Schneider v. Susquehanna Radio Corp.

• Decision Date: 14 March 2003
• Docket Number: No. A02A1655., No. A02A1654
• Citation: 260 Ga. App. 296,581 S.E.2d 603
• Parties: SCHNEIDER v. SUSQUEHANNA RADIO CORPORATION. Susquehanna Radio Corporation v. Garver.
• Court: Georgia Court of Appeals

581 S.E.2d 603

260 Ga. App. 296

SCHNEIDER v. SUSQUEHANNA RADIO CORPORATION.

Susquehanna Radio Corporation v. Garver.

Nos. A02A1654, A02A1655.

Court of Appeals of Georgia.

March 14, 2003.

Certiorari Denied July 14, 2003.

Weissman, Nowack, Curry & Wilco, Ned Blumenthal, Michael K. Jablonski, Marc B. Hershovitz, Atlanta, C. Ronald Ellington, Athens, for Schneider & Garver.

Dow, Lohnes & Albertson, Sean R. Smith, Atlanta, Edward A. Webb, for Susquehanna Radio Corporation.

MIKELL, Judge.

Susquehanna Radio Corporation owns and operates Atlanta radio station WNNX, popularly known as "99X." In the spring of 1999, Ryan A. Schneider received the following prerecorded message on his home telephone answering machine from morning radio show host Jimmy Baron:

Hello. Hey, you there? Hello, pick up. Hey, it's Jimmy from 99-X calling. Yeah, I just wanted to know if I could borrow your car. Oh, I also needed to tell you about the 50,000 Delta SkyMiles we're giving away on 99-X. Every Monday through Friday at 7, 11, 1, 3 and 5—50,000 Delta SkyMiles. It ends this week. Look, if you need more information, just call (404) 287-1008 [ten oh eight]. So listen tomorrow morning at 7. And, get back to me about your car.

Mathew Gerald Garver received a similar message on his home telephone answering machine from radio personality Leslie Fram:

Hi. This is Leslie from the Morning-X on 99-X. I just wanted to make sure that you were included in Delta Destination II. Over the next 5 weeks, 99-X is giving away 7 million Delta SkyMiles. I wanted to personally give you the times to listen each weekday to win. Starting at 7 AM on the Morning-X, and then at 11, 1, 3, and 5, you could win 50,000 Delta SkyMiles. Here's the number to call for more information: (404) 266-0997. Good luck.

On February 18, 2000, Garver and Schneider sued Susquehanna in the State Court of Fulton County, claiming that its delivery of the prerecorded messages to their residential telephone lines violated the federal Telephone Consumer Protection Act¹ ("TCPA"), which provides that

It shall be unlawful for any person ... to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes or is exempted by rule or order by the [Federal Communication] Commission[.]²

In accordance with its congressional mandate, the FCC implemented four exemptions to the TCPA's ban:

The term "telephone call" ... shall not include a call or message by, or on behalf of, a caller: (1) That is not made for a commercial purpose, (2) That is made for a commercial purpose but does not include the transmission of any unsolicited advertisement, (3) To any person with whom the caller has an established business relationship at the time the call is made, or (4) Which is a tax-exempt nonprofit organization.³

Initially, Susquehanna moved for judgment on the pleadings, challenging the constitutionality of the TCPA. The parties then filed cross-motions for summary judgment. The trial court granted Susquehanna's motion with respect to Schneider pursuant to the "established business relationship" exemption because he participated in a free discount program run by 99X. In Case No. A02A1654, Schneider appeals, and we affirm.

However, the trial court denied Susquehanna's motion with respect to Garver and granted partial summary judgment to Garver, ruling that the call to him was made for a commercial purpose and contained an unsolicited advertisement, thereby violating the TCPA. The court declined to address Susquehanna's constitutional arguments. In Case No. A02A1655, Susquehanna appeals the grant of Garver's motion and the denial of its motions for summary judgment and judgment on the pleadings. We remand for the trial court to determine the constitutionality of the TCPA as applied to Susquehanna.

