TCPA PERSONAL LIABILITY STRIKES AGAIN: Court Allows Managing Member of Auto Warranty Seller to be Personally Sued in TCPA Suit

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Plaintiff’s lawyer explains when they will sue someone personally. For more great content be sure to follow our INCREDIBLE YouTube channel!

The most unfair rule in all of American jurisprudence strikes again.

Gustav Renny–the “managing member” of  Pelican Investment Holding, LLC–may be sued personally for calls made by Pelican to sell auto warranties offered by Dimension Service Corporation a court held yesterday.

Apparently Renny had the misfortune of signing a marketing agreement with Dimension. He is also alleged to have overseen Pelican’s marketing efforts in connection with the challenged campaign. On that basis the Court determined he could be personally sued.

The Court also overruled the Defendants’ motion to dismiss more broadly, which is unsurprising since none of the arguments really made any sense (the motion challenged, for instance, that the precise date the consumer placed their number on the national DNC was not alleged–but that’s hardly a basis to dismiss a complaint.)

Given that Renny and Pelican face suit for four years worth of prerecorded calls here the liability may end up being extraordinarily high.

The case is: ROYAL SPURLARK, Plaintiff, v. DIMENSION SERVICE CORPORATION, et al.,  2022 WL 2528098 (S.D. Ohio July 7, 2022).

I will note that the FCC yesterday issued an alert that auto warranty scam calls are its single biggest complaint right now: https://www.fcc.gov/document/fcc-takes-actions-against-auto-warranty-scam-robocall-campaign

Folks in the auto warranty vertical should be extremely cautious. I know this is a “few bad apples” situation–but they really are ruining the entire bunch.

Take aways:

  1. If you are in the auto warranty business the crosshairs are on you right now so be extremely cautious out there;
  2. Always remember that if YOU are not a lawyer and you are signing a marketing agreement you might end up personally sued if that marketing arrangement results in illegal calls or texts;
  3. More broadly, personal liability–i.e. not just liability for a business or an LLC but for the actual employee, officer, director– remains a risk for anyone that oversees marketing campaigns or makes outbound calls;
  4. Prerecorded calls continue to drive massive litigation. Directionally you should be moving away from such calls and toward texts and “human selection” outbound dialing. This is true even where you think you have consent–remember, fraud in the affiliate network may be as high as 45%;
  5. Oh, and you might want to get yourself a good lawyer if you’re facing one of these cases. At $500.00 a call the liability here could be millions–or billions. And a willfulness finding may preclude bankruptcy discharge. So… make sure you have powerful attorneys on your side. (I know a guy.)

 

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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: Pavelka v. Pelican Funding Holdings Group - Autobit Daily

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