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Category: TCPA

No TCPA Claim for Student Loan Debt Backed by U.S.

Steven Uhrich

Link: Sanford v. NAVIENT SOLUTIONS, LLC, Dist. Court, Case No. 1:17-cv-4356-WTL-DLP (S.D. Ind. Oct. 1, 2018).

Judge William T. Lawrence dismissed a complaint on the pleadings alleging that Navient violated the Telephone Consumer Protection Act when it placed calls to the plaintiff’s cell phone. The court found that contrary to Plaintiff’s position, an  August 11, 2016, Report and Order from the FCC that would have placed restrictions on the collection of debts had not yet gone into effect. Thus the language in the TCPA that “a cellular telephone service . . . unless such call is made solely to collect a debt owed to or guaranteed by the United States” is controlling. 47 U.S.C. § 227(b)(1)(A)(iii).

 

 

 

TCPA Class Against CPA, LP Certified in Part: Issues With Rep Agreement

Steven Uhrich

Link: Lanteri V. Credit Protection Association LP, 1:13-cv-1501-WTL-MJD (S.D. Ind., Sept. 26, 2018).

Plaintiff, represented by Philipps & Philipps Ltd., Keogh Law, Ltd., and Macey and Aleman, P.C., sought to certify two classes in their Telephone Consumer Protection Act lawsuit against CPA. The suit alleges CPA continued to send texts to the class after they sent a “stop” text message in response or while the debt was subject to an automatic stay order of a bankruptcy court.

The court affirmed the “stop” class after dealing with the following language in the Plaintiff’s representation/retainer agreement:

If Client abandons the class and settles on an individual basis against the advice of Attorneys, Client shall be obligated to pay Attorneys their normal hourly rates for the time they expended in the case, and shall be obligated to reimburse the Attorneys for all expenses incurred.

The court found this objectionable but allowed the class to be certified if Plaintiff files an amended agreement without that language.

As the Defendants concede, the fee arrangement does not explicitly prohibit the Plaintiff from settling, and the Court notes that the arrangement does not impose any fees, costs, or expenses on the Plaintiff were she to agree to a class settlement against her attorneys’ advice. Nonetheless, as the Defendants also indicate, the arrangement creates the appearance of a possible conflict with respect to the Plaintiff’s ability to freely withdraw her claim or settle her claim against her attorneys’ advice.

The court, judge William T. Lawrence, also found that the bankruptcy class was not ascertainable:

The problem with this proposed class is that the Plaintiff has not provided a mechanism for how it will identify its members. The Plaintiff suggests that it can start from the list of persons who were called during the relevant time period and whose accounts were given a certain code by the Defendants, and then perform a “ministerial act” of reviewing bankruptcy court dockets to determine which of those persons filed for bankruptcy. This suggestion ignores the fact that this method would not identify the Plaintiff herself or others like her who filed for bankruptcy but whose account was not coded as doing so by the Defendants. It also equates filing for bankruptcy with the imposition of an automatic stay, when there are circumstances in which a bankruptcy filing does not result in a stay. See 11 U.S.C. § 362. The determination of whether there was an automatic stay in a particular case and, if so, until what date, is not necessarily a ministerial act. The Plaintiff offers no explanation of how “compar[ing] bankruptcy filing dates to call dates,” Dkt. No. 183 at 14, will be sufficient to determine whether the call dates were made during the pendency of an automatic stay; she does not address the need to determine (1) if an automatic stay did, in fact, take effect; and (2) if so, when the stay was lifted. In addition, if the class member filed under Chapter 13, any claim that accrued during the pendency of the bankruptcy proceeding was property of the estate, and if it was not disclosed as an asset during the pendency of the bankruptcy case, it cannot be pursued without reopening that case. Rainey v. United Parcel Serv., Inc., 466 Fed. Appx. 542 (7th Cir. 2012).

 

 

TCPA Class Case Against Citigroup Fails Certification

Steven Uhrich

Link: Tomeo v. Citigroup, Inc., Case No. 13-cv-4046 (N.D. Ill., Sept. 27, 2018).

Judge Sara L. Ellis denied a motion brought by Plaintiff’s attorneys (DiCello Levitt & Casey LLC) to certify two Rule 23(b)(3) classes under the Telephone Consumer Protection Act for calling their telephones using an automatic telephone dialing system (“ATDS”) without their express consent.  The court found that Plaintiff did not satisfy his burden of establishing that common issues of fact or law predominate.

