NIGHTMARE: Three Porch Executives Face Tens of Millions (Billions?) in Personal Liability for Texts Sent to Enroll Pros into Lead Generation Service

Haven’t talked about Dr. Evil–i.e. Tom Alvord--in a while.

But he is out there doing big things in TCPAWorld. LawHQ continues to pillage the landscape with an impressive series of wins.

DESERVE TO WIN EPISODE 7 IS HERE!: Law HQ Founder Tom Alvord Sits Down with the Czar to Discuss His New App that Turns Robocall Complaints into Lawsuits WITH A SWIPE

Here’s the latest.

You may recall that before Dr. Evil developed an app to generate lawsuits–I mean clients–he scraped through data sets found on porch’s own website to find Plaintiff’s to sue it–and then demanded $10BB from the company and executives of its predecessor company GoSmith–Darwin Widjaja, Brenton Marrelli, and Matthew Ehrlichman.

You can catch up on the background here:

TCPAWorld’s Own Dr. Evil?: Inventor of TCPA Lawsuit Manufacturing App Gathers Massive Amounts of Data Scraped from Porch Website—Now Claims Company Owes Plaintiffs $10 Billion Dollars

Well just yesterday the court weighed in on the defendants’ effort to dismiss the case and, well, it did not go well.

Essentially all of defendants’ arguments were rejected–texts are calls subject to the TCPA DNC provisions, private rights of action exist under the CFR for all claims (including caller identification claims in the context of a text message), etc. (Plaintiffs did lose the ATDS claim but that was a given since the Ninth Circuit has issued binding precedent the court had to follow on that issue.)

But the biggest loss concerns personal liability.

Remember, the texts at issue were sent by a company. Can employees involved in sending those texts be sued for them in addition to the company?

Yep.

In Dawson v. Porch, 2024 WL 4765159 (W.D. Wash. Nov. 13, 2024) the Court held corporate officers and employees can be held personally liable where they personally participated in a TCPA violation even if the texts at issue were sent by the company. (This, by the way, is the majority rule–although it is terribly unfair).

As the Court framed the issue, the only question then was whether plaintiffs’ allegations gave rise to a plausible inference of personal involvement. Focusing on allegations that Ehrlichman “knowingly participated [in], authorized, built, and directed” the unlawful telemarketing scheme at issue, the Court found the claim COULD stand against him even though he did not actually send the texts at issue.

Eesh.

Two other defendants were shipped off to a different court– the Northern District of California–on jurisdictional grounds but they still must face the claim in that court.

Plus, the Court found GoSmith’s successor company–Porch.com–can be held liable for GoSmith’s conduct as well:

The unity of conduct prior to January 2020 plus the transfer of GoSmith’s assets to Porch.com in January 2020 raise a plausible inference that the latter can be held liable for at least some portion of the former’s conduct.

Eesh again.

So pretty significant take aways here:

1. PERSONAL LIABILITY is a massive risk under the TCPA. You CANNOT just shutter a company and avoid liability. You can still be sued–as can any successor company;
2. Text messages sent for business purposes CAN violate the TCPA’s DNC provisions! The issue is whether the phone called is USED for personal purposes not whether your call was INTENDED for business purposes;
3. The TCPA damages are MASSIVE– the Defendants in this case are facing at least $60MM in damages–again, personally— and it could be much much worse for them;
4. LawHQ is increasingly a very dangerous threat. These folks have demonstrated an ability to win tough cases and pursue high dollar claims to the end. Don’t take them lightly.

Looking forward to seeing all of you on the webinar here in a few– but you should definitely be thinking about attending the big Florida TCPA summit next month where I will be diving DEEP into these issues!

Chat soon.