The most unfair rule in all American jurisprudence has struck again.
Gustav Renny – the “managing member” of Pelican Investment Holding, LLC – can be sued personally for calls made by Pelican to sell auto warranties offered by Dimension Service Corporation in court yesterday.
Apparently, Renny had the misfortune to sign a marketing deal with Dimension. He also allegedly oversaw Pelican’s marketing efforts in the contested campaign. On this basis, the Court determined that he could be personally prosecuted.
The Court also rejected the defendants’ motion for a broader dismissal, which is not surprising since none of the arguments really made sense (the motion disputed, for example, that the specific date on which the consumer had placed his number on the national DNC was not alleged – but that is not a basis for dismissing a complaint.)
Considering Renny and Pelican face a four-year lawsuit of tape-recorded calls here, the liability may end up being extremely high.
The case is ROYAL SPURLARK, Plaintiff, v. DIMENSION SERVICE CORPORATION, et al., 2022 WL 2528098 (SD Ohio July 7, 2022). I will note that the FCC issued an alert yesterday that auto warranty scam calls are its biggest complaint right now.
People in the auto warranty vertical should be extra careful. I know it’s a “few bad apples” situation – but they really ruin the whole band.
Take away food :
If you’re in the auto warranty business, you’re in the thick of it right now, so be extra careful there;
Always remember that if YOU are not a lawyer and sign a marketing agreement, you could find yourself personally sued if this marketing agreement results in illegal calls or texts;
More generally, personal liability – that is, not just the liability of a company or LLC, but that of the employee, officer or director – remains a risk for anyone overseeing drug campaigns. marketing or making outbound calls;
Pre-recorded calls continue to generate massive litigation. Directionally, you should move away from these calls and into texting and “human selection” outbound dialing. This is true even when you think you have your consent – remember that fraud in the affiliate network can be as high as 45%;
Oh, and you might want to find yourself a good lawyer if you’re faced with one of these cases. At $500.00 per call, the liability here could be millions or billions. And a voluntary conclusion can prevent the bankruptcy discharge. So… make sure you have powerful lawyers on your side. (I know a guy.)
© 2022 Troutman CompanyNational Law Review, Volume XII, Number 189