N. L. v. Credit One Bank, N.A.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

N. L., an infant by his mother and Nos. 19-15399
natural guardian Sandra Lemos, 19-15938
Plaintiff-Appellee,
D.C. No.
v. 2:17-cv-01512-
JAM-DB
CREDIT ONE BANK, N.A.,
Defendant-Appellant,
OPINION
and

GC SERVICES LIMITED PARTNERSHIP;
IENERGIZER HOLDINGS, LIMITED;
FIRST CONTACT, LLC, AKA Iqor
Holdings, Inc.,
Defendants.

Appeal from the United States District Court
for the Eastern District of California
John A. Mendez, District Judge, Presiding

Submitted March 25, 2020 *
San Francisco, California

Filed June 3, 2020

*
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
2 N.L. V. CREDIT ONE BANK

Before: Ronald M. Gould, Morgan Christen,
and Daniel A. Bress, Circuit Judges.

Opinion by Judge Bress

SUMMARY **

Telephone Consumer Protection Act

The panel affirmed the district court’s judgment after a
jury trial in favor of the plaintiff in an action under the
Telephone Consumer Protection Act.

Defendant Credit One Bank’s vendors made automated
calls to an eleven-year-old boy’s cell phone. Credit One was
trying to collect past-due payments from a customer, but the
customer’s cell phone number had been reassigned to the
boy’s mother, who let her son use the phone as his own. The
customer had given consent to be called, but the boy and his
mother had not.

The TCPA exempts from liability automated calls made
with the “prior express consent of the called party.”
Agreeing with other circuits, the panel held that the consent
of the person it intended to call did not exempt Credit One
from liability under the TCPA. Accordingly, the district
court properly instructed the jury that consent from the
intended recipient of the call was not sufficient.

**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
 N.L. V. CREDIT ONE BANK 3

The panel also held that, following Marks v. Crunch San
Diego, LLC, 904 F.3d 1041 (9th Cir. 2018), the district court
properly instructed the jury on the definition of an
“automatic telephone dialing system,” the use of which is
prohibited under the TCPA. The panel noted a circuit split
on the holding of Marks that the TCPA’s definition of ATDS
includes a device that stores telephone numbers to be called,
whether or not those numbers have been generated by a
random or sequential number generator.

In a concurrently filed memorandum disposition, the
panel addressed the district court’s award of attorneys’ fees.

COUNSEL

Noah A. Levine, Alan E. Schoenfeld, and Stephanie Simon,
Wilmer Cutler Pickering Hale and Dorr LLP, New York,
New York, for Defendant-Appellant.

Yitzchak Zelman, Marcus & Zelman, Asbury Park, New
Jersey, for Plaintiff-Appellee.

OPINION

BRESS, Circuit Judge:

Over a period of four months, Credit One Bank’s
vendors made 189 automated calls to an eleven-year-old
boy’s cell phone. Credit One was trying to collect past-due
payments from a customer, but, unbeknownst to the bank,
the customer’s cell phone number had been reassigned to
Sandra Lemos, who in turn had let her son, N.L., use the
phone as his own. N.L. sued Credit One for the torrent of
4 N.L. V. CREDIT ONE BANK

unwelcome calls. Among other things, he alleged that Credit
One violated the Telephone Consumer Protection Act
(TCPA), which makes it unlawful to call a cell phone “using
any automatic telephone dialing system,” or ATDS, without
the “prior express consent of the called party.” 47 U.S.C.
§ 227(b)(1)(A).

The principal question in this case is whether Credit One
can escape liability under the TCPA because the party it
intended to call (its customer) had given consent to be called,
even though the party it actually called had not. Consistent
with every circuit to have addressed this issue, we hold that
this argument fails under the TCPA’s text, most naturally
read. Credit One is therefore liable under the TCPA for its
calls to N.L. We affirm the district court in this and all
respects.

