Gager v. Dell Financial Services, LLC

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 12-2823
ASHLEY GAGER,
Appellant
v.
DELL FINANCIAL SERVICES, LLC
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(District Court No. 3-11-cv-02115)
District Judge: Honorable Robert D. Mariani
Argued on May 13, 2013
Before: FUENTES, SHWARTZ and ROTH, Circuit Judges
(Opinion filed: August 22, 2013)
Cary L. Flitter, Esquire (Argued)
Andrew M. Milz, Esquire
Flitter Lorenz, P.C.
450 North Narberth Avenue
Suite 101
Narberth, PA 19072
Carlo Sabatini, Esquire
Sabatini Law Form, LLC
216 North Blakely Street
Dunmore, PA 18512
Counsel for Appellant
Anthony L. Gallia, Esquire (Argued)
James G. Welch, Esquire
Duane Morris LLP
30 South 17th Street
Philadelphia, PA 19103
Counsel for Appellee
OPINION
ROTH, Circuit Judge:
I. Introduction
Ashley Gager brought suit against Dell Financial
Services alleging that Dell violated the Telephone Consumer
Protection Act of 1991 (TCPA), 47 U.S.C. §
227(b)(1)(A)(iii), by using an automated telephone dialing
system to call her cellular phone after she revoked her prior
2
express consent to be contacted. Gager contends that the
District Court improperly dismissed her complaint for failure
to state a claim on the theory that she could not revoke her
consent once it was given. We agree with Gager. Therefore,
for the reasons that follow, we will reverse the judgment of
the District Court and remand this case for further
proceedings consistent with this opinion.
II. Background
Around December 2007, Gager applied for a line of
credit from Dell to purchase computer equipment. The credit
application required that she provide her home phone number.
Gager listed her cellular phone number in that place on the
application. In doing so, however, she neither stated that the
number was for a cellular phone, nor did she indicate that
Dell should not use an automated telephone dialing system to
call her at the number she provided.
Dell granted Gager a line of credit, which she used to
purchase several thousand dollars worth of computer
equipment. Gager subsequently defaulted on her debt. Dell
then began using an automated telephone dialing system to
call Gager‟s cellular phone, leaving pre-recorded messages on
her voicemail concerning the debt. In December 2010, Gager
sent a letter to Dell, listing her phone number and asking Dell
to stop calling it regarding her account. The letter did not
indicate that the number was for a cellular phone. Gager has
alleged that, after receiving her letter, Dell called her cellular
phone approximately forty times over the three week period,
using an automated telephone dialing system.
Gager filed a complaint in the Court of Common Pleas
of Wayne County, Pennsylvania, asserting violations of 47
3
U.S.C. § 227(b)(1)(A)(iii), the TCPA‟s provision banning
certain automated calls to cellular phones. Gager alleged that,
after receiving her letter, Dell had an obligation under the
TCPA to cease all autodialed calls to her cellular phone
because she had withdrawn her prior express consent to be
contacted at that number via an automated dialing system.
The case was subsequently removed to the Middle District of
Pennsylvania under 28 U.S.C. § 1441.
Dell moved to dismiss the complaint under Rule
12(b)(6) for failure to state a claim. The District Court
granted the motion, holding that Gager could not revoke her
prior express consent for three reasons. First, the court
concluded that the lack of language in the TCPA providing
for “post-formation revocation of consent” weighed in favor
of finding that no such right exists. Gager v. Dell Fin. Servs.,
LLC, No. 11-cv-2115, 2012 WL 1942079, at *6 (M.D. Pa.
May 29, 2012). Second, the District Court held that, although
Gager was entitled to give “instructions to the contrary” as to
whether Dell could use an automated telephone dialing
system to call her, those instructions had to be “provided at
the time [she] . . . „knowingly release[d]‟ her telephone
number” to Dell. Id. Finally, the District Court determined
that, because calls regarding debt collection are not subject to
the TCPA and because Dell‟s calls were for debt collection
purposes, Gager failed to allege a violation of the TCPA. Id.Gager appealed.
