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Daubert v. NRA Group, LLC

United States Court of Appeals, Third Circuit

July 3, 2017

JOHN DAUBERT, Cross-Appellant
NRA GROUP, LLC, d/b/a National Recovery Agency, NRA Group, LLC, Appellant

          Argued May 23, 2017

         On Appeal from the United States District Court for the Middle District of Pennsylvania (M.D. Pa. No. 3-15-cv-00718) District Judge: Honorable A. Richard Caputo

          Richard J. Perr [ARGUED] Fineman Krekstein & Harris Ten Penn Center

          Brett M. Freeman Carlo Sabatini [ARGUED] Sabatini Law Firm

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


          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.


         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 ...

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