the 7th Circuit case of Soppet v. Enhanced Recovery held that, where a company gets prior express consent to prerecorded-call and/or to auto-dial or auto-text a cell phone, as the TCPA requires, the caller can still be liable, if at the time the call is made the cell number has been reassigned to a new subscriber who did not consent. This ups the ante considerably for companies who use automated dialing systems to reach customers, as does the new 11th Circuit Osorio decision, which holds, relying on Soppet, that “the consent must come from the current subscriber.” Osorio is as concerning as Soppet given that TCPA limits on calls to cells encompass autodialed live-agent calls, prerecorded calls, and texts via autodialer, all without regard to the content of a call – i.e., whether it is marketing, or only for customer-care, debt-collection, or other informational purposes.

In Soppet, Enhanced Recovery placed automated debt-collection calls to numbers its creditor clients obtained in transactions giving rise to the debts – and for which they thus had prior express consent – before the numbers were reassigned to unrelated third parties. The 7th Circuit held the reassignment rendered the consent ineffective, as it did not come from the party to whom the number belonged at the time calls were placed, and thus Enhanced Recovery (and, arguably, its clients) could be liable under the TCPA. This essentially creates strict liability as callers like Enhanced Recovery have no way of reliably tracking when cell phone numbers are reassigned. In fact, that reality underlies the petition that United Healthcare filed asking the FCC to clarify that TCPA liability cannot attach to autodialed and prerecorded calls to cell numbers for which prior express consent was obtained but which, unbeknownst to the calling party, were subsequently reassigned.

Osorio raises the stakes further, in some respects, as the cell number there was not reassigned. Rather, it was for a cell phone Osorio shared with his housemate, which the housemate gave to State Farm as a contact number. State Farm later autodialed the cell repeatedly to collect on the housemate’s overdue account with the company. The trial court held State Farm obtained the cell number in connection with a debt giving rise to the calls, and thus had consent to call it, even if the calls reached Osorio. The 11th Circuit disagreed and reversed, holding the consent (or collection of the cell number) was required to come from Osorio.

The 11th Circuit held the housemate had no authority to consent in her own right to the debt-collection calls to Osorio’s cell phone, but rather “only the subscriber … can give such consent, either directly or through an authorized agent.” The only way State Farm could thus prevail was if it could show it had the consent of Osorio as defined by common law, such as by showing an agency relationship between Osorio and the housemate. And, if that consent could be shown, the court further held, State Farm would also have to show Osorio did not revoke it by asking not to be called, inasmuch as “common-law notions of consent [ ] allow oral revocation” of consent. As there were disputed questions of fact on these agency and revocation questions, the case was sent back down to the district court for further proceedings.

Meanwhile, Osorio effectively doubles the number of states in which controlling precedent now holds that companies using autodialed calls/texts or prerecorded-messaging to dial cell phones can assume risks beyond their power to avoid, short of avoiding cells altogether. In Soppet, the 7th Circuit basically held such callers assume the risk that cell phone numbers they obtain from customers, and for which they may have also obtained prior express consent to contact via automated means, have since been reassigned. Now, Osorio places such callers at the mercy of whatever unknowable arrangements, understandings and/or relationships may exist between those who may share a cell phone. This makes the relief sought from the FCC in the United Healthcare petition that much more important. In the meantime, given the steep rise in class-action TCPA litigation the last several years, this is one more worry with which companies must grapple in crafting their telephonic customer outreach strategies.