III. Standard of Review
“To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
4
556 U.S. 662, 678 (2009). We exercise plenary review over
an order granting a Rule 12(b)(6) motion. W. Penn Allegheny
Health Sys., Inc. v. UPMC, 627 F.3d 85, 97 (3d Cir. 2010).
We also exercise plenary review over issues of statutory
interpretation. United States v. Manzella, 475 F.3d 152, 156
(3d Cir. 2007).
IV. Discussion1
We are asked to resolve two issues today: (1) whether
the TCPA allows a consumer to revoke her “prior express
consent” to be contacted via an automated telephone dialing
system on her cellular phone and (2) if a revocation right
exists, whether there is a temporal limitation on that right.
Neither the Third Circuit nor any other appellate court has
addressed either issue. Our analysis of the scope of the
TCPA is guided by the text of the statute, the FCC‟s
interpretation of the statute, the statute‟s purpose, and our
understanding of the concept of consent as it exists in the
common law. See Restrepo v. Att’y Gen. of U.S., 617 F.3d
787, 793 (3d Cir. 2010). Considering all of these factors, we
conclude that Gager has stated a plausible claim for relief
because (1) the TCPA affords her the right to revoke her prior
express consent to be contacted on her cellular phone via an
autodialing system and (2) there is no temporal limitation on
that right.
Congress passed the TCPA to protect individual
consumers from receiving intrusive and unwanted calls. See
Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740, 745 (2012).
1
The District Court had subject matter jurisdiction under 28
U.S.C. § 1331. This Court has appellate jurisdiction under 18
U.S.C. § 1291.
5
The relevant portion of the TCPA provides that it is unlawful
for any person:
to make any call (other than a call made for
emergency purposes or made with the prior
express consent of the called party) using any
automatic telephone dialing system or an
artificial or prerecorded voice . . . to any
telephone number assigned to a paging service,
cellular telephone service, specialized mobile
radio service, or other radio common carrier
service, or any service for which the called
party is charged for the call.
47 U.S.C. § 227(b)(1)(A)(iii) (emphasis added). Notably, the
statute does not contain any language expressly granting
consumers the right to revoke their prior express consent.
Congress authorized the Federal Communications
Commission (FCC) to implement rules and regulations
enforcing the TCPA. 47 U.S.C. § 227(b)(2). Under its rule-
making authority, the FCC has stated that autodialed calls—to
both cellular phones and land-lines—are lawful so long as the
recipient has granted “permission to be called at the number
which they have given, absent instructions to the contrary.”
In the Matter of Rules & Regulations Implementing the
Telephone Consumer Protection Act of 1991, 7 FCC Rcd.
8752, 8769 ¶ 31 (Oct. 16, 1992) (emphasis added)
(hereinafter the 1992 Ruling). The 1992 Ruling, however,
left unresolved the question of whether instructions to the
contrary may be given after a consumer has granted her prior
express consent and, if so, whether there is any temporal
limitation on the right to revoke prior express consent.
6
The most significant guidance from the FCC on the
issue of revocation of prior express consent comes from a
decision issued after the District Court dismissed Gager‟s
claim. See In the Matter of Rules and Regulations
Implementing the Telephone Consumer Protection Act of
1991, SoundBite Communications, Inc., 27 FCC Rcd. 15391
(Nov. 26, 2012) (hereinafter SoundBite). In SoundBite, the
FCC issued a declaratory ruling to resolve the issue of
whether “a consumer‟s prior express consent to receive text
messages from an entity can be construed to include consent
to receive a final, one-time text message confirming that such
consent has been revoked.” Id. at 15395 ¶ 9. The FCC
concluded that a text message confirming an opt-out request
is permissible under the TCPA.2 Id. at 15394 ¶ 7, 15398 ¶ 15.
Although the FCC‟s analysis in SoundBite was
directed at the use of an automated dialing system to confirm
an opt-out request, rather than whether an opt-out right exists,
the decision indicates that the FCC supports Gager‟s
argument that a consumer may revoke her prior express
consent once it is given. The decision in SoundBite starts by
noting that “neither the text of the TCPA nor its legislative
history directly addresses the circumstances under which
prior express consent is deemed revoked.” Id. at 15394 ¶ 8.