I

Credit One is a national bank that provides credit card
services. When its customers fall behind on payments,
Credit One hires vendors to make collection calls to the
delinquent cardholders. D.V. was a Credit One customer
who, in 2014, gave the bank his consent to be called on a cell
phone number ending in -9847 (the plaintiff here disputes
that D.V. gave sufficient consent, but we will assume D.V.
did so). About two years later, and without Credit One’s
knowledge, the phone number was reassigned to Sandra
Lemos. Lemos then allowed her minor son N.L. to use the
number.

When D.V. fell behind on his credit card payments, three
of Credit One’s vendors started calling the -9847 number to
collect the outstanding amounts. The vendors ultimately
called the number 189 times between February 20, 2017 and
June 13, 2017. In one instance, N.L. received eight calls in
 N.L. V. CREDIT ONE BANK 5

a single day, all before noon. On another occasion, Credit
One vendors called N.L. six times; three calls were made in
the same hour and two were made within a minute of each
other. To place the calls, the vendors used dialing systems
that call specific numbers from preset lists.

N.L., acting through his mother as guardian ad litem,
sued Credit One and its vendors for the unwanted calls,
bringing claims under the TCPA, California’s Rosenthal
Fair Debt Collection Practices Act, Cal. Civ. Code § 1788 et
seq., and California’s common-law tort of invasion of
privacy. Among other things, the TCPA creates a private
right of action to “recover for actual monetary loss from
[unlawful communications], or to receive $500 in damages
for each such violation, whichever is greater.” 47 U.S.C.
§ 227(b)(3)(B).

N.L. settled with the vendors and his claims against
Credit One were then tried before a jury. On the issue of
consent to receive the calls, the jury heard evidence that D.V.
had agreed to be contacted at the -9847 number and that
Credit One’s vendors had intended to reach D.V. when they
called that number.

At the close of trial, the parties submitted proposed jury
instructions. Credit One asked that the jury be instructed that
it must find for Credit One under the TCPA if Credit One or
its vendors had “a good-faith basis to believe that they had
consent to call N.L.’s telephone number.” Credit One also
sought an instruction that would negate liability if the jury
found “it was reasonable for Credit One Bank to rely on
D.V.’s prior express consent to call the number -9847.”

The district court rejected both proposals. Instead, the
court instructed the jury that “[t]he law requires the consent
of the current subscriber of the called phone, in this case
6 N.L. V. CREDIT ONE BANK

Sandra Lemos, or the consent of the nonsubscriber,
customary user of the called phone, in this case, [N.L.].
Consent from the intended recipient of the call, that is, D.V.,
is not sufficient.”

After a three-day trial, the jury returned a verdict for N.L.
on his TCPA claim, resulting in $500 in statutory damages
for each of the 189 unwanted calls, for a total of $94,500.
See 47 U.S.C. § 227(b)(3)(B). The jury also found for N.L.
on his Rosenthal Act claim, awarding him $1,000 in
statutory damages but no actual damages. The jury found
for Credit One on N.L.’s invasion of privacy claim. Credit
One timely appealed the judgment.

The district court subsequently denied N.L.’s post-trial
motion for treble damages under the TCPA but granted his
request for attorneys’ fees and costs under the Rosenthal Act.
Credit One timely appealed the fee award, and we
consolidated the appeals.

II

When a caller who is otherwise subject to the TCPA
phones someone who has not consented to its calls, can the
caller avoid liability under the TCPA’s ATDS prohibitions
if the person it intended to call had consented to the calls?
We have never answered this question. But the Seventh and
Eleventh Circuits have, and they both rejected Credit One’s
same “intended recipient” interpretation. See Osorio v. State
Farm Bank, F.S.B., 746 F.3d 1242, 1251–52 (11th Cir.
2014); Soppet v. Enhanced Recovery Co., 679 F.3d 637,
639–43 (7th Cir. 2012). The D.C. and Third Circuits have
also voiced support for the Seventh and Eleventh Circuits’
positions. See ACA Int’l v. FCC, 885 F.3d 687, 706 (D.C.
Cir. 2018); Leyse v. Bank of Am. Nat’l Ass’n, 804 F.3d 316,
325 & n.13 (3d Cir. 2015). Reviewing the district court’s
 N.L. V. CREDIT ONE BANK 7

jury instructions de novo for legal error, Navellier v. Sletten,
262 F.3d 923, 944 (9th Cir. 2001), we agree with our sister
circuits. Credit One’s intent to call a customer who had
consented to its calls does not exempt Credit One from
liability under the TCPA when it calls someone else who did
not consent.

