Because of the debt collector exemption in place at the time of the alleged calls, Navient could not have known it was violating the TCPA when it called Mehaffey, the court added, let alone have done so willfully.
“Yet where quasi-criminal punitive penalties are sought, due process demands a party have notice that its conduct will subject it to liability,” the court said. “Navient could not have foreseen, and was not required to foresee, that the exception would be found unconstitutional. Retroactively applying [Barr] to Ms. Mehaffey’s request for treble damages would deprive Navient of the due process to which it is entitled before being subjected to an award of quasi-criminal damages.”
Blackburn granted summary judgment in favor of Navient as to Mehaffey’s request for treble damages—as well as her request for statutory damages of $500 per violation.
In the U.S. Court of Appeals, Tenth Circuit, penalties in excess of actual damages are penal, he said. The court recognized that this was a minority position, citing a recent Delaware federal court decision.
“Nevertheless, lacking clearer or more persuasive authority … I conclude I am bound to adhere to the pronouncements of the Tenth Circuit and find the statutory damages provision of the TCPA constitute a penalty,” he wrote. “Thus, as with treble damages, because due process forbids the imposition of quasi-criminal penalties on a party who lacked notice that its conduct would subject it to liability, Navient is entitled to summary judgment on this aspect of Ms. Mehaffey’s claim as well.”
To read the order in Mehaffey v. Navient Solutions, Inc., click here.
Why it matters: The case demonstrates the continuing impact that the Barr decision is having on litigants. While a minority of courts have held that the entire autodialer provision was unconstitutional from when it was enacted to when Barr was decided, this court did not. Yet while the court agreed with the plaintiff that the defendant’s calls violated the TCPA because the severance of the government-backed debt exception meant it never existed, it also found that the defendant could not be liable for damages under the statute because they are quasi-criminal in nature. This argument could prove useful for defendants in the debt collection industry that hope to avoid costly statutory damages under the TCPA. To read more click here.