December 12, 2018

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December 10, 2018

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You Can’t Be Serious: TCPA Data Transfer to Defense Expert Lands DirectTV in Unshakable Privacy Class Action

Data privacy and protection concerns permeate TCPA class actions as consumer lawyers have become increasingly bold about demanding huge sets of private financial records and data from defendants. These demands risk the privacy and financial well being of millions of customers yet–in the greatest of ironies–courts are frequently told that the data is needed to assure that consumer privacy is protected–the TCPA protects privacy, after all.

TCPA defendants need to be extremely careful when providing customer data to anyone without a court order–a point driven home to devastating effect in the remarkable saga of Cordoba v. DirecTV, LLC.  There, DirecTV finds itself in an unshakable privacy lawsuit owing to its production of customer records to its own TCPA Defense expert.

Here’s the story:

Back in 2015 Cordoba sued DirecTV alleging, inter alia, violations of the TCPA’s DNC rules.  DirecTV decided to defend itself by arguing that many of the class members had established business relationships with it, which is an exception to the otherwise black-and-white rule that numbers on the DNC may not be called for telemarketing purposes. To advance that defense DirecTV retained an expert and transferred a bunch of account data to the expert to analyze and provide guidance to DirecTV (and eventually to the Court) as to whether and to what degree class members had EBRs.

That all seems appropriate, if not prudent. But there’s a twist.

DirecTV’s data is subject to something called the Satellite Television Extension and Localism Act of 2010. (“STELA.”) STELA imposes a commandment upon DirecTV to the effect: “thou shalt not disclose personal identifying information about your consumers to anyone…” (Paraphrasing.)

While you’ve probably never heard of STELA, DirecTV’s lawyers had and this is where things get interesting. When Plaintiff moved for certification back in 2017 DirecTV opposed certification arguing, inter alia, that individualized issues respecting the applicability of the EBR defense thwart commonality. In support of this argument they submitted their expert report relying on the customer data DirecTV had supplied.

In response the Plaintiff’s lawyers–the formidable bunch over at Lief Cabraser– demanded the data underlying the expert’s report. DirecTV refused to produce the data to LC, arguing that STELA prevents disclosure.

Hmmm.

So DirecTV asked the Court to–on the one hand–accept its expert’s report relying on the secret special data but–on the other hand–to deny the Plaintiff’s expert access to the same secret special data. You see where this is headed.

The Court ordered the production of the data over to LC’s expert and in so doing made an express finding that the data produced to DirecTV’s expert was, in fact, subject to STELA. Uh oh. (It then proceed to certify the TCPA case–more uh oh.)  You can read the opinion here: Cordoba Cert. Opinion

But Lief Cabraser was not satisfied with its data award or its certification order. Oh no, they had bigger plans.

In May, 2018 that plan was unveiled when a new class representative joined the case. This class representative did not allege that she had received calls in violation of the TCPA, however. Instead, she alleged that her data had been improperly provided by DirecTV to its defense expert in violation of STELA and sought to represent a class of at least 9,100 other individuals that had suffered the same indignity.  The class seeks to recover at least $9,100,000.00 in statutory damages for the violation! If you’re curious the Third Amended Complaint asserting the STELA claims can be found here: Cordoba Complaint

Not surprisingly, the Third Amended Complaint quotes the Court’s own earlier certification order noting that the data produced to the expert was, in fact, subject to STELA. The only liability question, therefore, was whether or not the data was produced pursuant to an enumerated exception.

DirecTV responded to the filing of the Third Amended Complaint by moving to compel arbitration. The Cordoba court ruled on that arbitration motion just last week–DENYING it– in Cordoba v. DirecTV, LLC, Case No. 15-cv-3755, 2018 WL 5919588 (N.D. GA Nov. 9, 2018). There the Court determined that the claims at issue did not arise out of the contract between Romero and DirectTV but, rather, arose out of the protections of STELA which were unrelated to the account.  The Court specifically rejected DirecTV’s argument that its privacy policy–which was built into the same contract containing the arbitration clause–provides a defense under a STELA exception and, as such, held that no part of the suit arose out of the contract containing the arbitration clause. Just that easily arbitration was denied.

Cordoba is a cautionary tale for all Defendants out there that face suit in TCPA class actions. Although it is tempting–and seemingly prudent–to get a head start on data analysis via an early production and assembly of data for review by experts be ware. Customer data is extremely important and private and its production is highly regulated. Do not assume that the data can be shared with friendly third parties. As Cordoba shows, the production of such material may be enough to get you sued in an entirely separate data privacy suit.

Copyright © 2018 Womble Bond Dickinson (US) LLP All Rights Reserved.

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About this Author

Eric Troutman, Womble Dickinson, TCPA Litigation Attorney
Attorney

Eric is one of the country’s prominent class action defense attorneys and is nationally-recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance.  He has served as lead defense counsel in more than 50 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...

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