This follows from the language of the TCPA itself. We
interpret the statute in accordance with its ordinary and
natural meaning, considering the key statutory terms in the
context in which they are used. E.g., Hall v. United States,
566 U.S. 506, 511 (2012); Davis v. Mich. Dep’t of Treasury,
489 U.S. 803, 809 (1989); Confederated Tribes & Bands of
the Yakama Indian Nation v. Alcohol & Tobacco Tax &
Trade Bureau, 843 F.3d 810, 812 (9th Cir. 2016). In this
case, Credit One’s argument founders on the more probable
meaning of the TCPA’s term “called party,” and the
statutory context that inescapably amplifies what Congress
meant (and did not mean) when it used that term.

The TCPA exempts from liability those ATDS-
generated calls made with the “prior express consent of the
called party.” 47 U.S.C. § 227(b)(1)(A). In context, the
provision reads as follows:

It shall be unlawful for any person within the
United States, or any person outside the
United States if the recipient is within the
United States—

(A) to make any call (other than a call
made for emergency purposes or made
with the prior express consent of the
called party) using any automatic
telephone dialing system [ATDS] or an
artificial or prerecorded voice—
8 N.L. V. CREDIT ONE BANK

...

(iii) to any telephone number
assigned to a paging service, cellular
telephone service, specialized mobile
radio service, or other radio common
carrier service, or any service for
which the called party is charged for
the call . . . .

Id. § 227(b)(1) (emphasis added).

One notices that this provision nowhere references an
“intended” recipient of the calls. Soppet, 679 F.3d at 640
(“The phrase ‘intended recipient’ does not appear anywhere
in § 227 . . . .”). Credit One’s argument thus starts off in the
backseat, for there is no obvious statutory text on which to
ground an “intended recipient” interpretation. And as we
now walk through how the undefined term “called party” is
used in the statute, Credit One’s interpretation becomes
more and more untenable as every statutory reference to
“called party” is considered.

Start first with the core “consent” provision in
§ 227(b)(1), which prohibits using an ATDS to “make any
call (other than a call made for emergency purposes or made
with the prior express consent of the called party).” Under
the statute, the “call” that is “made” is the call that is
received, for it is this received call that provides the basis for
the private cause of action and thus civil liability. See
generally 47 U.S.C. § 227(b). When the statute then goes on
to create an exemption for calls made “with the prior express
consent of the called party,” it would be odd if “called party”
referred to some third person external to the potentially
actionable communication, i.e., someone whom the caller
had not in fact called, but who had previously given consent
 N.L. V. CREDIT ONE BANK 9

to be called. A “called party”—in the past tense—is at the
very least one to whom a call was made. As the Seventh
Circuit reasoned, “[s]uppose Smith, trying to reach Jones,
dials the number with a typo and reaches Perkins, who says
‘you have the wrong number.’ No colloquial user of English
would [describe] Jones rather than Perkins [as] the ‘called
party.’” Soppet, 679 F.3d at 641.

As we work further through the TCPA, Credit One’s
“intended recipient” theory meets only more resistance.
Staying within § 227(b)(1), and after the “called party”
consent exception we have just discussed, is a list of
telecommunication services to which the TCPA’s
prohibitions on automatic telephone dialing systems apply.
Id. § 227(b)(1)(A)(iii). This clause (iii) extends these
prohibitions to various services (cell phones are among
them) and goes on to say that it applies to “any service for
which the called party is charged for the call.” Id. (emphasis
added).

