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04.15.16

TCPA class action lawsuit thrown out by California Federal District Court

BY TCPA Editorial Team

On March 31 2016, the United States District Court for the Northern District of California dismissed a TCPA putative class action lawsuit because the alleged calls were made to collect a debt owed to or guaranteed by the United States government.

The lawsuit, filed in February 2014 by Neil Silver (“Silver”), alleged that the Pennsylvania Higher Education Assistance Agency (PHEAA) placed unsolicited phone calls to his cellphone in an effort to collect a student debt.  Silver also claimed that the calls were made using an autodialer and without his consent.

In November 2015, Congress passed the Omnibus Budget Reconciliation Act of 2016 (the “2016 Budget Act”). The 2016 Budget Act amended the TCPA by providing and exemption for all calls made solely to collect a debt owed or guaranteed by the United States (the “amendment”.

As a result of the amendment to the TCPA, PHEAA filed a motion for summary judgment arguing that the amendment barred Silver’s TCPA claims. Silver objected, arguing that allowing PHEAA’s motion for summary judgment would be an unfair retroactive application of the statute. Judge Phyllis Hamilton rejected Silver’s argument.

In her opinion, Judge Hamilton granted PHEAA’s motion, concluding that the amendment does in fact exempt the alleged calls and “because the retroactivity issue is dispositive, the court need not reach the” issues of consent or whether the calls were placed using an autodialer.

To decide whether Silver’s claims were barred under the amendment, Judge Hamilton had to determine whether the statute would impair the right’s Silver had “when he acted, increase a party’s liability for past conduct, or impose new duties with respect to transaction already completed.”

Judge Hamilton found the TCPA amendment did not increase anyone’s liability for past conduct, it decreased it by creating an exception for telephone calls made to collect debt owed or guaranteed by the United States. Furthermore, rather than imposing new duties, the amendment eliminated certain duties.  Finally, Judge Hamilton said although Silver’s right to bring a lawsuit was impaired this alone was insufficient.

This decision is likely to be used as precedential authority in any upcoming TCPA case against a Student Loan Collector acting on behalf of the United States. It also offers persuasive authority for lawyers who argue that the TCPA amendment applies now even though the FCC has not issued regulations in response to the 2016 Budget Act.

The case is Silver v. Pennsylvania higher Education Assistance Agency, Case No. 14-cv-0652-PJH in the United States District Court for the Northern District of California.