Claims under the Telephone Consumer Protection Act do, in fact, survive the death of a plaintiff, according to a ruling from the Court of Appeals for the Sixth Circuit, which overturned a lower-court’s ruling in a class-action case. This is the first time that an Appeals Court has had to rule on this issue.
In reaching the determination, the Appeals Court found the TCPA to be a remedial statute and not a penal one. Remedial statutes are intended to compensate a plaintiff whereas penal statutes are intended to punish a defendant. When determining whether a statute is penal or remedial, courts look to a three-pronged test:
- whether the purpose of the statute was to redress individual wrongs or more general wrongs to the public;
- whether recovery under the statute runs to the harmed individual or to the public; and
- whether the recovery authorized by the statute is wholly disproportionate to the harm suffered.
A District Court had denied a motion to amend the complaint to replace the original plaintiff, who had died, with his daughter, ruling that claims under the TCPA do not survive the plaintiff’s death because the TCPA is a penal statute. The Appeals Court disagreed.
A copy of the ruling in Jeffrey Parchman and Nancy Carlin v. SLM Corp., Navient Corp., Navient Solutions, and Sallie Mae Bank can be accessed by clicking here.
The Appeals Court remanded the motion to amend the complaint back to the District Court. The Appeals Court found that prongs one and two of the test indicated that the TCPA is a remedial statute, but that the third prong — whether the recovery is disproportionate to the harm suffered — is punitive.
In looking at other statutes, such as RICO and antitrust laws, the court found nothing that directly compares with the TCPA.
The TCPA differs from these statutes in three ways, which point in competing directions in determining whether the TCPA is penal or remedial. First, the multiple recovery provision of the TCPA is triggered only when the defendant acts willfully or knowingly. Second, the TCPA permits the court to treble statutory damages of $500 per call, while the other provisions allow the multiple recovery of actual damages or actual finance charges. These differences suggest that the TCPA may be comparatively more penal. But, importantly, the TCPA gives the court discretion to decide in each case whether and how much to increase damages, unlike the provisions in the other statutes which automatically provide multiple recovery. This allows the court to evaluate the facts of a particular case and, perhaps, the harm caused to the plaintiff by the defendant’s violations in determining the appropriate level of damages. This difference suggests that the TCPA is comparatively more remedial.