A “called party” that is “charged for the call” cannot be
the “intended” but never-called person who had previously
given consent. Instead, this “second use of ‘called party’
must mean [the] [c]ell [n]umber’s current subscriber,
because only the current subscriber pays.” Soppet, 679 F.3d
at 639. That this subsection (iii) treats “called party” as the
current subscriber sheds light on what “called party” should
mean in the ATDS “consent” provision of which subsection
(iii) is a part. 47 U.S.C. § 227(b)(1)(A). We generally
presume “that a statute uses a single phrase consistently, at
least over so short a span.” Soppet, 679 F.3d at 639; Ass’n
des Éleveurs de Canards et d’Oies du Que. v. Becerra,
870 F.3d 1140, 1148 (9th Cir. 2017). One would not expect
to find different definitions of “called party” operating so
closely together in the same overall provision—especially
10 N.L. V. CREDIT ONE BANK

absent any indication that a divergent interpretation was
intended.

As we burrow deeper into the TCPA, we find several
more references to “called party” that only further confirm
that Credit One’s interpretation is not the best one. Section
227(b)(1)(B) prohibits certain calls “using an artificial or
prerecorded voice to deliver a message without the prior
express consent of the called party.” This subsection
parallels the § 227(b)(1)(A) “consent” provision for calls
using “any automatic telephone dialing system,” the
provision at issue here. The same point we made in the
context of § 227(b)(1)(A) applies to § 227(b)(1)(B): why
would the “consent” that could eliminate liability be given
by some third person who is alien to the telecommunication
that triggered the statute? Even if it were a possible
interpretation, it is not the most likely.

Other references to “called party” in the statute likewise
indicate that the term does not refer to the intended recipient
of the call. Like § 227(b)(1)(A)(iii), § 227(b)(2)(C) treats
the “called party” as the subscriber of the phone line, for it
authorizes the Federal Communications Commission (FCC)
to exempt from liability certain calls “that are not charged to
the called party.” (Emphasis added); see also Soppet,
679 F.3d at 640. Another provision, § 227(b)(2)(I)(iii),
provides that when the FCC is enacting these exemptions, it
must ensure that the exemptions contain requirements for
“the number of such calls that a calling party may make to a
particular called party.” This statutory text was enacted only
recently and after the events giving rise to this case. See
Pallone-Thune Telephone Robocall Abuse Criminal
Enforcement and Deterrence Act, Pub. L. No. 116-105,
§ 8(a)(3), 133 Stat. 3274, 3283 (2019). But it too
undermines Credit One’s theory. This new provision cross-
 N.L. V. CREDIT ONE BANK 11

references § 227(b)(2)(C), which treats “called party” as the
subscriber. See 47 U.S.C. § 227(b)(2)(I). It would be
atypical, to say the least, if the FCC were required to issue
regulations on the “number” of calls that can be made to a
“particular called party” if the subject of the regulation were
persons whom the caller had merely intended to call, but did
not in fact ring.

The remainder of the references to “called party” are
found in § 227(d)(3)(B), and they also point against Credit
One. Section 227(d)(3)(B) requires the FCC to prescribe
rules for systems that transmit artificial or prerecorded
messages, so that “any such system will automatically
release the called party’s line within 5 seconds of the time
notification is transmitted to the system that the called party
has hung up, to allow the called party’s line to be used to
make or receive other calls.” The first and third references
to “called party” in this provision more probably refer to the
subscriber of the line; the second reference quite clearly
refers to the person who answers, because only that person
can “hang up.” Soppet, 679 F.3d at 640. But all these
references to “called party” share a common characteristic:
they would make no sense if “called party” referred to an
intended but uncalled recipient. 1

1
The district court’s jury instructions shielded Credit One from
liability if it had received the consent of either the “subscriber” or the
“nonsubscriber, customary user of the phone,” as opposed to the
“intended recipient of the call.” In this case, neither the subscriber
(Lemos) nor the customary user (N.L.) gave consent to the calls, which
is sufficient to show that the required consent was not given. We do not
decide what the result would be if one, but not the other, had consented.
Credit One had requested only an “intended recipient” instruction, and
we reject its challenge on appeal by concluding that such an instruction
is incompatible with the TCPA.
12 N.L. V. CREDIT ONE BANK

