Eleventh Circuit Clarifies Ambiguities in § 227 of the Telephone Consumer Protection Act

In Osorio v. State Farm Bank, No. 13-10951 (Mar. 28, 2014), the Eleventh Circuit reversed the grant of summary judgment to State Farm with respect to a claim brought against it under the Telephone Consumer Protection Act (“TCPA”), 42 U.S.C. § 227 for the unwanted receipt of autodialed debt collection calls and with respect to State Farm’s third-party complaint alleging negligent misrepresentation against the party who provided the relevant cell phone number.

In 2007, Betancourt applied for a car-insurance policy with State Farm. At the end of the application process, the State Farm agent suggested that Betancourt open a State Farm credit card account so that the policy premium could be charged to the credit card. On her credit-card application, Betancourt listed the cell-phone number of her housemate Osorio, with whom she shares a cell-phone plan. Betancourt maintained that she listed Osorio’s number only as an emergency-contact number, while State Farm contended that she provided the number as her work-phone number. When Betancourt later failed to timely pay the minimum balance due on her credit card, State Farm’s agent placed 327 autodialed calls to Osorio’s number over a 6-month span in an attempt to collect the balance due.

The pertinent provision of § 227 makes it unlawful “for any person within the United States, or any person outside the United States if the recipient is within the United States . . . to make any call (other than a call made for emergency purposes or made with the express prior consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, specialized carrier service, or any service for which the called party is charged for the call . . . .” 47 U.S.C. § 227(b)(1)(A)(iii).

State Farm argued that it was not liable under § 227 because the term “called party” meant “intended recipient,” and that Betancourt—the called party by virtue of her status as the intended recipient—had given express prior consent to Osorio receiving the calls on his cell-phone. The court rejected this argument, relying largely upon Judge Easterbrook’s analysis in Soppet v. Enhanced Recovery Co., LLC 6799 F.3d 637 (7th Cir. 2012). There, Judge Easterbrook noted that the phrase “called party” appeared in § 227 seven times, and that in four of those instances, the phrase clearly referred to the current subscriber of the cell phone, not the “intended recipient.” The Court agreed with the Seventh Circuit reasoning that the presumption that a statute uses a single phrase consistently implied that the consent must come from the current subscriber, and not the intended recipient. As to State Farm’s argument that Betancourt nonetheless had the authority to consent on behalf of Osorio, the Court held that State Farm must demonstrate that it had the common law consent of Osorio to call his number. One way to do so would be to demonstrate that Betancourt had an agency relationship with Osorio. At this stage of the litigation, however, the Court found that key facts regarding the agency were in dispute and that the issue must be submitted to a jury. The Court also held that whether either Betancourt or Osorio effectively revoked whatever consent State Farm might have had should also proceed to a jury. Finally, the Court rejected State Farm’s argument that because Osorio was not charged for each call, they were exempted from liability under the statute.

As to State Farm’s third-party complaint against Betancourt for negligently misrepresenting Osorio’s number as her own, the Court determined that the elements necessary to establish negligent misrepresentation in Florida hinged on the resolution of factual disputes that must be submitted to a jury. Accordingly, the Court reversed the district court’s grant of summary judgment to State Farm on both Osorio’s Telephone Consumer Protection Act claim and on State Farm’s negligent misrepresentation claim against Betancourt, and remanded the case for further proceedings consistent with the opinion.

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