Wilmington, Del. — Phillips & Cohen Associates, Ltd., the leading Estates management business servicing creditors in the US, Canada, UK, Ireland, Australia, New Zealand, Spain, Portugal and Germany is reporting a significant surge in online consumer activity via its proprietary Estate-Serve℠ platform during the COVID-19 pandemic. 

The business, which has been consistently recognized for its innovative technological solutions during its 23-year history, deployed its market leading Estate-Serve platform in 2013 and uses both traditional and extensive digital, self-service solutions to provide assistance to consumers and communities during the pandemic.  Over the past two months, the business has witnessed an incredible 60.3% increase in usage across its digital platforms and a staggering 320.7% increase in consumer-driven self-service payment volumes.

SVP Consumer Communication & Digital Strategy, Bob Bednar, commented “Phillips & Cohen Associates has always invested heavily in digital and technological solutions to support consumers and we are pleased to report a 40.5% increase in consumer visits and a 60.3% increase in meaningful online activity from those visits.  We continue to evolve and adapt our strategies to support consumers during this difficult time.”  

Nick Cherry, Chief Operating Officer added, “As a business, our focus is on providing consumers with the support and time they need to deal with the impact of the pandemic. A key element of that is maintaining service levels and making sure that we are available to support and communicate with individuals who have questions or want to resolve matters. The dramatic increase in digital activity shows that Estate managers are increasingly looking to use a channel choice that suits them, and we will continue to offer multiple, innovative options.”

Adam S. Cohen, Co-Chairman/CEO commented, “Our long history of implementing real-time speech analytics and extensive digital solutions mean that we can rapidly adjust strategies and focus on supporting consumers through both traditional and self-service channels.  We remain committed to providing consumers and communities with any support possible through this unprecedented time.” 

About Phillips & Cohen Associates, Ltd.

Phillips & Cohen Associates, Ltd. is a specialty receivable management company providing customized services to creditors in a variety of unique market segments.  Phillips & Cohen Associates, Ltd is domestically headquartered in Wilmington, DE, with additional offices in Colorado and Florida as well as international offices in the UK, Canada, Spain, Germany and Australia.  For more information about Phillips & Cohen Associates visit www.phillips-cohen.com. PCA provides Equal Employment Opportunity for all individuals regardless of race, color, religion, gender, age, national origin, disability, marital status, sexual orientation, veteran status, genetic information and any other basis protected by federal, state or local laws.

It’s a tale as old as time for those in the industry. A consumer files a bankruptcy petition without properly listing FDCPA claims, only to later file such bankruptcy-covered claims (often to their attorney’s financial benefit). Some relief from this scheme came in the Eastern District of New York (E.D.N.Y.) in the case Nunez v. Mercantile Adjustment Bureau, LLC, No. 19-CV-02962 (May 13, 2020). 

What Happened?

The case involves two different consumer plaintiffs who received an almost identical collection letter from defendant. After the letters were received, one of the consumers filed for bankruptcy and obtained a discharge of their debts. On the bankruptcy petition, the consumer scheduled only one FDCPA claim, alleging it valued at $1,000 for statutory damages. This claim was exempted. Despite this, the consumer and her husband went on to file five different FDCPA lawsuits that should have been scheduled. 

The Court’s Ruling

The court dismissed the FDCPA filed by the bankruptcy consumer for lack of standing. According to the court, the consumer lacks standing because the claims belong to the bankruptcy estate. The court states:

Plaintiff Khatun and her husband commenced multiple FDCPA suits against six distinct defendants, thereby frustrating a trustee who would have to “distinguish among multiple claims or multiple defendants.

This vague and misleading disclosure of scheduled assets plainly runs afoul of bankruptcy regulations.

The court also found that even if the consumer hypothetically had standing, the claims don’t have merit and thus would have been dismissed. These claims included allegations of overshadowing through the letters format and the inclusion of a sentence that states  “send payment and correspondence” to a specific address; as well as a claim that including multiple addresses confuses consumers as to where disputes should be sent, despite the fact that the letter clearly identifies only one of those addresses for correspondence. 

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insideARM Perspective

Let’s take a quick pause to state something worth noting—the consumer likely didn’t fully understand what was happening—bankruptcy filings and schedules are long and complicated documents. They were likely following the advice of their counsel.

It’s also worth noting that this particular consumer’s bankruptcy counsel is also listed as the consumer’s attorney of record in the FDCPA suit.