The court reminds us of the import of Rule 26: Citi attempted to attach a previously undisclosed expert declaration to its motion to strike Plaintiff’s expert reports. The court found that was procedurally improper because Citi submitted it after the close of expert discovery and further, Citi did not move to extend the deadline or for permission to submit a sur-rebuttal.

Regarding expert testimony, Rule 26 provides that “[a] party must make disclosures at the times and in the sequence that the court orders.” Fed R. Civ. Pro. 26(a)(2)(D). Unless Citi can show that the failure to provide Taylor’s report in a timely manner was justified or harmless, the Court should exclude it. Finwall v. City of Chicago, 239 F.R.D. 494, 500 (N.D. Ill. 2006)(citing Keach v. U.S. Trust Co., 419 F.3d 626, 639 (7th Cir. 2005)).

However, Plaintiff’s expert report is still stricken because they did not inspect Citi’s ATDS system itself:

 it is Tomeo’s burden to demonstrate that his expert reports and testimony are admissible, and he has not provided that support. Just as in Legg, Hansen cannot even credibly state that Citi’s equipment conforms to the specifications discussed in the manual. Because the Court finds that Tomeo has not shown that Hansen’s opinions regarding Citi’s dialers are based on sufficient facts and data, the Court excludes the portions of Hansen’s reports that make findings regarding the function of Citi’s dialers.

As to class certification generally, the court said that there would need to be too many individualized inquiries as to whether there was a wrong number or consent given for the calls.

Simply put, neither Tomeo nor his experts adequately identify a common way to address the individual variations of consent and revocation that occurred in this case … And in the cases where the Seventh Circuit held that class certification could be appropriate even though causation or damages required individual proof, the issues requiring individual proof did not directly affect whether the defendant was liable for some violation of the law. See, e.g., McMahon v. LVNV Funding, LLC,807 F.3d 872, 875 (7th Cir. 2015) (finding that the predominate issue was whether the defendant’s actions violated the FDCPA, not whether that violation damages the class members); Pella Corp. v. Saltzman, 606 F.3d 391, 394 (7th Cir. 2010)(holding that the central question in the case was whether the product at issue was defective when it left the factory, not whether that defect proximately caused the class members’ damages). The individualized issues in those cases could be separated from the primary issue of liability. Here, on the other hand, consent is inextricably intertwined with primary issue of liability to the point where it predominates over the other common issues in the case.

Class Settlement Denied in TCPA and FDCPA Case Against Ocwen

Steven Uhrich

Link: Snyder v. Ocwen Loan Servicing, LLC, Case No. 16-cv-8677 (N.D. Ill., Sept. 28, 2018).

In this large TCPA / FDCPA case against mortgage servicing company Ocwen, judge Matthew F. Kennelly denied the parties’ motion for final approval of a class which was potentially enormous: Ocwen’s records showed that it had made, during the period covered by the limited class proposed for preliminary injunctive relief, over 146 million calls to 1.45 million unique telephone numbers.

Once Plaintiffs (represented by Burke Law Offices and others) realized Ocwen’s insurer would not be covering them (Ocwen failed to give its insurer notice), there was a question whether Ocwen would be able to cover any settlement or if it would need to fold, leaving the class with nothing. Plaintiffs responded by trying to add in the banks and trusts Ocwen was working for, but the court in an earlier ruling denied that request as not timely. Plaintiffs then filed suit against the banks and trusts themselves.

The judge rejected the final $17,500,000 settlement on two grounds: One, that there was nothing in the record that showed Ocwen would not be able to pay, which might account for the relatively low amount of money given the number of calls. Two, the settlement called for the dismissal of the second case filed against the banks and trusts, but there did not appear to be any consideration given by the banks in the settlement agreement.

As a refresher on getting a class settlement approved, here’s the standard the court used:

A district court may approve a proposed settlement of a class action only after it directs notice in a reasonable manner to all class members who would be bound and finds, after a hearing (which the Court has already held), that the proposed settlement is “fair, reasonable and adequate.” Fed. R. Civ. P. 23(e)(2). In making the latter determination, courts in this circuit typically consider the following factors:

(1) the strength of the case for plaintiffs on the merits, balanced against the extent of settlement offer; (2) the complexity, length, and expense of further litigation; (3) the amount of opposition to the settlement; (4) the reaction of members of the class to the settlement; (5) the opinion of competent counsel; and (6) the stage of the proceedings and the amount of discovery completed. . . . The most important factor relevant to the fairness of a class action settlement is the strength of plaintiff’s case on the merits balanced against the amount offered in the settlement.

