Court Finds Lawsuit Based on “Ruse,” Orders Plaintiff to Show Cause

A recent ruling from the Southern District of Ohio reveals the lengths to which some plaintiffs will go to manufacture TCPA claims – and how some courts are refusing to allow them to get away with such blatant manipulation. In Johansen v. National Gas & Electric LLC, No. 17-587, 2017 U.S. Dist. LEXIS 208878 (S.D. Ohio Dec. 20, 2017), the plaintiff alleged that the defendant violated the TCPA by calling him on three separate days even though his residential telephone number is on the National Do Not Call Registry. Before the court were two different motions filed by the defendant: a motion to compel arbitration and a motion to stay class discovery.

As a threshold matter, the court denied the motion to compel arbitration because the plaintiff had never received a copy of the arbitration agreement—because, as discussed below, he had given the defendant a phony address. The court also noted that the defendant had waived any claim that the plaintiff’s cancellation of services was untimely, and therefore invalid, by honoring the plaintiff’s cancellation of service and declining to impose a lateness penalty. Id. at *7-8.

The court then turned to the motion to stay class discovery, and in doing so discussed “troubling” statements from the plaintiff and his counsel that revealed that the lawsuit was “based on a ruse.” Id. Specifically, the plaintiff admitted that he “posed” as an interested customer when he received a telemarketing call from the defendant, and that it is his “‘typical practice to pose as a customer’ whenever he received a telemarketing call.” Id. This entailed “affirmatively” taking steps to enroll in the defendant’s services, which included providing his service address and his account number with his existing electrical provider, as well as authorizing the defendant to switch his electrical services. Id. at *9. The plaintiff took these steps despite admitting “he had no actual desire to enroll with” the defendant. Id. To ensure that he would not receive services from the defendant, the plaintiff “deliberately provided [the defendant] with an incorrect address and an incorrect account number.” Id.

Without going into further detail, the court found that these admissions cast “serious doubts on [the plaintiff’s] fitness to serve as an adequate class representative.” Id. at *10. In addition, the court noted that these admissions undermined the viability of the plaintiff’s TCPA claim. The plaintiff alleged he received three calls from the defendant. The parties dispute who initiated the first call, but the court determined that, under the Do Not Call rules, even if the defendant initiated the first call, “an individual does not have a cause of action until he has received ‘more than one telephone call within any 12-month period’ from the same entity.” Id. (quoting 47 U.S.C. § 227(c)(5)). The court determined that the second and third calls were not solicitation calls, because despite the plaintiff’s lack of interest in enrolling in the defendant’s services, his “deceptive conduct gave [the defendant] an objectively reasonable basis for believing that he had established a business relationship with [the defendant].” Id. at *11. In light of the admissions, the court granted the defendant’s motion to stay class discovery and ordered the plaintiff to show cause as to why his complaint should not be dismissed as meritless.

The National Gas & Electric decision demonstrates the lengths some plaintiffs will go to manufacture a TCPA claim, but also demonstrates that some courts will not allow claims predicated on deceptive conduct by plaintiffs to proceed.

Bradley J. Andreozzi

About the Author: Bradley J. Andreozzi

Bradley Andreozzi defends clients in high-stakes civil litigation, with a particular focus on class action trials and appeals. Brad is among the relatively small group of lawyers who have tried class actions before juries. He also has won pretrial dismissals and defeated class certification in courts across the country and prevailed on appeal in defeating purported billion-dollar class claims. Brad has a reputation for innovative arguments that limit or defeat claims and for the strategic use of motion practice to position cases for an early cost-effective resolution or limit the size and exposure of the case should it move forward. In addition to his trial work, Brad has won appeals in virtually every federal appellate court, including the U.S. Supreme Court.

John S. Yi

About the Author: John S. Yi

John Yi represents clients in civil and criminal litigations in federal court, as well as investigations and enforcement actions by the Federal Trade Commission (FTC), the U.S. Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and other federal and state regulatory bodies. For clients in health care and other sectors, he handles a full array of antitrust issues. John has helped secure merger clearances from federal regulators and defended clients’ interests in suits alleging a variety of anticompetitive conduct. He has assisted companies with internal investigations and compliance strategies. John also has experience handling all aspects of civil litigation, including discovery, settlement, dispositive motions, trial advocacy and appellate work. John also defends a number of class action cases with a wide variety of claims, including issues arising under federal and state antitrust laws, the Telephone Consumer Protection Act (TCPA) and the Fair Credit Reporting Act (FCRA).

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