SAN FRANCISCO – The U.S. District Court for the Northern District of California recently ruled that last year's congressional amendments to the Telephone Consumer Protection Act (TCPA) are retroactive, but left other questions open, a TCPA specialist said during an interview.
The amendments, a rider that passed as part of the federal budget deal reached last fall, exempts federally guaranteed loans and debt collection from TCPA liability. The exemption allows collectors of that debt to do what previously would have been considered harassment: calling – even robocalling – debtors on their cellphones.
What hasn't been decided is how far those amendments can reach, Christine M. Reilly, a litigation partner in Manatt, Phelps & Phillips' Los Angeles office, said during a Northern California Record interview.
For now, only companies collecting on money owed to or guaranteed by the federal government seem to be benefiting, Reilly said.
"I have clients who collect on state and other government debt who are asking me if they can use this for those debts," Reilly said. "Right now, I have to tell them, 'No.'"
Reilly is a litigator who defends companies in consumer class-action cases and other major civil litigation in areas that include consumer protection, unfair competition and false and deceptive advertising. Manatt, Phelps & Phillips recently issued a special focus on the Federal Communications Commission's proposed rules for debt collection call exemption in the 2015 Budget Act.
On March 31, the U.S District Court for the Northern District of California handed down a ruling in Silver v. Pennsylvania Higher Education Assistance Agency that made those TCPA exemptions retroactive. That could have a major impact in litigation consumer debt collection companies may already be defending over some of their debt collection practices, Reilly said.
"This decision could become very important in litigation they now are facing," she said.
That the U.S. Congress passed these amendments in the TCPA is a bit brow raising, Reilly said.
"We don't often see exemptions like this in the TCPA," she said. "This is not a common occurrence."
Congress has intervened only twice before in the TCPA in recent memory, in 2005 over junk faxes and in late 2010 over caller ID, Reilly said.
The latest congressional intervention in the TCPA appears self-serving and was quietly orchestrated, Reilly said.
The decision also was made as lawmakers were preparing for the 2016 election year, which might explain some of the legislative stealth, Reilly said.
"I don't think Congress wanted to make a big to do about it," she said. "They passed it as part of a larger bill and they passed it very quietly."
The Obama administration inserted into the congressional budget deal last fall, the provision to amend the TCPA that will allow, among other things, companies collecting money owed to or guaranteed by the federal government to robocall debtor's cellphones. The measure means that government student loan servicers may use auto dialers to call delinquent borrowers on their cellphones, but it also applies to debtors in all government-backed loans, including mortgages and federal taxes.
The provision itself did not specify whether the exemptions would apply retroactively. The decision handed down in the Silver case did.
The Silver case is a putative class action filed against a federal student loan servicer over alleged TCPA rule violations involving automated collection calls that were made without the consent of the borrower called. Judge Phyllis J. Hamilton granted the defendant's motion for summary judgment in the case, saying that applying the new TCPA exemptions retroactively will not impair plaintiffs' rights and that the amendment actually decreases liability for past conduct.
"Application of the TCPA amendment would further Congress’s intent to allow telephone calls to be placed in the furtherance of collecting debts owed to or guaranteed by the United States," the court's decision said. "Accordingly, the court finds that the TCPA amendment does indeed exempt the calls allegedly placed by defendant."
The Silver case was appealed to the 9th Circuit Court of Appeals on April 13.