Dont Cry Poor: Court Allows Plaintiff to Sue Employees of TCPA Defendant Directly After Company Claimed a Lack of Funds

It often happens in TCPA litigation that a Defendant will cry
poor– claiming to be judgment proof or otherwise incapable of settling a case
on a classwide basis–as if that were some sort of defense to a TCPA suit.

While
may times these are simply the cold hard facts, as Anthony Paronich told us long ago
that doesn’t mean a Plaintiff is likely to dismiss their case. Many times it
simply leads to a change in tactics: personally naming the officers and
employees that made the challenged communication.

For
instance, in Sattler, 2021 U.S. Dist. LEXIS 132083
(SDNY July 15, 2021) a Court granted a Plaintiff’s request to add employees
that sent allegedly illegal faxes after the company’s lawyer apparently claimed
the Defendant was judgment proof.

In
a letter filed with the court in June the Plaintiff stated the following:

[Defendant’s] counsel has repeatedly told
[Plaintiff’s] counsel that [Defendant] is insolvent and that it may stop
defending the litigation and allow a judgment to be entered against what
[Defendant’s] counsel represents would be an empty corporate shell. 

While
Defendant undoubtedly shared this information with Plaintiff in the hopes that
the case would go away, the opposite happened. Plaintiff doubled down and
decided to add corporate officers and employees as a direct result:

So that this litigation does not become a
meaningless academic exercise, [Plaintiff] is requesting this Court’s
permission to seek leave to amend her Complaint to add as defendants the
individual corporate officers, employees, and agents of [Defendant] who
directly participated in or personally authorized the conduct that violated the
TPCA. It is appropriate to add these individuals as defendants because the only
way in which a corporation can act is through the people who make decisions and
act on its behalf.

The
Defendant opposed arguing that it is inappropriate to hold such officers and
directors and employees liable for the acts of the corporate entity. Defendant
also argued that the proposed individual defendants are broke anyway so there
is no reason to add them.

The
Court disagreed and allowed Plaintiff to make his proposed amendment concluding
that the claims against the unnamed employees would not be futile since
personal liability is permitted under the TCPA. (Most unfair rule in the entire American legal system BTW.)

Moreover,
the court yawned at the notion that the new individual defendants (i.e.
employees of Defendant) might have no money–the Court reasoned that the mere
fact that a defendant is judgment proof is not a basis to deny the amendment.

As Sattler shows,
courts continue to liberally permit suits against individual officers and
employees of defendants that allegedly violated the TCPA–terrible though that
is.

But even more critically–Sattler highlights
why TCPA defendants should not expect to evade liability by pointing to a lack
of funds. TCPA defendants should recognize that by pointing to
empty corporate bank accounts they may actually be pointing the Plaintiff to
their own personal assets. TCPA defendants lacking the
resources to satisfy potential judgments should carefully weigh tactics with
their counsel and give consideration to concealing (rather than sharing) their
financial condition–which is NEVER relevant in TCPA litigation pre-judgment
anyway.

Leading with “the company is broke” may result in corporate
officers and employees sharing in its fate following personal liability for its
actions.

This
is serious stuff folks. Always consult counsel before engaging in any form of
outreach with consumers–and never assume that you can safely violate the TCPA
merely because the company you work for is small or underfunded. No way.