Wong v. Accretive Health, Inc., 773 F.3d 859, 863-64 (7th Cir. 2014) (internal quotation marks and citations omitted). The Court notes that as of December 1, 2018, absent contrary Congressional action, an amendment to Rule 23(e)(2) setting forth a list of points a court must consider in determining whether a proposed class action settlement is fair, reasonable, and adequate. The Court will address these points as well. They include whether:

• the class representatives and class counsel have adequately represented the class;

• the proposal was negotiated at arm’s length;

• it treats class members equitably relative to each other; and

• the relief provided by the settlement is adequate, taking into consideration the costs, risks, and delay of trial and appeal; the effectiveness of the proposed method of distributing relief; the terms of any proposed award of attorney’s fees; any agreements made in connection with the proposed settlement.

Proposed Fed. R. Civ. P. 23(e)(2) (eff. Dec. 1, 2018).

TCPA Class Claim Against Uber Subject to Arbitration

Steven Uhrich

Link: Johnson v. UBER TECHNOLOGIES, INC., No. 16 C 5468 (N.D. Ill. Sept. 20, 2018).

Judge John Z. Lee found that Uber’s arbitration click-wrap agreement is enforceable, and as a result tossed the putative class claims under the Telephone Consumer Protection Act:

Illinois law requires that a consumer be provided reasonable notice of all the terms and conditions of an agreement as well as reasonable notice that, by clicking a button, the consumer is assenting to the agreement. See Sgouros, 817 F.3d at 1034-36. “This is a fact-intensive inquiry: we cannot presume that a person who clicks on a box that appears on a computer screen has notice of all contents not only of that page but of other content that requires further action (scrolling, following a link, etc.).” Id. at 1034. As part of this inquiry, the court considers whether a reasonable person would be misled, confused, misdirected, or distracted by the manner in which the terms and conditions are presented. Id.

. . .

Similar to Dell’s website in Hubbert, the app that Johnson used to create his Uber account included the following statement: “By creating an Uber account, you agree to the Terms of Service & Privacy Policy.” See Def.’s LR 56.1(a)(3) Stmt. ¶ 15. The statement appeared in an easy-to-read font on an uncluttered screen, and no scrolling was required to view it. Id. ¶¶ 10, 15, 17. The words “Terms of Service & Privacy Policy” in the statement also served as a hyperlink, which appeared in a larger-sized font, enclosed in an outlined box. See id. The hyperlink, when clicked, brought the user to a screen displaying Uber’s Terms of Service in effect at the time. Id. ¶¶ 15, 18. As in Hubbert, the Court holds that the manner in which this statement and the Terms of Service were presented placed a reasonable person on notice that there were terms incorporated with creating an Uber account and that, by creating an account, he or she was agreeing to those terms.

 

Collection Calls to Wrong Person Basis for Valid FDCPA, TCPA claims—Not ICFA

Steven Uhrich

Link: Hayes v. RECEIVABLES PERFORMANCE MANAGEMENT, LLC, Case No. 17-cv-1239 (N.D. Ill. Sept. 26, 2018).

This suit, filed by Sulaiman Law Group, Ltd., alleges that employees from RPM called plaintiff numerous times looking to speak with and collect a debt from someone named “Lesha Wayne.” The plaintiff told RPM numerous times they had the wrong number and told them to stop calling. They didn’t. Plaintiff filed suit under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. (Count I); Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq. (Count II); and the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 ILCS 505/1 et seq. (Count III). Defendant filed a motion to dismiss, which the court, judge Robert M. Dow, granted in part and dismissed in part.

The court found Plaintiff did not sufficiently allege facts to show that he qualifies as a consumer under § 1692a(3) of the FDCPA, and dismissed his claim under Section 1692b(3) which requires that:

Any debt collector communicating with any person other than the consumer for the purpose of acquiring information about the consumer shall * * * not communicate with any such person more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information.

The court also dismissed his claim under section 1692c(a)(1) which provides:

Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt (1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer.

The court dismissed his claim under 1692e finding that Plaintiff didnot allege that he believed he owed the debt, or that Defendant or its agents ever said anything to him that even implicitly suggested he owed the debt. Instead, Plaintiff argued the calls were an attempt to mislead him into paying the debt.

