Daubert v. NRA Group: A $25 Medical Bill, 69 Autodialed Calls and a $34,500 TCPA Judgment

The facts

John Daubert obtained an x-ray at a hospital for back pain. The radiology group's bill was $46, insurance paid $21, and he didn't pay the remaining $25. The radiology group's billing company passed his account and cell number to NRA Group, a collector. NRA called him 69 times in ten months using a Mercury Predictive Dialer. He answered once.

Daubert sued under the Fair Debt Collection Practices Act (FDCPA) over a barcode on the collection envelope, and later added a TCPA claim. The Middle District of Pennsylvania granted him summary judgment on the TCPA claim, awarding $500 per call, or $34,500.

Consent through a hospital

NRA argued a jury could find Daubert consented. The Third Circuit disagreed. Under Federal Communications Commission (FCC) rulings, giving your cell number to a creditor in connection with a debt can count as prior express consent. And it doesn't have to go directly to the creditor. In Baisden v. Credit Adjustments (6th Cir.) and Mais v. Gulf Coast Collection Bureau (11th Cir.), patients consented through hospital admission forms that authorized sharing their information for billing.

Here, though, there was no such form in the record. The most NRA could show was that Daubert maybe gave his number to the hospital. The court held that isn't enough. NRA had the burden to prove consent, and once Daubert pointed out the absence of evidence, it was "put up or shut up time."

The sham affidavit

NRA's designated corporate witness under Rule 30(b)(6) testified that the dialer places calls automatically and that no employee is involved unless someone answers. She said she was prepared to speak for the company. At summary judgment, NRA submitted an affidavit from its collections director saying the dialer can't call without a person hitting the "F4" key.

The district court disregarded that affidavit under the sham affidavit doctrine, and the Third Circuit held that was within its discretion. The affidavit flatly contradicted the corporate testimony, no independent evidence backed it up, and NRA didn't give a satisfactory explanation. NRA had two weeks to prepare its witness and never asked for more time to build the record.

The FDCPA cross-appeal

On Daubert's FDCPA claim, the court reversed a judgment for NRA. Relying on district court decisions that approved similar envelope barcodes was a mistake of law, which the FDCPA's bona fide error defense doesn't cover. The court sent it back for entry of judgment and damages.

Why this matters

For collectors and healthcare billing companies, Daubert is a warning about both consent and litigation discipline.

Practical points:

1. Get the actual intake form showing the patient authorized sharing the number for billing.
2. Don't assume a number passed along by a hospital or billing company comes with consent.
3. Prepare your 30(b)(6) witness thoroughly on how your dialer works.
4. You can't fix bad corporate testimony with a later contradictory affidavit.

Read the Third Circuit's opinion in Daubert v. NRA Group.