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November 3, 2015Client Alert

Wisconsin District Court Continues Stay of TCPA Lawsuit

On October 20, 2015, Judge Randa from the U.S. District Court for the Eastern District of Wisconsin (The COUA) granted defendant Performant Technologies, Inc.’s (Performant) motion to continue a stay pending judicial review of the Federal Communications Commission’s (FCC) July 10 Declaratory Ruling and Order (Order) related to the Telephone Consumer Protection Act (TCPA). Gensel v. Performant Technologies, Inc., No. 13-C-1196 (E.D. Wis. Oct. 20, 2015)

n the Order, the FCC defined the term “capacity” in the auto-dialer context to include the potential capacity to store, produce or dial telephone numbers “using a random or sequential number generator.” The FCC also found that the term “called party” refers to the current cell phone subscriber, which means a defendant can be held liable for calls to reassigned phone numbers even if the original subscriber to the number previously provided his or her consent to receive phone calls. The Order created a limited safe harbor exception for certain calls to reassigned cellphone numbers. Subject to this exception, “calls to reassigned wireless numbers violate the TCPA when a previous subscriber, not the current subscriber or customary user, provided the prior express consent on which the call is based.” The Seventh Circuit and D.C. Circuit are currently reviewing the Order.

Here, plaintiff Lennett Gensel (Gensel) alleged that Performant repeatedly called her cell phone number to collect on another person’s debt in violation of the TCPA. Gensel’s cell phone carrier had reassigned the actual debtor’s number to her. The performant argued the telephone system used to call Gensel did not and does not have the capacity to randomly or sequentially call phone numbers.

The Court initially granted the Performant’s motion to stay the case on January 28, 2015, based upon  the primary jurisdiction doctrine, which “allows a federal court to refer a matter extending beyond the ‘conventional experience of judges’ or ‘falling within the realm of administrative discretion’ to an administrative agency with more specialized experience, expertise and insight.”

Here, the Court subsequently continued the stay “in the interest of judicial economy,” pending the outcome of the pending appeals. In doing so, the Court noted that the appellate courts likely will not overrule the FCC on the number reassignment/safe harbor issue. However, the Court determined it was much more likely the appellate courts would overturn the FFC on the definition of “capacity.” The Court stated, “the FCC majority’s interpretation of the term ‘capacity’ contradicts the plain language of the statute,” and therefore, not entitled to deference on appeal. Because the construction of the term “capacity” is central to the Gensel case, the Court found that a stay pending the outcome of judicial review is “in the interest of judicial economy.”

The meaning of the term “capacity” is a focal issue in many pending TCPA cases. As such, you can expect to see similar defendants follow suit and seek stays pending a ruling from the D.C. Circuit and Seventh Circuit on the Order. Indeed, if you have a case currently pending before a district court with similar issues, you should discuss with your in-house or outside counsel the pros and cons of moving to stay your case pending judicial review.

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