District Court Rules that Debt Collectors are Exempt from the TCPA

John Lynch

On November 22, 2011, the U.S. District Court for the District of Maryland granted summary judgment in favor of Defendant Accounts Receivable Management, Inc. (ARM) on a non-debtor’s claim that ARM repeatedly contacted him to collect the debt of another in violation of the federal Fair Debt Collection Practices Act (FDCPA) and Telephone Consumer Protection Act (TCPA).

Significantly, this is the first known decision from a federal court within the Fourth Circuit to hold that debt collection calls – including those to a non-debtor – are exempt from the TCPA’s prohibition on prerecorded messages to landlines.

Further, the Court held: (1) unanswered calls are not “communications” under the FDCPA, and (2) a debt collector may repeatedly contact a non-debtor to obtain location information for the debtor where the debt collector reasonably believes that a previous response from the non-debtor was erroneous or incomplete.

Plaintiff’s claims arise out of 10 debt collection calls allegedly placed to his residence that played a prerecorded message seeking to speak to someone other than the Plaintiff. Plaintiff, an attorney filing pro se, filed a complaint asserting four claims under the FDCPA, three claims under the TCPA, two claims under the Maryland TCPA, and common law invasion of privacy. The Court granted summary judgment in Defendant ARM’s favor, dismissing Plaintiff’s complaint in its entirety.

The Court held that debt collection calls, including those to a non-debtor, are exempt from the TCPA’s prohibition on prerecorded messages because such calls “do not adversely affect the privacy rights” that the TCPA “is intended to protect.” The Court emphasized that the purpose of the TCPA is to prevent abusive telemarketing practices and found that none of the alleged calls “included the transmission of an unsolicited advertisement.” Also, the Court held that the same exemption applies to Plaintiff’s Maryland TCPA claims.

The Court also held that “unanswered telephone calls can hardly be considered ‘communications’ under the FDCPA.” Further, the Court found that the two calls Plaintiff allegedly answered did not violate the FDCPA because ARM was attempting to locate the consumer and reasonably believed that Plaintiff’s prior response in pressing option “2” for “I am not the debtor,” but hanging up before speaking to a live agent, was erroneous and/or incomplete.

Finally, the Court dismissed Plaintiff’s invasion of privacy claim, finding the alleged phone calls would not be highly offensive to a reasonable person as a matter of law.

A copy of the Court’s memorandum opinion and order can be read here. Michael C. Worsham v. Account Receivables Management, Inc., No. JKB-10-3051 (D. Md. Nov. 22, 2011) (Bredar, J.)

John Lynch is a trial attorney with a national litigation practice. John is the leader of the Financial Services Litigation Group at Troutman Sanders LLP and works with attorneys handling class action and individual cases. He also represents companies and executives in intellectual property cases and commercial matters, involving patent and trademark matters, shareholder/partner disputes, construction, commercial contracts, and real estate.