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“Cherry Picking”: Effort to Add Owner of Small Business to TCPA Class Action Fails Spectacularly And I’m Here For It
Thursday, June 6, 2024

So I often say the rule that employees and business owners might be personally liable for TCPA violations is the most unfair rule in the American legal system.

In virtually every other context individuals are never directly liable for things they do on behalf of an employer, but in TCPAWorld individuals working for companies can find themselves personally sued even where they were just following directions. Its pretty awful.

And even CEOs and company owners can find themselves sued directly– no piercing the veil required.

Now most Plaintiffs lawyers won’t bring in corporate employees or owners out of the gate–I consider the move to be Busch League and when I see it I make sure my clients do NOT engage in any type of settlement discussions until the corporate officers or employees are dismissed–but one time you might see it is where the company is underfunded and the owner of the company has all the assets in personal accounts.

That was allegedly the case in Jackson v. Locus Medical, 4:22-cv-00424 (M.D. Pa. May 24, 2024) but the court refused to allow a late-stage amendment in order to add the owner of the defendant to the suit.

So quick background about how litigation works real quick. There is a complaint that gets filed at the start of every civil suit. The complaint determines who is being sued and for what.

A plaintiff can change the complaint at the beginning of the case but generally cannot make modifications after a certain period of time unless he can show “good cause” for the change. “Good cause” usually requires some sort cheating by the other side or at least “excusable” neglect in finding facts permitting the change.

In Jackson the Plaintiff sought to add George Spadaro, the owner of Locust Medical, late in the case arguing that Locus had hidden the fact that it essentially had no money. The alleged deception stemmed from testimony at deposition that Locust sold stuff and had employees.

But the Court was highly unimpressed with this showing and gave the Plaintiff a piece of its mind:

Before determining if Plaintiff may amend his complaint, I take a moment to address Spadaro’s purported deception. It is actually Plaintiff’s interpretation of Spadaro’s deposition testimony that “stretch[es] credulity.” 48 After cherry-picking supposed falsities, Plaintiff contends that this “overall obstruction and ball-hiding” cannot be justified by “technically true” statements. 49 But a cursory review of the deposition reveals that Plaintiff has largely misconstrued Spadaro’s statements. Perhaps realizing his miscalculation, Jackson backtracks and concludes that the veracity of these statements is ultimately “a red herring that does not bear on the standard for amending a complaint.” 50 The reason for this change does not escape the Court’s attention.

Eesh, that last line cuts pretty deep.

To non-lawyers this may not read like a razor blade but trust me, you don’t want this directed at you.

Perhaps soured by Plaintiff’s shenanigans the Court moves on to deny certification in the case.

As noted, the complaint determines the claims in a suit. The Plaintiff’s complaint had alleged a prayer for damages–very common in TCPA class actions. Generally people sue for money after all.

But Plaintiff in Jackson tried to certify an injunction-only class (basically a class to prevent a defendant from violating the TCPA but not to seek money.) Generally it is easier to certify thee non-monetary classes but the Court in Jackson was not having it– finding that Plaintiff had made his bed when he alleged a damages class action in the Complaint the motion to certify under 23(b)(2) was denied.

Really interesting little case and another reminder for litigators to always deploy truthful means of advocacy. Failing to do so may lead to a bad argument spoiling a good one–I doubt Plaintiff would have lost certification had he not tried to add the owner to the case on questionable grounds.

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