The FCC then noted “that consumer consent to receive . . .
messages is not unlimited.” Id. at 15397 ¶ 11. Consistent
2
The TCPA‟s prohibition on automated dialing applies to
both voice calls and text messages. SoundBite, 27 FCC Rcd.
at 15392 ¶ 2; see also Satterfiled v. Simon & Schuster, Inc.,
569 F.3d 946, 952 (9th Cir. 2009) (“[A] text message is a
„call‟ within the meaning of the TCPA.”).
7
with this notion, the FCC stated several times that a consumer
may “fully revoke[]” her prior express consent by
transmitting an opt-out request to the sending party. Id. at
15397 ¶ 11 n.47; see also id. at 15394 ¶ 7 (stating that a
consumer may “request that no further text messages be
sent”); id. at 15398 ¶ 13 (noting that a consumer may opt out
of receiving voice calls after prior express consent has been
given).
The remainder of the analysis in SoundBite focuses on
why permitting a text message confirming an opt-out request
would be harmonious with the TCPA‟s objectives, a concern
not germane to this appeal. Thus, notwithstanding the fact
that SoundBite principally addresses an unrelated issue, the
decision demonstrates that the FCC endorses two important
points: (1) a consumer may revoke her informed consent
once it has been given, see id. at 15397 ¶ 11 n.47, and (2)
there is no temporal limitation on when a consumer may
revoke her prior express consent by sending an opt-out
message, see, e.g., id. at 15398 ¶ 13 (suggesting that, after a
consumer has received text messages, she may then send a
request for those messages to stop at any time); id. ¶ 15
(same).
Dell‟s principal argument is that the TCPA‟s silence as
to whether a consumer may revoke her prior express consent
to be contacted via an autodialing system supports the
conclusion that the right does not exist. The District Court
adopted the same reasoning, as have several other district
courts. See Gager, 2012 WL 1942079, at *4-5; Kenny v.
Mercantile Adjustment Bureau, LLC, No. 10-cv-1010, 2013
WL 1855782, at *7 (W.D.N.Y. May 1, 2013); Saunders v.
NCO Fin. Sys., Inc., 910 F. Supp. 2d 464, 468-69 (E.D.N.Y.
8
2012). We disagree. Although the TCPA does not expressly
grant a right of revocation to consumers who no longer wish
to be contacted on their cellular phones by autodialing
systems, the absence of an express statutory grant of this right
does not mean that the right to revoke does not exist.
Dell‟s argument relies on a comparison of the rights
granted in the TCPA with the rights granted in other
consumer protection statutes. The gist of Dell‟s argument is
as follows: the TCPA does not contain an express provision
authorizing a consumer to revoke her prior express consent to
receive autodialed calls to her cellular phone. Yet, Congress
has passed several other remedial consumer protection
statutes—most notably the 1977 amendments to the Fair Debt
Collection Practices Act (FDCPA), the CAN-SPAM Act of
2003, and the Junk Fax Protection Act of 2005—containing
statutory avenues for a consumer to stop unwanted
communications and solicitations.3 See 15 U.S.C. § 1692c(c)
(FDCPA); 15 U.S.C. § 7704(a)(3)(A)(i) (CAN-SPAM Act);
47 U.S.C. § 227(b)(2)(D)(ii) (Junk Fax). The passage of
these statutes shows that—both before and after the passage
of the TCPA in 1991—Congress was willing and able to
create revocation rights in consumer protection statutes.
According to Dell, the incongruity between these statutes and
the TCPA supports the conclusion that the TCPA does not
permit a consumer to revoke her prior express consent once it
has been given.
3
Dell‟s submissions to this Court discuss only the FDCPA.
However, the express statutory revocation right granted in the
Junk Fax statute and CAN-SPAM Act also support Dell‟s
argument.
9
However, we conclude that the absence of an express
statutory authorization for revocation of prior express consent
in the TCPA‟s provisions on autodialed calls to cellular
phones does not tip the scales in favor of a position that no
such right exists. We reach this conclusion for three reasons.