Often times, the bankruptcy schedule only lists $1,000 per claim, completely disregarding the fact that these claims are usually settled for much more than that and most of that settlement money goes into the attorney’s pocket, even if the settlement is reached in the earliest stage of litigation where there is no way that fees have amounted to that much. Debt collectors can’t do much—defending themselves against all of the many lawsuits and threats of suit that come their way is not feasible, as they are unlikely to be awarded their defense fees even if they succeed on the merits. 

And so the loop of this scheme keeps going and going.

However, there is hope. We are seeing a trend of court decisions where the judges call out plaintiffs’ counsel for wrenching the FDCPA from its original purpose—rather than protecting consumers, they’ve used it to bring “lawyer’s cases” to help lucratively line their own pockets. There are even circumstances where the courts are beginning to sanction plaintiffs’ counsel. 

Editor’s Note: The iA Case Law Tracker allows you to quickly pull all those decisions in a matter of seconds. 

Why are we seeing such an influx? Because debt collectors are choosing to defend more cases. Defending these hyper-technical, bogus “lawyer’s cases”—as opposed to settling on the outset—brings these cases to the judge’s attention and shows them just how twisted the situation has become. These are the same judges that, when appropriate, will issue sanctions against these attorneys.

Because of this, it’s no longer a no-lose game for plaintiffs’ counsel. 

Editor’s note: This article is provided through a partnership between insideARM and Squire Patton Boggs LLP, which provides a steady stream of timely, insightful and entertaining takes on TCPAWorld.com of the ever-evolving, never-a-dull-moment Telephone Consumer Protection Act. Squire Patton Boggs LLP—and all insideARM articles—are protected by copyright. All rights are reserved.

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I love it when we have a chance to look deeper into the big TCPAWorld stories and share some fascinating tidbits with our readers.

One of the biggest stories of 2019 was the huge $267,000,000.00 verdict entered against collection company Rash Curtis & Associates in a certified TCPA class action. Although the judgment was not nearly the biggest of 2019—that “honor” belongs to ViSalus who was hit for nearly a $1BB earlier in 2019—the award was certainly eye-opening for the collection industry that had mostly avoided such huge-dollar TCPA verdicts in the past.

The story somehow became even bigger this year when the Court refused to reduce the award on constitutional grounds and awarded an eye-popping $89MM ($89,000,000.00) in attorney’s fees to the Plaintiff’s legal outfit, the always dangerous Bursor and Fisher.

Well, now we know a little bit more about the back story leading up to this train wreck on a dumpster fire. As gleaned from the decision in Perez v. Indian Harbor Ins. Co., No. 4:19-cv-07288-YGR, (N.D. Cal. May 11, 2020)(Perez-IH), it turns out that the Defendant (allegedly) could have walked away from the entire mess for under a million bucks at a mediation back in September 2017 but turned it down and decided to fight on. Ultimately it got creamed by a jury for roughly 300 times more than they (allegedly) could have settled for at mediation.

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Uh oh.

Interestingly, the Defendant may or may not have insurance for the TCPA claim at issue—the insurer denied coverage but Rash Curtis asserted a right to defense and indemnity and assigned its rights to a bad faith insurance claim to the Plaintiff. That set the stage for the filing of the complaint in Perez-IH which set forth a litany of purported missteps by the insurer in handling potential resolution of the case. The proverbial cherry on top—of course—was the story of the $875k mediation offer that was oh-so-imprudently left on the settlement table. The complaint also explains that “Rash Curtis walked out and made no settlement offer” at the mediation, a fact which—if true— speaks to an Odessyian level of hubris by the Defense.

The Court in Perez-IH ultimately determined that the events at the mediation are not properly pleaded in the complaint and ordered such allegations struck at the insurer’s insistence. Nonetheless, the case lives on—the Court determined the bad faith claim was live even though the underlying judgment against Rash Curtis is currently on appeal to the Ninth Circuit. In all likelihood, any chance that B&F will get paid for their work in the Perez trial hangs in the balance.

We’ll keep a close eye on this one.

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Looking for brief summaries of all industry-related court decisions? The iA Case Law Tracker does that in less time than it takes to pour your morning cup of coffee.

The California Consumer Privacy Act (CCPA), which became effective on January 1, 2020, substantially increased the privacy rights of California consumers.  The organization known as “Californians for Consumer Privacy” believes the CCPA does not go far enough.  This group is said to have obtained over 900,000 signatures on a petition in support of a new law which would be known as the California Privacy Rights Act (“CPRA”).  This proposed legislation is likely to be included on the California ballot this November. Although all of the specifics of the CPRA are not yet clear, it would include the following:

1. Additional rights regarding personal information;
2. Increased punishments regarding the assemblage and transaction of information of minors; and
3. Creation of an agency to enforce privacy rights.

