Armata v. Target Corp.

• Decision Date: 25 June 2018
• Docket Number: SJC–12448
• Citation: 99 N.E.3d 788,480 Mass. 14
• Parties: Debra ARMATA v. TARGET CORPORATION & another.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

480 Mass. 14

99 N.E.3d 788

Debra ARMATA

v.TARGET CORPORATION & another.¹

SJC–12448

Supreme Judicial Court of Massachusetts, Hampden..

Argued March 6, 2018.

Decided June 25, 2018.

Sergei Lemberg, Wilton, CT, for the plaintiff.

Brian Melendez, of Minnesota (Alan E. Brown, Boston, also present) for the defendants.

Maura Healey, Attorney General, & Benjamin K. Golden & Max Weinstein, Assistant Attorneys General, for the Attorney General, amicus curiae, submitted a brief.

Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

LENK, J.

In this case, we construe the revised Massachusetts debt collection regulations, which limit how often a creditor may attempt to contact a debtor via telephone in order to collect a debt.

Title 940 Code Mass. Regs. § 7.04(1)(f) (2012) (regulation), implementing G. L. c. 93A, § 2, prohibits creditors from "[i]nitiating a communication with any debtor via telephone, either in person or via text messaging or recorded audio message, in excess of two such communications in each seven-day period." Creditors are exempt under the regulation when they are "truly unable to reach the debtor or to leave a message for the debtor." Office of the Attorney General, Guidance with Respect to Debt Collection Regulations (2013) (http://www.mass.gov/ago/docs/government/debt-collection-guidance-2013.pdf [https://perma.cc/V4Q8-Y39E] ) (Attorney General's guidance). We must decide whether the regulation applies to creditors, such as the defendants, who use automatic dialing devices or voluntarily decide not to leave voicemail messages. We conclude that it does.

Debra Armata commenced an action in the Superior Court against Target Corporation and Target Enterprises, Inc., doing business as Target Corporate Services, Inc. (collectively, Target), alleging that Target violated the regulation by telephoning her more than two times in a seven-day period in order to collect a debt. A Superior Court judge granted Target's motion for summary judgment and denied Armata's cross-motion for summary judgment regarding liability under the regulation, and Armata appealed. Target does not deny that it telephoned Armata more than twice in a seven-day period in order to collect a debt. Rather, Target maintains that it did not "initiate" any communications within the meaning of the regulation because it telephoned Armata with an automatic dialing device, which only plays the prerecorded message after the call is answered and no live Target representative is available. Target also contends that the majority of telephone calls, which Armata did not answer, did not constitute "communications" within the meaning of the regulation because they did not convey any information, given that Target did not leave voicemail messages. In the alternative, Target claims that it was exempt from the regulation because, although it was able to reach Armata, it could not, as a practical matter, leave her voicemail messages without violating State and Federal law.

Target's proffered interpretation of the regulation is inconsistent with its plain meaning and the Attorney General's guidance, and is contrary to the regulation's purpose of preventing creditors from harassing, oppressing, or abusing debtors. The regulation applies to any attempted telephonic communication by a creditor to a debtor in an effort to collect a debt, so long as, as here, the creditor is able to reach the debtor or to leave a voicemail message for the debtor. Further, Target was not exempt from the regulation, because it was not actually precluded from leaving Armata voicemail messages under State or Federal law. Accordingly, Armata is entitled to summary judgment on the issue of liability.

1. Background. The material facts are not in dispute. In May, 2013, Armata applied for a Target-branded debit card. She then incurred a debt to Target; the debt at issue was more than thirty days past due, and was incurred for personal purposes. Target telephoned Armata numerous times beginning on January 23, 2015, in order to collect the debt.² There were times when Target telephoned Armata concerning the debt more than twice in a seven-day period.³

No person physically placed the telephone calls to Armata; rather, Target telephoned her using a "predictive dialer," which is an automatic dialing device. When Target cardholders answer the telephone calls placed by Target's predictive dialer, a live representative is on the line ninety-five per cent of the time. For the other five per cent of telephone calls, a recorded message is played; the recorded message does not start until the predictive dialer detects that someone has answered the telephone call and only if a live representative is unavailable.

