PHILADELPHIA – Counsel for a Pennsylvania man who has filed dozens of telephone consumer protection lawsuits is holding a finance firm and its principals accountable for not abiding by post-judgment orders to compel discovery, and has won motions for both civil contempt and sanctions against them.
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 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.
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.
This attempt concerned a yet second group of transcripts that the defendants say implicated Shelton in conspiring with others to execute his TCPA scheme, but Wolson rejected that rationale.
“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.”
UPDATE: Shelton Wins Motions For Contempt And Sanctions
Counsel for Shelton filed a pair of new motions for both contempt and accompanying sanctions on June 29.
In the civil contempt motion, Shelton’s attorney argued defendants FCS, Barry Shargel and Emil Yashayev should be held in contempt for not paying the $54,000 judgment reached against them on Dec. 11 of last year, and for continuing to disregard prior judicial orders to comply with post-judgment discovery requests – which had been compelled by the Court on May 26.
“In the absence of any responses to plaintiff’s post-judgment discovery requests, he cannot collect on the judgment. As such, plaintiff respectfully requests that the Court hold defendants Shargel and Yashayev each in contempt, and issue whichever penalties it deems appropriate, including but not limited to, monetary sanctions (payable to plaintiff). Plaintiff requests that defendants be ordered to pay plaintiff his reasonable attorney’s fees and costs for preparing and presenting the instant motion for contempt,” Shelton’s counsel, Bryan A. Reo, stated.
Subsequent to a hearing four days before, Wolson granted the contempt motion on July 21.
“Here, the facts establishing defendants’ contempt are not in dispute. The Court issued two valid orders, one compelling defendants to respond to discovery and one denying the reconsideration motion. Defendants were aware of those orders. Indeed, they could not have moved for reconsideration if they were not aware of the order compelling their responses, and they could not have appealed if they were not aware of the reconsideration decision. Yet they did not comply. They are therefore in contempt,” Wolson added.
Along with the motion for civil contempt, Reo filed an accompanying motion for sanctions against the very same defendants requesting identical penalties. This motion was also granted by Wolson.
“The sanctions that the Court will impose will compensate plaintiffs for the expenses they incurred. There is no need to pile on for that time. But a contempt sanction is appropriate to bring defendants into compliance with the Court’s order. The Court will therefore fine defendants $100 per day, from the date of this decision until they either post a bond pursuant to Rule 62 or comply with the Court’s order on the motion to compel,” 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