An interesting case just came out of the Western District of Washington that emphasizes the importance of having good defense counsel. In it, the Court seems to chastise the defendant for stipulating to a set of facts that destroyed his case. Ouch.

In Barton v. Delfgauw, No. 3:21-cv-05610-DGE, 2024 WL 45653226 (W.D. Wash. Nov. 1, 2024), Plaintiff Barton claims that Defendants violated the TCPA by sending solicitation text messages to his phone, despite it being listed on the DNCR. Defendant Delfauw and the co-defendant entities under his control brought a counterclaim of fraud: they claim that Barton used the identity of another person, Ivette Jimenez, to opt-in to text messages. Further, they claim that Barton is a serial TCPA plaintiff who is fraudulently manufacturing these claims for money.

In November of 2022, both parties moved for summary judgment. The judge denied these motions, however, noting that Defendants produced “significant circumstantial evidence” that Plaintiff consented to receive these messages and was engaging in a fraudulent scheme. Id. at *1. Specifically, Defendants provided evidence that the opt-in text messages were sent after Barton took possession of the relevant phone number and deposition testimony of the Jimenez, the former owner of the number, that she did not opt-in. Indeed, Barton allegedly used this number in a different lawsuit in the same district and founded a “TCPA University” to train people to collect “tens of thousands of dollars” in TCPA claims. Id.

After the Court denied summary judgment, the parties submitted their Joint Stipulated Facts, which “include significant concessions by Defendants and appear one-sided[.]” Id. at *2. The Court then granted Plaintiff leave to file a renewed motion for summary judgment on the counterclaim. Sadly, the Court explained that this stipulation “will make it impossible for Defendants to carry their burden of proof on their counterclaim at trial.” Id.

To avoid summary judgment under Rule 56(f), Defendants would need to establish a genuine dispute as to a material fact, considering admissible evidence only. To establish fraud under Washington state law, Defendant would have to prove the following elements by “clear, cogent, and convincing evidence”:

• A representation of existing fact, (2) its materiality, (3) its falsity, (4) the speaker’s knowledge of its falsity, (5) the speaker’s intent that it be acted upon by the person to whom it is made, (6) ignorance of its falsity on the part of the person to whom the representation is addressed, (7) the latter’s reliance on the truth of the representation, (8) the right to rely upon it, and (9) consequent damage.

Id. at *2 (internal citation omitted).

However, the Defendants stipulated to the following damaging facts: (i) that they assumed all the information submitted during the opt in process was correct; (ii) that they did not verify if the owner of email address provided had use of the relevant phone number; (iii) that they could have verified that the owner of the phone number wanted to receive the text messages by requiring them to reply back to confirm the opt in; (iv) that the consent language Barton agreed to when submitting the information only provided consent to receive messages from a specific list of partners and that the relevant entities were not on this list; and (v) that the same entity submitted the relevant opt-ins.

The Court expressly noted that the “language of the stipulation appears to have been written by Plaintiff and is one-sided in his favor, yet for whatever reason—be it strategic or lack of proper diligence—Defendants signed-on.” Id. at *3. And instead of disputing the validity of the stipulation itself, “Defendants point out what they did not stipulate to—the ultimate identity of the person who made the opt-in to consent to text messages.” Id.

Unfortunately for Defendants, litigants are bound by their stipulations, including at the summary judgment stage. As such, the Court found it impossible for Defendants to establish all nine elements of fraud.

As to the first element, outside of the stipulation, that the owner of the phone number consents to text messages via opt-in would constitute a representation of existing fact. But because Defendants stipulated that the entities that sent the text messages were not on the list of partners that had consent via the opt-in, they could not claim they had a representation of consent. The Court therefore found that Defendants could not establish this first element of fraud.

Defendants also stipulated away the third element of fraud—the falsity element. Indeed, they stipulated that they did not have consent to send Barton text messages and took no steps to verify the identity of an opt-in. And further, Defendant’s declaration in opposition to summary judgment confirmed that there was “no way for us to confirm” the opt-in’s identity. This was entirely at odds with Defendants’ theory of the case—that Barton consented to text messages by generating opt-ins in someone else’s name. Defendants, therefore, could not establish element three.

Even setting aside these stipulations, the Court found that Defendants failed to show a genuine dispute of material fact by reference to admissible evidence. Defendants produced a document showing the IP addresses and other information associated with the relevant opt-ins, showing six entries using Jimenez’s name and email address and two from an IP address in Camas, Washington, where Barton lives. Though probative, the Court found this evidence insufficient and inadmissible hearsay.

Since factors four through six rely on the falsity of the representation, the Court found that Defendants could not establish these elements. And since Defendants stipulated that they assumed the opt-in information was correct and did not verify it, the Court questioned whether Defendants could establish factor eight—whether it was reasonable for Defendants to rely on the opt-in information. As to the ninth factor, damages, Defendants claimed there was damage to their reputation and loss of business but provided no supporting evidence. These elements, therefore, also fell through.

Finally, the Court disposed of Defendant’s argument that because Barton is a serial plaintiff, he must have been committing fraud. Specifically, the Court pointed to Ninth Circuit precedent holding that “the mere fact that Barton is a frequent TCPA litigant does not evince bad faith, and there is no other evidence to that effect.” Id. at *5 (internal citation omitted). The Court also emphasized that Defendants misstated law and fact in saying that it was “‘proven previously’ that Barton ‘induced’ contacts to create claims”—that case involved a different Barton who slipped and fell in a Walmart store and the Court found it to have no bearing on this case. Id.

Based on this, the Court not only granted summary judgement, but it also issued an order to show cause as to why Defendant’s counsel should not be sanctioned for what appeared to be an attempt to mislead the Court.

Like I said… ouch. This case emphasizes the importance of retaining good counsel with an effective litigation strategy. And journalistic integrity.