Daubert v. NRA Grp., LLC

• Decision Date: 03 July 2017
• Docket Number: Nos. 16-3613,16-3629,s. 16-3613
• Citation: 861 F.3d 382
• Parties: John DAUBERT, Cross-Appellant in No. 16-3629 v. NRA GROUP, LLC, d/b/a National Recovery Agency, NRA Group, LLC, Appellant in No. 16-3613
• Court: U.S. Court of Appeals — Third Circuit

861 F.3d 382

John DAUBERT, Cross-Appellant in No. 16-3629

v. NRA GROUP, LLC, d/b/a National Recovery Agency,NRA Group, LLC, Appellant in No. 16-3613

Nos. 16-3613

16-3629

United States Court of Appeals, Third Circuit.

Argued May 23, 2017

Filed: July 3, 2017

Richard J. Perr [ARGUED], Fineman Krekstein & Harris, Ten Penn Center, 1801, Market Street, Suite 1100, Philadelphia, PA 19103, for Appellant.

Brett M. Freeman, Carlo Sabatini [ARGUED], Sabatini Law Firm, 216 North Blakely Street, Dunmore, PA 18512, for Appellee.

Before: HARDIMAN, ROTH, and FISHER, Circuit Judges.

OPINION OF THE COURT

FISHER, Circuit Judge.

This case—involving tens of thousands of dollars in statutory damages, half a jury trial, and cross-appeals—stems from a debt collector's pursuit of $25 in unpaid medical bills. John Daubert won summary judgment on his Telephone Consumer Protection Act (TCPA) claim against NRA Group, LLC but he lost at trial on his Fair Debt Collection Practices Act (FDCPA) claim. NRA appeals. Daubert cross-appeals. We'll affirm on the TCPA claim but reverse and remand on the FDCPA claim.

I

It started with lower-back pain. Daubert went to Wilkes-Barre General Hospital for treatment. The Hospital's radiology department, operated by Radiology Associates of Wyoming Valley, x-rayed him. His bill was $46. Radiology Associates forwarded his medical report and cellphone number to the company that billed its patients, Medical Billing Management Services, or MBMS. Daubert's health-insurer contributed $21, so Daubert was responsible for the remaining $25. He apparently didn't pay (it's unclear why). So MBMS transferred his account to a debt collector, NRA, passing along Daubert's cell number.

NRA attempted to collect the $25 that Daubert owed Radiology Associates in two ways. First, it sent him a collection letter through an independent vendor. Visible through glassine windows on the envelope were—Daubert alleged—the bare sequence of letters and numbers NRA used to keep track of Daubert's collection account in its system and—undisputedly—a barcode that, when scanned by the appropriate reader, revealed that account number. Second, NRA called Daubert sixty-nine times in ten months. He answered just once. Each call was made using a Mercury Predictive Dialer. Calls were made according to campaigns created by Charlene Sarver, NRA's collections director. Campaigns used preselected criteria to pick the accounts and phone numbers the Dialer could access.

Daubert sued NRA in Pennsylvania state court. He alleged violations of the FDCPA, 15 U.S.C. § 1692 et seq. The bare account number and barcode on the collection letter's envelope, he claimed, could've revealed his private information. NRA removed the case to the District Court and filed an answer pressing a "bona fide error" defense to Daubert's FDCPA claim. See 15 U.S.C. § 1692k(c).

A month before discovery's end Daubert filed a motion to amend his complaint. Based on the sixty-nine calls he received and the Dialer's automation he wanted to allege a violation of the TCPA, 47 U.S.C. § 227. NRA opposed the motion but the District Court granted it. So NRA amended its answer adding a "prior express consent" defense to Daubert's new TCPA claim. See id. § 227(b)(1)(A)(iii).

Daubert served NRA with a deposition notice under Federal Rule of Civil Procedure 30(b)(6). It was delivered two weeks before the deposition was to occur. It said NRA was to pick a witness ready to testify on its behalf about things germane to Daubert's FDCPA and TCPA claims. For his TCPA claim Daubert wanted information about any automated dialing system NRA used to call third parties.

NRA designated Anita Schaar, director of payment processing, as its 30(b)(6) witness. At her deposition she was asked, "Are you able to testify about all the information known or readily available to NRA Group, LLC about [the] topics [in the 30(b)(6) notice]?," to which she responded, "Yes." J.A. 153. She was asked, "Is there anything you think you could have done to have prepared more for today's deposition?" J.A. 154. She said, "No, I don't think so," but mentioned she could've spoken to her coworker Charlene Sarver who "might" have had "more technical information" about the Dialer than she. J.A. 155. Schaar went on to explain how NRA's employees only generate calling campaigns. The Dialer, she said, is otherwise fully automated:

Q. ... So how is a phone call placed through the dialer system?

A. There is a campaign created.

Q. And this is the type of campaign that Charlene [Sarver] would create?

A. Yes....

Q. Is a human being involved in the placement of any phone calls made on the dialer, with the exception of creating a campaign?

