Evidence Preservation is Not Optional: Repeat TCPA Plaintiffs Score Big Sanctions Win Against Marketer Using a “Sever in India” to Store Call Records
Telephone Consumer Protection Act (TCPA) class actions have a lot of moving parts and there a number of things that a Defendant must keep in mind to properly defend these suits and assure themselves the best shot at defeating certification.
One basic component of all litigation in federal court is that potentially relevant data must be preserved. A party to a lawsuit owes an obligation to take reasonable steps to preserve potentially relevant data ASAP—including reaching out to third-parties that may be in possession of relevant data and requesting that those parties also hold records.
TCPA cases often do add one layer of complexity, however. Those desiring to have calls made commonly contract with “downstream” vendors to make calls. And while best practices include assuring visibility to the calling practices and data sources used by those downstream vendors, many businesses—frankly—do not use best practices.
Perhaps among these companies is the Defendant in the recent case of Perrong v. Sperian Energy Corp., Case No. 2:19-cv-00115-RFB-EJY, 2020 U.S. Dist. LEXIS 10749(D. N.v Jan. 17, 2020). In that case a pair of repeat Plaintiffs filed a TCPA lawsuit against Defendants including Energy Group Consultants (“EGC”) alleged receipt of unwanted phone calls. The Plaintiffs had demanded production of call logs—which the court had earlier ordered—yet the Plaintiff has not received those logs. The Plaintiffs filed an “emergency” motion for sanctions—quite the emergency—and the Court held a hearing on the matter. Rather than presenting valid arguments for the failure to produce records, however, the Defendants essentially showed up in court with their pockets turned out and claimed they lacked any call records. Their excuse? A downstream vendor had—likely—made the calls and stored data within a classic blackbox—a “sever in India.”
The court was deeply unimpressed with the Defendants’ showing, calling it “unacceptable.” In the Court’s view it was the Defendants’ responsibility to notify all downstream vendors of the pending lawsuit and the need to preserve data. And although the Court could not tell based upon the scattered record whether or not the call records still existed or had met an untimely demise, the Court was quite sure that the Defendants had not met their obligations to assure data was preserved. Accordingly the Court issued monetary sanctions against one of the Defendants for failing to take steps to preserve data.
The take away here is clear—TCPA defendants must take more or less immediate steps to preserve all pertinent records, including call records. As the Perrong Court points out, that effort must take place in writing and should include reach out to data within the control of third-parties. Barring such a paper trail, the Defendant may be facing monetary sanctions in addition to potential TCPA liability.
And notably, things may yet get worse for the Defendants in Perrong. To date only monetary sanctions have been assessed, but the Court still wants to know—are the calling records on that server in India still or not? If not—and assuming there’s no valid excuse for the destruction of the records—the Court has strongly suggested additional sanctions (I.e. spoiliation sanctions such as instructions to the jury) may yet be coming.