As if the TCPA was not scary enough, a magistrate judge in the Southern District of Texas recently recommended allowing claims to pierce the corporate veil and hold individuals personally liable to move forward. See Schumacher v. Capital Advance Solutions, LLC, No. H-18-0436, 2019 U.S. Dist. LEXIS 34915 (S.D. Tex. Jan. 19, 2019). Notably, this sort of theory is in addition to the rule that corporate officers can be held directly liable for TCPA violations that they personally participate in.
The plaintiff in Schumacher alleged that despite being on the national do-not-call registry, he received calls from Capital Advance marketing business loans. But rather than simply suing the company, the plaintiff did some digging and allegedly identified two individuals as the people behind Capital Advance’s telemarketing strategy. He further alleged that the company was defunct with no assets, and simply a shell to shield the individual defendants from liability for their unlawful telemarketing strategy.
The Magistrate Judge found the allegations of personal liability sufficiently plausible to survive a motion to dismiss. In so holding, the Judge focused on two key allegations. First, the individuals created and used the company for an illegal purpose – presumably, telemarketing that violates the TCPA. Second, the corporation had no assets to satisfy any eventual liability. Piercing the corporate veil would therefore be necessary to ensure that the people who designed and profited from the calls could be held accountable.
The upshot of the decision is that it provides a potential path to holding accountable the people actually responsible for the “scourge of robocalls” referenced in nearly every TCPA complaint. As the Czar often points out, legitimate American businesses trying to market their goods and services and collect their accounts are not the ones actually responsible for modern robocalls. Instead, actual robocalls, which serve no purpose and tie-up the phone lines, primarily originate from offshore call centers. They are the entities behind calls from “the warranty department” and that threaten to have “the local sheriff arrest you” if you don’t send them money for back taxes. Schumacher provides a path to identifying and holding liable the individuals behind these type of scams.