Sanctions Upheld: Sanctions Award Against TCPA Plaintiff Upheld after Claim Deemed Frivolous on Appeal

I never take pleasure in another’s misery, no matter how richly deserved. So please don’t misunderstand the tone here– I’m just reporting the news with a little skip in my step.

In McCabe v. Lifetime Entm’t Servs., No. 18-1149, 2019 U.S. App. Lexis 3133 (2nd Cir. Jan 31, 2019) the Court considered an appeal from a district court order dismissing a time-barred claim and sanctioning the Plaintiff under Rule 11. The issue was the application of the old American Pipe tolling doctrine, that I have written about so often lately.

The McCabe Plaintiff was a member of the class in the old Leyse case (there were actually several Leyse cases but, for our purposes, assume just one.) The Leyse case denied certification, which resulted in a motion for reconsideration and an appeal to the Second Circuit that resulted in an affirmation of the denial of the certification order by the district judge. Simple enough.

Without question the McCabe Plaintiff’s claim was tolled during the pendency of some portion of Leyse but what portion? Was the claim tolled through the conclusion of the unsuccessful appeal by the Leyse class rep or only through the denial of class certification?

In some circuits this would be a tough call, but not in the Second Circuit. That question was answered directly in  Giovanniello v. ALM Media, LLC, 726 F.3d 106, 107 (2d Cir. 2013). There the Court determined that tolling ended when certification was denied because the class member could no longer reasonably rely upon the pending class action to protect his rights. Makes total sense.

Applying the rule of Giovanniello (great name BTW) the McCabe court had no problem determining that the McCabe claim had been filed over a year late. And since Plaintiff had offered no good faith arguments as to why Giovanniello wasn’t directly applicable to his case, the legal challenge posed by Plaintiff—relying on older and abrogated law—was frivolous. So the district court’s sanction order was affirmed.

This was a great ruling and I applaud Lifetime Entertainment Services for pushing sanctions and seeing the appeal through. Well done!

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Published by Eric J. Troutman

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.