The World of the Telephone Consumer Protection Act
This is another big one folks.
The Plaintiff’s bar–particularly “#7” Avi Kaufman–have been pursuing realty companies for the acts of their agents. These are particularly difficult cases to pursue and certify because the agents are generally independent contractors that operate their own businesses- very similar to franchisees. So there is no “control” and the real estate “agents” are only agents of consumers–they are not “agents” of the brokerage.
Still Kaufman has been pursuing these cases aggressively and he just found some major pay dirt in a case in California.
In Bumpus, Case No. 3:19-cv-03309-JD, 2022 U.S. Dist. LEXIS 52650 (N.D. Cal. March 23, 2022) the court certified three different classes involving a popular real estate brokerage that has 50,000ish agents (that will not be named, for now.)
The class certified are these:
(1) A “National Do Not Call Registry Nationwide” (NDNC) class under Rule 23(b)(2) and (b)(3) consisting of “[a]ll persons in the United States who received two or more calls made by a [Defendant]-affiliated Agent using a Mojo, PhoneBurner, and/or Storm dialer in any 12 month period on a residential landline or cell phone number that appeared on the National Do Not Call Registry for at least 31 days for the time period beginning June 11, 2015, to present;
(2) A “National Internal Do Not Call” (Internal DNC) class under Rule 23(b)(2) consisting of “[a]ll persons in the United States who received, in any 12-month period, two or more calls promoting [Defendant’s] services and made by a [Defendant]-affiliated Agent to their residential landline or cell phone number, for the time period beginning June 11, 2015, to present; and
(3) A “National Artificial or Prerecorded Message” (Prerecorded Message) class under Rule 23(b)(2) and (b)(3) consisting of “[a]ll persons in the United States who received a call on their residential telephone line or cell phone number with an artificial or prerecorded message, as indicated by the following call disposition codes: (1) ‘Drop Message’ (if using the Mojo dialer); (2) ‘ATTENDED_TRANSFER’ (if using the Storm dialer; and (3) ‘VOICEMAIL’ (if using a PhoneBurner dialer) in the call records listed in Appendix A and made by a [Defendant]-affiliated Agent for the time period beginning June 11, 2015, to present.
The classes include over 445,000 unique cell phones–meaning that the Defendant is facing minimum exposure of $222,500,000.00 at trial. Nearly a quarter billion dollars!
And that’s assuming each number only received one call–a highly unlikely circumstance.
And notably, despite the fact that Anya Verkhovskaya’s reports have been routinely discarded, the Court in Bumpas credited her report and her methodology fully–so watch out.
Systems like Mojo and PhoneBurner are often used by retail agents in the real estate, mortgage and insurance verticals who operate with significant independence. The use of these systems may not even be known to corporate compliance or legal teams, making the oversight and control of the agent’s behavior next to impossible.
As Bumpas shows, however, a mere professed lack of knowledge or direct oversight my no longer be enough to defeat liability here in TCPAWorld. The Court was particularly concerned with the lack of any apparent ability to oversee the agent’s behavior:
Plaintiffs also highlight common evidence to show that [Defendant] was willfully ignorant of its agents violations of its “Do Not Contact Policy.” Dkt. No. 154-3 at 5, 17. [Defendant] stated in its “Do Not Contact Policy” that it would monitor agents’ compliance with the policy. Dkt. No. 154-9 at 1. Despite this, [Defendant] had no way to actually monitor its agents’ compliance and there were no consequences for an agent’s non-compliance. Dkt. No. 154-14 at 101:13-17, 105:9-12, 205:7-18. [Defendant] encouraged its agents to “keep it strictly an information call” so they did “not have to adhere to DNC.” Dkt. No. 154- 17 at ECF 24. The evidence also shows that [Defendant] knew some of the numbers on its call lists were on Do Not Call lists, but did not remove those numbers from the lists. Dkt. No. 154-14 at 101:1-8.
But it was the Mojo Lead Store and suite of services that really seems to have got folks in trouble. As the court laid out the facts:
Plaintiffs’ evidence indicates that they can prove Mojo’s liability for initiating the calls because Mojo provided lead lists, which contained thousands of residential telephone numbers that could be used to determine who to call. Dkt. No. 154-3 at 6. Mojo’s Sales Training Manual shows that it offered a “lead store” which could provide users with numbers for homeowners of expired and off market properties and “for sale by owner” properties, as well as providing a reverse lookup function to find additional numbers. Dkt. No. 154-12 at ECF 12-13. [A]gents used Mojo’s “power dialer” to make high-volume calls to homeowners whose numbers were on the lead lists. Dkt. No. 154-13 at 50:11 51:2. The dialer also allowed realtors to change their caller ID in order to call a number multiple times. Dkt. No. 155-1 at ECF 37. Plaintiffs also rely on Verkhovskaya’s report to show that they can identify telephone numbers that were dialed using Mojo’s dialer and to which prerecorded messages were given. Dkt. No. 155-1 at ¶¶ 82-85
Notice that “power dialing” and changes in caller id are cited by the court in support of certifying classes that have nothing to do with that conduct–these atmospherics are frowned upon and will work against companies facing a discretionary certification ruling.
As astounding as it is to say, this major realty company is now facing direct liability for the actions of its myriad independent agents, despite the fact that the realty company did not direct or require the calls at issue. Indeed, it is highly likely that the defendant was completely unaware of the purportedly illegal conduct underlying the suit–and yet, they face exposure for it.
This is not the way its supposed to work folks. We’ll keep an eye on this.
The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues. View all posts by Eric J. Troutman
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