A. I—I don't know. I don't think there's any other way to—no. The dialer does the dialing.

Q. Okay. So a human being selects the campaign criteria but then the dialer actually places the phone call?

A. Correct.

Q. Okay. When does an employee of NRA first get involved in a phone call that's been placed?

A. When someone answers the phone....

Q. ... If a phone call is not answered by a debtor, is an NRA employee ever involved in that phone call?

A. No.

J.A. 198–99, 206–207.

When discovery closed Daubert asked for summary judgment on his FDCPA and TCPA claims. For his TCPA claim he cited, among other things, Schaar's 30(b)(6) testimony and his own affidavit saying he "never provided" Radiology Associates or NRA his cell number or "permission" to call his cell number. J.A. 137–38.

In opposing Daubert's summary-judgment motion NRA submitted an affidavit it didn't produce during discovery. It was from Charlene Sarver. There Sarver contradicted Schaar's 30(b)(6) testimony. The Dialer can't make phone calls without "human intervention," she said, as a person must first "hit the ‘F4’ key on a keyboard." J.A. 380. Doing so triggers the Dialer, she claimed, causing it to "go through the accounts" stored in NRA's system to select one meeting a campaign's criteria. Id. "Without a collector hitting the ‘F4’ " key, she swore, the Dialer "cannot make a phone call." Id.

The District Court granted Daubert summary judgment on his TCPA claim. Relying in part on Schaar's 30(b)(6) testimony the court found no genuine dispute that NRA violated the TCPA by autodialing Daubert's cellphone sixty-nine times without his prior express consent. Applying the sham-affidavit doctrine the court declined to consider Sarver's contradictory affidavit, binding NRA to Schaar's 30(b)(6) testimony. Daubert was owed $500 in statutory damages for each TCPA violation ($500 x 69 calls = $34,500). See 47 U.S.C. § 227(c)(5)(B).

The court, however, denied Daubert summary judgment on his FDCPA claim. It held that while the barcode undisputedly visible through the envelope violated the FDCPA, a reasonable jury could conclude that NRA relied in good faith on two federal district court decisions deeming similar barcodes legal under the FDCPA. So a genuine, material factual dispute existed on whether NRA's FDCPA violation was "not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid" it. 15 U.S.C. § 1692k(c). A jury trial was scheduled to resolve that dispute.

At trial NRA moved for judgment as a matter of law on Daubert's FDCPA claim under Rule 50(a). Despite finding that whether the account number was visible alongside the barcode was a "clear jury question," J.A. 677, the court granted the motion, holding that no reasonable jury could find that either alleged FDCPA violation resulted from anything other than an unintentional, bona fide error. With that the court discharged the jury and entered final judgment. These appeals followed.

II

The District Court had jurisdiction under 28 U.S.C. § 1331. We have it under 28 U.S.C. § 1291.

We review orders granting summary judgment de novo . Steele v. Cicchi , 855 F.3d 494, 500 (3d Cir. 2017). Summary judgment is warranted if the moving party shows there's "no genuine dispute as to any material fact" and he's "entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). We view the facts in the light most favorable to the nonmoving party, drawing all inferences in its favor. Steele , 855 F.3d at 500.

Though we've yet to say so expressly, we review a district court's decision to exclude materials under the sham-affidavit doctrine for abuse of discretion. See Hackman v. Valley Fair , 932 F.2d 239, 241 (3d Cir. 1991) (A court "may" disregard an affidavit under the doctrine.); cf. EBC, Inc. v. Clark Bldg. Sys., Inc. , 618 F.3d 253, 267–70 (3d Cir. 2010) (Courts "may, in their discretion, choose to allow contradictory changes" to deposition testimony.). Most courts of appeals do the same. See Escribano-Reyes v. Prof'l HEPA Certificate Corp. , 817 F.3d 380, 386 (1st Cir. 2016) ; France v. Lucas , 836 F.3d 612, 622 (6th Cir. 2016) ; Cole v. Homier Distrib. Co. , 599 F.3d 856, 867 (8th Cir. 2010) ; Yeager v. Bowlin , 693 F.3d 1076, 1079 (9th Cir. 2012) ; Law Co. v. Mohawk Constr. & Supply Co. , 577 F.3d 1164, 1169 (10th Cir. 2009) ; Telfair v. First Union Mortg. Corp. , 216 F.3d 1333, 1337, 1342–43 (11th Cir. 2000) ; cf. Buie v. Quad/Graphics, Inc. , 366 F.3d 496, 504 (7th Cir. 2004) ("We review for an abuse of discretion the district court's decision to disregard parts of a plaintiff's affidavit."). But see Galvin v. Eli Lilly & Co. , 488 F.3d 1026, 1030 n.* (D.C. Cir. 2007) (suggesting de novo review applies).

III

A

NRA first says the District Court was wrong to grant Daubert summary judgment on his TCPA claim. A reasonable jury, it argues, could find that Daubert gave his "prior express consent" to receive calls about his bill. We disagree.

"Congress passed the TCPA to protect individual consumers from receiving intrusive and unwanted calls." Gager v. Dell Fin. Servs., LLC , 727 F.3d 265, 268 (3d Cir. 2013) ; see Mims v. Arrow Fin. Servs., LLC , 565 U.S. 368, 372–73, 132 S.Ct. 740, 181 L.Ed.2d 881 (2012). To that end the TCPA bars "any person within the United States" from making calls...