Hyde & Swigart Partner Joshua B. Swigart interviewed by the Los Angeles Daily Journal

Hyde & Swigart's own Joshua B. Swigart was recently interviewd by The Los Angeles Daily Journal in regards to Mr. Swigart's "pioneering" in the field of class action lawsuits seeking to apply the state's privacy laws. Via The Los Angeles Daily Journal:

In recent years, California courts have seen a spate of class actions seeking to apply the state's privacy laws to routine communication between corporations and their customers. The plaintiffs in these class actions, of which the Daily Journal has identified nearly 80, argue the companies violated California's Invasion of Privacy Act, or CIPA, by failing to inform customers their calls were being recorded - ostensibly to monitor employee performance. Defense attorneys - and at least one judge - say the CIPA's drafters specifically intended to exempt such calls, known as "service-observing." "It's unequivocal they intended to exempt service-observing," said Fred R. Puglisi of Sheppard Mullin Richter & Hampton LLP. Granting companies the ability to record calls to monitor employee performance, he said, "is in the public's best interest." Defense attorneys point specifically to Assembly bill digests, Assembly journals and even a letter to then- Gov. Ronald Reagan in which CIPA's proponents discuss their intent to exempt service-observing recordings. The law has been on the books since 1967. So why the sudden burst of litigation over a 45-year-old statute? Paul R. Kiesel of Kiesel Boucher & Larson LLP, whose firm is currently litigating several of these cases, said companies have developed a bad habit of not disclosing that they're recording outgoing calls to customers. "Changes in technology have made it very easy for companies to record all calls both inbound and outbound," Kiesel wrote in an email. "The result are warnings for incoming but not for outgoing calls." But defense attorneys say the plaintiffs' bar has simply discovered CIPA's lucrative damages provision, which prescribes a $5,000 civil penalty for every illegally recorded phone call. "If you start adding up the number of calls from a customer service center of a large corporation," Puglisi said, "you're talking potentially hundreds of millions or even billions of dollars in damages." Puglisi said numbers that size can induce defendants to settle a class representative's claim before the putative class is certified. Despite negotiating some settlements, it's still unclear how well the litigation is going for plaintiffs' attorneys. Observers say the class actions have faced several roadblocks, chief among them finding class representatives with meritorious claims.

Attorneys say many cases have been voluntarily dismissed after discovery revealed that the class representative did in fact receive a disclaimer or, in some cases, that the call wasn't recorded at all. Kiesel said this is just part of the process. "When a client advises she has been 'recorded' without her consent," he wrote, "often times the prospective client doesn't have the actual recording. Plaintiffs' counsel can attempt to confirm that the alleged defendant 'records calls' and does not seemingly warn but until discovery is initiated, unless defense counsel volunteers the information, there is no way to guarantee a call was recorded and no warning was given." Tomio B. Narita of San Francisco-based Simmonds & Narita LLP offered a different explanation. Recent decisions by California appellate courts have opened the door for the plaintiffs' bar to cash in, he said, and the potential for such large awards has the lawyers proceeding rashly. "These guys are so excited about this statute, I don't think they're vetting these cases closely enough," he said. At the forefront of the litigation is Joshua B. Swigart of Hyde & Swigart in San Diego. Swigart has filed at least 22 of the class actions in the last three years, all of them in federal court. Swigart rebuffed the charge that such cases are all about money for plaintiffs' attorneys. Swigart said his class representatives, some of whom appear in two or three different lawsuits, are not hired hands but sophisticated clients genuinely aggrieved by various companies' recording practices.

I'd love to tell you what we're settling these cases for," Swigart said, "but I can't, because the defendants all bargain for confidentiality agreements. I can tell you it's not what you think." Swigart insisted the litigation is having an impact, even if some cases are struggling to get past the pleading stage. "I'm not saying I'm a pioneer," Swigart said, "but we have changed the way some companies are doing business. I've heard of significant industries where practices have changed."

As for whether case law will ever actually require these reforms, much remains to be seen. Last week, Los Angeles Superior Court Judge Daniel J. Buckley cited the statute's legislative history to dismiss one of the class actions, but attorneys say the decision isn't likely to have a wide impact, especially in federal court where most of the suits are filed. Some federal district courts have have dismissed class actions on the grounds that, at least when a customer initiates the phone call, the conversations don't carry the reasonable expectation of privacy required by the statute. Several dismissals, in both state and federal court, are currently being appealed. "This is a developing area of law," Swigart said. "It's probably going to take an appellate court decision." On Thursday, after Swigart's comments, the 9th U.S. Circuit Court of Appeals weighed in on one of the class actions - but only tentatively. Second Circuit Judge Robert D. Sack, sitting by designation and writing for a unanimous panel, agreed with a district court's dismissal of a putative class representative's claims, reasoning the plaintiff hadn't sufficiently alleged a reasonable expectation of privacy when calling ADT's customer service center. Faulkner v. ADT Services, Inc., 2013 DJDAR 817. But rather than affirm, the court remanded the case so Faulkner could amend his complaint, suggesting his communication with ADT may in fact fall within CIPA's ambit. "Circumstances may arise under which the nature of the relationship or the character of the communications between a customer and a home security company could plausibly constitute a confidential communication under the California statute," Sack wrote. Regardless of the outcome of Faulkner or other such privacy cases, attorneys on both sides said the nearly 80 class actions filed since 2010 is a significant number. "We've seen an avalanche of these filings," said Zachary J. Alinder of Bingham McCutchen LLP, who said he has handled "quite a few" recording cases. Puglisi of Sheppard Mullin said he's handled at least half a dozen such cases, adding that a situation where so many companies face such large potential awards "when no one has really been harmed" strikes him as "very unusual."

