On July 16, the United States Court of Appeals for the Eighth Circuit affirmed a decision from the Eastern District of Missouri awarding $32 million in a Telephone Consumer Protection Act class action. Significantly, in doing so, the Court upheld the district court’s decision to limit the jury’s award to $10 per call for a class of 3.2 million members. According to the Court, an award of $500 per call would have been shockingly large, implicating due process concerns.

Background

Plaintiffs Ron and Dorit Golan filed suit against defendants ccAdvertising and Dr. James Leininger in 2014, alleging that they received two telephone calls advertising a film entitled Last Ounce of Courage. The film was financed in part by Dr. Leninger and marketed by ccAdvertising, which made approximately 3.2 million phone calls over the course of a week to promote the film. The phone calls were formatted as a poll that concerned topics such as “American freedom and liberty” and “religious freedom.” After hearing two polling questions, call recipients were asked if they would like to hear more information about the film. The Golans, however, did not answer either phone call and instead received two messages on their answering machine that stated “Liberty. This was a public survey call. We may call back later.”

The district court initially dismissed the case, concluding that the Golans did not have standing because the messages left on their answering machine did not violate the TCPA. The Eighth Circuit concluded otherwise and reversed, finding that the messages qualified as telemarketing because the underlying purpose of the messages was to promote a product or service.

The case proceeded to trial in August 2017. At the close of the evidence, the district court granted the Golans’ motion for judgment as a matter of law against ccAdvertising. The district court did not, however, offer their proposed jury instruction with regard to Dr. Leninger. As a result, the Golans abandoned a direct liability theory against Dr. Leninger and only submitted an agency theory to the jury, naming Dr. Leninger as the principal and ccAdvertising as his agent.

The jury returned a verdict in favor of Dr. Leninger and the other defendants. At the close of trial, ccAdvertising moved the District Court for a reduction of damages, arguing that the statutory damages of $500 per call for 3,242,493 calls – a total of over $1.6 billion – was so excessive that it violated the due process clause of the Fifth Amendment. The district court agreed, reducing the damages award to $10 per call and entering judgment in the amount of $32,424,930.

The Appeal

On appeal, ccAdvertising asked the Eighth Circuit to revisit its standing decision in light of the Supreme Court’s ruling in Spokeo, Inc. v. Robins, which was decided after the appellate court’s initial review of the case. The Court concluded that the harm at issue – the receipt of two telemarketing messages without prior consent – bore “a close relationship to the types of harms traditionally remedied by tort law, particularly the law of nuisance.” No. 17-3168, slip op. at 9. It did not matter that the harm “was minimal;” for purposes of standing the Court determined that the existence of harm was sufficient, regardless of its nature or type. Id.

The plaintiffs appealed the District Court’s jury instruction on direct liability against Dr. Leninger, but the Eighth Circuit rejected any argument that the District Court erred. The Court determined that the Golans’ proposed jury instruction “articulated too loose a standard for direct liability and blurred the line between direct and agency liability.” Id. at 11. The proposed instruction, which suggested that a defendant could be held liable directly if he or she “had direct, personal participation in the conduct found to have violated the TCPA” or “personally authorized the conduct found to have violated the TCPA,” did not comport with the statute. Id. at 5, 13. The Eighth Circuit found that the instruction would improperly “allow direct liability even where the defendant did not ‘initiate’ the calls.” Id. at 14. Absent any evidence that Dr. Leninger actually placed the calls, the proffered jury instruction was improper. Id.

Finally, the Court rejected the plaintiffs’ argument that the District Court erred in reducing the award of statutory damages, calling the original statutory damage award “a shockingly large amount.” Id. at 16. “Compare that to the conduct of ccAdvertising. It plausibly believed it was not violating the TCPA.” Id. at 16-17. The Court further noted that ccAdvertising had prior consent to contact call recipients about religious liberty, which was “a predominant theme of Last Ounce of Courage.” Id. at 17. And while the Eighth Circuit found that the harm at issue was enough to confer standing, it was nonetheless “not severe” in the eyes of the Court. Id.

Looking Forward

The Eighth Circuit’s decision follows closely on the heels of a Fourth Circuit decision upholding a $61 million vendor liability verdict in Krakauer v. Dish Network, LLC. Despite a number of decisions at the district court level limiting the reach of the statute, juries are still returning significant TCPA verdicts in certain cases, with appellate courts upholding those verdicts. It appears that the effects of ACA International v. FCC have yet to be felt in the pockets of TCPA defendants.