Off the Hook?: Court Dismisses RICO Claim Against TCPA Repeat-Player Shelton

James E. Shelton is certainly no stranger to TCPA litigation. As a court observed just yesterday:

James Shelton has turned the private right of action under the TCPA into a business. He has filed dozens of cases in this District and in other districts around the country. 

While some courts have (properly) cast doubt on Shelton’s standing to pursue TCPA claims in instances where he has engaged in conduct suggesting he might be manufacturing lawsuits, most courts have determined that filing lawsuits repeatedly does not–in and of itself–deprive Shelton of standing to sue.

Well one Defendant Shelton sued decided to try and put a stop to Shelton’s business model by suing Shelton under RICO contending that he was engaging in racketeering activity, ostensibly by conspiring with other TCPA Plaintiffs to manufacture lawsuits. While the case against Shelton initially looked like it might have legs– there were those shocking “pillaging them” transcripts after all– a district court put an unceremonious end to the case yesterday.

The decision is Jacovetti v. Shelton, Case No. 2:20-cv-00163-JDW, 2020 U.S. Dist. LEXIS 158663 (E.D. Pa. September 1, 2020) and here’s the critical language:

The Court concludes that the Amended Complaint does not allege racketeering activity. The Amended Complaint primarily disputes the facts that Mr. Shelton alleged in the TCPA Action. But even if Mr. Shelton made incorrect allegations in the TCPA Action, that litigation conduct does not constitute a scheme or artifice to defraud because absent corrupt activity like bribing witnesses or parties, litigation conduct does not constitute a scheme or artifice to defraud for purposes of a civil RICO case.

The Amended Complaint also points to transcripts of conversations in which Mr. Shelton discussed his litigation strategy. Those conversations demonstrate that Mr. Shelton investigates potential defendants before he sues them to ensure they can satisfy a judgment. That pecuniary approach to litigation might be unseemly, as the Court has observed before. But it is not illegal. Certainly, it does not demonstrate that Mr. Shelton intends to cheat or defraud anyone. It only shows that he intends to collect if he prevails in litigation.

So there you have it. In one court’s view, inaccurate allegations in a TCPA case coupled with discussions about a desire to get paid and a large number of TCPA filings does not, by itself, mean that Shelton is committing RICO violations.

As the Court puts it, “A RICO claim is a serious charge that requires serious facts. Those are lacking here.”

Someone should probably tell Jeff Lohman…




1 Comment

  1. “While the case against Shelton initially looked like it might have legs” it actually never looked like it might have legs. The case was paralyzed and hamstrung from the beginning by an appalling lack of merit on the defamation claim via clear litigation privilege and the RICO claim via the absence of any supporting facts or evidence to show a corrupt or criminal scheme.

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