Shyriaa Henderson, on behalf of herself, and all others similarly situated, Plaintiff-Appellant,
United Student Aid Funds, Inc., DBA USA Funds, Defendant-Appellee.
and Submitted October 10, 2018 San Francisco, California
from the United States District Court for the Southern
District of California D.C. No. 3:13-cv-01845-JLS-BLM Janis
L. Sammartino, District Judge, Presiding
Alexander Glenn Tievsky (argued), Roger Perlstadt, and Ryan
D. Andrews, Edelson PC, Chicago, Illinois; Kas Gallucci,
Alexis Wood, and Ronald A. Marron, Law Offices of Ronald A.
Marron, San Diego, California; for Plaintiff-Appellant.
Marie Simonetti (argued), Vedder Price (CA) LLP, Los Angeles,
California; Bryan K. Clark, Vedder Price P.C., Chicago,
Illinois; for Defendant-Appellee.
Before: Dorothy W. Nelson, William A. Fletcher, and Jay S.
Bybee, Circuit Judges.
Consumer Protection Act
panel reversed the district court's grant of summary
judgment in favor of the defendant, the owner of the
plaintiff's student loans, and remanded for further
proceedings in an action under the Telephone Consumer
panel held that a reasonable jury could hold the defendant
vicariously liable for alleged TCPA violations by debt
collectors. The defendant hired a student loan servicer,
which hired the debt collectors. The panel held that the
defendant was not per se vicariously liable under FCC orders.
Under federal common law, however, there were genuine issues
of material fact as to whether the defendant ratified the
debt collectors' calling practices and had a
principal-agent relationship with the debt collectors.
Judge Bybee agreed that the FCC orders did not create per se
liability. He wrote that, assuming ratification may create an
agency relationship, he disagreed with the majority that
there was a material issue of fact as to whether the
defendant ratified the debt collectors' conduct or
granted the debt collectors implied actual authority to
violate the TCPA.
NELSON, CIRCUIT JUDGE
Henderson appeals the district's order granting summary
judgment in favor of Defendant-Appellee United Student Aids
Funds, Inc. (USA Funds). The district court incorrectly held
that a reasonable jury could not hold USA Funds vicariously
liable for the debt collectors' alleged Telephone
Consumer Protection Act (TCPA) violations. Accordingly, we
REVERSE and REMAND.
applied for and received a loan to attend university through
the Federal Family Education Loan Program (FFELP). After
experiencing some financial difficulty, she stopped paying
back her loans. Then, five different debt collection
companies started calling her about the money she had not
paid back. Henderson received prerecorded messages many times
in short intervals on a phone number she neither provided in
connection with her student loans nor consented to be called
on. Henderson contends this pattern shows that the companies
were combining the use of skip tracers and auto dialers.
Solutions, Inc., a servicer of student loans, hired these
debt collectors to collect on unpaid loans on behalf of USA
Funds, which owned Henderson's loans. USA Funds operates
under a government program by which it guarantees student
loans made by private lenders and then takes ownership of
those loans if a student-borrower defaults.
USA Funds owns billions of dollars in student loan debt, it
does not interact with the borrowers directly once they stop
paying back their loans. Instead, it hires companies, like
Navient, to service its loans, including debt collection. In
turn, Navient hires debt collectors to collect on defaulted
loans. The debt collectors handle many aspects of collecting
and repayment, including making calls to borrowers, setting
up payment plans, granting temporary delays, and accepting
USA Funds did not have a contractual relationship with the
debt collectors or any day-to-day dealings with them, USA
Funds had access to Navient's daily, weekly, and monthly
reports tracking the debt collectors' performance.
Similarly, USA Funds could, and did, review debt
collectors' calling notes when it had "an
issue" with a debt collector's calling practices.
USA Funds also regularly reviewed Navient's operations
and performance, including its regulatory compliance, or lack
thereof. Though USA Funds' service agreement with Navient
did not give USA Funds the ability to fire debt collectors,
USA Funds could ask Navient to replace underperforming
collectors and could have fired Navient if it did not comply.
