Antitrust Law Daily Wrap Up, PRIVACY—M.D. N.C.: Collection agency’s motion to stay consumer’s TCPA suit denied, (Nov 4, 2014)

By Linda O’Brien, J.D., LL.M.

A federal district court in Winston-Salem, North Carolina has denied a motion to stay by a collection agency in an action brought by a consumer claiming that the agency unlawfully called her cellular telephones using an automatic telephone dialing system and an artificial or prerecorded voice (Beiler v. GC Services L.P., November 3, 2014, Schroeder, T.).

Pamela Beiler owned two cellular telephones – one for her own use and the other was provided to her spouse, Scott Foster. Beiler subscribed through Verizon Wireless for the phone numbers assigned to each phone. Without Beiler’s knowledge, Foster applied for two credit cards. When he defaulted on both, GC Services (GCS) was engaged to collect the debts.

Beiler filed suit against GCS under the Telephone Consumer Protection Act (TCPA), alleging that GCS unlawfully called her cellphones over three hundred times, using an automatic telephone dialing system (ATDS) and using an artificial or prerecorded voice. GCS moved to stay the proceedings, pending referral of certain petitions to the Federal Communications Commission (FCC) under the primary jurisdiction doctrine.

The court found that GCS failed to show that a stay under the primary jurisdiction doctrine was warranted. The primary jurisdiction doctrine gives federal courts discretion to refer a matter to a federal agency as to give the parties a reasonable opportunity to seek an administrative ruling. GCS’ argument that four petitions had already been filed with the FCC seeking rulemaking on specific issues was rejected. The court noted that one petition regarding whether a predictive dialer not used for telemarketing purposes was an ATDS and a second petition seeking to limit the scope of the term “capacity” as it relates to ATDSs were withdrawn and not relevant to the case.

GCS’s contention that the case raised technical issues on which the FCC has particular expertise and congressionally delegated discretion was also rejected. The TCPA generally prohibits automatically dialed calls to cellphones and the FCC’s authority to create exemptions to this prohibition is substantially limited. While the FCC has exercised its discretion to exempt debt collection calls to residential landlines, there are no exemptions for autodialed debt collection calls to cellphones. Therefore, as to any debt collection exemption, GCS failed to show a need to refer the case due to the FCC’s expertise or need for uniformity, in the court’s view.

Additionally, the FCC recently affirmed its prior decisions, concluding that a predictive dialer constituted an ATDS and was subject to the TCPA’s restrictions on the use of autodialers. Finally, even if the FCC’s expertise would be helpful and there was a need for uniformity, neither issue may be relevant to the case. GCS denied the use of an ATDS and if discovery shows that GCS did not use an ATDS, a referral would have caused an unnecessary delay. If discovery shows that GCS used an ATDS, a referral would not have been dispositive since GCS could still establish prior express consent. Thus, a referral to the FCC clarifying the definition of an ATDS was not warranted at the current stage of the proceeding, the court concluded.

The case is No. 1:13cv869.

Attorneys: Christopher C. North (The Consumer & Employee Rights Law Firm, PC) for Pamela F. Beiler. Caren D. Enloe (Morris Manning & Martin, LLP) for GC Services LP.

Companies: GC Services L.P.

Cases: Privacy NorthCarolinaNews