No Escape: Court Asked to Find TCPA Judgment Against Corporate Officer Non-Dischargeable In Bankruptcy

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We’re still a month away from Halloween, but TCPAWorld has just become even scarier.

I have frequently remarked on the unfairness of individual corporate officers being held individually and personally liable for TCPA violations committed by corporate entities. That sometimes means liability well into the millions of dollars in personal exposure for individuals based upon actions taken by companies these individuals helped run. Well imagine, for a moment, if all that exposure were deemed non-dischargeable in bankruptcy. Horrifying right?

Well that is just the result a TCPA judgment-creditor is seeking in a bankruptcy proceeding involving a corporate officer who sought protection following entry of a default TCPA judgment against him. In re Kinikini, Case No. 19-00134-TLM, Adv. No. 19-06032-TLM, 2019 Bankr. LEXIS 2927 (D. Id. Bk. Sept. 20, 2019) the Plaintiff argued that a default judgment entered against the debtor was non-dischargeable as a “willful and malicious” injury under the bankruptcy code. The judgment in question had, apparently, concluded that the Defendant acted willfully under the TCPA, but does that mean that a TCPA judgment is per se non-dischargeable in BK where willfulness is found? Stated more precisely, are the findings required for a “willfulness” determination under the TCPA commiserate with those required for a “willful and malicious” injury rendering a claim non-dischargeable in bankruptcy? What a question!

Unfortunately we do not yet have an answer to it. In Kinikini the Plaintiff urged that the Defendant was prevented from disputing “willfulness”—by any standard—by defaulting in the underlying TCPA case. The Court analyzed that issue and concluded that allowing a default to be entered in federal court does not result in collateral estoppel in a related bankruptcy proceeding. That is to say, the debtor retains the right to argue he did not willfully injure the Plaintiff within the meaning of the bankruptcy code—but we still don’t (yet) know whether a willfulness TCPA finding suffices.

So there you go TCPAWorld—TCPA Plaintiffs are now arguing that not only are corporate officers liabile for bad actions by the corporate entities they oversee, resulting judgments cannot even be discharged in bankruptcy. Happy Monday.

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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.

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  1. Pingback: Talk About Scary: Manual Calls Might be Dialer Calls, Landlines Might be Cell Phones and More TCPA Facts and Stats to Freak You Out – TCPAWorld

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