Funds also conducted an annual audit of the debt collectors.
The audit focused on the various repayment programs that
borrowers had a right to use in the FFELP. TCPA compliance
was not one of the FFELP audit parameters. However, during
each of USA Funds' audits from 2000, 2009, and 2010, debt
collectors called borrowers on phone numbers that they did
not consent to be called on, prompting USA Funds to note
"improper collection practices" and to recommend
"corrective action." Navient, however, continued to
use these debt collectors, and USA Funds did not object when
the same debt collectors were used in the following years.
Moreover, USA Funds was aware that debt collectors handling
USA Funds' loans had been sued regarding their calling
practices but USA Funds did nothing to ensure TCPA
sued USA Funds for alleged TCPA violations related to the
collection of her student loan debt. Though Henderson also
sued Navient and several debt collectors, those defendants
were dismissed for lack of personal jurisdiction.
"review a district court's grant of summary judgment
de novo" to determine "whether there are any
genuine issues of material fact and whether the district
court correctly applied the relevant substantive law."
Oklevueha Native Am. Church Of Haw., Inc. v. Lynch,
828 F.3d 1012, 1015 (9th Cir. 2016). We view the facts
"as a whole and in the light most favorable to the party
opposing the motion." Pavoni v. Chrysler Grp.,
LLC, 789 F.3d 1095, 1098 (9th Cir. 2015). "An
issue of material fact is genuine 'if the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party.'" Id. (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
challenges the district court order granting USA Funds'
summary judgment motion on two grounds. First, Henderson
argues that under an FCC order, USA Funds is per se
vicariously liable for the debt collectors' TCPA
violations. Second, she argues that USA Funds is similarly
liable under the federal common law agency principles of
ratification and implied actual authority. Henderson's
theory of liability is that USA Funds has a principal-agent
relationship with the debt collectors and that a court may
hold it liable for their TCPA violations. We agree. We,
therefore, reverse the district court's summary judgment
order because there are "genuine issues of material
fact" as to whether USA Funds ratified the debt
collectors calling practices. We remand for further
the TCPA, it is unlawful to "to make any call (other
than . . . with the prior express consent of the called
party) using any automatic telephone dialing system or an
artificial or prerecorded voice . . . to any telephone number
assigned to a . . . cellular telephone service." 47
U.S.C. § 227(b)(1)(A)(iii). Telemarketers, debt
collectors, and others obtain phone numbers consumers did not
consent to be called on through skip tracing. Because consumers
did provide these callers with their phone numbers, the
consumers have not given "prior express consent" to
be called on those numbers. Therefore, if the numbers were
also auto dialed, the calls violated the TCPA. 47 U.S.C.
collectors that auto dialed Henderson on a phone number she
did not provide in connection with her student loan would be
liable under this section. For USA Funds to be liable under
this section, Henderson must show that there is an agency
relationship between USA Funds and these liable debt
FCC Orders Do Not Create Per Se TCPA Liability
argues that USA Funds is per se vicariously liable for the
debt collectors' alleged TCPA violations. She bases this
conclusion on her analysis of In re Rules &
Regulations Implementing the Tel. Consumer Prot. Act of
1991, 23 F.C.C. Rcd. 559, 565 (2008) ("2008 FCC
Order"), which states, "[c]alls placed by a third
party collector on behalf of that creditor are treated as if
the creditor itself placed the call." Because Congress
has not acted directly on this issue and because the 2008 FCC
Order is a fully adjudicated declaratory ruling, the panel
must afford it Chevron deference. See Chevron,
U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837,
843 (1984). Though the 2008 FCC Order implies a creditor
could be liable for a debt collector's TCPA violations,
the Order does not make such liability per se or automatic,
as Henderson argues. To the contrary, in a 2013 order, the
FCC clarified that a court should determine whether a