The court also dismissed his f claim:

A Plaintiff who uses the same factual allegations underlying another § 1692 claim for his § 1692f claim, however, fails to state an independent basis on which relief can be granted.

The court did allow the section 1692d(5) claim to stand:

While Defendant asserts these allegations are not enough to state claim, the court in Wright v. Enhanced Recovery Company denied a motion for summary judgment where the parties agreed that the defendant had only been called 21 times but disagreed at what point and how many times the plaintiff had asked for the calls to stop. 227 F. Supp. 3d at 1214-15. In light of Wright, and the fact that Plaintiff alleges he demanded the calls to stop on numerous occasions, Plaintiff has alleged facts to show a plausible violation of the FDCPA with regard to § 1692d(5).

The TCPA claim survived despite Defendant’s argument regarding whether plaintiff alleged they used an autodialer:

Here, Plaintiff alleges both that he has experienced the distinctive “click and pause” after answering calls from Defendant [1, ¶ 18], and that on other occasions he experienced “dead air” and received no response whatsoever when he answered Defendant’s calls, [1, ¶ 19]. Given these experiences, Plaintiff infers that Defendant used an ATDS to make these calls. [1, ¶ 47.] Considering the precedent above, the Court agrees that Plaintiff has pled sufficient facts to support the reasonable inference that Defendant used a ATDS to place the relevant calls.

The Court also dismissed the ICFA claim:

As explained above, Plaintiff has not pled facts sufficient to show that Defendant engaged in a deceptive act or practice under 15 U.S.C. § 1692e. Thus, he has not pled facts to support his claim under the ICFA. While Defendant’s calls may have been annoying, and possibly abusive, nothing in Plaintiff’s complaint suggests that Defendant sought to deceive Plaintiff.

TCPA Case Against Uber Subject to Arbitration

Steven Uhrich

Link: Johnson v. UBER TECHNOLOGIES, INC., Case No. 16 C 5468 (N.D. Ill., Sept. 20, 2018).

Plaintiff sued on the basis that he installed the Uber app once, never used it, uninstalled it, then received an unsolicited text message asking him if he wanted to drive for Uber. Judge John Z. Lee found that despite Plaintiff’s arguments to the contrary, his TCPA claim was subject to the arbitration agreement found within Uber’s  click-wrap terms of service that were available via hyperlink when the Plaintiff installed the app on his phone.

[T]he Uber app contained a clear and conspicuous statement that, by creating an Uber account, a user agreed to the Terms of Service & Privacy Policy and prompted the user to click the hyperlink by displaying it prominently in an outlined box.

Plaintiff also argued that his TCPA action is not within the scope of the clause. The court rejected this:

Undeterred, Johnson further argues that, even if he did enter into an arbitration agreement, his TCPA claim does not fall within its scope. “Once it is clear, however, that the parties have a contract that provides for arbitration of some issues between them, any doubt concerning the scope of the arbitration clause is resolved in favor of arbitration as a matter of federal law.” Gore v. Alltel Commc’ns, LLC, 666 F.3d 1027, 1032 (7th Cir. 2012). “To this end, a court may not deny a party’s request to arbitrate an issue `unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'” Kiefer Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907, 909 (7th Cir. 1999).

$2.8 Million Fee Request Reduced to $450,000 in TCPA Class Case

Steven Uhrich

Link: Douglas v. Western Union Company, No. 14 C 1741 (N.D. Ill., Aug. 31, 2018)

Judge Gary Feinerman issued a memorandum opinion approving a class settlement against Western Union Company under the Telephone Consumer Protection Act, but awarding attorney Joseph Siprut only $450,000 of the $2,804,850.27 he requested in fees and costs.

After discussing the case law applicable to attorney-fee awards in class cases, the court went another direction:

Were this an ordinary case, the court would proceed to address, among other things, whether to adopt the lodestar method or the percentage method, whether to adopt a sliding scale or a straight percentage approach if the percentage method were adopted, and whether to employ a lodestar cross-check on the amount derived from the percentage method. See generally In re Akorn, Inc. Sec. Litig., 2018 WL 2688877, at *1-4 (N.D. Ill. June 5, 2018); Gehrich, 316 F.R.D. at 234-39. But due to Siprut’s conduct in this matter, this is not an ordinary case.

