Notorious marketing company Business 2 Business Solutions was hit with a $22 million default judgment in a New Jersey Telephone Consumer Protection Act lawsuit originally brought against a roofing company.
David/Randall Associates, Inc. was sued by a car dealership that received three unsolicited faxes from the roofing company in 2006. Discovery revealed that David/Randall worked with B2B, which sent almost 45,000 fax advertisements on its behalf over a three-month period to the dealership, City Select. The court certified a class of recipients and rejected David/Randall's proposal to cap damages at $300,000.
The roofing company then filed a third-party complaint against B2B and the company's owners, Caroline and Joel Abraham. David/Randall alleged that the Abrahams offered to market the company's roofing services through their facsimile advertising program and represented that they operated a lawful business. Once David/Randall acquiesced, the defendants "conceived, designed, and implemented" the campaign, the company said, and sent 44,832 unsolicited transmissions to a list of individuals "that they alone determined," all of which David/Randall believed to be lawful.
David/Randall asserted that the Abrahams should be held jointly and severally liable to contribute and/or provide indemnification for any judgment entered against it. The court entered judgment in favor of City Select in the amount of $22,405,000, and two days later David/Randall successfully effectuated personal service of the third-party complaint on the Abrahams in Brooklyn.
The Abrahams, who were implicated in dozens of other TCPA suits across the country, failed to respond. David/Randall moved for a default judgment and U.S. District Court Judge Jerome B. Simandle granted the motion.
"The record developed in this action readily supports a finding that acts by the Abrahams resulted in the same injury that has been alleged and adjudicated against David/Randall, namely, the transmission of unsolicited facsimile advertisements in violation of the TCPA," the court wrote. "Indeed, in entering judgment against David/Randall, the Court made clear that David/Randall's liability flowed directly from the Abrahams' direct transmission of over 44,000 unlawful facsimile advertisements. David/Randall, by contrast, bore vicarious liability for the Abrahams' actual transmissions, as a result of the fact that the Abrahams sent the transmissions on David/Randall's behalf, and in order to advertise David/Randall's roofing services."
Denying the motion for a default judgment would also prejudice David/Randall, the court said, as the company "has no other means of obtaining contribution from the Abrahams who share equally the burden of recompense."
Once the court concluded that a default judgment was appropriate, Judge Simandle turned to the appropriate amount of damages to be awarded. "Here, because David/Randall's damages flow directly from the Judgment entered against it … the calculation of damages in this instance proves uncomplicated," the court said. "Indeed, because the Abrahams, as stated above, have equal liability to that of David/Randall as joint tortfeasors in connection with the unlawful fax transmissions, the Court finds David/Randall entitled to the entry of Judgment in the same amount entered against it, $22,405,000."
To read the opinion in City Select Auto Sales v. David/Randall Associates, click here.
Why it Matters: The decision provides a powerful reminder about the potential liability for violations of the TCPA, not just for the entity engaged in the offensive behavior, but for all parties involved. B2B has been implicated in many other lawsuits across the country, from the Eleventh Circuit Court of Appeals to Michigan federal court.