The TCPA "Czar" is forecasting more pain for mortgage players fighting spam call lawsuits.
Eric Troutman, partner at Irvine, California-based Troutman Amin LLP, is an expert in
"These are complex federal court matters that suck tremendous resources and dollars to defend properly, so making sure that you are complying with this statute should be an absolute priority for any institution," he said.
While there hasn't been a recent major settlement by a mortgage player in a TCPA case, Troutman said they're probably coming in the next 6 to 8 months. He described
Troutman, the self-described "czar" of the TCPA world, has garnered attention for
National Mortgage News spoke with him about the mortgage industry's
This interview has been edited for length and clarity.
Why are the number of TCPA lawsuits rising?
Troutman: This is the most valuable cash cow in the history of the plaintiffs' bar. More multimillionaire plaintiffs' lawyers have been made under the TCPA than under any other federal statute. If you look at the recoveries under these claims, they're simply wild. You're talking about seven-figure, eight-figure settlements regularly, whereas most lawsuits you have to litigate for years to get that kind of recovery. Here, you can do it in under a year, if you know what you're doing.
That has led to a high volume of incredibly sophisticated, very well-educated, very aggressive plaintiffs lawyers entering the space. There's just so much money here, and they're starting to proliferate.
Are real estate firms more frequent targets of TCPA suits versus other industries?
Troutman: The plaintiffs' bar is aggressive across verticals, and real estate companies have been very popular targets in the past. If you look at historic trends, finance companies were kind of the first wave of targets, going all the way back to 2010. You saw a lot of insurers and retailers come in subsequent years as the plaintiffs' lawyers basically moved from one industry to another, shifting their focus as they went through and terrorized like locusts.
Real estate agencies have just been destroyed in the last three or four years. Now we are seeing the mortgage companies back in the spotlight. I think there's definitely going to be more pain in this particular sector as the plaintiffs lawyers again sharpen their knives and come back for the mortgage industry.
Are TCPA lawsuits more successful against real estate companies than other industries?
Troutman: The success has been relatively equivalent across different sectors. In any vertical, what you're going to see is a trend of certain repeat player defendants hiring good counsel and essentially insulating themselves, both from a compliance and litigation strategy standpoint. So although they might get sued, their settlement dollars tend to be lower, and their overall cost in terms of litigation tends to be a lot lower.
Then you're going to see certain companies that generally hire big law firms that don't necessarily know what they're doing in the TCPA space, and they just get crushed. You saw
How do TCPA cases typically play out?
Troutman: It depends, there's a ton of pieces that go into TCPA litigation. These are some of the most complex cases.
What is pretty static is that relatively few of these cases go to trial. The vast majority of cases that Troutman Amin handles, as an example, are either won outright prior to class certification, or are resolved individually prior to certification. Only a tiny handful, at least of the cases we're handling, go through certification.
The record of plaintiffs' lawyers in the last two years has been incredibly good. The TCPA world went from a place where 10% of cases were certified 10 years ago. Now, because of the sophistication of the plaintiffs' bar, their ability to pick jurisdictions, pick defendants, and most importantly, pick what opposing counsel they want to go against, you're seeing certification rates at 70% to 75%.
Essentially, if the plaintiffs' bar is taking you to certification, they've got about a three-in-four chance of walking away with a certified class action. Once it's a certified class action, you're talking about a seven or eight-figure settlement, almost guaranteed.
Still, there have not been trials in certified TCPA class actions in the last several years. When you're facing potentially billions of dollars in exposure, very few TCPA defendants want to go all the way and try that case.
Should companies take pro se plaintiffs (litigants with no attorney representation) seriously?
Troutman: It depends. Not every pro se case is the same. You really have to know who you're dealing with, because take the example of Mark Dobronski (
Some of these guys are actually really good litigators. On the other hand, some of these guys are complete knuckleheads, and they should really be dealt with forcefully and immediately. Sometimes the defendant is best off just not dealing with them at all. I can think of a couple of people, if you don't respond to them, they just go away. So really, having a complete understanding of who you're dealing with is essential.
What would you advise companies about today's TCPA litigation environment?
Troutman: TCPA in my opinion is the single-biggest risk to any consumer-facing B2B enterprise that makes large volume outreach by phone or by text message.
A wrong number, pre-recorded call class action case will potentially cost your company billions of dollars. And if you settle it, it's likely to be an eight-figure resolution. These are incredibly dangerous cases with some of the best lawyers in the world on the other side.
Usually, when the volume of filings go up, it's garbage and the success rate starts to drop. Here it's the opposite. The volume of filings is going up and the success rate is going up with it. This is a terrifying thing, and it demonstrates that people are still not fully informed about how the TCPA operates, and are still choosing counsel who are not sufficiently experienced in this area to deliver wise counsel and good results.
