Judge Rules For Servicer in TCPA Case Regarding Calls to Number Provided for Subsequent Loan

On March 13, 2017, a United States District Court Judge ruled that Navient Solutions, LLC (Navient) did not violate the Telephone Consumer Protection Act (TCPA) when it contacted a consumer on her cell phone regarding a delinquent student loan when calling a cell phone number provided in a different (and subsequent) loan application from the one that was delinquent. The case is Stauffer v. Navient Solutions, LLC (Case No. 15-cv-1542, U.S. District Court, Middle District of PA).

A copy of the court’s Memorandum can be found here. 

Background 

On April 20, 2010, plaintiff Crystal Stauffer (Stauffer) applied for federal student loans to cover the cost of her education at Everest College. Stauffer executed a master promissory note to obtain the loans. In that document, she authorized the school, the Department of Education (ED or Department), or their respective agents to contact her regarding the loans “at the current or any future number that [she] provide[s] for [her] cellular telephone or other wireless device using automated telephone dialing equipment . . . .” Stauffer provided a telephone number ending in “5039.”

Stauffer executed an unemployment deferment request on February 26, 2012. In the unemployment deferment request, Stauffer again authorized ED, her school, her lender, and any guarantor, to contact her about the loans. Like the 2010 note, the deferment request granted those parties permission to contact Stauffer at the telephone number listed on the request and “any future number” that she provides. However, in this document Stauffer provided a telephone number ending in “1687.”

In early 2014 Stauffer sought additional federal student loans to enroll in courses at a different school, Ashford University. Stauffer executed a second master promissory note on January 10, 2014 to obtain the new loans. Stauffer listed a third telephone number ending in “3005” in the 2014 note. The 2014 note granted permission to the school, ED, and their “agents and contractors” to contact Stauffer concerning her loans at the 3005 number or “any future number” she supplied. 

Since May, 2013 Navient had serviced both of Stauffer’s federal student loans pursuant to a contract with the Department of Education. Navient services loans at the account level rather than by individual loan. It uses any telephone number provided by the borrower as a contact number for all loans on the individual’s account.

Navient called the 3005 number on February 14, 2014. During this call, Stauffer requested a student loan deferment. Thereafter, Navient did not call the 3005 number again for more than one year. Beginning in February 2015, Navient attempted to contact Stauffer concerning past-due payments for the 2010 Everest loans.

Between February 19, 2015 and May 26, 2015, Navient called the 3005 number 81 times. Stauffer answered only one of the 81 calls; on May 26, 2015, she spoke with a Navient representative and advised that Navient had dialed an incorrect number. However, Stauffer did not tell Navient to stop calling the 3005 number. Nonetheless, Navient did not call the 3005 number after May 26, 2015. 

On August 7, 2015, Stauffer filed this suit against Navient alleging that Navient knowingly violated the TCPA. Stauffer contends that she did not consent to calls at the 3005 number concerning the loans issued in 2010.

Navient filed a motion for summary judgment on July 29, 2016. It was this motion that the court considered. 

Editor’s note: A motion for summary judgment is based upon a claim by one party (or, in some cases, both parties) that contends that all necessary factual issues are settled or so one-sided they need not be tried. The summary judgment is appropriate when the court determines there no factual issues remaining to be tried, and therefore a cause of action or all causes of action in a complaint can be decided upon certain facts without trial. 

The Court’s Decision 

The decision was rendered by Christopher C. Conner, Chief Judge of the United States District Court, Middle District of Pennsylvania.  Judge Conner began his analysis with a thorough review of the TCPA and various FCC Rulings and interpretations of the statute.   

Conner then reviewed the record to determine what facts were not in dispute when viewing the record “in the light most favorable to Stauffer.” 

Conner determined that the undisputed evidence established: 

• That Stauffer provided three separate telephone numbers to her creditor (ED) on three occasions.
• In her 2010 federal student loan application, Stauffer supplied a “5039” number, authorizing ED and its agents to contact her at that number or “any future number that [she] provide[s].”
• In a 2012 deferment request, she gave a “1687” number and again authorized ED and its agents to contact her at that number “or any future number.”
• In a second application for federal student loans in 2014, Stauffer provided a “3005” number and reiterated that ED and its agents may call her at that number or any number subsequently provided.
• Stauffer does not dispute that Navient is ED’s agent for purposes of servicing her student loans.

After the above findings, Judge Conner wrote: 

“Our resulting inquiry is narrow. We must determine whether Navient, a federal student loan servicer, may contact a debtor concerning one set of student loans at a telephone number provided to it in connection with a second and later-issued set of loans.” 

Stauffer argued that the 2010 and 2014 loans “were two separate transactions, regarding two separate schools.” According to Stauffer, ED and its loan servicer could not contact her at the 3005 number concerning the 2010 loans because that number was not provided during the 2010 transaction.

Judge Conner rejected that argument. He wrote: 

“As a threshold matter, we reject Stauffer‟s attempt to cast the 2010 and 2014 loan applications as independent transactions. Stauffer stresses that the loans concern “two separate schools” and were executed “four years apart.” But the loans are serviced in the same account for the same creditor (ED) and the same debtor (Stauffer). That the loans were disbursed to two separate schools is of no moment. 

Consistent with FCC rulings, we hold that a debtor consents to debt-related calls from her creditor when she “knowingly releases” her wireless number thereto. We thus consider whether Stauffer knowingly released the 3005 number to Navient and assented to debt-related communications therefrom. The Rule 56 record answers this inquiry in the affirmative. 

When Stauffer executed the 2010 promissory note, she knowingly released her then-current telephone number to the Department and its agents and authorized them to call her at “any future number” that she may provide to them. Stauffer then provided a future number to the Department—the 3005 number—and consented to calls at that number concerning her student loan debt. The record on this point is unequivocal: Stauffer invited the Department—and Navient as its agent—to contact her at the 3005 number in connection with her student loan debt and their “normal business” relationship. No reasonable juror could determine otherwise.

Hence, Navient is entitled to summary judgment on Stauffer‟s Telephone Consumer Protection Act claim.” 

insideARM Perspective

insideARM recommends the ARM industry review the Memorandum in this case for a concise review of the TCPA restrictions and the history of the FCC’s rulings interpreting the TCPA.

This case provides an interesting, but far from unusual, set of facts. This is not a case that should be limited only to student loans. It is a fact scenario that exists quite often outside of the student loan world.   

Many credit grantors deal with this fact situation on a regular basis. A consumer has more than one account with the same creditor. The accounts were not opened at the same time. The consumer provides express consent to be called on his/her cell phone in the account documentation. The express consent is written. The consent language is well drafted. The consumer consents to be called “at the current or any future number that [she] provided for [her] cellular telephone or other wireless device using automated telephone dialing equipment.”

The court in this case seemed to find it compelling and significant that Navient services loans at the account level rather than by individual loan and that it uses any telephone number provided by the debtor as a contact number for all loans on the individual’s account. 

However, it seems to this writer that the facts presented allowed the calls, regardless of whether Navient serviced the loans at the account level. The express written consent language was clear. The consumer agreed to be called at any future number she provided to ED.    

Just to be certain, insideARM suggests that “Express Written Consent” language be reviewed by creditors that may have multiple accounts with the same consumer to clearly allow consent in one set of account documents to pass to all other accounts.