The CPRA would also increase fines for violations of the CCPA pertaining to the private information of minors. Currently, the CCPA includes penalties of $2,500.00 per violation and up to $7,500.00 for intentional violations. The CRPA would raise these penalties to $7,500.00 per violation and $22,500.00 per intentional violation. This could result in massive penalties as violations are based upon fragments of personal information obtained, and businesses typically collect many such fragments including names, addresses, account information, phone numbers, and email addresses. 

The CPRA’s proposed enforcement agency would supplement the California Attorney General, which is charged with enforcing the CCPA. 

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Privacy Rights Are Here to Stay

Calls for the regulation of privacy rights are on the increase. The proposed CPRA demonstrates California consumers’ significant desire to protect their personal information from use by businesses in ways they do not intend.  Because the CCPA became effective on January 1, 2020, businesses should already be following their security policies and procedures regarding consumers’ personal information. Businesses not in compliance should take immediate steps to do so since the California Attorney General has pledged to meet its July 1, 2020 deadline to begin enforcement.  If the CPRA passes in November of this year, businesses that deal with personal information of California residents will have even more obligations.

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Editor’s Note: This article was originally published on Messer Strickler’s blog and is republished here with permission.

ATLANTA, Ga. — PossibleNOW, the leading provider of direct marketing compliance, enterprise consent and preference management solutions, today announced its partnership with Numeracle™, the pioneer of call blocking and labeling visibility in the calling ecosystem, to extend actionable measures to improve the accurate presentation of vetted and verified business calls.

As the only solution provider with a defined Know Your Customer (“KYC”) process to vet and verify the trust associated with an enterprise caller or call center solutions provider, Numeracle provides a single path to proactively identify legitimate entities and prevent the improper blocking of legal, wanted calls across multiple carriers and service providers. 

By establishing trust in the entity behind the call as well as any contact center partners facilitating compliant call delivery, Numeracle’s solution not only prevents the improper classification and blocking of calls today but prepares trusted callers for the next wave of call authentication through STIR/SHAKEN.

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“The issue is far more complex than monitoring ‘Suspected Spam’ or ‘Scam’ labels at the individual phone number level or employing a never-ending cycle of phone number rotation with diminishing returns,” said Rebekah Johnson, founder & CEO, Numeracle. “The remediation of phone number reputation begins by certifying trust in an organization’s identity and good standing through our NumeraCert KYC process. Organizations already taking advantage of PossibleNOW’s expertise in calling compliance are that much more ahead of the curve.”

“Improving a business’ contact rates, brand reputation, and customer engagement has become infinitely more complex due to the forward momentum of robocall blocking and labeling initiatives driven by the FCC, FTC, service providers, and consumer groups,” said Scott Frey, CEO, PossibleNOW. “In today’s uncertain economic environment, we know it’s more important than ever for trusted organizations to be able to maintain that positive interaction with their customers, patients, and members. We’re pleased to partner with Numeracle to ensure compliant, legal organizations may continue to leverage their communications channel of choice with as few interruptions as possible.” 

Since being founded in the year 2000, PossibleNOW has been focused on helping companies build trust with their customers through compliant and relevant communications. The partnership with Numeracle will help further this goal, through Numeracle’s mission to return trust and transparency to the voice channel. One of the first actions of our partnership is hosting a joint webinar about call blocking and labeling on Wednesday, May 20th, at 2pm EST – join us to find out how to improve your contact rates in the new era of STIR/SHAKEN. 

About PossibleNOW

PossibleNOW’s technology and services enable relevant, trusted, and compliant interactions between businesses and the people they serve. Its initial offering, DNCSolution, was tailored specifically to address the Do Not Contact databases and regulations such as TCPA, CAN-SPAM and CASL, allowing companies to adhere to customer do-not-contact preferences with peace of mind backed by a 100% compliance guarantee. Its enterprise consent and preference management platform, MyPreferences®, collects customer and prospect preferences, stores them safely and makes them available to any other system or application in the enterprise.

Additionally, PossibleNOW provides strategic services experts who define strategic roadmaps, plan technology deployments, and design consumer interfaces to position clients for success. PossibleNOW is purpose-built to help large, complex organizations gain control over communications, mitigate compliance risk and reduce marketing expenses while improving customer experience and loyalty. For more information about DNCSolution, visit https://www.possiblenow.com/do-not-call-compliance.

