The Eastern District of Texas recently adopted a report from Magistrate Judge Christine A. Nowak finding that the Court lacked personal jurisdiction over an attorney and law firm in a pro se plaintiff’s Telephone Consumer Protection Act lawsuit. The case is Cunningham v. Mark D. Guidubaldi & Assocs., 2019 U.S. Dist. LEXIS 38652 (E.D. Tex. Jan. 11, 2019).
The TCPA suit was filed by Craig Cunningham, a Tennessee serial plaintiff who calls himself a“debt collection terrorist.” Defendant Mark D. Guidubaldi & Associates LLC, doing business as Protection Legal Group (“PLG”) is alleged to be a Texas entity that placed calls to Texas residents on the moving defendants’ behalf. Defendants Sanford J. Feder (an individual attorney) who resides in New Jersey and Feder’s law firm, the Law Office of Sanford J. Feder, LLC, which is organized under and governed by the laws of New Jersey, is alleged to have contracted with PLG to place the calls at issue in this case. While the parties did not dispute the Court’s exercise of personal jurisdiction over PLG, the Feder defendants argued that the Court lacked personal jurisdiction over Feder and his law firm, which did not have employees, offices, or bank accounts in Texas.
Cunningham argued that Feder and his law firm “conducted business in a common enterprise and joint venture” in Texas by contracting with PLG to place calls to Texas residents. The Court held that the contractual relationship and the calls are not enough for either general or specific jurisdiction.
According to the Court, general jurisdiction is lacking because Feder and his law firm are residents of, or incorporated in, the state of New Jersey—and the alleged contractual agreement between the Feder defendants and PLG, which ultimately led to calls to Texas residents, is “insufficient” to demonstrate the “continuous and systematic contacts with the State of Texas required for general personal jurisdiction.” The holding is significant for TCPA defendants facing class actions because it could limit the jurisdictions in which plaintiffs can file nationwide class actions. If courts apply Bristol-Myers Squibb to class actions, the implications could be huge as finding multiple plaintiffs in different states is not always possible for plaintiffs’ lawyers in TCPA cases, meaning that they will be restricted to a single state class if they want to sue in their chosen forum. In the alternative, they will be forced out of their comfort zone to sue in the defendant’s home forum.
While specific jurisdiction appeared to create a tougher question for the Court, it ultimately determined that even though the Feder defendants entered into a contract with a Texas entity that placed calls to individuals in Texas, nothing in the record indicated that the contracted-for efforts targeted Texas “because the contacted phone numbers are associated with an area code in Tennessee.” Thus, neither Feder as an individual or the law firm had fair warning that they could be sued in Texas, and were not subject to jurisdiction in Texas, regardless of whether calls were placed to individuals there.
Because specific jurisdiction hinges on whether the cause of action is related to, or arises out of, the defendant’s contacts with the forum state and those contacts meet the due process standard, it is an issue that presents itself in unique ways in TCPA cases. Practically speaking, a defendant’s calls from one state to residents of a targeted state could land in an altogether different state. It is no secret that there are certain jurisdictions where plaintiffs’ class action attorneys prefer to file suit, especially now with a circuit split like the one present in Dominguez and Marks. Cunningham and the string of similar cases to emerge since Bristol-Myers Squibb signal hope that plaintiffs’ days of forum shopping may be numbered.