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Zondlo v. Allied Interstate, LLC

Citation: 290 F. Supp. 3d 296Docket: No. 3:16cv936

Court: District Court, M.D. Pennsylvania; February 11, 2018; Federal District Court

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Pending before the court are cross-motions for summary judgment in a case involving Plaintiff Cheryl Zondlo and Defendant Allied Interstate, LLC, concerning alleged violations of the Telephone Consumer Protection Act of 1991. The case arises from Zondlo's opening of retail store credit cards with Gap, American Eagle Outfitters, and JCPenney, all issued through Synchrony Bank. After Zondlo fell behind on payments, Synchrony Bank referred her Gap account to Allied for collections on September 15, 2015, leading to calls made to her provided landline number.

On October 7, 2015, Zondlo contacted Synchrony Bank regarding her American Eagle Outfitters account and explicitly revoked any consent for them to call her about her debt. Following her request, Synchrony noted on her American Eagle account that she should not be contacted by cell phone or automated dialer, but did not apply this notation to her Gap or JCPenney accounts. Consequently, Allied continued to call her regarding the Gap account.

On October 15, 2015, Synchrony referred Zondlo’s JCPenney account to Allied, which began calling her cell phone. Although Zondlo confirmed she received calls from Allied, she did not request them to stop. On November 18, 2015, she ported her landline number to a cellular service, which meant calls to that number were now transmitted over a wireless network. Allied continued to call both her landline and cell phone numbers until her accounts were sold to a third-party debt buyer on January 24, 2016.

After revoking consent for calls, the plaintiff received 66 calls from the defendant to her 3231 Cell Number and 246 calls to her newly ported 9301 Landline Number. The case examines whether the revocation of consent regarding calls about the plaintiff's American Eagle account also extends to her Gap and JCPenney accounts, and whether it applies to third-party debt collectors, specifically Synchrony Bank's agent, Defendant Allied. The defendant's continued calls to the plaintiff's landline, which was converted to a wireless number, are also contested. The plaintiff filed a complaint in the Court of Common Pleas for Luzerne County on April 19, 2016, for violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, leading to the case's removal to federal court on May 19, 2016. At the conclusion of discovery, the defendant sought summary judgment, prompting the plaintiff to file a cross-motion for summary judgment. 

The court has federal question jurisdiction under 28 U.S.C. 1331 and 1343(a)(3, 4). Summary judgment is appropriate if there are no genuine issues of material fact, meaning that the evidence must demonstrate that a reasonable jury could not favor the non-moving party. The burden is initially on the moving party to show the absence of a genuine issue, after which the non-moving party must present specific facts to demonstrate a genuine issue for trial.

Plaintiff alleges that the defendant violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, by making automated calls to her cellular phone without consent. The parties agree that the defendant qualifies as a "person" under the statute and that, after October 7, 2015, the defendant placed 66 calls to plaintiff's 3231 Cell Number and 246 calls to her 9301 Landline Number, which she had ported to a cellular network. All calls were non-emergency, and cross-motions for summary judgment have been filed based on largely agreed-upon facts. The remaining issues include: 1) plaintiff's standing to pursue the TCPA claim; 2) whether the defendant used an automatic dialing system; 3) whether there was prior express consent for calls made after October 7, 2015; and 4) the defendant's entitlement to call the 9301 Landline Number post-November 18, 2015.

The defendant contends that the plaintiff lacks standing, arguing that she must show an injury connected to the calls. The defendant claims that because plaintiff was actively seeking to initiate a TCPA lawsuit while receiving legal advice, she did not suffer unwanted calls, thereby failing to establish injury under the TCPA. Article III of the Constitution necessitates that a plaintiff demonstrate a concrete and particularized injury to establish standing. In response, the plaintiff cites several non-binding cases asserting that unsolicited calls can constitute concrete harm, countering the defendant's argument.

Plaintiff asserts that her legal representation and advice regarding the TCPA violation should not diminish her claims, emphasizing that seeking legal counsel is a legitimate consumer action. The court agrees, noting that the TCPA aims to protect consumers from unwanted calls. Evidence indicates that the plaintiff explicitly requested not to receive calls from Synchrony Bank, contradicting any notion that she desired the over 300 calls she received. The court finds the plaintiff's consultation with counsel irrelevant to her standing, as no legal requirement exists for her to be unaware of her rights when filing a lawsuit. The cited case, Stoops v. Wells Fargo Bank, is distinguished from the current situation, as it involved a plaintiff who sought calls to collect damages, whereas the plaintiff here did not instigate the calls. The record supports that the plaintiff took steps to reduce unwanted communications, establishing her standing under the TCPA.

The parties also dispute whether the dialing system used by the defendant qualifies as an automatic telephone dialing system (ATDS) under the TCPA. The plaintiff contends that the defendant should be collaterally estopped from contesting this issue, as a prior ruling determined the aQrate system to be an ATDS. The court acknowledges the applicability of offensive collateral estoppel, referencing the 2015 ruling by Judge Nealon, which found the aQrate system constituted an ATDS, suggesting that relitigating this matter would be inefficient.