About Numeracle 

Numeracle is working with telecom carriers, call blocking and labeling analytics providers, device manufacturers, and industry leaders to deliver a path to visibility and control in the new calling ecosystem. Through the company’s technology vision and industry leadership, Numeracle is laying the foundation for returning trust and transparency to customer communications. To learn more about Numeracle’s call blocking and labeling solutions for call originators and call centers, visit www.numeracle.com.

This video is part of the iA Think Differently series. Written by members of the iA Innovation Council, the series showcases thought leadership in analytics, communications, payments, and compliance technology for the accounts receivable management industry.

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Today I’m joined by Greg Allen, CEO of Pairity, and an Innovation Council member. Greg talks about the idea of quantifying compassion, and about preparing for the future, 6-12 months from now, when the industry will see a major increase in volume. He spends his time thinking about how to help companies handle that volume — and still earn a profit.

Transcript

The iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

2020 members include:

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The global pandemic caused by the novel coronavirus, commonly referred to as COVID-19, has rewritten the social contract between business owners, its employees, and customers. As states reopen their economies, business owners will be presented with a new array of risks—both real and perceived.

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Businesses that reopen in a manner that the public views as reckless may find themselves in a race to the bottom: trading away long-term market favor in exchange for minimal short-term gains. Even scientifically unsubstantiated preventative practices may be necessary if the public perceives them to be necessary.

Businesses that reopen in a responsible manner may not be immune from the risks imposed on post-COVID business owners. For example, the widespread joblessness and financial hardship caused by the COVID-19 lockdowns may have the unfortunate side effect of making consumers even more litigious than normal. Businesses that reopen responsibly and have the appearance of faring well in a recovering economy may, paradoxically, find themselves the target of financially desperate consumers looking for a quick cash grab.

Below are a few of the early considerations and lessons that can be gleaned from businesses that have reopened after being closed due to the coronavirus. This list may be supplemented as more information becomes available. It should be noted, however, that every business is different and will need to tailor its policies and procedures to fit its specific business model. 

Social Distancing:

• Consider staggering the times when employees return. For example, an employer could start with only first-shift employees returning for the first two weeks and then the second-shift employees returning for the next two weeks.
• Maintain teleworking and/or flexibility with employees’ schedules.
• Continue to hold large staff meetings virtually.
• Rethink holding any in-person events with mass gatherings and consider hosting events virtually or rescheduling.
• Increase physical space between employees and visitors in the workplace. For example, have a maximum number of individuals who may enter a break room, conference area, or lobby.
• Place physical markers in high-traffic areas to keep people six feet apart.
• Place physical barriers to the extent necessary.
• Rearrange workspaces to permit greater social distancing.
• Develop protocols for elevator use.
• Stagger break and lunch times. Plan for longer break times to accommodate social distancing measures.
• Permit employees to leave the facility during meals and breaks to increase social distancing.
• Implement clear shields/barriers for employees whose work prevents them from being physically distant from customers/clients, such as cashiers and bank tellers.

Cleaning, Protection & Hygiene

• Place proper hand-washing protocol posters in all common work areas and in restrooms.
• Be flexible with employees’ breaks to allow for frequent hand-washing.
• Include additional sanitation measures for the facility, especially in common areas and for frequently touched surfaces or shared equipment.
• Require employees to disinfect common surfaces following use as appropriate (for example, in microwaves).
• Provide hand sanitizer, disinfecting wipes, and proper disposal in all common areas and at workstations where employees cannot leave to wash their hands between interactions with the public.
• Encourage employees to use masks or approved facial coverings and gloves and provide them if able.
• If employers permit employees to use their own, provide clear expectations on what is appropriate.
• In some jurisdictions, masks are required for employees returning to work.
• Ensure employees are trained on proper use of PPE.
• Continue to encourage employees to observe infection-control practices, such as regular hand-washing, coughing, and sneezing etiquette.
• Coordinate with facility maintenance to increase air exchanges in facilities.

 Employee & Visitor Screening

• Institute safe screening practices for both employees and visitors prior to entrance into the facilities.
• Place conspicuous messages at entrances prohibited feverish and sick employees and visitors from entering.
• Be sure these messages are printed in both English and Spanish.
• Mandate that employees with symptoms stay home from work and follow employer call-in procedures.
• Implement temperature checks upon entrance in a safe and confidential manner.
• Be mindful of privacy concerns and any necessary accommodations.
• Consider suspending or reconfiguring security practices that require touching frequently touched surfaces, such as PIN-entry devices, thumbprint scanners, time clock stations, and sign-in books.

