Topic: Disproportionate Damages

District Court Departs from Supreme Court Plurality to Find Government-Debt Collector Retroactively Liable Under TCPA — But Rejects Statutory Damages

For nearly five years, the TCPA explicitly excluded from liability calls made to collect government-backed debt. Naturally, government debt collectors relied on this exception and called debtors without fear of TCPA liability. In 2020, the Supreme Court ruled that this exception was unconstitutional and severed it from the statute. Now, a federal district court has ruled that government debt collectors may be liable for calls made prior to the Supreme Court Ruling, despite their reasonable reliance on the exception. In doing so, the court brushed aside due process concerns.

As previously reported, the government debt exception was severed from the statute by the Supreme Court’s decision in Barr v. AAPC. The AAPC decision was highly fractured—with the Court issuing four opinions but none commanding a majority.  Since, district courts have been grappling with AAPC means for the statute.

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Court Refuses to Reduce $925M in Aggregate Statutory Damages

The District of Oregon recently found that a $925,220,000 damages award was not unconstitutionally excessive, reasoning that due process does not limit the aggregate statutory damages that can be awarded in a class action lawsuit under the TCPA. Wakefield v. ViSalus, Inc., No. 3:15-cv-1857, 2020 WL 4728878 (D. Or. Aug. 14, 2020).

As we previously explained, when the trial court denied the plaintiff’s request for treble damages, the jury in the Wakefield case found that the defendant had violated the TCPA by placing 1,850,436 telemarketing calls. Id. at *1. Because the TCPA’s minimum statutory penalty is $500 per violation, the defendant faced aggregate damages of $925,220,000. Id. at *2.

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Seventh Circuit Remands $280 Million TCPA Penalty Against DISH Network, LLC

The Seventh Circuit recently issued an opinion with significant implications for defendants evaluating the prospects for due process challenges to awards of statutory damages under the TCPA, as well as defendants facing claims of agency liability for the acts of their vendors or contractors. In an opinion by Judge Easterbrook, the Seventh Circuit ordered the District Court to reexamine a “whopping” $280 million penalty against DISH Network, LLC (“DISH”) for violations of the TCPA, the Telemarketing Sales Rule, 16 C.F.R. § 310 (the “Rule”), and related state laws. U.S. v. DISH Network, LLC, 2020 WL 141844, at *8 (7th Cir. Mar. 26, 2020). Although the Seventh Circuit suggested in dicta that the damages award was constitutionally acceptable, it held that the District Court erred because it only considered DISH’s “ability to pay” when calculating the award. Id. The court stated that the analysis should “start from harm rather than wealth, then add an appropriate multiplier.” Id.

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Million-Dollar Settlement of Billion-Dollar Claim Found Reasonable in Light of Due Process Problems Posed By Disproportionate Damages

Another court has observed that a billion-dollar aggregate liability under the TCPA likely would violate due process, adopting the Eighth Circuit’s reasoning that such a “shockingly large amount” of statutory damages would be “so severe and oppressive as to be wholly disproportionate[] to the offense and obviously unreasonable.”

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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. Continue reading “Court Rejects Attempt to Treble $925 Million Statutory Damages Award”

Eighth Circuit Finds that Telemarketer’s Plausible Belief of Consent to Calls Supports Radical Reduction of Statutory Damages Award

In Golan v. FreeEats.com, Inc., No. 17-3156 (8th Cir. July 16, 2019), the Eighth Circuit affirmed a trial court’s radical, post-trial reduction of damages in a TCPA case.

Although the trial court originally awarded the plaintiffs more than $1.6 billion in statutory damages, it later slashed the award by 98 percent to approximately $32.4 million. The plaintiffs appealed that decision. (The plaintiffs also appealed the trial court’s rejection of their preferred jury instruction on direct liability, which the Eighth Circuit also affirmed.) Continue reading “Eighth Circuit Finds that Telemarketer’s Plausible Belief of Consent to Calls Supports Radical Reduction of Statutory Damages Award”

Court Applies Wrong Lyrical Analysis—But Right Legal Analysis—In Setting High Bar to Recovering Treble Damages in Reassigned Number Case

The U.S. District Court for the Southern District of Florida recently entered summary judgment on the issue of treble damages, finding that there was no genuine issue of material fact regarding whether the defendant had called plaintiff’s cell phone number “willfully or knowingly.” Floyd v. Sallie Mae, Inc., No. 12-22649, 2018 WL 7144330 (S.D. Fla. Dec. 27, 2018). The case highlights the facts a defendant can develop to avoid a treble damages award, particularly in a case involving a reassigned number. Continue reading “Court Applies Wrong Lyrical Analysis—But Right Legal Analysis—In Setting High Bar to Recovering Treble Damages in Reassigned Number Case”

TCPA Claims Still Uncertain (Although Death and Taxes Remain So)

We previously discussed Hannabury v. Hilton Grand Vacation Co., LLC, a 2016 decision from the Western District of New York that held that TCPA claims do not survive a consumer’s death because penal claims extinguish at the party’s death and the TCPA is penal in nature. Continue reading “TCPA Claims Still Uncertain (Although Death and Taxes Remain So)”

Court Reduces Aggregate Award of Statutory Damages Deemed “Obviously Unreasonable and Wholly Disproportionate”

After awarding a judgment as a matter of law at the close of plaintiffs’ case, Judge E. Richard Webber of the Eastern District of Missouri reduced the award because statutory damages of $500 per call would have been “obviously unreasonable and wholly disproportionate to the offense,” making it unconstitutional as applied to the facts of the case. Golan v. Veritas Entm’t, LLC, No. 14-0069, 2017 WL 3923162, at *4 (E.D. Mo. Sept. 7, 2017).
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