PHILADELPHIA – A Pennsylvania man who has filed dozens of telephone consumer protection lawsuits can now count another victory over a corporate defendant he has sparred with in court.
James Everett Shelton is accused by FCS Capital in a racketeering lawsuit of conducting a money-making scheme involving the Telephone Consumer Protection Act. FCS Capital and Jacovetti Law filed suit against Shelton and fellow defendants Final Verdict Solutions and Dan Boger on Jan. 9.
Shelton will have to defend himself against recordings brought to the court’s attention earlier this year – though his attorneys deny that Shelton is involved in any type of scheme and said the transcript recordings are “not relevant and are not probative of any fact of consequence.”
“Pillaging them, that’s the point. We’re absolutely pillaging them. I know the other person’s banks before I even file the case. I know how much money they have,” Shelton is recorded as saying.
On the recording, he also admitted 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.
Opposing counsel had 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,” FCS Capital argued.
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.
Judge Wolson Rejects FCS’s New Transcripts, Reconsideration Argument
The original, separate-but-related and underlying lawsuit filed by Shelton against FCS Capital saw both a new motion for reconsideration and concurrent motion for injunctive relief filed on June 1, by counsel Joshua L. Thomas.
“We now have third party evidence that not only has Shelton been working with others to continue this ongoing scheme, but he has also contacted others to now continue to harass the same defendants in this matter,” Thomas said, of new recording transcripts obtained in the case.
Thomas pointed in attached documents to Shelton and others’ connection to the Heidarpour Law Firm in Washington, D.C. – allegedly a serial filing firm well-known in TCPA litigation circles – and mailings FCS Capital received from potential TCPA litigants represented by Heidarpour.
“Given that the plaintiff has now admitted to participating in such schemes, and apparently employs the same tactics used here in other cases with other serial litigants, this should be taken into consideration in this case, it should be reopened and further discovery be permitted, to find out if any of plaintiff’s claims are actually legitimate, or merely part of the ongoing scheme,” Thomas said.
Thomas simultaneously filed a motion for temporary and permanent injunctive relief expressly precluding Shelton’s motion to compel the gathering of post-judgment discovery, which had been filed on May 25 and granted by the court the following day, without opportunity for opposing counsel to respond, Thomas says.
“Since there was an objection, we should have been granted the time to actually respond to the motion, rather than have it summarily granted. When the court granted the motion to compel one day later, there was no order stating that defendants’ objection time would be abridged, nor was on requested,” Thomas states.
On June 17, U.S. District Court for the Eastern District of Pennsylvania Judge Joshua L. Wolson said FCS’s third effort to avoid the judgment reached against it would fail, just as the two previous attempts before it did.
“They base this effort on transcripts that they have obtained of plaintiff James Everett Shelton discussing his litigation strategy. But they have not shown that those transcripts are admissible or relevant. They therefore do not justify reconsideration. FCS also has not shown that the transcripts or anything else justifies putting a hold on Mr. Shelton’s efforts to execute on the judgment in this case,” Wolson said.
“The transcripts have a date of May 15, 2020, and have a case caption from a case in the Cuyahoga County Court of Common Pleas in Ohio. However, nothing on the transcript indicates the date of the conversations, who made the recordings, the circumstances of the conversation recorded, or how the recordings were made.”
According to Wolson, FCS was first required to show that the transcripts were authentic and actually described a complete conversation in which Shelton participated –and the company did not do so.
“Second, FCS have not shown that the recorded conversations are material or would have changed the outcome. Even taken in the light most favorable to FCS (which is not the applicable standard), the recordings demonstrate that Mr. Shelton sues only parties from whom he can collect a judgment and that he shares information about those parties… because the recordings do not shed light on any fact that is ‘of consequence in determining the action,’ they are not relevant,” Wolson stated.
According to Wolson, “The transcribed recordings on which FCS rely do not demonstrate fraud or misrepresentation. They only show that Mr. Shelton views litigation through a pecuniary lens. Some people might consider that unseemly, but it is not fraudulent. Nor does it demonstrate misconduct on Mr. Shelton’s part.”
Wolson added if FCS had participated in discovery in this case, it could have discovered material germane to its arguments, but now cannot re-argue the facts that it conceded by failing to respond to the summary judgment motion and additionally, its request for injunctive relief also failed.
“FCS chose not to participate in discovery and chose not to respond to the motion for summary judgment in this case. They have to live with the consequences of those choices, including the judgment that the Court entered against them. Nothing in their motions absolves them of that obligation. The Court will deny their motions to reconsider and for preliminary injunctive relief,” Wolson said.
U.S. District Court for the Eastern District of Pennsylvania cases 2:20-cv-00163 & 2:18-cv-03723
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com