A lawsuit filed in federal court in New York this week is seeking class action status under the TCPA. Named in the case is a major utility and nearly all of its subsidiaries and parent companies, including global holding firms, even though the alleged violation was committed by a third party debt collection agency. It is a continuation of a trend that sees plaintiffs skipping collectors and going straight after the big money.

The case in question, Jenkins v. National Grid USA, was filed by a recently-prolific pro se plaintiff that targets the ARM industry. But for this particular action, Jenkins retained an attorney to push for class action status.

The suit alleges that a third party collection agency, NCO Financial Systems, contracted by National Grid used an autodialer to make collection calls and send pre-recorded messages to the plaintiff’s – and other members of a potential class – cell phone without prior express consent to do so. The plaintiff was a utility customer of National Grid.

All of the actions named in the lawsuit were taken by NCO, not by National Grid. Jenkins claims that the company is “directly liable and/or vicariously liable” for NCO’s actions, however. NCO is not named as a defendant in the action.

But a host of entities associated with National Grid are named, including many of the largest utility providers in the Northeast and New England.

Jenkins has a fairly lengthy record of recent pro se actions against major ARM firms, principally for violations of the FDCPA or FCRA. Many of the cases have been dismissed. But one still open action appears to have led directly to this lawsuit.

In July 2014, Jenkins sued NCO under the FCRA for pulling his credit report. Jenkins claimed that NCO had not permissible purpose to access his credit file. NCO responded that it did, in fact, have a permissible purpose to obtain the credit report: it was collecting a debt on behalf of National Grid. NCO has filed a motion to dismiss, but the case is still ongoing.

Using some other information from discovery, Jenkins fashioned a TCPA claim based on NCO’s actions. But he skipped NCO as a defendant and went straight to their client. It’s a move that is becoming increasingly common.

Just last month, American Express lost a motion to dismiss a TCPA lawsuit that made very similar allegations. The credit card giant was the target of a class action suit claiming direct liability under the TCPA for the actions of a contracted debt collection agency. “With respect to the debt collection phone calls, whether American Express itself actually placed the calls at issue is irrelevant,” the judge in the case wrote.

It makes sense that collection agency clients would be target of TCPA class actions. There have been some massive settlements of such cases recently.

In late February, a federal judge in Illinois granted final approval to a $40 million TCPA class action settlement between plaintiffs and credit card issuer HSBC. That was the third-largest TCPA settlement recorded. The largest TCPA settlement went final only weeks before, in front of the same judge. That action saw Capital One pay $75 million in a collection call-related TCPA class action settlement.

The past several years have seen an explosion of TCPA lawsuits aimed at the ARM industry. Plaintiffs’ attorneys are now realizing that the real money is with collection clients rather than ARM companies. Everyone in the debt collection industry should take note of these recent trends.


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