Antitrust Law Daily Wrap Up, PRIVACY—SDFla: Class Certification Granted in Telephone Consumer Protection Act Lawsuit Against Medical Debt Collection Company, (Mar 28, 2013)

By Tobias J. Gillett, J.D., LLM.

The federal district court in Miami has granted class certification under the Telephone Consumer Protection Act to a putative class of recipients of telephone calls from a medical debt collection company (Manno v. Healthcare Revenue Recovery Group, LLC, March 26, 2013, Scola, R.).

Stephen Manno received treatment as a patient in the emergency room of Memorial Hospital Pembroke from a physician belonging to Inphynet South Broward, Inc. During the admissions process, Manno provided a cellular telephone number, but allegedly did not expressly consent to its use for debt collection purposes.

Manno later defaulted on his debt to Inphynet, and the debt was referred to Healthcare Revenue Recovery Group, LLC (HRRG) for collection. On June 17, 2010, HRRG left a prerecorded voicemail message on behalf of Inphynet at the telephone number Manno had provided. The number was in the name of his wife, and the bills were sent to her, although he alleged that they shared a family telephone plan.

Manno filed suit on behalf of a putative class against HRRG for violations of the Telephone Consumer Protection Act (TCPA) and the Fair Debt Collection Practices Act (FDCPA), and against Inphynet for violations of the TCPA. In the present motion, Manno sought certification of classes under the TCPA and the FDCPA.

Standing

Article III standing. The defendants initially asserted that Manno lacked Article III standing for his TCPA claim because he had not alleged that he had suffered any injury from their conduct, and only sought statutory damages. The court rejected this argument, noting that “a plaintiff suffers an injury under Article III whenever there is a violation of a legally protected interest,” and that Congress could create new legal rights. Manno’s allegations that the defendants had violated his protected interests under the TCPA were sufficient to confer standing upon him.

Statutory standing. The court also rejected the defendants’ argument that Manno lacked statutory standing because he was not the “called party” under the TCPA because the telephone number was registered in the name of his wife. The court cited judicial precedent concluding that the TCPA extended standing to any “person or entity” injured by a violation of the statute, and did not expressly limit standing to the called party. Moreover, previous decisions had concluded that standing depended not on whether the plaintiff was the registered holder of the telephone number, “but on whether the plaintiff is the regular user of the phone and whether the defendant was trying to reach him or her by calling that phone.” Manno satisfied that standard.

Furthermore, the fact that his wife paid the bills did not deprive him of standing. The payments for the telephone bill came out of a joint checking account owned by Manno and his wife. Moreover, the court concluded that a proper interpretation of the relevant section of the TCPA did not require a plaintiff to be charged for a call in order to have standing.

Class Certification

Rule 23(a). Having established that Manno possessed standing, the court proceeded to address whether Manno’s proposed TCPA class sufficiently satisfied the prerequisites of Federal Rule of Civil Procedure 23(a). The court rejected the defendants’ assertion that Manno had not shown that at least forty Florida residents had received the challenged telephone calls, noting that discovery had revealed that more than 5,000 Florida residents met the TCPA class definition. Therefore, Manno had satisfied the requirement that joinder of all class member would be impracticable.

The court determined that his TCPA class also met the requirement that the class must have “questions of law or fact common to the class.” The defendants argued that the issue of whether the recipients of the telephone calls had provided express consent defeated commonality because it would require individualized inquiry. Although other courts had denied certification on that ground, in the present case the magistrate judge had required HRRG to identify in discovery which called parties had communicated with HRRG prior to HRRG’s telephone call. Therefore, the court could weed out those recipients that had provided express consent without conducting individual inquiries. Moreover, the question whether providing a telephone number during the hospital admissions process constituted consent was one that was subject to common resolution on a classwide basis.

The proposed class also satisfied the requirement that “the claims or defenses of the representative parties [be] typical of the claims or defenses of the class,” according to the court. The defendants contended that Manno’s claims were not typical of his class because he allegedly did not provide consent, while the class members may have, and determining whether they did would require individualized inquiry. As explained with respect to the commonality requirement, the consent issue did not “destroy[] the cohesiveness of the class,” and the issue of whether giving a telephone number during admission constituted consent was one common to Manno and all putative class members.

Furthermore, Manno and his counsel would adequately represent the interests of the proposed class, in the court’s view. Manno’s interests in resolution of his claims were not opposed to those of his class, and his attorneys were experienced class action litigators. The defendants did not provide any evidence that Manno’s two-year delay in bringing suit resulted in any persons losing their claims that would have otherwise been in the class.

Rule 23(b). Having determined that Manno’s putative TCPA class met the conditions of Rule 23(a), the court moved on to consider whether Manno could obtain certification under Rule 23(b)(3), which requires that “questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.”

Here, common questions of law or fact predominated over individual questions, according to the court. Despite the defendants’ contrary contention, the issue of consent did not predominate over common questions because, as previously explained, recipients of the telephone calls who might have communicated with HRRG prior to the calls had already been excluded, and the question regarding whether providing a telephone number during admission constituted consent was an issue “common to the class as a whole.”

The court also concluded that a class action was a superior method for resolving the claims. Although the TCPA provided incentives for individual litigation, such as statutory damages and attorney fees, that fact did not demonstrate that TCPA claims were inappropriate for class treatment. Nothing indicated that Congress wanted to discourage TCPA class actions, and class actions could be a more effective deterrent than individual actions. Moreover, the large number of claims, the small statutory damages, the desirability of consistent adjudication of the claims, the relatively low interest of plaintiffs in controlling prosecution of the claims, and the lack of manageability concerns all supported class action resolution. Furthermore, all plaintiffs were Florida residents, making litigation in a Florida district court sensible.

The court rejected the defendants’ contention that class certification should be denied because their potential liability would be “enormous and completely out of proportion to any harm suffered.” The defendants had not cited any case in which a court had denied certification on that ground, nor had they shown that a disproportionate damage award would necessarily result.

Moreover, Congress had indicated its opinion of the proportionate compensation for a TCPA violation by setting statutory damages at $500 for each violation, or triple that amount for willful violations, and that proportionality did not change as the amount of violations increased. Furthermore, the court could review any unconstitutionally large award at a later stage of the proceedings. Finally, the court did not see why damage calculations would be “particularly onerous” in the present case, even if the case presented individualized damages issues.

Therefore, the court certified Manno’s TCPA class. The court also granted certification of a class for his FDCPA claims.

The case is No. 11-61357 SCOLA.

Attorneys: O. Randolph Bragg (Horwitz Horwitz & Associates) for Stephen M. Manno. Barbara Fernandez (Hinshaw & Culbertson LLP) for Healthcare Revenue Recovery Group, LLC.

Companies: Healthcare Revenue Recovery Group, LLC; Inphynet South Broward, Inc.

Cases: Privacy FloridaNews