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DON’T MESS WITH TEXAS: $221,500.00 Judgment on Just 28 Illegal Calls Highlights the Dangers of Telemarketing to the Lone Star State

Here’s another reminder as to why TCPA.World is one of the most widely read legal blogs on the planet. A story that won’t get covered anywhere else–but that is incredibly important to folks hoping to call the 29 million folks living within the boundaries of the Great State of Texas.

So a company called Dealer Renewal Services was sued for making a grand total of 28 calls to a consumer in Texas.

28.

The resulting judgment? Nearly a quarter million bucks.

Here’s what happened.

The consumer sued DRS under the TCPA and under the little enforced Section 302.101 of the Texas Business and Commerce Code.

The Defendant failed to show up in court so the Court considered the damages available to the consumer. Here’s what the Court determined:

  1. Since the calls were allegedly made using an ATDS or prerecorded voice and without consent, each of the 28 calls violated Section (b)(iii) of the TCPA. The Court assessed the maximum of $1,500.00 per call for each of those calls–finding them to be willful–and resulting in $42k in damages automatically.

  2. But the Court also found these same 28 calls violated 227(c)’s prohibition against calls to consumers on the DNC list. Once again the Court elected to apply the maximum penalty of $1,500.00 for each call–resulting in a total of another $42k in fees. (Notably this should not have been possible since a consumer must receive two calls in a 12 month period to be actionable, so only 27 calls should have lead to damages here.)

  3. The Court found the caller also failed to register with the secretary of state as allegedly required under Texas law. Specifically, “a seller may not make a telephone solicitation from a location in this state or to a purchaser located in this state unless the seller holds a registration certificate for the business location from which the telephone solicitation is made.” Tex. Bus. & Com. Code Ann. § 302.101(a). “A person who violates this chapter is subject to a civil penalty of not more than $5,000 for each violation.” Id. § 302.302. In light of these violations the Court assessed the maximum penalty to the 28 calls resulting in an additional $140,000.00 in penalties.

So 28 calls ended up costing a caller $221,500 (it should have been $224k but a co-defendant [wisely] paid $2,500.00 to get out of the case.)

That means each call ended up costing the Defendant $8,000–and notice that each single call was deemed to have violated two different sections of the TCPA and a section of a state law enactment. So gone are the days–it seems–when an illegal call costs only $500-$1,500.00.

Some take aways here:

  1. In the post-Facebook (tcpa)world you MUST be aware of state enactments folks. While Florida continues to get much of the news (for good reason), state law enactments–such as those in Texas and Virginia–may actually carry even higher per call penalties than the TCPA. If you’re not properly licensed in states requiring marketer registration you should be–or you risk HUGE exposure. ;

  2. Again, penalty stacking is becoming more common. As I explained in my “Ahead of the Curve” article a few days ago, the Plaintiff’ bar is no longer content to recover a mere $500.00 a call these days; and

  3. Never allow yourself to go into default on one of these TCPA cases. You may think that 28 calls is a small number and that the case is not worth fighting–but this did not end up being the $14k loss the Defendant might have expected. And remember–unlike other areas of law the Plaintiffs do not need to pierce the corporate veil to sue the owners and operators of the business for TCPA violations directly.

The case is Thompson v. Dealer Renewal Servs., No. 4:21-cv-0467-P2021 U.S. Dist. LEXIS 223424 (N.D. Tex. November 18, 2021).

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 334
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About this Author

Eric Troutman Class Action Attorney
Of Counsel

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...

213-689-6510
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