Claws are out as court allows rare counterclaim

Always Say ‘Allegedly’

At first glance, it’s just a run-of-the-mill Telephone Consumer Protection Act (TCPA) class action.

Back in early 2018, Georgia citizen Ricky Franklin sued Upland Software, a Texas company, for allegedly sending more than 20 unwelcome text messages to his phone. In his complaint, he claims that he had never “provided his cellular phone number to the Defendant or given his prior express consent to be called, whether on his own or on behalf of any third party.”

The rest of the suit should be familiar to any denizen of TCPA Land: concrete and real invasions of privacy, extra charges, and harm and damages from emotional distress leading to anger and resentment.

And treble damages of $1,500 per text (augmented by $2,000 per text under Georgia law).

Auto-Dialer Auto-Filer?

Here’s where it gets interesting. Franklin allegedly has a bit of a past in the TCPA lawsuit business. According to a counterclaim filed by Upland a month after the original complaint, Franklin had been involved in at least seven other TCPA lawsuits during the prior three years. Worse than that, Upland alleged, Franklin had been accused in “many” of the earlier cases of falsely claiming that the messages he received were unsolicited.

Upland went on to maintain that Franklin had received his phone from Benita Ross (possibly his wife), who previously had consented to receive texts from Upland’s client. Upland wrote, “He therefore knew, prior to sending a demand letter to Upland in February 2018 and filing this suit in March 2018, that Benita Ross had opted in to receive phone calls and text messages ... .”

And with that, Upland hit Franklin with a suit for common-law fraud and fraud for nondisclosure. Generally, such allegations would be used to support a motion to dismiss. But in an age of rampant TCPA lawsuits, one company simply had enough – or, if the allegations are false, thought such a countersuit would be a smart defense strategy.

In the court’s recent report on the case, which responded to Franklin’s motion for summary judgment and motion to dismiss the counterclaims, the judge gave this approach a green light.

Against the Grain

Before we address that issue, however, one argument from Franklin’s motion for summary judgment bears examination.

Franklin claimed Upland was liable because it provided the texting service to the vendor that was doing the marketing to Ross. This accusation aligns with a recent TCPA trend that punishes platforms for the sins of the clients who use them, but in this case, the court favored the defendant.

“[Upland’s] platforms require significant human intervention and sorting on almost all aspects of the text messages and the platforms do not have the capacity to act as an auto dialer,” the court held. “In the Court’s examination of the summary judgment evidence, it can find nothing to suggest that Upland initiated the text messages or that an ATDS was used. To the extent that Franklin relies on a theory of vicarious liability, he does not succeed in his motion.”

On to the fraud.

The Takeaway

On the fraud claims, the court was blunt.

“Taking all of Upland’s factual allegations as true,” the court wrote, “Upland has pled enough factual content to allow the Court to draw the reasonable inference that Franklin is liable for the misconduct alleged.”

Serial TCPA litigants – honest or not – take notice: Defendants have a new weapon in their arsenal.