Third And Seventh Circuit Courts Of Appeals Issue TCPA Decisions

The Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. ("TCPA"), prohibits "robo-calls" to cell phones, text messages and "junk" faxes without prior consent. It imposes statutory penalties from $500 to $1,500 per violation, regardless of any actual damage, and is thus increasingly popular with the plaintiffs' class action bar. Though passed in 1991, there are relatively few Circuit Court of Appeals decisions regarding the TCPA. In August of 2013, however, both the Third and Seventh Circuits issued TCPA decisions—one involving the revocation of prior express consent and the other involving cy pres awards in TCPA class actions.

In Gager v. Dell Financial Services, LLC, --- F.3d ----, 2013 WL 4463305 (3d Cir. Aug. 22, 2013), the plaintiff, in the course of obtaining financing from Dell to purchase a computer, provided her cell phone number on her application. (Though courts have split on the issue, the plaintiff in this case conceded this was sufficient consent to be called.) After she stopped making payments, Dell called her on her cell phone using an auto-dialer and/or a pre-recorded voice. Eventually, Gager sent a letter revoking her consent and asking that Dell stop calling her on her cell phone. Dell refused, so Gager filed a federal class action lawsuit against Dell for allegedly violating the TCPA. The district court granted Dell's motion to dismiss on the grounds Gager could not revoke her consent under the TCPA.

On appeal, the Third Circuit reversed, holding that the TCPA allows a consumer to revoke any prior express consent previously provided. The Third Circuit also held that there is no temporal limit to this right—that is, a consumer can revoke his or her consent at any time. In addressing these issues, the Third Circuit also held that the TCPA applies equally to both telemarketing calls and debt collection calls. Plaintiffs' class action counsel may use this tangential holding to argue that strict new rules by the FCC interpreting "prior express consent" for telemarketing calls should apply equally to debt collection calls. See Shannon Petersen, New FCC Interpretation of Express Consent to Increase TCPA Class Action Liability.

The other appellate decision comes from the Seventh Circuit, Holtzman v. Turza, --- F.3d ----, 2013 WL 4506176 (7th Cir. Aug. 26, 2013). The district court in Illinois certified a...