In the last post-Barr development, a Colorado federal district court ruled that the government guaranteed debt exception was still invalid, but found that due process issues prevented consumer protection law from being enforced over the phone ( TCPA) against the defendant.
The case is Mehaffey v. Navient Solutions, LLC. The plaintiff, Tina Mehaffey, has reportedly received dozens of calls from Navient Solutions seeking to collect student loan payments. She sued under the TCPA because the calls were all attempts to reach someone named Alexis Whitcomb, who allegedly provided the number to Navient in 2014 before it was reassigned to Mehaffey in 2018.
After Barr v. American Association of Policy Consultants, Inc., was decided in 2020, removing the government guaranteed debt exception, the parties renewed their summary judgment motions.
Although U.S. District Judge Robert E. Blackburn agreed with Mehaffey that the separation of the TCPA exception worked retroactively, he nevertheless refused to award damages to Navient.
Blackburn turned to the Barr indicative decision, but deemed unnecessary the conflicting opinions filed in the pluralist decision. Therefore, he returned to “first principles”, noting that court rulings apply retroactively, meaning that without the public debt exception in place, the calls Navient made to Mehaffey violated the TCPA.
However, when the court considered how to explain Navient’s appeal to the exception – which was still part of the law at the time the appeals were made – Blackburn looked at what happens when a party is potentially liable for past acts which were subsequently determined. be illegal.
[D]This process prohibits the application of an unforeseen criminal sanction to conduct which, at the time, was lawful, “the court wrote. Nature. For this reason,”[r]the illegal imposition of punitive damages would raise a serious constitutional question. ‘”
This question: Do damages offered under the TCPA constitute punitive damages?
Yes, Blackburn held on.
“Apart from the fact that such triple damages are not linked to any notion of compensation for the actual damage suffered by a plaintiff, they are only available on proof of a willful or conscious violation of the law, which indicates an intention to punish such violations beyond the scope of what is normally permitted under the law, ”he wrote. “I therefore conclude that the TCPA’s triple damages provisions are the functional equivalent of punitive damages. “
Due to the debt collection exemption in place at the time of the alleged appeals, Navient could not have known he was violating the TCPA when he called Mehaffey, the court added, let alone having done so voluntarily.
“Yet, when quasi-criminal punitive sanctions are requested, due process requires that a party be warned that their conduct will subject them to liability,” the court said. “Navient could not have foreseen, and was not required to foresee, that the exception would be declared unconstitutional. Retroactive application
[Barr] Ms. Mehaffey’s claim for triple damages would deprive Navient of the due process to which she is entitled before being subject to an award of quasi-criminal damages. “
Blackburn granted summary judgment in favor of Navient over Mehaffey’s claim for treble damages, as well as his claim for statutory damages of $ 500 per violation.
At the United States Court of Appeals, Tenth Circuit, penalties in excess of actual damages are criminal, he said. The court acknowledged that this was a minority position, citing a recent Delaware Federal Court ruling.
“Nonetheless, for lack of clearer or more convincing authority … I conclude that I am bound to adhere to the statements of the Tenth Circuit and to conclude that the statutory damages provision of the TCPA constitutes a penalty,” he said. -he writes. “So, as with treble damages, because due process prohibits the imposition of quasi-criminal penalties on a party who has not been informed that their conduct would expose them to liability, Navient is also entitled summary judgment on this aspect of Ms. Mehaffey’s claim. “
To read the order in Mehaffey v. Navient Solutions, Inc., Click here.
Why is this important: The case demonstrates the continuing impact that the Barr decision is to have on litigants. Although a minority of courts have ruled that the entire automatic dialer provision was unconstitutional from its adoption until its Barr was decided, this court did not. Yet although the court agreed with the plaintiff that the defendant’s appeals violated the TCPA because the separation of the government guaranteed debt exception meant that it never existed, it also concluded that the defendant could not be held liable for damages under the law because they are almost criminal in nature. This argument could prove useful for defendants in the debt collection industry who hope to avoid costly statutory damages under the TCPA.
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