When Armata did answer the telephone calls from Target, she heard a prerecorded message requesting that she contact Target. The record is silent as to whether she heard such a message more than twice in any given week. Armata was never connected with a live person. Although Target was able to leave Armata voicemail messages, it chose not to, based on an internal policy not to leave voicemail messages.

Armata commenced an action in the Superior Court, alleging that Target violated the regulation by placing more than two debt collection calls to her cellular telephone within a seven-day period. See 940 Code Mass. Regs. § 7.04(1)(f). Target moved for summary judgment, and Armata cross-moved for summary judgment as to liability. Reasoning that Target's unsuccessful attempts to speak to Armata via telephone did not constitute "communications" as defined by the regulations, and that there was no indication that Armata heard a prerecorded message from Target more than twice in a given week, a Superior Court judge denied Armata's motion and allowed Target's motion. Armata appealed, and we transferred the case from the Appeals Court to this court on our own motion.

2. Discussion. a. Standard of review. "The standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law." Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120, 571 N.E.2d 357 (1991). "In a case like this one where both parties have moved for summary judgment, the evidence is viewed in the light most favorable to the party against whom judgment [has entered]" (citation omitted). Boazova v. Safety Ins. Co., 462 Mass. 346, 350, 968 N.E.2d 385 (2012). "Because our review is de novo, we accord no deference to the decision of the motion judge." DeWolfe v. Hingham Ctr., Ltd., 464 Mass. 795, 799, 985 N.E.2d 1187 (2013).b. Statutory and regulatory framework. General Laws c. 93A, § 2 (a ), prohibits "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." The Attorney General may implement rules and regulations interpreting this provision. G. L. c. 93A, § 2 (c ). In 2012, the Attorney General amended the regulation, 940 Code Mass. Regs. 7.04(1)(f), which now provides:

"It shall constitute an unfair or deceptive act or practice for a creditor to contact a debtor ... [by] [i]nitiating a communication with any debtor via telephone, either in person or via text messaging or recorded audio message, in excess of two such communications in each seven-day period to either the debtor's residence, cellular telephone, or other telephone number provided by the debtor as his or her personal telephone number ..." [emphasis added].

In 2013, in response to public inquiries, the Attorney General issued "Guidance With Respect to Debt Collection Regulations." This guidance explained:

"The goal of this provision is to not only limit the number of times a creditor can communicate with a debtor via telephone to try to collect a debt, but to also limit the fees that a creditor can impose on a debtor (thereby limiting voicemails and text messages to twice in a seven day period). Accordingly, unsuccessful attempts by a creditor to reach a debtor via telephone may not constitute initiation of communication if the creditor is truly unable to reach the debtor or to leave a message for the debtor. Notwithstanding this interpretation, the Office of the Attorney General may still consider enforcement action against any conduct, including initiation of communication via telephone, the natural consequence of which is to harass, oppress, or abuse a debtor" (emphasis added).

See Attorney General's guidance, supra at 1.⁴

c. Analysis. The parties agree that, for purposes of the regulation, Target was a creditor and Armata was a debtor. See 940 Code Mass. Regs. § 7.03 (2012). It also is undisputed that, at times in 2015, Target telephoned Armata more than twice in a seven-day period in an effort to collect a debt. The only dispute is whether, in telephoning Armata, Target was "[i]nitiating a communication ... via telephone, either in person or via text messaging or recorded audio message" within the meaning of the regulation.⁵ See 940 Code Mass. Regs. § 7.04(1)(f).

"We interpret a regulation in the same manner as a statute, and according to traditional rules of construction." Warcewicz v. Department of Envtl. Protection, 410 Mass. 548, 550, 574 N.E.2d 364 (1991). "Thus, we accord the words of a regulation their usual and ordinary meaning." Id.

The regulation does not define "initiating." Webster's dictionary defines the term "initiate" as "to begin or set going," to "make a beginning of," or to "perform or facilitate the first actions, steps, or stages of." Webster's Third New International Dictionary 1164 (1993). See Commonwealth v. Samuel S., 476 Mass. 497, 501, 69 N.E.3d 573 (2017) ("we look to dictionary definitions as a guide to a term's plain or ordinary meaning"). The current language of the regulation was the result of the Attorney General's revisions in 2012. The prior version prohibited creditors from "[e]ngaging any debtor in...