Interesting little case for you folks today.

Any time you are in a TCPA class action that involves multiple parties– such as when a lead seller makes calls and then transfers the calls to a buyer who is subsequently sued– the defendants need to work together to avoid a terrible mistake.

The mistake– one party trying to settle out with the Plaintiff alone.

Why is this such a mistake?

Well, first it just funds the plaintiff’s ability to fight the lawsuit against the remaining parties. So it creates a “no lose” situation for the plaintiff and his lawyers.

But that’s just the half of it.

Most of the time the settling defendant isn’t actually out of the case at all– they get sucked back in by the other defendants who pull them down like the proverbial crabs in a pot.

For instance in Katz v. Allied First Bank, 2025 WL 1489176 (N.D. Ill May 24, 20245), Katz originally sued both Allied First Bank– the lead buyer–and Consumer Nsight– the lead seller– for calls allegedly made by CN without consent.

CN thought it would be smart to settle their claims with Katz and leave Allied holding the bag.

So silly.

Although CN ended up dismissed by Katz it was immediately sued by Allied and is now stuck in the case.

Except rather than fight out the claim in the same proceeding CN made another mistake and has asked–and was granted– a transfer of the suit.

In Katz the Court determined CN was not subject to personal jurisdiction in Illinois where the case was brought. So now CN will be sued in either Florida or Arizona, which is a hollow victory. Rather than being present to help defend against the underlying suit Katz brought it is now going to be fighting a residual lawsuit in a court room thousands of miles away.

Not smart in my view.

So what should have happened?

Well CN should have used its willingness to settle to push Katz to a global resolution and should have worked with Allied to get it done. It Allied really wanted to fight it should have negotiated a release from Allied before settling with Katz.

Instead all CN has accomplished is feeding Katz to make sure he can pursue his case against Allied– and by extension Allied’s case against CN.

Just a terrible move IMO.

In any event we will keep an eye on this.

Pretty clear take aways:

1. Lead purchases continue to be risky so make sure you know and trust your partners!
2. Do NOT settle a case and expect to walk away if there are other parties involved. Negotiate the deal globally or arrange a release from co-defendants.