END OF AN ERA: Massive Decade-Long TCPA MDL Against Portfolio Recovery Services Comes to A Close And It Is a Good Opportunity to Reflect

For well over a decade a massive multi-district proceeding against a debt collector accused of using an autodialer to harass debtors has been mired in federal court in San Diego, California.

Filed in 2011, the action was pursued by dozens of individuals Plaintiffs and untold thousands (millions?) of unnamed class members was the result of numerous separate class actions being collapsed together into one massive suit.

Through the years dozens of law firms have represented the various parties and over 900 documents were filed in the suit.

But in the end, the case against all Defendants was soundly defeated and judgment was entered for the defense yesterday.

What a colossal waste of time.

So what happened?

Well, the law changed is what happened. And Portfolio Recovery Associates was brazen enough to push forward in the litigation through one sea change after another until it finally prevailed.

When the suit was filed back in 2011, the idea that a predictive dialer was subject to the TCPA was novel and controversial. Only a handful of cases–mostly in Illinois–had so held, and they relied on an obscure ruling from the FCC from 2003 that few had ever heard of.

Then in 2015, the FCC tripled down on its ruling and it looked like PRA was really in tremendous trouble.

That trouble seemed to abate in March, 2018 when ACA, Int’l struck down the FCC’s work in its Omnibus ruling that expanded the ATDS definition, but then PRA seemed to be in even hotter water following the Ninth Circuit Court of Appeal’s September, 2018 ruling in Marks that confirmed PRA was using an ATDS after all.

Still PRA fought on–likely inspired by a massive circuit split on the issue–and found pay dirt when the U.S. Supreme Court handed down Facebook in April, 2021. There the Supreme Court ruled that only dialers making use of a random or sequential umber generator trigger the TCPA.

While the Plaintiffs suing PRA still had a glimmer of hope–the SCOTUS ruling left open an avenue for source code to result in an ATDS finding even where a predictive dialer was used–that was dashed by the Ninth Circuit’s subsequent ruling in Borden, which demolished Plaintiff’s arguments.

And so etched– like so many striations of limestone–across the face of this epic litigation we see all the eras of TCPAWorld laid bare. From the primordial ooze of ATDS litigation through to the modern era.

And in the end, a simple paragraph ruling made work of the entire case:

Plaintiffs provide no evidence that the numbers called were randomly or sequentially generated and, in fact, acknowledge they were not. See Amended Complaint ¶¶ 25, 37 (Doc. No. 484) (Plaintiffs’ allegation that the numbers dialed were obtained from skip-tracing services.); Motion to Open Discovery Hearing Transcript 3:12–15 (Doc. No. 804) (“Obviously, this is a debt collection type cause so they’re not making up ten-random digits of numbers; they have a database of numbers and they are calling from that database list.”). Accordingly, the undisputed evidence demonstrates Defendant did not utilize an ATDS and, therefore, Defendant is entitled to judgment

And so ends the saga of one of the largest and slowest moving pieces of litigation in TCPA lore. The final ruling is In Re Portfolio Recovery, 2023 WL 4355347 (S.D. Cal. July 5, 2023), which stands as a monument to TCPAWorld’s shape-shifting nature.

Have we finally found bedrock on ATDS cases? Perhaps. But with a recent case casting doubt on Borden’s formulation–and a circuit split already present again–we may not have seen the end of the ATDS battles.

But at least we have seen one long battle come to an end.

For those interested in learning what the future of the TCPA, ATDS, DNC and prerecorded call litigation may look like,  you MUST attend (virtually) the Troutman Amin, LLP 2023 marketing law conference.

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1 Comment

  1. Even though I’m in the 6th Circuit, where the legality of list-based autodialers is in doubt, I’ve noticed that these types of spam debt collection calls have made a comeback since the Facebook ruling. They follow a pattern: frequent hang-ups from various phone numbers that change every day, then finally a call (with 10 seconds of dead air at the beginning) from an India or Pakistan call center. The names of the “debtors” that they ask for are improbable, and possibly machine-generated. I’m not sure how the callers profit from this, but I guess they occasionally reach someone whose name is close to the one in their system and can convince them to pay some ancient bill that isn’t theirs. It’s a “business” model that’s feasible only with the ability to make calls at zero marginal cost.

    The collection agencies that make predictive dialer calls to skip-traced or random phone numbers usually have a documented history of other unethical and deceptive acts. (I got a spam call this week from a collector that has had at least FOUR $10 million+ penalties!) Morally, there’s no difference between them and the robocallers selling fake car warranties or pretending to be from the immigration office. They just have better lawyers and lobbyists. I don’t know how any legitimate collector ever gets through to anyone when they have to compete with all of the trash.

    While this Portfolio ruling demonstrates that Congress urgently needs to act to clarify the ATDS definition, the states should take notice as well. I don’t see much point in a mini-TCPA that imposes ridiculously heavy fines and burdensome restrictions on telemarketers if it carves out exemptions for other types of for-profit phone spammers.

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