Court Rejects Attempt to Treble $925 Million Statutory Damages Award

The District of Oregon recently denied a motion for treble damages following a jury verdict finding that defendant made over 1.8 million advertising calls to the named plaintiff and other members of a certified class. Wakefield v. ViSalus, Inc., No. 15-cv-1857, 2019 WL 2578082, at *1 (D. Or. June 24, 2019). The court found that enhanced damages simply were not appropriate under the circumstances of the case.

In Wakefield, the named plaintiff filed suit for purported violations of the TCPA after she allegedly received multiple telephone calls advertising defendant’s products. Id. at *1 After a three-day trial, the jury returned a verdict finding that defendant placed four calls to the named plaintiff and approximately 1.8 million calls to other class members. Id. Therefore, the minimum statutory damages award totaled over $925 million. Id. Plaintiffs filed a motion seeking treble damages under the TCPA and asked the court to find that defendant acted “willfully or knowingly” when it placed the calls at issue. Id. Defendant filed a separate post-trial motion seeking to decertify the class. Wakefield, No. 15-cv-1857, Dkt. No. 306 (D. Or. filed May 17, 2019).

Initially, the court rejected defendant’s argument that in order to act “willfully” it “must have known that its conduct would violate the statute.” Wakefield, 2019 WL 2578082, at *1. Instead, the court found that a plaintiff seeking treble damages must show that the “[d]efendant knew that it was engaging in the conduct that gave rise to liability.” Id. at *2. This means defendant must have known: “(1) that it was placing telemarketing calls; (2) to a mobile (or cellular) telephone number or to a residential telephone landline; (3) the call used an artificial or prerecorded voice; and (4) the person being called had not given defendant prior express written consent.” Id.

Defendant disputed that it knew it called class members without their consent, arguing that: (1) the written consents it obtained from its customers were legally compliant until at least October 2013, when the FCC changed the rules for consent; (2) the shifting legal landscape for what qualifies as legally sufficient consent for automated telemarketing calls has led to confusion; and (3) it believed that consents obtained under the pre-2013 standards continued to be valid despite the FCC’s rule change. Id.

The court ultimately declined to resolve the willfulness question because it held that the circumstances of the case did not warrant treble damages. Id. The court observed that plaintiffs did not introduce any evidence suggesting that defendant had faced previous TCPA lawsuits. Id. Furthermore, although plaintiffs introduced evidence that defendant called certain class members even after they asked for the telephone calls to stop, defendant received only two complaints after it placed more than 1.8 million calls to consumers. Id. The court asserted that the two complaints may not have put the defendant on notice of a serious problem with its calling program. Id. The court also found that a treble damages award “would serve no further deterrent purpose” because defendant stopped making the type of calls at issue soon after it learned of the lawsuit. Moreover, the court held that the minimum statutory damages award of $925 million was sufficient to deter others from violating the TCPA. Id.

The Wakefield damages battle continues because the court has not yet ruled on defendant’s post-trial motion to decertify the class. See Wakefield, No. 15-cv-1857, Dkt. No. 306-34. If the court decertifies the class, the ruling could undermine the validity of the jury’s verdict and mitigate the resulting damages award. Moreover, on June 13, 2019, the FCC granted defendant “retroactive waivers [of the consent rules]” for “calls made on or before October 7, 2015.” See id, Dkt. No. 321 (D. Or. filed June 14, 2019). The parties recently submitted supplemental briefs regarding the impact of the FCC waivers on the decertification motion. See, e.g., id. Dkt. Nos. 327, 333. Nonetheless, the recent Wakefield decision illustrates the factors that a court will consider when assessing whether or not to award treble damages under the TCPA. The case also serves as a cautionary tale regarding the potentially catastrophic damages available under the terms of the statute.

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