On March 27, 2014, the Federal Communications Commission (“FCC”) issued two declaratory rulings regarding the definition of “prior express consent” under the Telephone Consumer Protection Act (“TCPA”).  In the first ruling, Cargo Airline Association obtained an exemption under the TCPA’s “prior express consent” restriction on autodialed and prerecorded telephone calls and text messages to wireless telephone numbers.  The second ruling addressed a petition filed by GroupMe, Inc., a group text messaging service.  In that decision, the FCC clarified that “prior express consent” can be conveyed through an intermediary.  The FCC stated that “Congress did not expect the TCPA to be a barrier to normal, expected, and desired business communications.”

Federal courts throughout the country continue to grapple with issues of consent and revocation.  Most recently, on March 28, 2014 in Osorio v. State Farm Bank, the Eleventh Circuit Court of Appeals remanded a case to the district court regarding the TCPA’s definitions of “express consent” and “called party.”  In that case, Osorio’s housemate, Betancourt, applied for car insurance and a credit card issued by State Farm Bank using Osorio’s phone number in place of her own. When Betancourt failed to timely make the minimum payments due on the card, State Farm attempted to contact her to collect the balance using autodialed calls to the number she provided, which in fact belonged to Osorio.  Osorio sued State Farm under the TCPA, 47 U.S.C. § 227, which provides a damages remedy for cellular-phone subscribers who receive autodialed phone calls without having given prior express consent to receive such calls. State Farm, in turn, sued Betancourt for the balance due (plus legal expenses) on her delinquent credit-card account and for its legal expenses in defending itself against Osorio’s TCPA lawsuit, the latter claim being based on Betancourt’s alleged negligent misrepresentation regarding the telephone number that she had provided to State Farm.

On cross-motions for summary judgment, the trial court ruled in favor of State Farm on both complaints.  The court reasoned that Betancourt had consented to Osario receiving the calls, and neither she nor Osario had effectively revoked consent because they did not do so in writing.  Regarding State Farm’s breach of contract claim, the district court held Betancourt was delinquent on her credit card debt, and that Betancourt caused it to incur legal fees by negligently misrepresenting Osorio’s phone number was her own.

On appeal, the Eleventh Circuit reversed the district court’s grant of summary judgment on Osario’s TCPA claim as well as its grant of summary judgment on State Farm’s negligent misrepresentation claim against Osario.  Following the Soppet opinion from the Seventh Circuit, the court reasoned that Osorio’s housemate “had no authority to consent in her own right to the debt collection calls to [Osorio] because one can consent to a call only if one has the authority to do so, and only the subscriber (here, Osorio) can give such consent, either directly or through an authorized agent.”  Thus, one way State Farm could show the necessary consent would be by demonstrating that Betancourt had an agency relationship with Osorio that permitted her to consent to Osorio receiving the calls, and by showing that she exercised that authority in this case by giving Osario’s number to State Farm in connection with her debt.  Because a genuine issue of material fact existed regarding whether there was such an agency relationship, the court ruled summary judgment was not appropriate.

Similarly, the Eleventh Circuit ruled that a genuine issue of material fact precluded summary judgment as to State Farm’s third-party claim against Betancourt for negligent misrepresentation.  In particular, Betancourt had argued that she never misrepresented the number as her own, but instead listed it only as an emergency contact number.  The court identified the dispositive question as whether Betancourt told State Farm that the number was only to be used for emergencies such that she would have corrected any misrepresentation before State Farm relied upon it to collect payment after Betancourt’s default.  Accordingly, the Eleventh Circuit remanded the case to the district court for further proceedings.

Clearly, Osorio is not good news for companies facing TCPA claims, especially in the debt-collection space because issues of oral revocation can be easy to state and challenging to refute.  Additionally, in cases of shared cell phones, wrong numbers and recycled numbers, Osorio will be used by plaintiffs to establish TCPA liability in the face of common sense.  Yet another reason why an appropriate FCC opinion and clarification is needed now more than ever.