First, our understanding of the common law concept of
consent shows that it is revocable. Second, in light of the
TCPA‟s purpose, any silence in the statute as to the right of
revocation should be construed in favor of consumers.
Finally, the FCC‟s decision in SoundBite provides further
evidence that we have reached the correct result in this case.
Our holding that the TCPA allows consumers to
revoke their prior express consent is consistent with the basic
common law principle that consent is revocable. “[W]here
Congress uses terms that have accumulated settled meaning
under . . . the common law, a court must infer, unless the
statute otherwise dictates, that Congress means to incorporate
the established meaning of these terms.” Neder v. United
States, 527 U.S. 1, 21 (1999). Here, we conclude that
Congress did not intend to depart from the common law
understanding of consent because the statute does not treat the
term differently from its common law usage. Under the
common law understanding of consent, the basic premise of
consent is that it is “given voluntarily.” Black‟s Law
Dictionary, 346 (9th ed. 2009); Restatement (Second) of
Torts § 892 (“Consent is a willingness in fact for conduct to
occur.”). Further, at common law, consent may be
withdrawn. Restatement (Second) of Torts § 892A, cmt. i
(1979) (“[C]onsent is terminated when the actor knows or has
reason to know that the other is no longer willing for him to
continue the particular conduct.”); see also United States v.
Greer, 607 F.3d 559, 564 (8th Cir. 2010) (discussing a
10
criminal suspect‟s right to withdraw consent to a search);
Desnick v. Am. Broad. Cos., Inc., 44 F.3d 1345, 1351 (7th
Cir. 1995) (discussing the common law right of a proprietor
to revoke consent for a patron to enter a store).4
Consequently, based on the common law, we hold that the
TCPA allows consumers to revoke their prior express
consent.
Our decision is also in line with the purpose of the
TCPA. The TCPA is a remedial statute that was passed to
protect consumers from unwanted automated telephone calls.
See S. Rep. 102-178, at 5 (1991), reprinted in 1991
U.S.C.C.A.N. 1968, 1972; see also Satterfield, 569 F.3d at
954 (discussing TCPA‟s purpose of curbing calls that are a
nuisance and an invasion of privacy); SoundBite, 27 FCC
Rcd. at 15391-92 ¶ 2 (discussing TCPA‟s purpose of
protecting consumers against unwanted contact from
automated dialing systems). Because the TCPA is a remedial
statute, it should be construed to benefit consumers. See
Lesher v. Law Offices of Mitchell N. Kay, PC, 650 F.3d 993,
997 (3d Cir. 2011) (construing the FDCPA broadly to effect
its purpose). As a result, we should interpret in Gager‟s favor
any silence in the TCPA as to a revocation right. See Beal,
2013 WL 3870282, at *13-17 (holding that absence of a
4
Two district courts have relied on the same common law
understanding of consent in holding that the TCPA allows
consumers to revoke their prior express consent. See Beal v.
Wyndham Vacation Resorts, Inc., --- F. Supp. 2d ---, No. 12-
cv-274, 2013 WL 3870282, at *14-15 (W.D. Wis. June 20,
2013); Adamcik v. Credit Control Servs., Inc., 832 F. Supp.
2d 744, 749-50 (W.D. Tex. 2011) (citing Restatement
(Second) of Torts § 892A cmt. i).
11
statutory revocation right in the TCPA does not preclude
consumers from revoking prior express consent); Adamcik,
832 F. Supp. 2d at 752 (noting that, if Congress wanted to
limit a consumer‟s right to revoke consent under the TCPA, it
should have done so in the statute). Therefore, the TCPA‟s
silence as to revocation should not be seen as limiting a
consumer‟s right to revoke prior express consent. Instead, we
view the silence in the statute as evidence that the right to
revoke exists.
Finally, we cannot overlook the FCC‟s decision in
SoundBite.5 The FCC‟s analysis on the revocation right is
admittedly sparse, but its conclusion is clear: consumers may
revoke their prior express consent to be contacted by
autodialing systems. SoundBite, 27 FCC Rcd. at 15397 ¶ 11.