Perhaps because the statutory text stands in opposition to
its argument, Credit One focuses more intently on perceived
statutory purpose and the policy implications of the district
court’s instruction. But even if these considerations could
overcome the most natural construction of the TCPA’s
language, N.L. still has the better of the argument. In its
findings supporting the TCPA, Congress aimed to strike a
“balance[]” between “[i]ndividuals’ privacy rights, public
safety interests, and commercial freedoms of speech . . . in a
way that protects the privacy of individuals and permits
legitimate telemarketing practices.” Telephone Consumer
Protection Act of 1991, Pub. L. No. 102-243, § 2(9),
105 Stat. 2394, 2394 (1991). Credit One insists that
imposing liability on a caller that unknowingly dials a
reassigned number would undermine the TCPA’s intended
balance, placing companies in “constant risk of staggering
statutory damages for calls to reassigned numbers, with no
way to know whether any particular number has been
reassigned.”

But Credit One’s interpretation conflicts with the very
congressional findings upon which it relies, in which
“Congress appears to equate the ‘called party’ with the
‘receiving party.’” Leyse, 804 F.3d at 325 n.13. In enacting
the TCPA, Congress found that “[b]anning such automated
or prerecorded telephone calls to the home, except when the
receiving party consents to receiving the call . . . , is the only
effective means of protecting telephone consumers from this
nuisance and privacy invasion.” Pub. L. No. 102-243,
§ 2(12), 105 Stat. at 2394 (emphasis added).

Credit One also attempts to draw support from certain
orders of the FCC, which has authority to promulgate
regulations implementing the TCPA. 47 U.S.C. § 227(b)(2).
In 2015, the FCC issued an order creating a one-call safe
 N.L. V. CREDIT ONE BANK 13

harbor for callers who unknowingly dial reassigned numbers
if they had obtained consent from the previous subscriber.
See Declaratory Ruling & Order, In the Matter of Rules &
Regulations Implementing the Telephone Consumer
Protection Act of 1991, 30 FCC Rcd. 7961, 7999–8000
(2015) (2015 FCC Order). The D.C. Circuit later vacated
the 2015 Order’s safe harbor as arbitrary and capricious. See
ACA Int’l, 885 F.3d at 708–09. The FCC then issued a new
order in 2018 approving the creation of a comprehensive
reassigned number database and adopting a safe harbor for
callers who rely on it. See Second Report & Order, In re
Advanced Methods to Target & Eliminate Unlawful
Robocalls, 33 FCC Rcd. 12024, 12043–45 (2018) (2018
FCC Order). In Credit One’s view, these safe harbors weigh
against interpreting “called party” in a way that creates strict
liability for callers that dial reassigned numbers.

If anything, the FCC’s orders weigh against Credit One.
If a caller’s intent could defeat liability, the safe harbors
would be unnecessary. Moreover, and in reasoning that the
D.C. Circuit did not reject and if anything supported, ACA
Int’l, 885 F.3d at 706, the 2015 FCC Order expressly
“clarif[ied] that the TCPA requires the consent not of the
intended recipient of a call, but of the current subscriber (or
non-subscriber customary user of the phone).” 2015 FCC
Order, 30 FCC Rcd. at 7999 (footnote omitted). The FCC
also “reject[ed]” proposals to “interpret ‘called party’ to be
the ‘intended recipient’ or ‘intended called party,’” relying
on the reasoning of the Seventh and Eleventh Circuits in
Soppet and Osorio. Id. at 8002 & n.278. While Credit One
relies most heavily on one dissenting FCC Commissioner’s
views, see id. at 8077–78 (Pai, dissenting), the TCPA is best
read in the way we have set forth above, under which Credit
One’s preferred interpretation must fail.
14 N.L. V. CREDIT ONE BANK

