Tempers Flare in Joint Stipulation Pitting 'Serial' TCPA Plaintiff vs. Defendant

Defendant Diamond Resorts seeks a Sept. 27 hearing on its motion to compel plaintiff Paul Sapan’s Telephone Consumer Protection Act claims to arbitration, said Diamond’s notice of that motion Wednesday (docket 8:23-cv-00147) in U.S. District Court for Central California in Santa Ana.

Sapan alleged in his Jan. 23 class action that Diamond engages in a scheme to sell timeshares via “cold calls” to residential phone numbers listed on the national do not call registry, in violation of the TCPA (see 2301240064). The joint stipulation Wednesday accompanying Diamond’s notice of its motion to compel suggests relations between the parties in the 7-month-old case have grown exceptionally strained.

Plaintiff Sapan “is no ordinary litigant,” said Diamond’s portion of the joint stipulation. He’s one of the “most prolific TCPA litigants in the country,” having filed more than 80 TCPA lawsuits in federal court since August 2012, represented by the same counsel, it said. His counsel for the Diamond litigation is Prato & Reichman in San Diego, court documents show.

But Sapan sees himself as a “TCPA Robin Hood” who hates junk calls and sues "junk callers" like Diamond for their illegal calls, “then gives his portion of the recovery to charity,” he said in his portion of the joint stipulation. Diamond improperly tries to raise the issue of what Sapan does with his money to impugn the plaintiff, which is “never relevant” to whether Diamond “did the illegal acts alleged,” it said.

Sapan and his lawyers have more recently started filing their TCPA lawsuits as putative class actions, such as the one against Diamond, said the resort company in the joint stipulation. “None has ever been certified as a class action,” it said. It’s unclear how many pre-suit demands threatening a putative class action Sapan has sent, it said. The courts recognize the mere threat of filing a class action lawsuit, let alone actually filing one, “creates a bargaining chip that allows a plaintiff and his lawyers to extract a significant premium to settle an individual claim,” it said.

Diamond has chosen to defend against “this new iteration” of Sapan’s “business model,” it said in the joint stipulation. It will argue that a class can’t be certified because Sapan and his lawyers are inadequate class representatives “who have exploited and continue to seek to exploit the class action device for only their own gains,” it said.

Sapan’s “remarkable history” of being a “serial TCPA litigant” also raises questions about how many phone numbers he uses, and how he uses them, said Diamond. Another question is “how is it that he continues to receive so many allegedly unconsent telephone calls,” it said. It suggests Sapan “engineers” such calls “to generate claims for statutory damages,” it said: “A plaintiff’s credibility, motivations in bringing suit, and lack of injury are always relevant, but they take on greater significance where he seeks to represent a class.”

Sapan and his lawyers “rebuffed” Diamond’s discovery requests “seeking to inquire about these subjects on flimsy and baseless objections,” hence the motion to compel, said Diamond. “There are a number of reasons why the objections at issue should be overruled,” it said. Sapan “should be compelled to provide full and complete responses to the requests for production and interrogatories at issue,” Diamond said. Sapan should know he can’t file a lawsuit “and seek to avoid “any meaningful discovery of clearly relevant matters relating to his claims,” it said.

Diamond “knows full well” it made hundreds of thousands of illegal calls, and it “desperately” needs “to gin up some non-issue like adequacy” to take the focus off its illegal conduct, countered Sapan in the joint stipulation. Sapan didn’t first raise the issue of what he does with TCPA case proceeds, “even though he has a compelling story,” he said.

Diamond improperly infers that Sapan is running “a profit-making enterprise,” said Sapan. The plaintiff’s counsel repeatedly told the opposition they would raise Sapan’s charity only if Diamond “tried to falsely paint him as a grasping villain,” he said. Diamond did this because it has “no defense” for the illegal calls, he said.

Diamond’s “real problem” is that it has “no actual case issue” for which the evidence it seeks “could possibly be relevant or proportional,” said Sapan. It raises only two theories of relevance: (1) adequacy of the representative and counsel; and (2) credibility “generally not tethered to any legal element,” he said. The first theory suffers from the fact one can’t just attack “adequacy generally” but must show there’s a specific defense to which the plaintiff is “uniquely susceptible,” he said. The second theory of relevance, credibility generally, “runs afoul of the law,” he said.