U.S. Consumer Debt Hits All-Time High: Borrowing Rises To $2.7 Trillion

Via HuffingtonPost.com:

WASHINGTON — Americans swiped their credit cards more often in October and borrowed more to attend school and buy cars. The increases drove U.S. consumer debt to an all-time high. The Federal Reserve said Friday that consumers increased their borrowing by $14.2 billion in October from September.

Total borrowing rose to a record $2.75 trillion. Borrowing in the category that covers autos and student loans increased by $10.8 billion. Borrowing on credit cards rose by $3.4 billion, only the second monthly increase in the past five months. The strong rise in borrowing came in a month when Americans cut back on consumer spending, reflecting in part disruptions from Superstorm Sandy.

Many consumers may also have scaled back because of fears about the "fiscal cliff." That's the name for automatic tax increases and spending cuts that will take effect in January if Congress and the Obama administration fail to strike a budget deal by then. Consumer spending drives roughly 70 percent of economic activity. Economists think that it could bounce back in November. But the underlying trend remains weak because with unemployment remaining high, households don't have the incomes to spend. Many consumers have been reluctant to build up credit card debt, which typically carries steeper interest rates than other loans.

 Credit card usage has fallen sharply since the 2008 credit crisis. Four years ago, Americans had $1.03 trillion in credit card debt, an all-time high. In October, that figure was 17 percent lower. During the same period, student loan debt has increased dramatically. The category that includes auto and student loans is 22 percent higher than in July 2008. That reflects in part the fact that many Americans who have lost jobs decided to go back to school to get training for new careers.

Federal District Court of Washington certifies class in text message suit against Papa John’s

Crosby Connolly

 Hyde & Swigart

 November 25 2012


With a national class and a Washington state sub-class getting official certification two weeks ago, the national pizza chain Papa John’s International, Inc. (“Papa John’s”) suddenly has a lot more to worry about than just the passing of Obamacare. On November 9, 2012, the federal District Court of Washington certified both a national class and a Washington state sub-class in an action brought by Maria Agne, on her own behalf and on behalf of other similarly situated persons, against Papa John’s, alleging that Papa John’s violated the Telephone Consumer Protection Act (“TCPA”). It is alleged that Papa John’s violated the TCPA by sending unsolicited advertising text messages to prior Papa John’s customers. The class was certified upon a showing to the court that plaintiffs had standing in federal court and satisfied all other class certification requirements.

 For those not regularly schooled in the art of statutory interpretation, the TCPA is a federal privacy law enacted by congress in 1991 and signed into law by President George H.W. Bush which imposes restrictions on automated dialing systems, artificial and prerecorded voice messages, fax machine communications and telephonic solicitations – including both telemarketing calls and text messages. Under provisions in the TCPA, telephonic solicitations can be legal if consent is obtained from the sendee by the sender prior to the telephonic solicitations. Here in lies the problem. Plaintiffs claim that Papa John’s and its franchisees not only sent customers unsolicited text message with promotional codes for future discounted purchases of Papa John’s products, they did so without first obtaining the customers’ consent before sending the alleged text messages.

 According to the complaint, filed May 28, 2012, particular Papa John’s franchisees provided the marketing company OnTime4U with lists of telephone numbers of individuals who had purchased pies from the national pizza chain. Although there was no concrete evidence showing Papa John’s expressly contracted with OnTime4U to solicit Papa John’s customers via telephonic solicitations, the court observed that preliminary discovery supported plaintiffs’ clam that Papa John’s authorized and encouraged its franchisees to utilize OnTime4U’s telephonic solicitation services.

WE SUE ABUSIVE AND HARASSING DEBT COLLECTORS 

 If you are behind in paying your bills, you can expect to hear from a debt collector. A debt collector is someone, other than the creditor, who regularly collects debts owed to someone else. Lawyers who collect debts are considered to be debt collectors, too. And debt collectors are abusive. They violate the law, but you can fight back!

Debt collectors generate more complaints to the FTC than any other industry group. The list of things a debt collector is prohibited from doing is exhaustive and complicated. If you want to get an idea of whether you are being abused, seek the advice of a consumer rights attorney.

 If you think are being harassed by a debt collector, fill out this simple debt collection evaluation form and an attorney from our office will review the information and respond to you within 24 business hours (and usually faster). They have waited this long, they can wait another day while you check out your legal rights and remedies.

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