The Telephone Consumer Protection Act (“TCPA”) was enacted in 1991.  On October 16, 2013, the last of the most recent amendments to the TCPA regulations went into effect.  The TCPA, with some notable exceptions, allows individuals to file lawsuits (including class action lawsuits) to collect damages for having received unsolicited telemarketing calls, faxes, pre-recorded telephone calls and/or autodialed telephone calls.   The TCPA allows for actual damages, or statutory damages ranging from $500.00 to $1,500.00, per unsolicited call/text message.  Not surprisingly, the TCPA (particularly its applicability to text message marketing) has become fertile ground for class action litigation against advertisers and telemarketers, as well as suits seeking personal liability against owners and officers.

What to Do if You Are Named Personally in a TCPA Lawsuit

The first steps you take are critical.

First, contact your attorney immediately.  Time is of the essence.   A TCPA lawsuit, particularly a class action, is an extremely serious matter.  While you potentially have a wide range of legal and/or factual defenses to personal liability, some may be waived or impaired if you do not act quickly and properly.  For example, if you did not direct, personally participate in or personally authorize the transactions at issue, you should be removed promptly from the case.  Moreover, the court may lack personal jurisdiction over you, even if the court has jurisdiction over one or more of the corporate defendants.  An attorney experienced in TCPA law and litigation can be the difference between a positive or decidedly negative outcome in a TCPA class action, particularly when personal liability is at issue.

Second, consider who, other than you, may be obligated to pay legal bills, settlement and/or judgment amounts on your behalf.  For example, do you or your employer/company have insurance which might cover the defense of the claim?  In the absence of such insurance, will your employer/company be assuming the cost of your defense? Finally, is there an indemnity agreement in place whereby a third-party, e.g. the publisher or call center, is obligated to assume the defense of any TCPA action?

Third, do not overreact.  A press release or call to plaintiff’s counsel in defense of your business practices will almost certainly backfire.  It is a very poor legal strategy to rely upon the good faith of the law firm that is suing you personally.  Business practices that you believe to be proper, and that many or most of your industry peers are engaged in may, in fact, be unlawful.  Moreover, such practices are often the basis of plaintiff’s claim.  Sharing your business practices with your adversary directly, or through a press release, may simply confirm plaintiff’s case and serve as a clear admission of wrongdoing.  In fact, do not speak to anyone about any aspect of the lawsuit, including employees and co-workers, unless and until authorized to do so by your attorney.

Finally, do not edit, create or destroy documents.   In our digital age, document tampering, spoliation, backdating, etc., will generally be uncovered.  Not only will this dramatically increase your adversary’s interest in the underlying case, but such activities may create a basis for independent causes of action, sanctions or may compel the court to strike critical defenses that would have been otherwise available to you.  

Better Yet, Avoid Personal Liability Altogether

Working on an ongoing basis with experienced telemarketing and Internet marketing attorneys, well versed in TCPA law and litigation, can make all the difference.  Counsel will let you know how to comply with the TCPA, where the landmines are, how to insulate yourself from personal liability, how to minimize the chance that the actions of a third-party marketer will expose you to personal liability, and how to make sure that you are optimally protected through indemnity clauses and other contractual provisions.

Of further note, the court in a TCPA action will look to the affirmative efforts of an officer/owner to determine whether he/she directed the acts which resulted in the alleged TCPA violation.  However, at least one federal court has indicated that the converse is also true.  Where the officer/owner undertook deliberate efforts to implement TCPA compliant policies, the court relied upon that fact in denying personal liability and dismissing the officer/owner from the action.  Clearly working closely with seasoned marketing lawyers is a critical component of such defense.

This topic should be of interest to any company or individual engaging in a commercial venture within the United States, especially those involved in the text message marketing and telemarketing industries.