Feb. 13, 2007 at 7:00 AM ET
When André-Tascha Lammé was granted a judgment of $3,500 last month in a Sacramento, Calif., small claims court, he heard gasps.
"You could hear people in the courtroom saying, 'You can sue telemarketers?'" he said. You can. In fact, you can make some decent cash for your trouble.
Lammé started getting pelted with calls from mortgage brokers last year, just as his adjustable rate mortgage was about to reset. Like many consumers, he quickly reached the boiling point over the frequent interruptions. But unlike many consumers, the computer programmer took the time to educate himself – perhaps owing to the spirit of his grandmother, a lawyer for several decades – and quickly discovered the Telephone Consumer Protection Act.
"It specifically deals with unwanted calls," he said. "For each violation, there is a $500 penalty." Who gets that money? The call recipient. Lammé read on and found he didn't have to hire a high-priced attorney to pursue the penalty fees – he could file the case himself.
So far, Lammé has won $6,000 in judgments against telemarketers in three cases. He's not a lawyer, but by filing in small claims court, he's spent no more than $100 in court fees and scarcely more than an hour of his time on any case. Now he wants you to do it, too.
The Telephone Consumer Protection Act of 1991, signed into law by George Bush the elder, led to creation of the ragingly popular Do Not Call List. But tucked away in the bill was another important provision that entitles consumers to take what's called a "private right of action." For each violation of the act, consumers can sue for a $500 penalty. Violations include calling after a consumer has told a company to stop, or failing to provide the consumer with a copy of the firm's Do Not Call policy.
In his most recent case, heard in January in Sacramento, Lammé was awarded $3,500 for seven violations allegedly committed by Country Club Mortgage Inc. of Visalia. David Mitchell, vice president of Country Club Mortgage, said he couldn't comment on the litigation.
Suing a telemarketing firm might sound like a paperwork headache beyond the means of most people, but it's not, said Lammé. Small claims court papers are easy to file, he said. In Sacramento County, he doesn't even have to walk down to the courthouse. He can file online.
"It only took me five or 10 minutes to file," he said. "No more than a half-hour total."
In two prior cases, Lammé didn't even have to go to court. Two other companies settled with him for about $2,500 after he filed his case.
Web-filing streamlines the process
Suing telemarketers is not new, but Web-based court forms have made it much easier. Electronic filing is slowly becoming standard at small claims courts across the country, said Emily Doskow, editor of "Everybody's Guide to Small Claims Court."
"It's very consumer friendly," she said. "It's been growing in popularity for the last five years."
Despite Lammé's success, Davids don't typically triumph over Goliaths in the venue, said Stuart Rossman, director of litigation at the National Consumer Law Center in Boston.
Consumers who pursue a small claims case after frustrating fights with their cable provider, cell phone company or a retail electronics store are in for a rude awakening, he said. In almost all those situations, they long ago waived their right to sue by agreeing to mandatory binding arbitration for disputes.
Don't remember doing that? Well, you did, virtually any time you signed a contract with a service provider, used your credit card or even opened a shrink-wrapped piece of software you purchased at an electronics store. Binding arbitration agreements are everywhere, and they virtually eliminate a consumers' ability to bring small claims court cases.
"Courts will say, 'You have agreed to arbitration, we can't get involved,'" said attorney Ed Rapacki, who is challenging arbitration clauses in several cases around the country. "At small claims, (the defendant) will file a motion to dismiss or to compel arbitration. They'll say, 'Here's the contract, here's the arbitration clause.' And the judge will order you to proceed to arbitration."
The legal basis for mandatory arbitration dates all he way back to the Federal Arbitration Act of 1925, which was designed to allow two parties to streamline court proceedings.
But Rossman said arbitration has turned into a one-sided arrangement that nearly always favors the corporation and forces consumers to unknowingly surrender their rights to use the traditional court system.
"There are a number of things that organizations like banks are doing to protect themselves in those (contracts)," he said. "Mandatory arbitration prevents individuals from bringing claims ... and they are difficult to defeat."
An organization named StopBMA (binding mandatatory arbitration) has been trying to call attention to the issue of arbitration agreements. More information is available at GiveMeBackMyRights.org.
Lammé is a lucky litigant for two reasons: Congress made it clear that penalties awarded under the Telephone Consumer Protection Act should go to consumers, and he is suing companies with which he has no contractual relationship, and therefore can't have signed arbitration agreements.
How to file
If you are interested in pursuing a small claims case against a telemarketer, Lammé has set up a Web site with instructions at KillTheCalls.com. It includes a handy list of links to various small claims court instruction pages all around the Internet.
In most cases, your small claims court will be located at the county courthouse in the same building as your superior court.
The real trick to successful small claims cases is adequately serving the defendant with a summons indicating they've been sued and must appear in court. That means you'll have to provide the court with a viable address and preferably the name of a corporate executive or officer. That's sometimes easier said than done, but often you can find the information on the state Secretary of State's Web site.
On court day, it's important to bring supporting paperwork organized in an easy-to-read format. Lammé always brings a copy of the Telephone Consumer Protection Act to hand to the judge. The trials are informal, so you won't need to learn any legal jargon to plead your case. You might feel nervous or intimidated, but acting as your own lawyer is not as hard as it seems, Lammé said. He recommends going to court a day or two before your case just to become familiar with the courtroom procedures.
"Small claims judges are ... sympathetic," to the legally uninitiated, he said. "The judges give the benefit of the plaintiffs."
You only get one shot to make your case. By filing in small claims as a plaintiff, you waive your right to appeal the verdict or file in any other court.
One other bit of bad news: If you win a judgment, you will likely have a tough time collecting, particularly if your defendant resides in another state. You'll no doubt have to pay additional court fees in an attempt to collect. But you will have time on your side -- in New York and Massachusetts, for example, you have 20 years.
Because Lammé has sued firms that can't disappear overnight, he has been able to collect on his lawsuits. But he's not in it for the money, he said. He thinks consumers' lawsuits are the best way to end unwanted phone calls.
"If you sue these people, they're going to get the message," he said.