Antitrust Law Daily Wrap Up, PRIVACY—M.D. Pa.: Fannie Mae could be on the hook for third-party’s collection calls, (Oct 15, 2014)

By Jody Coultas, J.D.

The federal district court in Scranton, Pennsylvania, has denied a motion filed by Federal National Mortgage Association (Fannie Mae) to dismiss Telephone Consumer Protection Act (TCPA) claims filed by cell phone user Dawn Hartley-Culp (Hartley-Culp v. GreenTree Servicing, LLC, October 10, 2014, Munley, J.).

Resolve Solution Services Corporation (RSSC) left pre-recorded message addressed to a person named Lee Culp stating that it was calling on behalf of Freddie Mac regarding Lee Culp’s Green Tree Servicing LLC mortgage loan. Despite informing RSSC that it was calling the wrong person, the calls to Hartley-Culp’s cell phone continued. Hartley-Culp filed TCPA claims against Green Tree and Fannie Mae.

Fannie Mae argued that the claims against it should be dismissed because it did not place the calls at issue, and that it could not be held vicariously liable for the actions of RSSC.

Vicarious liability. The TCPA can impose liability directly or vicariously upon any person or entity on whose behalf a third party places a call, according to the court. The Federal Communications Commission (FCC) has ruled that creditors bear the responsibility for TCPA violations by its agent. Creditors are placed “in the shoes” of the caller for purposes of liability under the TCPA’s autodialing provisions. Fannie Mae’s arguments to the contrary were dismissed.

Hartley-Culp adequately stated a TCPA vicarious liability claim against Fannie Mae, according to the court. The complaint stated that RSSC left voice messages on Hartley-Culp’s cell phone on behalf and at the direction of Fannie Mae and Green Tree.

Fannie Mae argued that Federal Crop Insurance Corporation v. Merrill, 332 U.S. 380 (1947) prohibited courts from holding a federal instrumentality liable for the actions of its agents or independent contractors that the instrumentality has not expressly authorized. However, Merrill did not involve the agent of the federal instrumentality committing TCPA violations. Courts have not applied Merrill outside the context of a contractual relationship, let alone that of a statutory tort. Hartley-Culp was, therefore, able to state TCPA claims against Fannie Mae.

The case is No. 3:14cv200.

Attorneys: Cynthia Levin (Law Offices of Todd M. Friedman, PC) for Dawn Hartley-Culp. Martin C. Bryce, Jr. (Ballard Spahr LLP) for Green Tree Servicing, LLC. Lesli C. Esposito (DLA Piper U.S. LLP) for Federal National Mortgage Association Fannie Mae.

Companies: Resolve Solution Services Corp.; Green Tree Servicing, LLC; Federal National Mortgage Assn.

Cases: Privacy PennsylvaniaNews