On February 1, 2017 a federal Judge in Illinois denied a motion to dismiss a TCPA lawsuit brought by a defendant who argued that the plaintiff lacked Article III standing under Spokeo v. Robbins __ (U.S. __, 136 S.Ct. 1540 (2016) (Spokeo).  The case is Cholly v. Uptain Group, (Case No. 15-5030, U.S. District Court, Northern District of Illinois, Eastern Division). 

Plaintiff Julie Cholly, on behalf of herself and all others similarly situated, brought a one count third amended putative class action complaint against defendants Uptain Group, Inc. (Uptain) and Alere Health, LLC (Alere), alleging that defendants violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227 et. seq. Defendants had moved to dismiss the complaint and to strike plaintiff’s proposed classes.

The Honorable Robert W. Gettleman issued a Memorandum and Order that denied defendant’s motion to dismiss, but granted defendant’s motion to strike the plaintiff’s proposed class action claims.

Background

Plaintiff incurred a debt to Alere, a medical services provider. Alere subsequently hired Uptain, a debt collection service, to collect the Debt from plaintiff. According to the complaint, on December 16, 2013, Uptain contacted plaintiff on her cellular telephone using an automatic telephone dialing system. Again, according to the complaint, during that telephone call, plaintiff allegedly told Uptain to stop calling her and informed Uptain that she would be filing for bankruptcy. The complaint further alleges that “[d]espite Plaintiff’s clear and unambiguous instruction to Uptain to stop calling her, Uptain told Plaintiff that she must provide the bankruptcy case number in order for Uptain to stop calling.” Following this December 16, 2013, call, Uptain allegedly “placed many more telephone calls to plaintiff’s cellular telephone using an automatic telephone dialing system.” 

On July 31, 2014, plaintiff filed a Voluntary Petition for Chapter 7 Bankruptcy, listing Alere as one of her Schedule F creditors. The Petition did not list her potential claims against Uptain or Alere on her schedule of assets.

The complaint alleges that on August 6, 2014, the bankruptcy court sent Alere, via first class mail, notice of plaintiff’s bankruptcy petition, stating that an automatic stay was in place for all collection actions against plaintiff.

Despite the automatic stay, Uptain allegedly contacted plaintiff for non-emergency reasons, “with a pre-recorded or artificial voice on plaintiff’s cellular telephone on behalf of Alere on numerous occasions between September 2014 and May 2015.” The complaint alleges that neither defendant had consent to contact plaintiff. 

The Court’s Opinion

The court first addressed the Spokeo argument. The court held:

“In the instant case, the court concludes that the allegations of receipt of the allegedly unlawful telephone calls are sufficient to allege a concrete injury. Although the Seventh Circuit has not yet addressed this issue, all of the district courts within this circuit that have reached the issue have held that a violation of the TCPA gives rise to a concrete injury under Article III.  The court concludes that plaintiff has alleged such concrete harms identified by Congress and that she has standing to bring her claims.”

Next the court addressed the defendant’s second argument; that “plaintiff is judicially estopped from alleging violations of the TCPA for calls made prior to her filing for bankruptcy because those claims are property of the bankrupt estate.”

The court disagreed with the defendant. Judge Gettleman wrote:

“In the instant case, there is nothing to suggest that plaintiff was attempting to manipulate or pervert the litigation process, or has impaired the integrity of the court by failing to initially list her potential claim against defendants. Indeed, when alerted, she moved to amend her schedule of assets, and the bankruptcy trustee has now abandoned any interest in the claims. Under these circumstances, the court declines to exercise its discretion to estop her from asserting her claims.” 

Finally, the court moved to defendant’s motion to strike plaintiff’s proposed class action. In her complaint, plaintiff proposed the following class definitions:

  • All persons in the United States to whose cellular telephone number Uptain placed a non-emergency telephone call using an artificial or prerecorded voice and/or an automatic telephone dialing system on or after June 9, 2011 with respect to a debt allegedly owed to Alere where Uptain did not have express consent to call said cell phone numbers.
  • Direct Revocation Sub-class - All persons in the United States to whose cellular telephone number Uptain placed a non-emergency telephone call using an artificial or prerecorded voice and/or an automatic telephone dialing system on or after June 9, 2011 (6) with respect to a debt allegedly owed to Alere where Uptain was directly informed to stop calling or cease communication. 

The court held:

“In the instant case, plaintiff’s complaint asserts claims based only on telephone calls made to her cellular phone after she had expressly revoked her consent. Because she had apparently originally given consent, she cannot represent a class of persons who received calls from Uptain where Uptain did not have express consent. Her claims would not be typical to those persons.

Plaintiff also attempts to represent a sub-class of persons who received calls from Uptain after “Uptain was directly informed to stop calling or cease communication.” In order to determine whether each potential class member did in fact revoke his or her prior consent at the pertinent time, the Court would have to conduct class members specific inquiries for each individual. This court concludes that the individual inquiries necessary to determine class membership will “inevitably predominate” over any common questions of fact. Consequently, the proposed revocation class fails to satisfy Rule 23(b)(3), and the class allegations are stricken. 

This case must proceed on an individual basis only.”

insideARM Perspective 

It is not surprising that the court did not dismiss this case under Spokeo. insideARM has written about other TCPA cases that reached the same result.  See our TCPA Resources Page, including our TCPA caselaw grid (updated on a monthly basis by Bedard Law Group). 

The success of defendant’s motion to strike the proposed classes is a victory for the defendant.  insideARM predicts there will be more and more cases where the issue of consent and revocation of consent will be a factor in the determination of whether a case proceeds as a class action.

Finally, lost in the discussion of the defendant’s motions is the fact that this case includes both the client and the agency as named defendants. insideARM has reviewed the Third Amended Complaint. It is not clear what the theory is for the alleged joint liability. It could be based on the failure of the client to notify the agency of the plaintiff’s bankruptcy filing. It could be some theory of vicarious liability for the act of the agency.  (Editor’s note: Also not found in the pleadings and memorandum is any discussion of the failure of the client to notify the agency of the bankruptcy filing.)

insideARM will continue to monitor this case for further developments.


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