Debt collectors scored a major victory Monday when the Eleventh Circuit Court of Appeals voted 3-0 to reverse a district court ruling in the case of Gulf Coast Collection Bureau Inc. v. Mais.
The Mais decision proved controversial within the collection industry and in some judicial circles, where it's been outright ignored.
The case involved plaintiff Mark Mais, who was treated in a Florida emergency room in 2009. His wife completed and signed admission forms for him, providing the hospital personal information including a cell phone number. The forms came with a standard notice that the information could be provided to and used by others in the case of both further medical care and bill payment issues.
When Mais did not pay the medical bill, Gulf Coast was hired to collect the debt. The agency used an automated dialer to call Mais and left four messages. Mais then sued the collection agency, citing violations of the Telephone Consumer Protection Act for using the automated dialer without prior express consent. He also pushed to certify the case as a class action.
Gulf Coast had pushed for dismissal, citing a Federal Communication Commission 2008 ruling that concluded when a consumer provides a cell phone number to a creditor, for example, on a credit application or on admission forms, then auto-dialed and pre-recorded calls to mobile numbers were considered to have prior express consent and therefore were permissible under the TCPA. The FCC further stated that calls placed by a third-party collector on behalf of the creditor should be treated as if the creditor placed the call.
The U.S. District Court for the Southern District of Florida ultimately ruled against Gulf Coast, declining to apply the FCC's interpretation of prior express consent in a TCPA case. The court thus became the only one to conclude that district courts have jurisdiction to review FCC rulings and disregard FCC interpretation.
Monday's appellate ruling is the first to clarify the scope of the FCCs consent ruling. It specifically found that the act of providing a mobile phone number to a creditor is consistent with the meaning of "prior express consent" announced in the FCC's 2008 ruling and thus the collection agency's calls were legal. The appellate court further held that the FCCs ruling applies to a wide range of creditors and collectors, such as those collecting medical debt.
In June, a separate district court called into question the original Mais ruling when it dismissed a class-action lawsuit citing TCPA violations related to a series of autodialed collection calls made by a hospital provider to an individual's cell phone.
In Hudson v. Sharp Healthcare, U.S. District Court Judge Michael M. Anello in the Southern District of California flatly rejected the decision in Mais v. Gulf Coast, stating: ". . . Mais is viewed as an outlier decision and is not otherwise binding on this Court . . . In line with other courts in this district; this Court treats the FCC Orders as binding."