 Policies

• Review and update attendance, leave-of-absence, Family Medical Leave Act and PTO policies to prepare for COVID-19 absences.
• Ensure that a policy and procedure is in place for processing Families First Coronavirus Response Act leave requests and recouping available tax credits.
• Create a policy or procedure for when employees diagnosed with COVID-19 or suspected of having COVID-19 can return to work.
• Review and update any teleworking and accommodation policies or procedures.
• Develop and implement procedures to track any positive cases to provide proper notification for those exposed and to prevent further spread.
• Update procedures for reporting any safety issues.
• Review time-keeping procedures to ensure they allow for social distancing and adequately recording working time.
• Ensure employees understand these updated policies.
• Review and update safety policies and clearly communicate new rules and procedures to employees in writing.
• Require training on updated safety procedures for employees.
• Train supervisors on how to monitor compliance with and enforce new rules and procedures.
• Have employees acknowledge receipt of training, rules and procedures.

 Miscellaneous Considerations

• Stay aware of continuing restrictions from federal, state, and local public health organizations and remain compliant with public health orders.
• Develop a strategy for workers who decline to return to work or need additional time off.
• Consult with counsel about implications under the National Labor Relations Act, the Americans with Disabilities Act, Occupational Health and Safety Act (and state equivalents), labor laws and others employment laws.
• Employers should be mindful of laws against unemployment fraud. In some circumstances, employees may decline to work because they are earning more benefits on unemployment than in their normal position. Employers should inform state unemployment insurance departments if work is available and the employee refuses to return for an unexcused reason.
• Be mindful of responsibilities under the Payroll Protection Program and other support programs for keeping employees on the payroll.
• Prepare to follow the interactive process for accommodation requests under the Americans with Disabilities Act or state equivalent regarding returning to work and/or any of the safety measures.
• Accommodations may include PPE, remote work, alternative scheduling, alternate work locations, alternate work assignments, increased social distancing, and leaves of absence.
• Ensure the extra safety precautions do not violate wage and hour laws.
• Create a plan for when employees may resume business travel.
• Be mindful of anti-discrimination and anti-retaliation laws when returning employees and addressing safety issues.
• Prepare a contingency-operation plan to address an increased outbreak or spike in infections as restrictive measures are loosened.
• Be cognizant of rights and obligations under collective bargaining agreements.
• Encourage employees to raise questions or concerns and designate a task force member to engage in dialogue with employees.

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Editor’s Note: This article was originally published on Messer Strickler’s blog and is republished here with permission. 

Editor’s note: This article is provided through a partnership between insideARM and Squire Patton Boggs LLP, which provides a steady stream of timely, insightful and entertaining takes on TCPAWorld.com of the ever-evolving, never-a-dull-moment Telephone Consumer Protection Act. Squire Patton Boggs LLP—and all insideARM articles—are protected by copyright. All rights are reserved.

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Well folks, today was the big day–oral argument took place in Barr v. AAPC and it did not disappoint.

With the advocates and the Supreme Court Justices –including Ginsburg who called in from a hospital bed– calling into the hearing by phone the stage was set for a robust back-and-forth between the advocates and the Justices, who asked questions in order of seniority.

What emerged over the hour-long argument was the tale of a stark choice: strike down the entirety of a beloved statute (the Telephone Consumer Protection Act) which–at least according to popular fiction– combats robocalls or sever an unconstitutional exemption to the TCPA and forever set precedent allowing courts to expand unconstitutional restrictions on speech by judicial fiat.

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What a choice!

Remarkably there is ZERO case law directly on point here as the advocates both acknowledged in their arguments. That leaves the Supreme Court justices with a blank slate to draw on in formulating the proper dimensions of First Amendment scrutiny where a content-neutral restriction on speech contains an unconstitutional, content-specific exemption. That also makes AAPC v. Barr a huge case–not just for the TCPA for First Amendment precedent and our freedom of speech as a whole.

While it is always dangerous to draw conclusions from oral argument–justices notoriously will ask questions that do not ultimately tip their hand– we think the tea leaves here are pretty safe to read to some degree. Here are our TOP 10 takeaways from the big AAPC v. Barr TCPA review.

1. The TCPA’s Government-Backed Debt Exemption is Dead:

If there was any doubt that the government-back debt exemption might be upheld going into the oral argument, the questions of the Justices seem to put those doubts to bed.

The exemption was already limping when, ahead of oral argument, the government conceded away the position that the government-backed debt exemption does NOT survive strict scrutiny. That left it in the difficult position of arguing that the exemption was not content-based–a real stretch.

The Court did not seem impressed. Several of the justices expressed outright rejection of this concept from the bench, highly suggesting that the government-backed debt exemption is a goner.

