On August 24th, the FCC released a Notice of Proposed Liability for Forfeiture (“NAL”) in the amount of $5,134,500 against John M. Burkman, Jacob Alexander Wohl , and J.M. Burkman & Associates LLC for allegedly sending over one thousand illegal prerecorded messages to wireless numbers without first obtaining the express consent of the recipients in violation of the TCPA and FCC rules.
What is a Notice of Proposed Liability for Forfeiture?
The FCC generally opens an investigation after receiving information about a potential violation from any number of sources, and gathers the information it needs through a Letter of Inquiry (“LOI”), which requires the recipient to answer questions and produce documents relevant to evaluating whether a violation has occurred. The FCC also has the power to compel the production of information and testimony through administrative subpoenas.
If an investigation reveals that a party has violated a rule or statute enforced by the FCC, it may then issue an NAL, which informs the party how it has violated the law, and sets forth a proposed penalty for the violation. The party has an opportunity to file a response, which the FCC will evaluate and address in a subsequent Order.
The Communications Act of 1934 (which established the FCC), establishes the maximum amount that the Commission may impose for a penalty against a particular violator, and the factors it must consider in determining the appropriate penalty.
The Burkman & Associates NAL
Burkman and Wohl are lobbyists and political consultants behind Burkman & Associates, a Virginia-based lobbying firm which uses the name ‘Project-1599’ for political activities.
According to the NAL, the parties were responsible for sending 1,141 unlawful prerecorded messages that allegedly “told potential voters that if they voted by mail, their ‘personal information will be part of a public database that will be used by police departments to track down old warrants and be used by credit card companies to collect outstanding debts.’”
The NAL proposed a penalty of $4,500 for “each apparently unlawful robocall that was placed to a wireless number,” for a total penalty of $5,134,500.
Piercing the Corporate Veil
The NAL further proposed holding all parties individually and collectively liable for the penalty based on evidence showing that all three were jointly and severally involved in making the robocalls at issue.
One of the primary advantages of conducting business through a corporation or LLC is the legal shield that protects the owners’ personal assets from company debts and other obligations, a legal concept known as the “corporate veil.” However, the corporate veil can be disregarded and a company’s owners held personally liable for corporate acts in certain circumstances, an undertaking known as “piercing the corporate veil.”
Under the TCPA, whoever “makes” the call at issue is the party held responsible for the violation. Under FCC rules, an individual may be deemed the “maker” of a call if that person was so involved in the placing of a call as to be deemed to have initiated it. This determination is made based on who took the steps necessary to physically place the call, and whether another person or entity was so involved in placing the call as to be deemed to have initiated it, considering the goals and purposes of the TCPA.
In this case, the FCC found that the evidence it uncovered supported piercing the corporate veil. Critical facts that led to that conclusion included the following:
- The illegal messages identified Burkman and Wohl by name;
- Burkman’s personal cell phone number was listed as the calling party on the recipients’ caller ID;
- Burkman and Wohl admitted, under oath, their involvement in the creation and distribution of the robocalls; and
- The dialing platforms used to distribute the robocalls provided service agreements signed by Burkman that listed his residential address and personal cell phone number.
In addition, the FCC observed that “Burkman appears to exercise complete control over Burkman and Associates, and publicly represents that he is the founder of Burkman and Associates.”
In other words, this is a case in which the owner of a business responsible for sending thousands of illegal prerecorded messages was so mind-numbingly dense as to display his personal cell phone number on Caller ID, and include his name in the message itself. As the old saying goes, “against stupidity, the gods themselves contend in vain.”
Under the express terms of the NAL, the parties have 30 calendar days from the NAL release date either to pay the full amount of the proposed forfeiture or file “a written statement seeking reduction or cancellation of the proposed forfeiture.”
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