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Recent TCPA Decisions Focus on the Difficulty of Proving Manufactured Claims

A scale of justice and gavel in the foreground, somebody signing a contract in the background

Posted by Chris Alarie on Wed, 09/28/2022 - 13:53

Three recent court decision in Telephone Consumer Protection Act (TCPA) lawsuits illustrate the complicated nature of this litigation. In each case, the plaintiffs behaved in ways that suggest the possibility of manufactured claims, but the defendants were unable to use those possibilities as viable defenses against the lawsuits.

The Cases

In Rowan v. US Dealer Services, the plaintiff purchased a vehicle service agreement from Palmer Administrative Services then canceled the policy a month later. He did not issue a do not call (DNC) request in his cancellation letter. Five months after he had canceled the policy, the defendant made five “win-back” calls to him on behalf of Palmer. He purchased a contract during the fifth call then canceled that policy as well, this time including an explicit DNC request. He filed a TCPA class action against USDS alleging DNC list violations.

USDS moved for summary judgment on the grounds that their five calls were protected by established business relationship (EBR) rules. The plaintiff argued that the EBR was terminated by his initial cancellation of the first policy. The New Jersey District Court sided with the defendant, writing, “[A]bsent the consumer providing the seller with a do-not-call request, or the functional equivalent of such a request, the termination of an underlying commercial relationship is not sufficient to terminate an EBR and cut off the otherwise-applicable eighteen-month deadline for calls.”

In Atkinson v. Pro Custom Solar, the plaintiff alleged that she received unsolicited text messages and calls from a solar company, Pro Custom Solar LLC d/b/a Momentum Solar. During one of the calls, she agreed to schedule a home meeting with a representative of Momentum. During that home meeting with the Momentum rep, the plaintiff “confirmed his identify, took his business card and a brochure, took a photo of him wearing a Momentum shirt, gave him a Gatorade, and then asked him to leave and not call her any more... During the meeting she explained to the representative that the purpose of the meeting was to investigate who was making the solicitation calls to her cell phone, not to possibly purchase solar panels.” The plaintiff filed suit alleging violations of the DNC list.

The defendant attempted to argue that the plaintiff’s verbal consent was sufficient despite the TCPA’s clear requirement for express written consent. The court clearly did not find this argument compelling and ruled in favor of the plaintiff’s motion for summary judgment. The court also rejected an argument that the plaintiff’s feigned interest could be construed as fraudulently manufacturing a claim.

In Hastings v. Smartmatch, the plaintiff’s TCPA allegations were matched by a counterclaim from the defendant alleging fraud on the part of the plaintiff. Namely, the defendant alleged that the plaintiff intentionally entered in his phone number, a false name, and a relative’s former business address into a third-party lead generation form in order to manufacture TCPA violations. The defendant alleges that the plaintiff furthered this deception during the resulting phone conversation by never giving his real name, implying that the false name was his, not informing the caller that his number was on the DNC list, not requesting to not be called in the future, and feigning interest in the health insurance quotes that were being solicited.

The court ultimately did not support this fraud counterclaim due to the defendant’s inability to fully satisfy the requirements of Arkansas’s common law fraud statute. However, as explained by Tori Guidry at TCPAWorld, it did not entirely disagree with the basic premise of the defendant’s fraud claims, potentially setting a road map for a more successful version of this defense in the future.

Analysis

Collectively, these cases demonstrate both the risks of plaintiffs manufacturing claims as well as the difficulty of successfully using that as a defense in court. In Rowan, the plaintiff purchased and then canceled policies in a suspicious pattern that seemed designed to elicit calls. In Atkinson, the plaintiff feigned interest to the point of having an agent conduct a home visit. And in Hastings, the plaintiff behaved in a manner that suggests that they gave false information while signing up on a lead generation site and during a phone conversation to invite additional calls. But none of the defendants were able to use these behaviors as the basis of successful defenses or fraud counterclaims.

While that didn’t necessarily doom the defendants—USDS was successful with their EBR defense and Eric Troutman at TCPAWorld suggests that an invocation of the DNC list’s 90-day inquiry rule may have served Pro Custom Solar better than their actual defense—it shows how difficult it can be to mount a litigation defense against manufactured and feigned interest claims once the calls have been made. Ultimately the best way to defend against manufactured claims is to have measures in place ensuring that those efforts do not result in calls at all.