5
Gager argues that the SoundBite decision is entitled to
deference under Chevron U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984). Chevron
deference appears to be inappropriate here because the FCC
never articulated a rationale for deciding why the TCPA
affords consumers the right to revoke their prior express
consent. Cf., e.g., Toussaint v. Attorney General of U.S., 455
F.3d 409, 414-15 (3d Cir. 2006) (noting that “meaningful
review” by an agency was a prerequisite for Chevron
deference). Nonetheless, we will still afford some deference
to the FCC‟s decision in SoundBite. See, e.g., United States
v. Mead Corp., 533 U.S. 218, 234 (2001) (“An agency
interpretation may merit some deference whatever its form,
given the specialized experience and broader investigations
and information available to the agency and given the value
of uniformity in its administrative and judicial understandings
of what a national law requires.”) (internal citations omitted).
12
This conclusion is consistent with our common law analysis
above. It is also consistent with the TCPA‟s purpose. The
FCC‟s decision in SoundBite therefore serves as additional
authority supporting our holding that a consumer may revoke
her prior express consent.
In sum, we find that the TCPA provides consumers
with the right to revoke their prior express consent to be
contacted on cellular phones by autodialing systems.
Dell contends, however, that, even if the TCPA allows
consumers to revoke their prior express consent, Gager had to
deliver “instructions to the contrary” to Dell at the time she
filled out the credit application. In other words, Dell argues
that the TCPA imposes a temporal limitation on when a
consumer may revoke her prior express consent. Again, we
disagree. Just as the TCPA is silent as to whether the
revocation right exists, the TCPA also does not include any
express language as to whether there is a temporal restriction
on when a consumer may exercise her right to revoke her
prior express consent. Nevertheless, this silence does not
mean that the TCPA should be interpreted as imposing a
temporal restriction on the revocation right.
The principal support for Dell‟s argument comes from
the FCC‟s 1992 Ruling which states that “persons who
knowingly release their phone numbers have in effect given
their invitation or permission to be called at the number
which they have given, absent instructions to the contrary.”
7 FCC Rcd. at 8769 ¶ 31 (emphasis added). According to
Dell, this language means that instructions to the contrary
may only be given at the time the consumer consents to
receive autodialed calls. Citing the identical portion of the
13
1992 Ruling, the District Court adopted the same argument.
Gager, 2012 WL 1942079, at *6.
We are not persuaded by such a narrow reading of the
TCPA. First, there is no indication in the legislative history
that Congress intended for the statute to limit a consumer‟s
rights by imposing a temporal restriction on the right to
revoke prior express consent. Indeed, the legislative history
supports our view that express consent is revocable at any
time because the TCPA was intended to protect consumer
rights, not restrict them. See, e.g., S. Rep. No. 102-178 at 1-
2. Moreover, as stated in the discussion above regarding the
right to revoke prior express consent, we read the silence in
the TCPA in favor of Gager because it is a remedial statute.
See Lesher, 650 F.3d at 997.
Additionally, the common law understanding of the
notion of consent discussed above cuts strongly against Dell‟s
argument that the revocation of prior express consent should
be contingent on timing. Instead, an individual should be
allowed withdraw consent at any time if she no longer wishes
to continue with a particular course of action. See Adamcik,
832 F. Supp. 2d at 749 (citing Restatement (Second) of Torts
§ 892A cmt. i). Finally, the FCC‟s decision in SoundBite cuts
strongly against Dell‟s position because the consumer‟s
revocation of consent was effective well after the consumer
consented to be contacted by an autodialing system.
SoundBite, 27 FCC Rcd. at 15392 ¶ 4. We therefore reject
Dell‟s assertion that there is a temporal limitation on when a
consumer may revoke her prior express consent.
In addition to the legal arguments discussed above,
Dell also asserts that the facts of this case do not state a cause
of action under the TCPA for two reasons: (1) the content-
14
based exemption in the TCPA permitting autodialed debt-
collection calls precludes Gager from withdrawing her prior
express consent and (2) equitable principles dictate that Gager
should not be permitted to revoke her prior express consent.
These arguments are unavailing.
