N. L. v. Credit One Bank, N.A.N. L. v. Credit One Bank, N.A.
FOR PUBLICATION
Submitted March 25, 2020*
Before: Ronald M. Gould, Morgan Christen, and Daniel A. Bress, Circuit Judges.
Opinion by Judge Bress
SUMMARY**
Telephone Consumer Protection Act
The panel affirmed the district court‘s judgment after a jury trial in favor of the plaintiff in an action under the Telephone Consumer Protection Act.
Defendant Credit One Bank‘s vendors made automated calls to an eleven-year-old boy‘s cell phone. Credit One was trying to collect past-due payments from a customer, but the customer‘s cell phone number had been reassigned to the boy‘s mother, who let her son use the phone as his own. The customer had given consent to be called, but the boy and his mother had not.
The TCPA exempts from liability automated calls made with the “prior express consent of the called party.” Agreeing with other circuits, the panel held that the consent of the person it intended to call did not exempt Credit One from liability under the TCPA. Accordingly, the district court properly instructed the jury that consent from the intended recipient of the call was not sufficient.
The panel also held that, following Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018), the district court properly instructed the jury on the definition of an “automatic telephone dialing system,” the use of which is prohibited under the TCPA. The panel noted a circuit split on the holding of Marks that the TCPA‘s definition of ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator.
In a concurrently filed memorandum disposition, the panel addressed the district court‘s award of attorneys’ fees.
COUNSEL
Noah A. Levine, Alan E. Schoenfeld, and Stephanie Simon, Wilmer Cutler Pickering Hale and Dorr LLP, New York, New York, for Defendant-Appellant.
Yitzchak Zelman, Marcus & Zelman, Asbury Park, New Jersey, for Plaintiff-Appellee.
BRESS, Circuit Judge:
Over a period of four months, Credit One Bank‘s vendors made 189 automated calls to an eleven-year-old boy‘s cell phone. Credit One was trying to collect past-due payments from a customer, but, unbeknownst to the bank, the customer‘s cell phone number had been reassigned to Sandra Lemos, who in turn had let her son, N.L., use the phone as his own. N.L.
The principal question in this case is whether Credit One can escape liability under the TCPA because the party it intended to call (its customer) had given consent to be called, even though the party it actually called had not. Consistent with every circuit to have addressed this issue, we hold that this argument fails under the TCPA‘s text, most naturally read. Credit One is therefore liable under the TCPA for its calls to N.L. We affirm the district court in this and all respects.
I
Credit One is a national bank that provides credit card services. When its customers fall behind on payments, Credit One hires vendors to make collection calls to the delinquent cardholders. D.V. was a Credit One customer who, in 2014, gave the bank his consent to be called on a cell phone number ending in -9847 (the plaintiff here disputes that D.V. gave sufficient consent, but we will assume D.V. did so). About two years later, and without Credit One‘s knowledge, the phone number was reassigned to Sandra Lemos. Lemos then allowed her minor son N.L. to use the number.
When D.V. fell behind on his credit card payments, three of Credit One‘s vendors started calling the -9847 number to collect the outstanding amounts. The vendors ultimately called the number 189 times between February 20, 2017 and June 13, 2017. In one instance, N.L. received eight calls in a single day, all before noon. On another occasion, Credit One vendors called N.L. six times; three calls were made in the same hour and two were made within a minute of each other. To place the calls, the vendors used dialing systems that call specific numbers from preset lists.
N.L., acting through his mother as guardian ad litem, sued Credit One and its vendors for the unwanted calls, bringing claims under the TCPA, California‘s Rosenthal Fair Debt Collection Practices Act,
N.L. settled with the vendors and his claims against Credit One were then tried before a jury. On the issue of consent to receive the calls, the jury heard evidence that D.V. had agreed to be contacted at the -9847 number and that Credit One‘s vendors had intended to reach D.V. when they called that number.
At the close of trial, the parties submitted proposed jury instructions. Credit One asked that the jury be instructed that it must find for Credit One under the TCPA if Credit One or its vendors had “a good-faith basis to believe that they had consent to call N.L.‘s telephone number.” Credit One also sought an instruction that would negate liability if the jury found “it was reasonable for Credit One Bank to rely on D.V.‘s prior express consent to call the number -9847.”
