The Telephone Consumer Protection Act (TCPA) continues to haunt defendants even after the death of a named plaintiff, with a New York federal court holding that a claim under the statute survives because the TCPA is remedial in nature and not penal.
William Jay Sharp obtained an automobile loan from Ally Financial on January 5, 2013. In October 2014, Sharp was diagnosed with stage four esophageal cancer. He began chemotherapy a week later and continued with the treatment until June 2015. While he received treatment, Sharp could no longer work and fell behind on his loan payments. He notified Ally of his health and financial circumstances.
In January 2015, Sharp learned that the cancer had spread to his brain and added radiation to his treatment program. Ally began calling several days a week regarding his debt, and representatives of the company told Sharp that if he fell behind on his payments, his car would be repossessed. Since he used the car to go to the hospital for his treatment program, the calls made him “feel even worse,” Sharp said.
Sharp eventually filed a complaint with the New York attorney general’s office, claiming that he had received 24 calls within an 80-minute period on a single day. The calls subsided by July 2015, when Ally sent Sharp a letter apologizing for the number of calls made by one of its representatives.
After he filed his lawsuit asserting claims of intentional infliction of emotional distress (IIED) and violation of the TCPA, Sharp passed away in August 2016. The administratrix of his estate then filed a motion to be substituted as party plaintiff in the case.
Ally moved for summary judgment, arguing that Sharp’s TCPA claims abated upon his death. The defendant also sought to have the plaintiff’s IIED claim tossed because the plaintiff was not verbally abused or otherwise threatened by Ally, and the only harassing conduct alleged consisted of the telephone calls themselves.
In response, the plaintiff contended that questions of fact precluded summary judgment on Sharp’s IIED claim. As for the TCPA, the statute is more remedial than penal in nature, the plaintiff told the court, and therefore the claim did not extinguish upon death.
Under federal law, a claim survives a party’s death if it is “remedial” rather than “punitive,” U.S. District Judge Elizabeth A. Wolford explained, with three factors to consider: whether the purpose of the action is to redress individual wrongs or wrongs to the public; whether the recovery runs to the individual or the public; and whether the recovery is disproportionate to the harm suffered.
Beginning with the legislative history of the TCPA, the court found “an intent to redress individual harms” and a focus “on the personal frustrations and invasion of privacy experienced by individual consumers.”
Like most modern consumer protection statutes, the TCPA serves both remedial and penal purposes, the court recognized. “The private right-to-action was included in the bill so that afflicted consumers could recover damages resulting from the nuisance of abusive telephone and facsimile practices, a conclusion that suggests a more remedial character,” Judge Wolford wrote. “On the other hand, it is equally apparent that Congress sought to deter undesirable and injurious business behaviors.”
On balance, however, “the first factor weighs in Plaintiff’s favor because the primary purpose of the TCPA private right-to-action provision is to redress individual wrongs,” the court said, finding that the first survivability factor tipped in favor of a “remedial” determination.
As for the second factor, recovery under the statute runs to the individual by its express language, as “any award of damages … goes to the recipient of the call, not the public.” The court had little trouble concluding that the second factor also weighed in favor of a finding that the TCPA is “remedial.”
The third factor favored the “penal” reading of the statute, as the $500 statutory award—not to mention the $1,500 trebled damage award—is “wholly disproportionate to the harm suffered,” the court said. But this conclusion did not outweigh the court’s finding that the first two factors suggested the TCPA private right-to-action is “remedial,” particularly as the TCPA provides courts with discretion as to whether and how much to increase damages, moderating the penal nature of the TCPA remedy.
With this analysis in mind, Judge Wolford denied summary judgment for the defendant as to whether the plaintiff’s TCPA claim abated upon Sharp’s death and ordered the substitution of the estate administratrix.
Turning to Sharp’s IIED claim, the court said questions of fact remained. The plaintiff pointed to several New York decisions standing for the proposition that a planned campaign of harassing calls may constitute extreme and outrageous behavior necessary to support an IIED. Prior to his death, Sharp testified as to the number of calls he received, including an 80-minute period where he received 24 calls, as well as threats from Ally’s representatives to seize his car—his means of travel for the necessary treatment of his cancer.
“Although it is undisputed that Defendant’s representatives did not threaten, humiliate or otherwise verbally abuse Plaintiff during these phone calls, Defendant was on notice of Plaintiff’s vulnerable condition—stage four esophageal cancer that had metastasized to his brain,” the court wrote. “Despite Defendant’s awareness of Plaintiff’s medical condition, Defendant’s representatives continued to call Plaintiff with persistent regularity. Plaintiff testified that he was told that if he could not make his payments, he would lose his automobile, which he relied upon to reach his cancer treatment. Plaintiff also testified that he found these calls to be harassing and emotionally disturbing, which only made his struggle with cancer that much more difficult.”
The court also denied the defendant’s motion for summary judgment on the IIED claim.
To read the decision and order in Sharp v. Ally Financial, Inc., click here.
Why it matters: Rejecting a 2016 decision from a different district in New York as unpersuasive, Judge Wolford sided with the Sixth Circuit in holding that the TCPA is primarily remedial in nature and that TCPA suits survive the plaintiff’s death (allowing a daughter to pursue her father’s TCPA lawsuit). There is now a split of authority on the matter, even within New York itself, but with more courts holding that the TCPA is remedial in nature, the risk of TCPA cases being litigated even after the death of a plaintiff increases.