The U.S. District Court for the District of Nevada granted a defendant’s motion for summary judgment in a case arising under the Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA). It found that the evidence did not reasonably support an inference that the defendant had actual knowledge of the plaintiff’s legal representation regarding an account and that the plaintiff providing her phone number regarding the original transaction is consent to communications originating from that transaction, including efforts to collect on the debt. The plaintiff owed three separate medical debts to St. Rose Hospital. St. Rose assigned the three accounts to Medicredit to collect. The first account was placed with Medicredit in 2019, and the second account was placed in 2020. The plaintiff retained legal representation in April 2021 regarding her first two debt accounts. Medicredit received notice of the plaintiff’s legal representation on her first two accounts in April 2021. Thereafter, the plaintiff’s third account was placed with Medicredit on June 4, 2021.
The parties dispute when Medicredit received notice of representation regarding the plaintiff’s third account. The plaintiff contends her counsel provided notice by fax on June 15, 2021, but Medicredit denies it received notice on the third account until August 12, 2021.
Medicredit contacted the plaintiff by phone directly to collect on the debt. As a result, the plaintiff filed a lawsuit alleging that Medicredit violated the FDCPA by contacting her directly when Medicredit had knowledge of her legal representation. The plaintiff also alleged that Medicredit violated the TCPA because communications were made through an automatic telephone dialing system (ATDS) without her consent. Medicredit moved for summary judgment arguing that it cannot be held liable under the FDCPA because it did not have any knowledge of the plaintiff’s legal representation regarding the third account and that the plaintiff gave express consent for such calls pursuant to her agreement to seek medical care.
Court’s Analysis
The court begins by acknowledging that there is no dispute that the plaintiff is a consumer, Medicredit is a debt collector, and the debt is personal. The court then points out that the sole issue is whether Medicredit knowingly contacted the plaintiff in violation of the FDCPA to determine liability for harassment and unconscionable practices under the FDCPA. The court noted that Medicredit has a policy of designating attorney representation on an account-specific basis and that the June 2021 notice only referenced the second account and not the third account subject to the dispute. Considering this, the court found “[b]ecause Medicredit’s policy designates representation by account, Medicredit’s knowledge of representation was thus limited to the accounts on which it was specifically informed. Communication efforts to collect on the third account were therefore not improper during the disputed time.” The court held Medicredit is entitled to summary judgment regarding the FDCPA claims because “[t]he evidence does not reasonably support an inference that Medicredit had actual knowledge of [the plaintiff’s] representation on the third account . . . and therefore finds Medicredit was reasonable in its efforts to collect on the third account.”
Next, the court analyzed the plaintiff’s claim that Medicredit uses an ATDS and artificial, prerecorded messages in violation of the TCPA. Medicredit denied using an ATDS and argued that the plaintiff gave express consent for such calls pursuant to her agreement to seek medical care. The court looked at the general elements of a TCPA claim:
1. The defendant called a cellular telephone number.
2. Using an automatic telephone dialing system or artificial or prerecorded voice.
3. Without the recipient’s prior express consent, the third element was found to be dispositive.
The court relied on a Sixth Circuit case which found “that consumers may give ‘prior express consent’ under the [Federal Communication Commission’s (FCC)] interpretation of the TCPA when they provide a cell phone number to one entity as part of a commercial transaction, which then provides the number to another related entity from which the consumer incurs a debt that is part and parcel of the reason they gave the number in the first place.”
Here, since the plaintiff provided her cellphone number to St. Rose as part of a commercial transaction to seek medical care, she consented to communications originating from that transaction, including efforts to collect on the debt. Medicredit received the plaintiff’s number from St. Rose when St. Rose placed the account for collection with Medicredit. To read more click here.