Case No. A02A1654

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law.⁴ On appeal from the grant or denial of a motion for summary judgment, we review the evidence de novo,⁵ and all reasonable conclusions and inferences drawn from the evidence are construed in the light most favorable to the nonmovant.⁶ Viewed in this light, the evidence shows that Schneider was enrolled in 99X's "Freeloader Program." Mark Renier, the radio station's general manager, testified by affidavit that participants in the free program receive discounts at restaurants and on concert, theater, and symphony tickets. Renier further averred that Schneider applied for membership on October 16, 1996, giving his name, address, and telephone number; that he updated his membership information on September 4, 1998; and that he expressly granted 99X permission to contact him. In his affidavit, Schneider admitted his Freeloader status but averred that he supplied 99X with his office telephone number, not his residential one, in order to avoid receiving telemarketing calls at home.

The FCC defines the term "established business relationship" as

a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party.⁷

On appeal, Schneider does not appear to dispute that his participation in the "Freeloader Program" fits the FCC's definition of an " established business relationship." Rather, he argues that the exemption is inapplicable in this case for the three reasons enumerated below.

1. Schneider first contends that the TCPA prohibits, without exemption, any prerecorded call that contains an "unsolicited advertisement."⁸ Schneider relies on 47 U.S.C. § 227(b)(2)(B), which delegates to the FCC the power to prescribe regulations to effectuate the TCPA. Specifically, this subsection provides that the FCC may exempt from the TCPA

(i) calls that are not made for a commercial purpose; and (ii) such classes or categories of calls made for commercial purposes as the Commission determines—(I) will not adversely affect the privacy rights that this section is intended to protect; and (II) do not include the transmission of any unsolicited advertisement.

Schneider argues that by using the word "and," Congress restricted the FCC from implementing any regulation exempting any prerecorded call containing an unsolicited advertisement. Therefore, he argues that the message he received from 99X advertising Delta SkyMiles violated the TCPA despite his relationship with Susquehanna. This strained construction suggests that we ignore the legislative history surrounding the enactment of the TCPA as well as the deference owed by this Court to the FCC's rulemaking authority.

In recommending passage of the TCPA, the Committee on Energy and Commerce

concluded that an enterprise having an "established business relationship" with a subscriber should be permitted to solicit the subscriber even if the subscriber otherwise objected to unsolicited calls.... The Committee recognized this relationship so as not to foreclose the capacity of businesses to place calls that build upon, follow up, or renew ... [an] "existing customer relationship." For example, ... [a] person who recently bought a piece of merchandise may receive a call from the retailer regarding special offers or information on related lines of merchandise.⁹

It is clear from the House Report quoted above that Congress did not intend the interpretation of the TCPA urged by Schneider. Moreover, to adopt Schneider's interpretation would require us to ignore all FCC rules and reports regarding the exemptions to the TCPA. In accordance with United States Supreme Court authority, courts are obliged to defer to an agency's rulemaking authority.

The power of an administrative agency to administer a congressionally created program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress. If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.¹⁰

The FCC acted pursuant to an explicit grant of congressional authority when it created four exemptions to the ban on prerecorded calls. Those exemptions are connected by the disjunctive "or";¹¹ therefore, they must be construed so as to make each exemption self-contained. "Canons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise."¹² Here, the context does not dictate otherwise. When the FCC amended its rules regarding the TCPA in 1995, it issued a report stating: "Our rules explicitly exempt calls made either by a party with whom the subscriber has an established business relationship or calls that do not transmit an unsolicited advertisement and are made for a commercial purpose."¹³ Accordingly, within the context of an established business relationship, calls containing an unsolicited advertisement are not automatically prohibited.

2. In his second enumerated error, Schneider asserts that Susquehanna should not be able to escape liability under the TCPA because there is evidence that he was reached as a result of a telemarketing campaign that did not target Freeloader members. Schneider reasons from this evidence that in placing the call at issue, Susquehanna did not intend to build upon its relationship with him, creating a question of fact on...