Chief U.S. District Judge Michael McShane refused to dismiss a lawsuit against Freeway Insurance Services of America on Wednesday, instead ordering further investigation into the business practices of a serial plaintiff and his legal team. Defense attorney Ryan Watstein requested the continuation of the case, alleging that the plaintiff, Chet Wilson, and a network of law firms have ginned up consumer protection lawsuits for financial gain.
The litigation centers on the Telephone Consumer Protection Act (TCPA), a 1991 federal law that allows individuals to sue over unwanted robocalls and spam texts. Under the statute, plaintiffs can seek damages ranging from $500 to $1,500 for each violation. Wilson, an Oregon resident, has filed over 80 such lawsuits as proposed class actions in recent years.
Watstein alleged in court filings that Wilson deliberately acquired a specific phone number ending in 999-9999 to attract spam calls. He further claimed that a Washington, D.C.-based firm, Heidarpour Law Firm, acts as a lead generator, arranging contingency deals where lawyers reportedly take up to 90% of settlements. Attorney Andrew Perrong, representing Wilson, denied these claims, stating that Wilson owned the number long before the lawsuits began and that the intent is to stop illegal robocalls.
During the hearing, Judge McShane expressed skepticism regarding the plaintiff's motives, noting that Wilson and his attorneys appeared to be making a "cottage industry" out of the law. The judge denied class certification, ruling that Wilson was unfit to serve as a fiduciary for other consumers, and cited evidence of racist and antisemitic comments Wilson had made online as a factor in his unsuitability.
The scale of the issue is reflected in national data from WebRecon and CompliancePoint, which show that 1,532 TCPA lawsuits were filed in the first half of this year alone, a 34% increase over the previous year. Serial plaintiffs, who file an average of 3.6 cases each, were responsible for more than half of all TCPA litigation last year. In one specific example cited during the hearing, a serial plaintiff settled 18 cases for a total of $633,500, with nearly 90% of that figure—roughly $570,000—going toward legal fees rather than the consumer.
The concrete result of this decision is that defense attorneys now have a precedent for refusing settlements and instead pursuing discovery into how plaintiffs acquire their phone numbers and the specific terms of their legal representation. This could lead to a reduction in quick, out-of-court settlements that businesses often pay to avoid litigation costs. Moving forward, the defense will now depose witnesses and seek documents to probe the relationship between the plaintiff and the Heidarpour firm. No specific deadline for the next phase of discovery was reported, but the judge stated that robust discovery is required before he will consider a final dismissal.