The district court rejected both proposals. Instead, the court instructed the jury that “[t]he law requires the consent of the current subscriber of the called phone, in this case Sandra Lemos, or the consent of the nonsubscriber, customary user of the called phone, in this case, [N.L.]. Consent
After a three-day trial, the jury returned a verdict for N.L. on his TCPA claim, resulting in $500 in statutory damages for each of the 189 unwanted calls, for a total of $94,500. See
The district court subsequently denied N.L.‘s post-trial motion for treble damages under the TCPA but granted his request for attorneys’ fees and costs under the Rosenthal Act. Credit One timely appealed the fee award, and we consolidated the appeals.
II
When a caller who is otherwise subject to the TCPA phones someone who has not consented to its calls, can the caller avoid liability under the TCPA‘s ATDS prohibitions if the person it intended to call had consented to the calls? We have never answered this question. But the Seventh and Eleventh Circuits have, and they both rejected Credit One‘s same “intended recipient” interpretation. See Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, 1251-52 (11th Cir. 2014); Soppet v. Enhanced Recovery Co., 679 F.3d 637, 639-43 (7th Cir. 2012). The D.C. and Third Circuits have also voiced support for the Seventh and Eleventh Circuits’ positions. See ACA Int‘l v. FCC, 885 F.3d 687, 706 (D.C. Cir. 2018); Leyse v. Bank of Am. Nat‘l Ass‘n, 804 F.3d 316, 325 & n.13 (3d Cir. 2015). Reviewing the district court‘s jury instructions de novo for legal error, Navellier v. Sletten, 262 F.3d 923, 944 (9th Cir. 2001), we agree with our sister circuits. Credit One‘s intent to call a customer who had consented to its calls does not exempt Credit One from liability under the TCPA when it calls someone else who did not consent.
This follows from the language of the TCPA itself. We interpret the statute in accordance with its ordinary and natural meaning, considering the key statutory terms in the context in which they are used. E.g., Hall v. United States, 566 U.S. 506, 511 (2012); Davis v. Mich. Dep‘t of Treasury, 489 U.S. 803, 809 (1989); Confederated Tribes & Bands of the Yakama Indian Nation v. Alcohol & Tobacco Tax & Trade Bureau, 843 F.3d 810, 812 (9th Cir. 2016). In this case, Credit One‘s argument founders on the more probable meaning of the TCPA‘s term “called party,” and the statutory context that inescapably amplifies what Congress meant (and did not mean) when it used that term.
The TCPA exempts from liability those ATDS-generated calls made with the “prior express consent of the called party.”
It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States—
(A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system [ATDS] or an artificial or prerecorded voice—
...
(iii) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service
for which the called party is charged for the call....
One notices that this provision nowhere references an “intended” recipient of the calls. Soppet, 679 F.3d at 640 (“The phrase ‘intended recipient’ does not appear anywhere in § 227 . . . .“). Credit One‘s argument thus starts off in the backseat, for there is no obvious statutory text on which to ground an “intended recipient” interpretation. And as we now walk through how the undefined term “called party” is used in the statute, Credit One‘s interpretation becomes more and more untenable as every statutory reference to “called party” is considered.
Start first with the core “consent” provision in
As we work further through the TCPA, Credit One‘s “intended recipient” theory meets only more resistance. Staying within
A “called party” that is “charged for the call” cannot be the “intended” but never-called person who had previously given consent. Instead, this “second use of ‘called party’ must mean [the] [c]ell [n]umber‘s current subscriber, because only the current subscriber pays.” Soppet, 679 F.3d at 639. That this subsection (iii) treats “called party” as the current subscriber sheds light on what “called party” should mean in the ATDS “consent” provision of which subsection (iii) is a part.
As we burrow deeper into the TCPA, we find several more references to “called party” that only further confirm that Credit One‘s interpretation is not the best one. Section 227(b)(1)(B) prohibits certain calls “using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party.” This subsection parallels the
Other references to “called party” in the statute likewise indicate that the term does not refer to the intended recipient of the call. Like
The remainder of the references to “called party” are found in
Perhaps because the statutory text stands in opposition to its argument, Credit One focuses more intently on perceived statutory purpose and the policy implications of the district court‘s instruction. But even if these considerations could overcome the most natural construction of the TCPA‘S language, N.L. still has the better of the argument. In its findings supporting the TCPA, Congress aimed to strike a “balance[]” between “[i]ndividuals’ privacy rights, public safety interests, and commercial freedoms of speech. . . in a way that protects the privacy of individuals and permits legitimate telemarketing practices.”
But Credit One‘s interpretation conflicts with the very congressional findings upon which it relies, in which “Congress appears to equate the ‘called party’ with the ‘receiving party.‘” Leyse, 804 F.3d at 325 n.13. In enacting the TCPA, Congress found that “[b]anning such automated or prerecorded telephone calls to the home, except when the receiving party consents to receiving the call ..., is the only effective means of protecting telephone consumers from this nuisance and privacy invasion.” Pub. L. No. 102-243, § 2(12), 105 Stat. at 2394 (emphasis added).