Justice Kavanaugh was, perhaps, the most direct of the justices in his remarks, commenting:

I think the government-debt exception is almost certainly content based. You don’t argue that it could satisfy strict scrutiny. Those two things make this a case about severability.

-Justice Kavanaugh commenting at oral argument in AAPC v. Barr, May 6, 2020.

Bye bye government-backed debt exemption.

2. Striking Down the Entire TCPA is Very Much on the Table: 

As noted above, the Supreme Court Justices really seem to be struggling with the idea of striking down the entire TCPA. Nonetheless, that appears to be one of the stark and few choices available to SCOTUS in addressing the Respondent’s meritorious First Amendment challenge to the TCPA’s government-backed debt exemption.

Chief Justice Roberts himself set the stage for the possibility that the TCPA might fall in its entirety early in the argument:

I wonder why in that situation the whole statute shouldn’t fall.

-Chief Justice Roberts commenting at oral argument in AAPC v. Barr, May , 2020.

The “situation” the Chief Justice was analyzing was one where an exemption is perfectly legal standing alone but only becomes legal with reference to a restriction (remember when the Archduke analyzed that issue?):

When we sever provisions its because they are illegal. here there is nothing illegal about the government-debt exception…

-Chief Justice Roberts commenting at oral argument in AAPC v. Barr, May 6, 2020.

3. The Justices Seemed Deeply Concerned With Expanding an Unconstitutional Restriction on Speech as a Remedy for a Successful First Amendment Challenge 

The most common category of questions posed to both advocates involved the “irony” of expanding an unconstitutional restriction on speech as a remedy to a successful challenger of a speech restriction. As several justices noted, this is not an equal protection case–where severing exemptions can make everyone “equal”–but rather a direct First Amendment challenge where the challenger’s substantive right to speak has been infringed.

Justice Gorsuch framed issue perhaps best of all when he noted the:

[i]rony of a First Amendment challenge leading to the suppression of more speech as a remedy…

-Justice Gorsuch commenting at oral argument in AAPC v. Barr, May 6, 2020.

He also delivered a powerful blow to the idea that severence is the proper remedy to a First Amendment violation by pointing out that the Respondent’s neither sought the remedy of severence nor had standing to seek it, even if they wanted it:

 They didn’t seek the relief and they dont have standing to seek that relief [striking the exemption]..should that tell us anything?

-Justice Gorsuch commenting at oral argument in AAPC v. Barr, May 6, 2020.

And Justice Alito was in clear agreement:

In a free speech case what the complaining party is objecting to is a restriction on its speech… [if severance is applied] the complaining party does not get what it wants…

-Justice Alito commenting at oral argument in AAPC v. Barr, May 6, 2020.

4. The Justices Also Seemed Concerned that Striking the Exemption Would Take Away the Rights of Non-Parties to the Case

The Justices also recognized that striking an exemption would result in the rights of non-parties to the case being taken away–a deprivation of both due process and a substantive right to speak. Indeed, Justice Thomas–who is renowned for rarely speaking at oral argument–stated matters bluntly remarking that severing the restriction: “

…seems to be taking speech away from someone who is not in this case.

-Justice Thomas commenting at oral argument in AAPC v. Barr, May 6, 2020.

5. The Supreme Court Justices Are a Big Fan of the TCPA For Some Strange Reason: 

If anyone thought the Supreme Court might not like the vague and unwieldy restrictions of the TCPA–guess again. Over and over again the Justices heaped (undeserved?) praise upon the statute, suggesting that it was responsible for preventing unwanted robocalls.

Chief Justice Roberts began the praise when he called the TCPA an “extremely popular law” in response to a comment by Respondent’s counsel that it ought to be struck down.

Then there was this gem:

The TCPA is “one of the more popular laws on the books…want to argue against that common sense?

-Justice Kavanaugh commenting at oral argument in AAPC v. Barr, May 6, 2020.

Eesh.

6. There Was Not Much Discussion of a Middle Ground:

As noted above, the choice before the Supreme Court appears stark–strike down the TCPA entirely or expand a restriction on speech to the assistance of none and the detriment of non-parties.

Indeed, throughout the entire argument there was only ONE reference to a possible middle ground– and it seems an unlikely one. Specifically, Justice Sotomayor suggested that the proper remedy might be to somehow carve out political speech from the reach of the TCPA. Her words:

Why shouldnt we limit any remedy striking down this provision simply to permit the types of calls that your clients make?

-Justice Sotomayor commenting at oral argument in AAPC v. Barr, May 6, 2020.