The court noted that because of the detailed hourly counts submitted by counsel in support of his fees, “[t]he message conveyed by Siprut’s affidavit and chart was unmistakable: By reporting total hours in six-minute increments, and by further dividing those hours into fifteen finely-honed categories, Siprut plainly intended to convey the impression that he and his team had kept reasonably close track of their time.”

However, the court then explained that counsel actually had reconstructed his hours at the end of the case, and that “[t]he reconstructed time records here lack support and are highly suspect.”

Given all this, the court would be well within its rights to deny Siprut’s fee request in its entirety…Instead, given the good result he obtained for the class and the fact that he is responsible for covering additional administrative expenses, the court will award Siprut $425,000 in attorney fees and costs, which is five percent of the settlement fund.

This reduction reflects in part that Siprut failed to keep contemporaneous time records and, compounding the problem, failed to provide any support (other than his own say-so) for his reconstructed time calculations … The reduction also reflects in part the undeniable fact that Siprut, having failed to either maintain reasonably contemporaneous time records or provide support for his reconstructed records, proceeded to greatly inflate the hours he reported, just as he did in the Southwest Airlines Voucher case. 2018 WL 3651028, at *4. Finally, the reduction reflects in part that Siprut’s reporting his and his colleagues’ hours in six-minute increments, and his allocation of those hours across fifteen categories, was designed to create the impression of precision and reasonableness, when in fact the hours reported were wholly imprecise and unreasonable.

 

TCPA Action Against Hertz Surives Summary Judgment

Steven Uhrich

Link: Tillman v. Hertz Corporation, Case No. 16 C 4242 (N.D. Ill., Aug. 29 2018)

A TCPA case brought by SmithMarco, P.C. against Hertz for unsolicited automated calls to plaintiff’s cell phone withstood a motion for summary judgment brought by Hertz. The court (Robert W. Gettleman) found that—because defendant could not produce the contract that plaintiff signed—there was a material issue of fact of whether the contract plaintiff signed contained a provision granting consent to unsolicited automated calls. Plaintiff also alleged they revoked any consent they had given over the phone.

The court also rejected defendant’s arguments that such consent couldn’t be effective:

Reyes holds that under the TCPA a consumer cannot “unilaterally revoke his or her consent to be contacted by telephone when that consent is given, not gratuitously, but as bargained-for consideration in a bilateral contract.” Id. at 56. The Reyes court explains that this holding is consistent with other cases and FCC orders holding that consumers can revoke consent through any reasonable means because that precedent considers consumers who have given their consent “feely and unilaterally.” Id. (citing Gager v. Dell Fin. Servs., LLC, 727 F.3d 265 (3d Cir. 2013); Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014); the 2015 FCC Order, 30 F.C.C. Rcd. 7961). Regardless of how well-reasoned Reyes may be, it is not the law of this circuit. The Seventh Circuit’s precedent holds that “consent [can] be revoked `at any time and through any reasonable means.'” Blow, 855 F.3d at 803 (quoting the 2015 FCC Order, 30 F.C.C. Rcd. at 7989-90). Although the Seventh Circuit has not made the distinction that Reyes relies on, it is binding on this court and must therefore be followed.

TCPA Class Against Heska Corp. is Certified

Steven Uhrich

link: Fauley v. Heska Corpoartion, 2015-cv-2171 (N.D. Ill, Aug. 24, 2018)

Shaun Fauley, through counsel Anderson + Wanca, filed a motion to certify a class alleging that defendant Heska contacted over 10,850 customers via fax in violation of the Telephone Consumer Protection Act. After rehashing issues with Heska contacting class members in a “reconfirmation” effort to retroactively obtain customers’ consent, the court certified the following class:

All persons or entities who were successfully sent one or more facsimiles regarding Heska Corporation’s goods or services from March 12, 2011, through July 21, 2014, that either (1) contain no “opt-out notice” explaining how to stop future faxes or (2) contain an opt-out notice stating, “To unsubscribe from Heska’s promotional faxes, please call 800-464-3752, ext. 4565 or fax (970) 619-3008, and indicate your clinic name and fax number.”

The Court applied the standard used by the D.C. Circuit in the case of Bais Yaakov, agreeing that the TCPA does not impost an opt-out requirement on solicited faxes. The court also noted Heska timely obtained an FCC waiver of the opt-out rule for solicited fax advertisements.