The parties concur that there have been no significant changes to the dialing software since the Morse case and have agreed to utilize deposition testimony from Morse in the current case. Trial courts have broad discretion regarding the application of offensive collateral estoppel, which may be appropriate if: 1) the identical issue was previously adjudicated; 2) the issue was litigated; 3) the determination was necessary for the decision; and 4) the party being precluded was fully represented. Courts must also assess if the precluded party had a full and fair opportunity to litigate the issue previously. The defendant contends that offensive collateral estoppel is inappropriate for two reasons: first, the outcome in Nieto v. Allied Interstate is inconsistent with Morse, as the former found Allied did not use an ATDS; second, the settlement of Morse post-summary judgment deprived the defendant of a full opportunity to litigate the ATDS issue. After review, the plaintiff's position that collateral estoppel is appropriate regarding whether Allied's aQrate system is an ATDS is upheld. The Nieto case's outcome is not inconsistent with Morse because the facts differ significantly, and the Nieto court did not analyze aQrate, focusing instead on the plaintiff's failure to present evidence. In contrast, the Morse court thoroughly analyzed whether the aQrate system constituted an ATDS, which was crucial for its summary judgment decision.

Allied had a strong motivation to defend itself against summary judgment due to the significant damages involved in the Morse case, which are greater than those currently at issue. Allied was adequately represented in that case and has agreed to utilize deposition testimony from Morse, as its aQrate system remains unchanged since then. The court notes that Allied seeks to re-examine evidence previously assessed by Judge Nealon, which contradicts the principles of collateral estoppel designed to prevent such relitigation. Allied's claim that it would have appealed Nealon's ruling if the case hadn't settled is deemed unconvincing since the settlement closed the case and waived the right to appeal. As a result, Allied had a fair opportunity to contest whether its aQrate system constitutes an ATDS, and Judge Nealon's ruling is considered final. Consequently, the court concludes that Allied is collaterally estopped from revisiting this issue, leading to a summary judgment in favor of the plaintiff.

Regarding consent to call the plaintiff after October 7, 2015, both parties agree that Synchrony Bank initially had consent to contact her about her credit cards, which was granted when she opened the accounts. This consent extended implicitly to Allied for collection purposes. The dispute arises over whether consent was retained after the plaintiff revoked it during a call with Synchrony Bank on October 7, 2015. The defendant contends that this revocation only applied to the American Eagle Outfitters account, while the plaintiff asserts that revocation applied to all accounts, inhibiting both Synchrony Bank and Allied from further contact. The court must determine if revocation of consent to a creditor transfers to a third-party debt collector, referencing Gager v. Dell Financial Services, which supports the view that consent is revocable under common law principles, despite the TCPA lacking explicit revocation language.

Consumers have the right to revoke consent to contact by third-party debt collectors, either orally or in writing, as stated by the Federal Communications Commission (FCC). It is generally reasonable for a plaintiff to revoke consent with a third-party collector by revoking it with the original creditor. The defendant contends that consent given to a creditor is transferable to a debt collector but argues that revocation should not be transferable. This position is seen as unfair, as the plaintiff would need to contact the debt collector directly, despite potentially having no prior interaction, while the defendant could continue calling based on consent from the creditor. 

The court finds that revocation of consent by a creditor should also apply to debt collectors. However, the case presents complications because the plaintiff allegedly revoked consent regarding an account that was not assigned to the debt collector, raising questions about the reasonableness of the revocation. As both parties have submitted cross-motions for summary judgment, the court notes that critical information about account connections and communication processes between Synchrony Bank and Allied is lacking. Consequently, as the record does not favor either party sufficiently, the court denies both motions for summary judgment, indicating that further development of the facts is necessary.

Additionally, the court addresses whether the defendant could continue calling the plaintiff's landline after it was ported to a cellular service. The Telephone Consumer Protection Act (TCPA) prohibits calls to cellular numbers without prior express consent, emphasizing the legal requirement for consent for such communications.

Allied did not require prior express consent from the plaintiff to contact her on the 9301 Landline Number while it was associated with a landline. Consequently, the plaintiff's revocation of consent on October 7, 2015, did not affect Allied's right to call her until November 18, 2015. On that date, the plaintiff ported her 9301 Landline Number to a cellular service, asserting that calls from the defendant should cease due to her earlier revocation of consent for cell phone calls. The defendant countered that the revocation could not apply to a number that was still a landline at the time of the revocation and argued that the plaintiff needed to notify Allied directly after porting the number. There is no disagreement that the plaintiff did not revoke consent after the porting. The court found summary judgment inappropriate as there are unresolved factual disputes, primarily regarding whether the plaintiff actually ported her number and the timing of this event. Key questions include whether the defendant was aware of the porting and if Synchrony Bank had an obligation to inform Allied. Consequently, both parties' motions for summary judgment are denied in part and granted in part: the plaintiff is granted standing and the classification of Allied's system as an ATDS, while the issues of consent revocation and the continued right to call after November 18, 2015, remain unresolved. Prior to the revocation, Synchrony Bank had consent to call both the 3231 Cell Number and the 9301 Landline Number, which was provided by the plaintiff in connection with her JCPenney account.

The defendant made 77 phone calls to the plaintiff using "Quallbar" software, a detail not mentioned elsewhere in their filings. The plaintiff's supporting brief for her cross-motion for summary judgment is titled to indicate opposition to the defendant's motion, suggesting overlapping issues in both motions, which will be addressed collectively. The plaintiff's argument regarding Allied's use of an Automated Telephone Dialing System (ATDS) relies on what the court deemed a "conclusory allegation" and "mere speculation," as she claims that Allied needed to employ an ATDS to remain competitive in debt collection. Legal precedent indicates that consent from a creditor is transferred to third-party debt collectors, treating calls made by them as if made by the creditor directly. The defendant contends that Synchrony Bank did not inform them of the plaintiff's revocation of consent, which the plaintiff does not dispute but deems irrelevant. She states that she intended to port her number before summer 2015, but it was not completed until November 18, 2015. Although the plaintiff hints at an argument for the Telephone Consumer Protection Act (TCPA) being a strict liability statute, the court declines to interpret it that way due to a lack of legal basis.