A state court judge in California last month dismissed Telephone Consumer Protection Act (TCPA) claims against a debt collection agency in a case brought by a consumer. While the details of the case are specific to the company in question, at least one law firm thinks it might create defense opportunities for other ARM companies.

Orange County Superior Court Judge Ronald Bauer handed down the order in Stockwell v. Credit Management. Bauer ruled that “the use of a number generator is required in order for [the defendant’s] calling technology to be considered an ATDS (automatic telephone dialing system).” At issue were calls made to the plaintiff’s cell phone.

Bauer was responding to a motion to dismiss from Credit Management. In its defense, the company submitted an employee’s declaration that the calling technology does not have a number generator.

“Plaintiff failed to offer any evidence in rebuttal,” the court wrote. “Thus, the uncontroverted evidence presented is that [Credit Management’s] calling technology does not have a number generator. Therefore, [Credit Management’s] calling technology does not meet the requirements of an ATDS as defined by the TCPA.”

The case was not dismissed in full. Stockwell made other claims under California’s Rosenthal Fair Debt Collection Practices Act which survived the motion. But defense firm Manatt Phelps & Phillips LLP wrote in their coverage of the case that it may provide a path for TCPA defense.

“Judge Bauer’s ruling may provide a new defense strategy to the multitude of defendants facing potential liability of $1,500 per alleged violation of the TCPA,” partners Mark Roth and Becca Wahlquist wrote. “Courts have generally accepted the argument that technology qualifies as an ATDS under the Act simply because it has the capacity to automatically dial random or sequential calls – and not necessarily based on whether the machine was doing so at the time of the calls in question. Judge Bauer’s narrow reading of ‘capacity’ under the TCPA may provide defendants with ammunition to argue that their technology does not fall within the scope of liability because a number generator was not used.”

Manatt’s article coincided with a large feature in Monday’s Wall Street Journal focused on the rise of TCPA cases. “Curbs on Cellphone Calls Pay Off for Lawyers,” penned by Ryan Knutson, explores the dramatic increase in TCPA cases brought by plaintiffs’ attorneys, primarily in the area of debt collection.

The article restates a lot that we at insideARM.com have written over the past year, but it’s interesting that a publication like The Wall Street Journal is jumping on the bandwagon. Knutson spoke with a plaintiff attorney who noted that TCPA cases are generally easier to prove than cases filed under the Fair Debt Collection Practices Act (FDCPA), the traditional basis for debt-collection cases.  ”There tend not to be a lot of defenses,” he added. “My client got 500 calls. Show me the consent, and either they do or they don’t. And if they haven’t, they probably haven’t for a lot of other people.”

insideARM does offer help for collection agencies in understanding the TCPA.  To the Point: Telephone Consumer Protection Act (TCPA) has been one of our most popular products for months. Check it out.


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