7. The TCPA’s Chances of Survival Were Greatly Helped by the Identity of the Respondent–and the Tactical Choice to Diminish the Value of Privacy in Challenging the Statute: 

It is said that bad facts make bad law and this case may end up adding further proof to that adage.

If the TCPA survives SCOTUS review in Barr v. AAPC it will almost certainly be–at least in part–because the Respondent was attempting to defend unsolicited “out of the blue” calls, rather than targeted specific calls to, for instance, customers of a business.  But preventing random-fired “out of the blue” calls is precisely what Congress wanted to stop when it enacted the TCPA in the first place.

Whereas a business making targeted calls could easily argue that the TCPA is overly broad as applied to them–again it was designed to prevent the nuisance and intrusion of random-fired calls not expected contacts from businesses– the Petitioner in this suit (apparently) did not feel comfortable making a similar overbreadth challenge. Instead, its counsel focused– again and again– on the government lacking a compelling interest in protecting privacy. At one point counsel argued that the interest in protecting privacy is just “not strong enough” to justify the TCPA’s restrictions.

Pause.

You read that right. Respondent’s primary argument as to why the TCPA does not survive First Amendment review is because privacy is not really that big of a deal anyway.

Eesh. I mean. Come on.

But giving the argument its due, Respondent contends that Congress showed it did not really care about privacy in enacting the TCPA when it amended the statute in 2015 to exalt the collection of money over protecting consumers. If privacy was all that “compelling” Congress would never have made that choice. I mean, right?

Hmmm. I don’t know. Probably would have been better if the Respondent could have faithfully argued that the TCPA’s vague and unwieldy ATDS restriction covers way more speech than necessary to accomplish the statute’s stated objective, a point Justice Ginsburg herself recognized:

What congress wanted to stop were out of the blue calls…. [debt collection] calls are not out of the blue, they are simply a reminder..

-Justice Ginsburg commenting at oral argument in AAPC v. Barr, May 6, 2020.

Ugh. What might have been.

8. The Government Was Very Concerned that the Supreme Court Might Focus Scrutiny on the ATDS Restriction and not the Exemption

The Respondent was not alone in making some interesting tactical choices. The DOJ’s SG–arguing in support of the TCPA’s constitutionality as Petitioner–kept answering the question that no one was asking: does the TCPA’s ATDS definition survive First Amendment review?

Over and over again throughout the argument and in discussions with virtually every justice, the Petitioner’s counsel hammered that the ATDS restriction survives the appropriate level of scrutiny. This is true although there was barely a whisper from the justices on the issue.

Without a doubt both the Respondent’s brief and TCPAWorld.com focused much fire on the ATDS restriction and the need to apply scrutiny to the restriction rather than the exemption, but the Petitioner’s focus on this issue–which seemed a phantom before a court obsessed with severability– seemed an odd choice. (It may, however, prove to have been tactically brilliant if–for instance–the Court elects to sever and still reviews the TCPA under intermediate scrutiny.)

9. This is a True Issue of First Impression–Which Means the Ruling Could Have Huge Impact on our Freedom of Speech Moving Forward

Throughout the oral argument multiple justices and the advocates themselves remarked that there was really no direct precedent available to guide the issue of severability. As we have written repeatedly, never before has the Supreme Court struck an exemption in order to expand a statute as a remedy to a successful First Amendment challenge.

As Justice Alito framed the issue–after calling it “fascinating”–the question is:

what is best precedent for application of severability analysis in case like this where arguably a regulation of speech is unconstitutional only because it contains a content based exception.

–Justice Alito commenting at oral argument in AAPC v. Barr, May 6, 2020.

As already noted above, the Supreme Court’s take on this issue will set an incredibly-important precedent that will determine the way lower courts are to apply First Amendment principles for decades to come.

10. There Was Very Little Discussion of the ATDS Definition– But that Doesn’t Mean it Won’t Get Resolved on This Appeal

One of the key things we were looking for is whether and to what degree the Supreme Court justices were focused on applying scrutiny to the ATDS restriction. Based on the questions of the justices there appears to be very little focus on that issue in this appeal.

Nonetheless, as the Court grapples with the difficult and stark choice presented by this appeal, the common-sense solution available to it may still find its way into a majority opinion: apply strict scrutiny to the TCPA’s ATDS restriction, read it narrowly, and uphold the statute intact.

That was my prediction going into the oral argument and–although I concede the likelihood of that prediction coming true took a hit today–it still seems the easiest and most logical resolution to the difficult questions posed by AAPC v. Barr. 

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Looking for brief summaries of all industry-related court decisions? The iA Case Law Tracker does that in less time than it takes to pour your morning cup of coffee.

