TRENTON, N.J. (Legal Newsline) - A repeat plaintiff who said he once earned a third of his annual income from Telephone Consumer Protection Act claims was tagged with a $286,000 legal bill after his case against a credit card company went badly wrong and an arbitrator accused him of fraud.
Adam and Genese Lieberman filed a TCPA claim against Credit One in 2017 accusing the company called them hundreds of times to collect an overdue balance. Adam Lieberman took out the card in his wife’s name but gave his telephone number as a contact. They hired Yitzchak Zelman, a New Jersey lawyer whose firm featured prominently in a Legal Newsline series, “Phoney Lawsuits,” about TCPA plaintiffs who used multiple cellphones to try to accumulate “unwanted” calls they exploit to earn large settlements.
Zelman has since broadened his practice to include Americans with Disabilities Act lawsuits – one client named Kevin Davis has filed more than 30 this year, according to federal court records, sometimes three a day – and lawsuits over debt-collection practices. Zelman didn’t return a phone call seeking comment.
Adam Lieberman isn’t entirely inexperienced at this sort of litigation either. Zelman has represented him in similar lawsuits against Barclays Bank, Capitol One, Kohl’s Department Stores and other lenders.
This time, Credit One filed a counterclaim against the Liebermans accusing them of fraud, breach of contract and misrepresentation. Those claims had teeth: The arbitration agreement Adam Lieberman signed in his wife’s name contained an indemnification clause requiring the Liebermans to reimburse Credit One for “any costs and expenses, including reasonable attorney’s fees,” if they lost their case.
Arbitrator Ariel E. Belen rejected the Liebermans’ claims in January 2021, awarding Credit One $286,064.62 in fees and costs. In his order, the retired judge said Adam Lieberman falsely claimed he hadn’t opened the account in his wife’s name and deliberately avoided telling Credit One to stop calling him so he could build a better TCPA case.
“The reality,” the arbitrator wrote, “is that claimant decided to bring an arbitration and is seeking compensation in the hundreds of thousands of dollars for what is decidedly a fraud.”
Belen noted that Adam Lieberman was convicted of fraud and paid a $14.5 million fine in 1998 for alleged stock manipulation at the Sterling Foster brokerage firm. In 2018, Belen wrote, he earned 30% of his income from TCPA settlements.
“It is clear beyond peradventure” that Lieberman “institute this arbitration to fraudulently collect damages,” the arbitrator concluded.
The Liebermans sought to overturn the award in federal court, but in an Aug. 4 decision, U.S. District Judge Ann Thompson refused.
The Liebermans argued Credit One couldn’t apply the indemnification clause because Adam had supplied his telephone number but the card was in his wife’s name. The judge rejected that argument, saying the clause refers to everyone authorized to use the card, which included Genese. The court rejected other complaints about the arbitrator’s decision, citing the Federal Arbitration Act, which limits courts to hearing claims the arbitrator engaged in fraud or “manifest disregard of the law.