Finally, contrary to Credit One’s suggestion, callers are
not helpless absent its “intended recipient” construction.
Here, Credit One’s vendors called an eleven-year-old boy
nearly 200 times before determining that he was not the
delinquent cardholder they were pursuing. In all events, the
FCC in its 2015 order itself recognized that “caller best
practices can facilitate detection of reassignments before
calls,” that “there are solutions in the marketplace to better
inform callers of reassigned wireless numbers,” and “that
businesses should institute new or better safeguards to avoid
calling reassigned wireless numbers and facing TCPA
liability.” 2015 FCC Order, 30 FCC Rcd. 7999–8000. The
Seventh Circuit in Soppet offered some work-arounds as
well, noting (for example) that callers can avoid TCPA
liability by “hav[ing] a person make the first call” to confirm
a number has not been reassigned or by using “a reverse
lookup to identify the current subscriber.” 679 F.3d at 642.
And this is to say nothing of any further implementation of
the FCC’s safe harbors, which may provide other
protections. See 2018 FCC Order, 33 FCC Rcd. at 12043–
45.

In all events, whether Credit One’s “intended recipient”
rule reflects the better balancing of competing interests is not
for us to decide. What matters here is the balance that the
text of the TCPA most naturally reflects. And given the
“called party” language that Congress used in the TCPA, we
hold that the district court’s instruction complied with the
statute.

III

Credit One raises one additional argument under the
TCPA that it acknowledges is foreclosed under our circuit’s
precedent, but which Credit One wishes to preserve for
further review. This argument concerns the definition of
 N.L. V. CREDIT ONE BANK 15

“automatic telephone dialing system,” or ATDS. The TCPA
prohibits the use of an ATDS, except in certain
circumstances (consent of the “called party” being one of
them). 47 U.S.C. § 227(b)(1). The TCPA defines an ATDS
as “equipment which has the capacity—(A) to store or
produce telephone numbers to be called, using a random or
sequential number generator; and (B) to dial such numbers.”
Id. § 227(a)(1).

The district court instructed the jury: “The term
[a]utomatic telephone dialing system means equipment
which has the capacity, one, to store numbers to be called;
or two, to produce numbers to be called using a random or
sequential number generator and to dial such numbers.”
(Emphasis added). Accordingly, under the challenged
instruction, a device qualifies as an ATDS if it can store
numbers and dial them—even if it cannot produce numbers
using a random or sequential number generator.

Credit One maintains that this instruction misstates the
TCPA’s requirements because, in its view, a device must be
able to generate random or sequential telephone numbers to
qualify as an ATDS. And Credit One contends that the
district court’s jury instruction was prejudicial because there
was no evidence that its systems could produce and dial
random or sequential numbers. As Credit One
acknowledges, however, the district court followed our
decision in Marks v. Crunch San Diego, LLC, 904 F.3d 1041
(9th Cir. 2018), which held that the TCPA’s “definition of
ATDS includes a device that stores telephone numbers to be
called, whether or not those numbers have been generated by
a random or sequential number generator.” Id. at 1043.

There is an acknowledged circuit split on this issue. Our
decision in Marks parted ways with the Third Circuit’s
decision in Dominguez v. Yahoo, Inc., 894 F.3d 116, 121 (3d
16 N.L. V. CREDIT ONE BANK

Cir. 2018). See Marks, 904 F.3d at 1052 n.8. Subsequently,
the Seventh and Eleventh Circuits issued forceful decisions
disagreeing with Marks. See Gadelhak v. AT&T Servs., Inc.,
950 F.3d 458, 466–67 (7th Cir. 2020); Glasser v. Hilton
Grand Vacations Co., 948 F.3d 1301, 1306–13 (11th Cir.
2020). Most recently, the Second Circuit weighed in on the
side of Marks. See Duran v. La Boom Disco, Inc., 955 F.3d
279, 281 n.5 (2d Cir. 2020).

The ATDS definitional issue is a difficult one, but the
issue before us is not: as a three-judge panel, we are bound
by Marks, as Credit One agrees. See, e.g., Multi Time Mach.,
Inc. v. Amazon.com, Inc., 804 F.3d 930, 936 n.2 (9th Cir.
2015). Because the jury instruction on the definition of
ATDS is consistent with Marks, Credit One’s challenge to
that definition fails. 2

AFFIRMED.

2
In a separate memorandum disposition filed concurrently with this
opinion, we reject Credit One’s challenge to the district court’s award of
attorneys’ fees.