Dell argues that “[t]he relationship between the caller
and the called as debtor/creditor is, in fact, dispositive” of the
issue in this appeal because the TCPA‟s restrictions apply to
telemarketers, not debt collectors. This argument is
misplaced because this distinction does not apply to calls
made to cellular phones.
At first glance, Dell‟s argument appears correct: the
FCC regulations implementing the TCPA permit certain types
of autodialed debt collection calls, including calls similar to
the ones at issue in this case. See, e.g., 47 C.F.R.
§ 64.1200(a)(2)(iii), (iv) (exempting calls “made to any
person with whom the caller has an established business
relationship” and calls “made for a commercial purpose [that
do] not include or introduce an unsolicited advertisement or
constitute a telephone solicitation”). However, Dell fails to
recognize that these exemptions do not apply to cellular
phones; rather, these exemptions apply only to autodialed
calls made to land-lines. See 47 C.F.R. § 64.1200(a)(2).
Therefore, the debt collection exemption invoked by Dell is
not applicable in this case.
Looking to the provisions of the TCPA that apply to
autodialed calls to cellular phones and the exemptions
promulgated by the FCC, it is clear that Dell‟s argument is
15
without merit.6 The statutory provision under which Gager
brought her claim bans the use of “any automatic telephone
dialing system” to call “any . . . cellular telephone service.”
47 U.S.C. § 227(b)(1)(A)(iii) (emphasis added). The only
exemptions in the TCPA that apply to cellular phones are for
emergency calls and calls made with prior express consent.
See id.; 47 C.F.R. § 64.1200(a)(1)(iii). Unlike the exemptions
that apply exclusively to residential lines, there is no
established business relationship or debt collection exemption
that applies to autodialed calls made to cellular phones. Thus,
the content-based exemptions invoked by Dell are inapposite.
Finally, Dell invokes two equitable arguments in
support of its position that Gager should not be able to revoke
her prior express consent. Neither argument has merit.
First, Dell asserts that basic principles of contract law
should preclude Gager from revoking her prior express
6
Dell argues that Gager‟s phone should be treated as if it
were a land-line because she listed her cellular phone number
as her home phone on the credit application she filed with
Dell. This argument is unavailing. Callers have a continuing
responsibility to check the accuracy of their records to ensure
that they are not inadvertently calling mobile numbers. See In
the Matter of Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991, 19 FCC Rcd.
19215, 19219-20 ¶ 11 (Sept. 21, 2004) (declining to extend
safe harbor provisions to calls made erroneously or
inadvertently to wireless numbers); see also Breslow v. Wells
Fargo Bank, N.A., 857 F. Supp. 2d 1316, 1322 (S.D. Fla.
2012) (“[C]ompanies who make automated calls bear the
responsibility of regularly checking the accuracy of their
account records[.]”);
16
consent. In short, Dell posits that a creditor will want to
know in advance whether a credit applicant will consent to
automated phone calls and that this knowledge is part of the
“consideration” that the applicant offers in support of her
application. Although Dell is correct that the level of contact
that a debtor will consent to may be relevant to the
negotiation of a line of credit, the ability to use an autodialing
system to contact a debtor is plainly not an essential term to a
credit agreement. More importantly, Dell‟s argument that its
contractual relationship with Gager somehow waives her
rights under the TCPA is incorrect. The fact that Gager
entered into a contractual relationship with Dell did not
exempt Dell from the TCPA‟s requirements. As discussed
above, she retained the right to revoke her prior express
consent.
Dell also contends that it would be unfair to allow a
consumer to revoke her prior express consent to be contacted
on a cellular phone in the debt-collection context because the
inability of a creditor to use an automated dialing system to
call a borrower might make it “difficult, if not impossible,
[for the creditor] to ever contact the borrower with regard to
the credit it extends.” This argument overlooks the fact that
creditors are permitted to attempt live, person-to-person calls
in order to collect a debt. Consequently, Dell will still be able
to telephone Gager about her delinquent account; the only
limitation imposed by the TCPA is that Dell will not be able
to use an automated dialing system to do so.
17
V. Conclusion
For the foregoing reasons, we will reverse the
judgment of the District Court and remand this case for
further proceedings consistent with this opinion.
18