The Fair Debt Collection Practices Act (FDCPA) has a very specific attorney’s fee provision. If the consumer wins, he gets his fees and costs. If the debt collector wins, it doesn’t—unless a very high bar is met. Under section 1692k of the FDCPA, a debt collector may be awarded its fees and costs if the court finds that the action was brought for the purposes of harassment. This is rarely granted, but yesterday, the District of Arizona (D. Ariz.) did… sort of.

So, what happened?

In Navarro v. Portfolio Recovery Assocs., No. 18-cv-02333 (D. Ariz. May 6, 2020), the consumer filed an FDCPA lawsuit alleging that the defendant failed to credit report his account as disputed. The consumer previously mailed a dispute directly to the defendant, who properly reported that the account was under dispute. Then, once the dispute was resolved, the defendant reported the same and noted that the consumer disagreed with the findings of the investigation. At some point, the consumer pulled his credit report and noticed that it was no longer showing his account as disputed. 

Evidence presented by defendant showed that it was, indeed, reporting the dispute to the credit bureau and it seems that something on the credit bureau’s end prevented the dispute from showing up on the credit report. Defendant’s in-house counsel also notified plaintiff’s counsel of the same as early as one month after the lawsuit was filed. Ultimately, the court granted summary judgment for defendant, finding that, “The fact that Experian may have failed to take corrective action on its end does not support the inference that Defendant failed to report the dispute on its end.”

Notably, the court also mentioned that defendant might be eligible for fees and costs under 1692k. This is what prompted defendant’s request for fees.

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The court’s decision

In the end, the court granted in part and denied in part the motion for fees. The court granted the request as to costs (totaling roughly $450), but denied the request for attorney fees.

For fees, the court found that plaintiff’s actions did not meet the very high bar of showing bad faith or harassment. While the court found that plaintiff’s claim was based on faulty evidence, it declined to say that the claim was without merit. The court noted that while defendant’s counsel notified plaintiff’s counsel that it did report the dispute to the credit bureau, there was no evidence presented that defendant sent actual documentation or evidence of such a report to the bureau and plaintiff did not have to accept defendant’s word that it did not violate the FDCPA.

The court also looked at the statutory language of the FDCPA section in question—it discusses bad faith or harassment when the suit is filed, not for actions that occur during the pendency of the lawsuit. Here, even if plaintiff’s counsel received documentation evidencing the dispute reporting during the lawsuit (it was received during discovery), that doesn’t change the analysis that at the time of filing, there was still an open question about whether or not a violation occurred. 

However, the court noted there is a slightly lower bar to meet when it comes to awarding costs—it may grant costs to the debt collector as the prevailing party under the FDCPA without a showing of bad faith or harassment. It chose to do so here for the costs related to obtaining a transcript of the plaintiff’s deposition. 

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Want to track what arguments for debt collector fees/costs under the FDCPA are winning? The iA Case Law Tracker does that in less time than it takes to pour your morning cup of coffee.

SACRAMENTO, Calif. — On April 23, 2020, the Receivables Management Association International (RMAI) published the RMAI Commitment to Consumers and FAQs. To help consumers, RMAI prepared answers to frequently asked questions addressing a variety of concerns. RMAI members take hardship issues seriously and implemented guidance on hardship programs long before the COVID-19 pandemic. RMAI members enhanced their existing hardship policies to provide temporary relief from collections for consumers who notify them they are impacted by COVID-19. These hardship programs allow consumers facing short-term setbacks to recover and prevent continued collections for those facing permanent setbacks.

Previously on April 13, 2020, RMAI encouraged the federal government to ensure that direct funds distributed to households through the Coronavirus Aid, Relief, and Economic Security (CARES) Act are not subject to collection. RMAI voiced support for formal protections of the “recovery rebates” provided by the CARES Act and requested the Federal Treasury earmark these funds as they do other federal funds such as Social Security benefits and Veteran’s benefits.

Additionally, RMAI advised members to avoid seeking federal stimulus funds as a potential source of payment on outstanding consumer obligations. Specifically, to the degree the federal stimulus funds are ascertainable, RMAI advised members to avoid soliciting those funds in all collection activities.

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About Receivables Management Association International:

Receivables Management Association International (RMAI) is a nonprofit trade association that represents more than 550 companies that purchase or support the purchase of performing and nonperforming receivables on the secondary market. The Receivables Management Certification Program and Code of Ethics set the global standard within the receivables industry due to its rigorous uniform industry standards of best practice which focuses on the protection of the consumer.

More information about RMAI is available at www.rmaintl.org.