Credit One also attempts to draw support from certain orders of the FCC, which has authority to promulgate regulations implementing the TCPA.
If anything, the FCC‘s orders weigh against Credit One. If a caller‘s intent could defeat liability, the safe harbors would be unnecessary. Moreover, and in reasoning that the D.C. Circuit did not reject and if anything supported, ACA Int‘l, 885 F.3d at 706, the 2015 FCC Order expressly “clarif[ied] that the TCPA requires the consent not of the intended recipient of a call, but of the current subscriber (or non-subscriber customary user of the phone).” 2015 FCC Order, 30 FCC Rcd. at 7999 (footnote omitted). The FCC also “reject[ed]” proposals to “interpret ‘called party’ to be the ‘intended recipient’ or ‘intended called party,‘” relying on the reasoning of the Seventh and Eleventh Circuits in Soppet and Osorio. Id. at 8002 & n.278. While Credit One relies most heavily on one dissenting FCC Commissioner‘s views, see id. at 8077–78 (Pai, dissenting), the TCPA is best read in the way we have set forth above, under which Credit One‘s preferred interpretation must fail.
Finally, contrary to Credit One‘s suggestion, callers are not helpless absent its “intended recipient” construction. Here, Credit One‘s vendors called an eleven-year-old boy nearly 200 times before determining that he was not the delinquent cardholder they were pursuing. In all events, the FCC in its 2015 order itself recognized that “caller best practices can facilitate detection of reassignments before calls,” that “there are solutions in the marketplace to better inform callers of reassigned wireless numbers,” and “that businesses should institute new or better safeguards to avoid calling reassigned
In all events, whether Credit One‘s “intended recipient” rule reflects the better balancing of competing interests is not for us to decide. What matters here is the balance that the text of the TCPA most naturally reflects. And given the “called party” language that Congress used in the TCPA, we hold that the district court‘s instruction complied with the statute.
III
Credit One raises one additional argument under the TCPA that it acknowledges is foreclosed under our circuit‘s precedent, but which Credit One wishes to preserve for further review. This argument concerns the definition of “automatic telephone dialing system,” or ATDS. The TCPA prohibits the use of an ATDS, except in certain circumstances (consent of the “called party” being one of them).
The district court instructed the jury: “The term [a]utomatic telephone dialing system means equipment which has the capacity, one, to store numbers to be called; or two, to produce numbers to be called using a random or sequential number generator and to dial such numbers.” (Emphasis added). Accordingly, under the challenged instruction, a device qualifies as an ATDS if it can store numbers and dial them—even if it cannot produce numbers using a random or sequential number generator.
Credit One maintains that this instruction misstates the TCPA‘s requirements because, in its view, a device must be able to generate random or sequential telephone numbers to qualify as an ATDS. And Credit One contends that the district court‘s jury instruction was prejudicial because there was no evidence that its systems could produce and dial random or sequential numbers. As Credit One acknowledges, however, the district court followed our decision in Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018), which held that the TCPA‘s “definition of ATDS includes a device that stores telephone numbers to be called, whether or not those numbers have been generated by a random or sequential number generator.” Id. at 1043.
There is an acknowledged circuit split on this issue. Our decision in Marks parted ways with the Third Circuit‘s decision in Dominguez v. Yahoo, Inc., 894 F.3d 116, 121 (3d Cir. 2018). See Marks, 904 F.3d at 1052 n.8. Subsequently, the Seventh and Eleventh Circuits issued forceful decisions disagreeing with Marks. See Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 466–67 (7th Cir. 2020); Glasser v. Hilton Grand Vacations Co., 948 F.3d 1301, 1306–13 (11th Cir. 2020). Most recently, the Second Circuit weighed in on the side of Marks. See Duran v. La Boom Disco, Inc., 955 F.3d 279, 281 n.5 (2d Cir. 2020).
The ATDS definitional issue is a difficult one, but the issue before us is not: as a three-judge panel, we are bound by Marks, as Credit One agrees. See, e.g., Multi Time Mach., Inc. v. Amazon.com, Inc., 804 F.3d 930, 936 n.2 (9th Cir. 2015). Because the jury instruction on the definition of ATDS is consistent with Marks, Credit One‘s challenge to that definition fails.2
AFFIRMED.
DANIEL A. BRESS
UNITED STATES CIRCUIT JUDGE