TCPA Defendant Allowed to Seek Indemnification from Plaintiff’s Daughter, the Intended Recipient of its Debt-Related Calls

One of the central issues that was before the D.C. Circuit in ACA International v. FCC was whether the term “called party” refers to the intended or the unintended recipient of a call. In its July 10, 2015 Declaratory Ruling and Order, the FCC interpreted the term to be the current “subscriber” on the account to which the phone number is assigned or “the non-subscriber customary user of the phone.” Under this interpretation, businesses that try in good faith to contact consumers who have consented to receive such calls face significant liability with minimal recourse, when those calls reach someone else. The D.C. Circuit set aside the FCC’s “treatment of reassigned numbers as whole,” which includes its interpretation of called party. In light of the D.C. Circuit’s ruling, the FCC is currently seeking comment on critical TCPA issues with an eye toward taking a much broader view of the TCPA landscape than it did in its 2015 TCPA Order. In the meantime, one business involved in a TCPA action is seeking indemnification from the consumer it intended to reach in making the calls that form the basis of the TCPA action against it.

In Tucker v. Credit One Bank, plaintiff alleged that Credit One violated the TCPA by calling his cellular telephone number hundreds of times over a period months using an ATDS in an attempt to collect a credit card debt. Plaintiff alleged that he informed Credit One that he was not the person Credit One was attempting to contact and requested that the calls stop. Credit One’s factual investigation into the allegations revealed that the calls placed to the plaintiff’s cellular number were intended for his daughter, Jessica Tucker a/k/a Jessica Patino (“Patino”). As it turned out, when Patino applied for a credit card with Credit One and completed the account verification process, she provided the cellular number at issue as a secondary contact number. Shortly after activating her card, Patino defaulted on her payments and Credit One began calling the provided cellular number in an attempt to reach her. After learning in discovery that Plaintiff’s daughter had provided the number involved, Credit One sought leave to file a third-party complaint against Patino for claims of contractual indemnification and negligent misrepresentation.

According to the third-party complaint, under the terms of the cardholder agreement, Patino expressly authorized Credit One to contact her at any phone number, including cellular numbers, she provided to Credit One or that Credit One obtained through other means. Also under the terms of the cardholder agreement, Patino agreed to indemnify Credit One if she provided a telephone number to which she was not the subscriber. The indemnification provision reads:

If you provide telephone number(s) for which you are not the subscriber, you understand that you shall indemnify us for any costs and expenses, including reasonable attorneys’ fees, incurred as a result of us contacting or attempting to contract you at the number(s).

To support its negligent misrepresentation claim, Credit One alleged that Patino’s representation—that she owned and could lawfully be contacted at the secondary contact number regarding her financial obligations to Credit One—was false based on plaintiff’s allegations regarding his use of the number.

Although plaintiff opposed Credit One’s motion for leave to file a third-party complaint as untimely, the court granted Credit One’s motion finding that Credit One had acted diligently, and that plaintiff would not be prejudiced.

As businesses anxiously await the FCC’s next steps in light of the D.C. Circuit’s now-final decision in ACA International v. FCC, at least one business is taking action and seeking indemnification from the consumer who provided the cellular telephone number at issue and the consent to call that number. Whether other businesses will pursue similar actions against their own customers remains to be seen, however. As individual consumers are generally unable to meaningfully indemnify a TCPA judgment and related defense costs, the absence of the family dynamic at play here may well lead to the conclusion that such third-party actions are not worth the effort.