PHILADELPHIA – Recorded conversations prove a Pennsylvania man who has filed dozens of lawsuits is intentionally taking advantage of a federal law to extort settlements from defendants, says one of the companies he has targeted.
James Everett Shelton is accused by FCS Capital in a racketeering lawsuit of conducting a money-making scheme involving the Telephone Consumer Protection Act. He'll have to defend himself against recordings recently brought to the court's attention, though his attorneys say the evidence is not a “silver bullet” and that opposing counsel should be sanctioned for their failure to follow court deadlines.
"Pillaging them, that’s the point," Shelton is recorded as saying. "We’re absolutely pillaging them."
It will possibly open the door for FCS Capital and other defendants to challenge Shelton's standing to bring TCPA lawsuits against companies that call his phone. If a call is unwanted, plaintiffs have standing, courts have ruled.
But if a plaintiff admits that he or she welcomes calls for the purpose of bringing lawsuits, then that person can't argue they've been harmed by a call, a Pennsylvania court ruled in the case of a woman who kept 30 phones with different numbers in a shoebox.
Since 2016, Shelton has filed cases in courts around the country, alleging he has been the target of numerous unwanted telephone solicitations from a variety of businesses, in violation of the TCPA. He even has at least one trial win under his belt - a $33,000 victory recently affirmed by the U.S. Court of Appeals for the Third Circuit.
TCPA lawsuits are common (and plenty of people have used them to make money), but trials are rare, as are vehement defenses. Defendants often choose to settle rather than risk an adverse trial verdict or spend thousands on lawyers to defend themselves – particularly when the plaintiff files a class action. The TCPA provides damages in the amount of $500 per phone call, or $1,500 per call for more egregious violations.
"I don’t get out of bed for $500. But basically, what I’ll do is I’ll hit them up for – if it’s a robocall or an ATDS call, I’ll hit them up for $1,500 for [violating] 227(b), if they call me more than twice, and if they call me two times or more, that’s a violation of 227(c), because my number’s on the Do Not Call list," Shelton said on recordings obtained by FCS.
FCS Capital and Jacovetti Law filed suit against Shelton and fellow defendants Final Verdict Solutions and Dan Boger on Jan. 9.
The defendants responded with a motion for judgment on the pleadings on Feb. 11, which sought for the case at hand to be thrown out and for plaintiff counsel to be sanctioned for causing excess costs. Shelton and the defendants sought reimbursement of $4,575 from plaintiff counsel Joshua L. Thomas.
On Feb. 24, the plaintiffs motioned for an extension of time to respond to U.S. District Judge Joshua D. Wolson’s initial Jan. 27 order that they file a corporate disclosure statement within a week, as well as the judge’s follow-up order from Feb. 14 to show cause why they should not be sanctioned for not complying with the first order in a timely manner.
After the motion for judgment was granted because the plaintiff never responded to it due to an apparent misunderstanding, FCS Capital filed a motion to fully reopen the case in order to introduce a new complaint with allegations stemming from the recordings of Shelton discussing his TCPA strategy.
Attached as an exhibit in the plaintiffs’ motion are transcripts provided by a New Jersey-based litigation support company called Veritext Legal Solutions, which the plaintiffs argue outlines Shelton’s TCPA lawsuit operation:
"I know other person’s banks before I even file the case. I know how much money they have," Shelton is recorded as saying.
He also admits to encouraging others to take part in litigation.
"And you know, basically I’ll be like, hey, have you got any calls from these guys? Yeah, I have. You know, they’re on my list here somewhere. I mean, he gets way more calls than I do. So, and then, when I end up getting a judgment against them or end up getting paid from them, I’ll say, Craig, man, look, you should go – you should sue them. I mean, and so, he sues them. And now he’s going to get paid," Shelton said.
The Craig he's referring to is Craig Cunningham, another prolific filer of TCPA lawsuits.
Plaintiff counsel labeled the recordings as “incredibly damning.”
“While brief, these recordings get to the heart of what defendant Shelton does, and then uses these methods to further include others," the company argues.
"This comports with Shelton’s well-known plan to not only sue companies, but when he is done, to encourage others to do so as well. It is believed that these recordings may be the first evidence, in all of the many cases, that Shelton has initiated, that show his pattern of practice is intentional,” per the plaintiffs.."
On March 16, counsel for Shelton and the other defendants responded to the motion to reopen the case, labeling the proposed amended complaint as having “regurgitated the original claims against defendants which are meritless”, denying that Shelton is involved in any type of “scheme” and indicating the transcript recordings are not credible evidence.
“Defendants lack knowledge or information sufficient to determine what plaintiffs are even alleging. Transcripts of Shelton talking about suing tortfeasors who violate federal law is not some sort of silver bullet that plaintiffs can use against defendants in the instant civil action,” defense counsel stated in their response.
“Defendants further aver that telemarketers should stop calling Shelton and those similarly situated as Shelton in violation of federal law.”
The plaintiffs are represented by Joshua Louis Thomas of Joshua L. Thomas & Associates, in Chadds Ford.
The defendants are represented by Bryan Anthony Reo of Reo Law in Mentor, Ohio and Clayton S. Morrow of Morrow & Artim, in Pittsburgh.
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-00163
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com