As Contemplated By the FCC?: TCPA Defendant Seeks Indemnification From Consumer Who Provided Plaintiff’s Mobile Number

One of the central issues in the consolidated appeal from the FCC’s July 10, 2015 Declaratory Ruling and Order is whether the term “called party” refers to the intended or actual recipient of the call. The FCC’s Order interpreted the term “called party” to be the “subscriber” or “non-subscriber customary user” of the phone that was called, regardless of whether the caller meant to call someone else. Under this interpretation, businesses that in good faith attempt to contact consumers who have consented to receive such calls face significant liability when those calls reach someone else instead.

The FCC suggested in its Order that, in the case of reassigned numbers, businesses could consider suing their own customers for failing to notify them when they change numbers. Specifically, the FCC noted that “[t]he failure of the original consenting party to satisfy a contractual obligation to notify a caller about such a change [of a cell phone number] does not preserve the previously existing consent to call that number, but instead creates a situation in which the caller may wish to seek legal remedies for violation of that agreement.” In other words, rather than apply the more reasonable interpretation to the term “called party” as the intended recipient of the call, the FCC would have businesses sue their own customers for providing telephone numbers that give rise to TCPA liability.

At least one business that is embroiled in TCPA litigation has heeded that advice and sought indemnification from a consumer who provided the cellular number that formed the basis of the TCPA action against it.

In Ellington v. First Premier Bank, the plaintiff alleged that First Premier Bank violated the TCPA by calling his cellular telephone number using an ATDS in an attempt to collect a debt without the requisite consent. Shortly after the plaintiff filed suit, First Premier Bank filed a third-party complaint alleging that the third party defendant submitted the phone number in an online application to obtain a credit card from First Premier Bank. As part of the application, the third party defendant listed the plaintiff’s cellular number as her work telephone number, and consented to First Premier Bank’s using an ATDS to call it to discuss her account and collect debts. First Premier Bank alleges that the third party defendant and the plaintiff have some sort of relationship. When the third party defendant defaulted on her account, First Premier Bank began placing debt collection calls to the telephone number she had provided. Because these calls form the basis of the plaintiff’s TCPA claim against it, First Premier Bank sought to hold the third party defendant liable for any damages it incurred as a result of the plaintiff’s lawsuit.

On June 26th, the Middle District of Tennessee denied the plaintiff’s motion to strike First Premier Bank’s third party complaint. The plaintiff argued that the third party complaint should be stricken because the third party defendant’s liability to First Premier Bank was not “contingent or derivative” of First Premier Bank’s liability to the plaintiff. The court found this argument unavailing because First Premier Bank’s claims against the third party defendant arise directly from the allegations of the plaintiff’s complaint and its measure of damages against the third party defendant would be the amount of any judgment entered on the plaintiff’s claims. In other words, if the plaintiff’s claim fails, then the third party complaint would be moot, but if the plaintiff’s claim succeeds, then “the court (or jury) will determine [the third party defendant] is liable to [First Premier Bank] for the amount of [the plaintiff’s] claim.”

As businesses anxiously await a ruling from the D.C. Circuit in the consolidated appeal from the FCC’s July 2015 Declaratory Ruling and Order, at least one business is striking back and seeking indemnification from the consumer who provided the number and consent to call that number that gave rise to the TCPA action against it. However, it is unclear whether other businesses will—or will even want to—pursue similar actions against their customers, who often will be unable to support a TCPA judgment and related defense costs. We will monitor this case and report on any significant developments.