Debt Collector Countersues Verizon Over TCPA Class Settlement

Verizon’s debt collection agency, CBE Customer Solutions, is countersuing the carrier, alleging any negligence that mushroomed into a Telephone Consumer Protection Act class action and settlement was of Verizon’s doing, not CBE’s.

Verizon sued CBE to recover $6.1 million in damages and court costs associated with the class-action settlement under an April 2014 master services agreement that provided that CBE indemnify Verizon for fees and costs that the carrier incurs “in defending any claims arising out of CBE’s services” (see 2210140026). Verizon said its TCPA problems began after a CBE employee “negligently failed” to remove consumer Robin Breda from one of Verizon’s call lists. Breda began getting inundated with debt-collection calls from Verizon’s automated “voice response” system, except she was not a Verizon customer.

CBE has no control over “who, how or when Verizon’s automated system” calls individuals, said CBE’s counterclaim Friday (docket 1:22-cv-08703) in U.S. District Court for Southern New York. Though CBS handled many of the calls, Verizon, “at all times, controlled both the technology and methodology” for initiating the calls, it said. “What is outside the norm is what happened when Verizon’s internal customer management system failed -- and failed systematically,” it said.

Even when individuals used Verizon’s own automated dialing response system to indicate that they had been wrongly contacted in response to Verizon’s automated initiated calls, Verizon’s system “failed to properly record that information, and Verizon made hundreds of thousands of additional calls using its autodialer,” said CBE’s counterclaim. “This was not CBE’s responsibility,” it said. “When a successful class certification motion loomed, Verizon settled its case for millions, and then turned to CBE to demand indemnity, despite having cut CBE out of the defense of the claims on remand.”

The problem is that CBE “doesn’t manage the automated dialing system,” but only handles live customer debt-collection calls, said the counterclaim. Though the class plaintiff in the Breda litigation “did receive calls after a live discussion with a CBE operator, the vast majority of the settled claims in Breda were customers complaining about Verizon’s automated dialing system,” it said. “Now Verizon wants CBE to pay for the settlement payout to a class who never engaged with a CBE employee. Worse, Verizon makes this demand after making unnecessary concessions, needless admissions, and strategic choices that disadvantaged CBE all while refusing to allow CBE to participate in the defense.”

Verizon, not CBE, is responsible for making the “material errors here,” said CBE. Verizon deployed the “flawed” automation system, and Verizon “made the litigation missteps that cost it millions,” it said. It then settled claims “for a class that had nothing to do with CBE,” it said. “Insisting that CBE foot the bill for harms it not only did not cause, but in which it had absolutely no role, is the definition of a bad-faith indemnity claim.” CBS seeks declaratory and injunctive relief “prohibiting Verizon from continuing to be enriched by the value provided by CBE and not paid for,” it said. Verizon didn’t comment Monday.