Another Trap for the Unwary: Court Finds Calls Violating Multiple TCPA Sections Give Rise to Only One Recovery– But Watch Out!

We’ve been tracking the exploits of James Everett Shelton over the last few weeks. The Pennsylvania resident was recently the focus of a Pennsylvania Record story regarding his multiple TCPA suits and a couple of recent decisions spinning out of these suits have pushed the standing limits in TCPAWorld—with one decision finding Shelton had standing to pursue his claims but another suggesting a scheme to collect illegal B2B phone calls would not afford prudential standing.

Well in a third case involving Shelton—and the one highlighted in the Record story— the court entered a verdict in his favor last week after the Defendant failed to respond to duly-served requests for admissions. See Shelton v. Fast Advance Funding, CIVIL ACTION NO. 18-2071, 2019 U.S. Dist. LEXIS 77535 (E.D. Pa. May 8, 2019) But although the Defendant was found to have violated multiple provisions of the TCPA willfully, the Court still only awarded a per call violation for each of the 22 calls at issue—and not a per violation penalty for each of the 66 or so violations of the statute Plaintiff had demonstrated.

Drilling down a bit, the Court found that each of the 22 calls at issue had violated § 64.1200(c)(2)(barring telemarketing calls made to a residential number registered with the national DNC), § 64.1200(d)(1) (preventing solicitation calls being made without an internal DNC policy), and 47 C.F.R. § 64.1200(d)(3) (requiring a caller to log the name and contact information of a party requesting not to be called). Despite the multiple violations of regulations, however, the Court concludes that the language of § 227(c)(5) anticipates a plaintiff receiving $500 per call, and not $500 per violation per call.  This is so because the statutory provisions specifically ties recovery to the initiated call: “Plaintiff’s private right of action for all counts arises under § 227(c)(5), which specifically states that a person must “receive[] more than one telephone call within any 12-month period . . . in violation of the regulations” to have a private right of action.”

As the Court explains in a footnote, the reference to the word “call” in the private right of action suggests that a violation of the statute is not the trigger for recovery—it is, in fact, a call. The court does, however, find that the violation were willful—again based on the RFAs that were deemed admitted—and elected to treble damages. So Plaintiff netted a recovery of $1,500 x 22= $33k, which is bad but not as bad as the $99k he was seeking.

Shelton is an interesting case for a number of reasons. First, it represents yet another recovery by a repeat-TCPA Plaintiff that may or may not be running a fake business merely to collect illegal calls to sue for. Second, the case demonstrates why discovery in federal court must be taken oh-so-seriously—the court showed no appetite for Defendant’s efforts evade the effect of their failure to timely respond to the Plaintiff’s discovery demands. But most of all, of course, Shelton stands solidly for the proposition that multiple violations of the TCPA’s complex DNC rules and regulations will only net one recovery per call.  And while one can question the wisdom of a rule that essentially treats multiple violations as equivalent to one, given the massive penalty affixed to any violation it can hardly be suggested that callers are getting away with anything here. This is especially true as the Court elected to treble damages—why don’t courts just double damages once in a while?—so Plaintiff was truly well compensated for these calls.

One important note, the Shelton case was pursued under 227(c)(5)—which gives rise to causes of action for violations of the TCPA’s DNC rules. Most TCPA cases, however, are brought under 227(b)(3)—which affords a private right of action for ATDS or pre-recorded calls made without consent. The language of the private right of action in 227(b)(3) affords a recovery for a violation of the TCPA’s delivery restrictions, not for a call. While some courts have yet held that 227(b)(3) also affords recovery only on a per call basis—as is logical in context—other courts draw the distinction between the language of 227(c)(5) and 27(b)(3) to reach the contrary result. Yet another trap for the TCPA unwary. Be careful out there TCPAWorld.


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