The United States District Court for the Southern District of California recently granted summary judgment in favor of defendant United Student Aid Funds, Inc. (“USAF”) in a Telephone Consumer Protection Act class action, holding that the plaintiff had failed to prove that USAF is vicariously liable for the acts of its third party servicers.
In Henderson v. United Student Aid Funds, Inc., plaintiff Shyriaa Henderson defaulted on her student loans. USAF was the guaranty agency for Henderson’s loans and purchased the claims to the defaulted loans. USAF hired Navient Solutions, Inc. (“NSI”) to serve and collect on the defaulted loans, and Henderson subsequently received “a number of unsolicited phone calls, featuring artificial or prerecorded voices, to her wireless phone.” Henderson claims she never gave consent to USAF or any relevant entity to call her cell phone with the use of an autodialer or prerecorded message.
Henderson filed a putative class action against USAF in August 2013. USAF subsequently moved for summary judgment on two grounds: (1) that the Bipartisan Budget Amendment Act of 2015 created an exception to the TCPA which applies to USAF in the present case; and (2) that there is no basis to impose vicarious liability on USAF.
With respect to the first argument, USAF argued that Henderson’s student loans constitute debt “owed to or guaranteed by the United States” such that they fall within the newly added exception to the TCPA. The Court held that the Amendment did not apply to guarantor agencies such as USAF, stating “that the new exception to the TCPA … applies solely when the calls are made during a period in which the United States’ obligations as the ultimate guarantor or debtee have been triggered and are active.”
However, the Court agreed with USAF’s second argument regarding the lack of vicarious liability. NSI acted as a mere independent contractor, and USAF “did not maintain sufficient control over NSI’s activities to constitute an agency relationship.”
The Court ultimately granted USAF’s motion. The class action case is now closed.