Dish Network is liable under the Telephone Consumer Protection Act not only for telemarketing calls made by the company, but for those a call center and other third parties made on its behalf, a federal court judge in Illinois has ruled.
The partial grant of summary judgment to the Federal Trade Commission as well as attorneys general in California, Illinois, North Carolina, and Ohio on more than 57 million illegal calls could cost Dish $725 billion, if the damages are trebled under the statute.
Originally filed in 2009, the action alleged that Dish violated the TCPA, analogous state statutes, and the Telemarketing Sales Rule by its own actions and those of retailers and other third parties that Dish rewarded for making calls on its behalf. The FTC filed a subsequent 2012 suit based on calls made in violation of Dish’s internal do-not-call list, which was joined with the earlier case.
In a 238-page opinion, U.S. District Court Judge Sue E. Myerscough determined that Dish made more than 5 million calls to numbers on the National Do Not Call Registry and that authorized retailers made 2.6 million more at the behest of Dish.
As for illegal prerecorded calls, Dish itself made 98,054 and directed two retailers to make an additional 49,738,072 more.
Judge Myerscough further wrote that the four state Attorneys General were entitled to a finding that Dish engaged in a pattern or practice of making prerecorded and outbound telemarketing calls to their residents whose numbers were on the National DNC Registry. Illinois and North Carolina established that Dish used autodialing equipment to make calls to their residents, the court added.
Although the defendant told the court it should not be held vicariously liable for calls made by retailers or other third parties, the judge said the governmental entities provided sufficient evidence that Dish had some knowledge of the unlawful activities through emails from Dish employees.
The court relied on a 2013 ruling from the Federal Communications Commission issued in response to a petition filed by Dish addressing the scope of vicarious liability for alleged violations of others. The FCC wrote that the standard to establish vicarious liability should be the federal common law of agency, although the Commission added that liability could also be based on principles of apparent authority and ratification.
Judge Myerscough also rejected Dish’s attempt to take advantage of the TSR’s safe harbor provisions. She held that the company did not meet the “basic requirement” of establishing written procedures and documentation to indicate that the company was following the law.
Having ruled on the parties’ summary judgment motion, the court proposed a bifurcated trial as the next step in the proceedings. First up: consideration of remaining liability issues, followed by a separate trial on the question of damages. Based on the findings already made by the judge, Dish is facing a potentially multi-billion dollar award.
In a statement, Dish said it “respectfully disagrees with the bulk” of the court’s decision and “looks forward to defending itself in court.”
To read the opinion in U.S. v. Dish Network, click here.
Why it matters: TCPA litigation rose to record numbers in 2014 and the Dish case ended the year with a bang. Companies should take note of the court’s ruling on the issue of vicarious liability as a cautionary tale and keep an eye on the upcoming trial.