Ginwright v. Exeter Finance Corp.
280 F. Supp. 3d 674 (2017)
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Rule of Law:
A debtor's initial consent to receive autodialed calls from a creditor can be revoked at any time and through any reasonable means, even if the initial consent was part of a contract. However, a class action under the TCPA generally cannot be certified under Federal Rule of Civil Procedure 23 where individualized issues of consent and revocation of consent predominate over common questions of law or fact.
Facts:
- Exeter Finance Corporation ('Exeter') operates as an automobile finance company, purchasing consumer automobile retail installment contracts from car dealerships to provide financing and service loans.
- The specific terms of Exeter’s agreements with customers, including consent to telephone contact, vary depending on the dealership where the loan originated because Exeter does not use a standard form for each customer.
- On May 23, 2013, Billy Ginwright purchased a vehicle from Baltimore Washington Auto Outlet ('BW Auto Outlet') and sought a loan to finance the purchase.
- Ginwright signed a credit application from DealerTrack, listing his cell phone number and expressly agreeing to the use of automatic dialing equipment for servicing or collecting his account; Exeter was not specifically named on this application.
- On the same day, Ginwright also signed a Retail Installment Sale Contract ('RISC') with BW Auto Outlet, which included an integration clause stating that upon assignment, only the RISC and its addenda would comprise the entire agreement between Ginwright and the assignee.
- The RISC was subsequently assigned to Exeter, which then issued a loan to Ginwright.
- Exeter made over 1,800 calls to Ginwright's cell phone between June 11, 2013, and July 30, 2015, some for account introductions and others regarding overdue payments.
- During at least some of these calls, Ginwright confirmed his cell phone number with Exeter as the primary way to contact him, and on one occasion (June 17, 2015), he explicitly granted consent for Exeter to use the number for contact.
- Ginwright expressed frustration with Exeter’s calls on multiple occasions, testifying that he told Exeter to 'stop calling my phone' up to five different times, and Exeter’s internal Shaw System records reflected that Ginwright’s consent to receive calls was not granted on at least five separate occasions.
Procedural Posture:
- Billy Ginwright brought suit against Exeter Finance Corporation in the United States District Court for the District of Maryland, alleging violations of the Telephone Consumer Protection Act ('TCPA') and the Maryland Telephone Consumer Protection Act ('MTCPA').
- Exeter Finance Corporation filed a Motion for Summary Judgment.
- Ginwright filed a Motion for Class Certification.
- The District Court exercised its discretion to consider Exeter’s Motion for Summary Judgment before addressing Ginwright’s Motion for Class Certification.
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Issue:
Does a genuine issue of material fact regarding a debtor's revocation of consent preclude summary judgment for a creditor on TCPA claims, and does the need for individualized inquiries into consent and revocation of consent prevent class certification under Federal Rule of Civil Procedure 23(a) and 23(b) in a TCPA action?
Opinions:
Majority - Theodore D. Chuang
No, a genuine issue of material fact regarding a debtor's revocation of consent does preclude summary judgment for a creditor on TCPA claims, and yes, the need for individualized inquiries into consent and revocation of consent does prevent class certification under Federal Rule of Civil Procedure 23(a) and 23(b) in a TCPA action. Regarding summary judgment, the court found that Ginwright initially provided 'prior express consent' for Exeter to call his cell phone about his debt by listing his number on the Credit Application, consistent with FCC rulings interpreting the TCPA (e.g., 2008 FCC Ruling, 2014 FCC Ruling). This consent extends to autodialed calls regarding the debt. However, the court affirmed that a called party may revoke consent at any time and through any reasonable means, citing the 2015 FCC Ruling and precedents like Gager v. Dell Fin. Serv. The court explicitly declined to follow Reyes v. Lincoln Automotive Financial Services, which suggested that contractual consent could not be revoked, deeming it inconsistent with FCC rulings and the TCPA's remedial purposes. Moreover, the court determined that the consent clause in the Credit Application was not contractually binding on Ginwright and Exeter due to the RISC's integration clause, which limited the agreement upon assignment to the RISC and its addenda. Because Ginwright testified that he asked Exeter to stop calling and Exeter's internal records indicated non-consent on multiple occasions, a genuine dispute of material fact existed as to whether and when Ginwright revoked his consent. Therefore, summary judgment for Exeter was denied. Regarding class certification, the court determined that Ginwright's proposed class failed to satisfy the commonality requirement of Rule 23(a) and the predominance and superiority requirements of Rule 23(b)(3), and also could not be maintained under Rule 23(b)(1) or (b)(2). While the class met numerosity and adequacy, commonality was not established because whether Exeter's calling constituted 'knowing and willful' TCPA violations would depend on individualized circumstances of consent or revocation for each class member. The court noted that Exeter used non-standard credit applications from various dealerships, making the initial provision of consent and any subsequent revocation highly individualized inquiries. These individualized issues of consent and revocation would 'predominate' over any common issues, leading to 'myriad mini-trials' rather than a cohesive class adjudication, as highlighted in Gene & Gene LLC v. BioPay LLC. The court distinguished cases involving unsolicited advertisements or 'skip tracing' where consent issues were less individualized. Certification under Rule 23(b)(1) was inappropriate as a ruling on Ginwright's claim would not create inconsistent standards or prejudice other class members. Rule 23(b)(2) certification was also rejected because the case predominantly sought monetary damages, and any injunctive relief would require individualized assessments, lacking the necessary class cohesiveness.
Analysis:
This case reinforces the consumer's ability to revoke consent for automated calls under the TCPA, even if initially provided in a contract, by explicitly rejecting the Second Circuit's Reyes precedent and emphasizing the TCPA’s remedial purpose. For attorneys, it serves as a critical guide regarding the significant hurdles to achieving class certification in TCPA cases against creditors, particularly where consent or revocation of consent involves individualized interactions and non-uniform documentation. The ruling underscores that the factual variations in how debtors provide and withdraw consent will often defeat the predominance requirement of Rule 23(b)(3), likely necessitating individual litigation of claims rather than consolidated class actions, which could increase litigation costs for both parties.
