On December 27, 2007, in a 7-0 decision, the Ohio Supreme Court defined "knowingly" and "willfully" for purposes of violation of the Telephone Consumer Protection Act of 1991 ("TCPA"), Section 227, Title 47, U.S.Code, and the Consumer Sales Practices Act ("CSPA"), Ohio Revised Code Chapter 1345. Charvat v. Ryan, Slip Opinion No. 2007-Ohio-6833.
The issue of whether the terms "knowingly" and "willfully" as used in the TCPA and the term "knowingly" as used in the CSPA require that a defendant merely act in a manner that violates the acts or whether the defendant must also know that the conduct violates the law came before the Court on certified conflict from the Tenth District Court of Appeals.
In this case, Plaintiff Charvat received a prerecorded message advertising dental services on this home telephone from Defendant Ryan. After listening to the message, which was made using automated dialing equipment, Charvat demanded a copy of Ryan's "do not call" policy.
Charvat filed a complaint in the Franklin County Common Pleas Court alleging multiple violations of the TCPA and the CSPA and asked for:
- Statutory damages permitted under both the TCPA and the CSPA,
- Treble damages allowed under the TCPA,
- Attorney fees allowed under the CSPA and
- A permanent injunction.
The TCPA, Section 227(b)(3)(C) provides a private right of action: "If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, at its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph."
Ohio Revised Code Section 1345.09 outlines the remedies available to an Ohio consumer for a violation of the CSPA and pursuant to that section "[t]he court may award to the prevailing party a reasonable attorney's fee limited to the work reasonably preformed, if either of the following apply: (1) the consumer complaining of the act or practice that violated this chapter has brought or maintained an action that is groundless, and the consumer filed or maintained the action in bad faith; (2) the supplier has knowingly committed an act or practice that violates this chapter."
The trial court found Defendant Ryan liable for two violations of the TCPA -- one, for leaving the pre-recorded message and two, for not responding to Charvat's request for a copy of Ryan's "do not call" policy. The trial court awarded Charvat damages for a single violation of the CSPA. The trial court, however, declined to award Charvat treble damages finding that the Defendant did not "affirmatively know it was a violation of a regulation when making the telephone call" for purposes of the TCPA. Additionally, the trial court denied Charvat's request for attorney fees under the CSPA as the Defendant did not have actual awareness that his act was a violation of the statute. Charvat at 5.
Charvat challenged the trial court's denial of both treble damages and attorney fees in an appeal to the Tenth District Court of Appeals. The Tenth District held that Charvat was entitled to statutory damages for the delivery of the message and for failure to send the "do not call" policy. However, the appellate court held that the trial court "did not abuse its discretion in finding that the violation that resulted from the call was not willful." The appellate court "remanded the case to the trial court to weigh the 'knowing' and 'willful' status for the violations as well as for the failure to send the 'do not call' policy to Charvat" and affirmed the denial of attorney fees under the CSPA. Charvat at 7.
Charvat filed a motion for reconsideration and a motion requesting certification of a conflict on the definition of "knowingly" under the TCPA. After determining that its decision conflicted with Reichenbach v. Financial Freedom Ctrs., Inc., 6th Dist. No. L-03-1357, 2004-Ohio-6164, a decision of Sixth District Court of Appeals, the Tenth District certified the following issue to the Ohio Supreme Court:
Whether the defendant knowingly violates Section 227(b), Title 47, U.S. Code, or the regulations promulgated thereunder, for purposes of awarding treble damages under Section 227(b)(3), where the plaintiff demonstrates that the defendant had knowledge of the facts constituting the offense; or whether the plaintiff must prove that the defendant knew when it placed the offending call that the call constituted a violation of the TCPA or any regulations promulgated thereunder.
Charvat at 8. The Ohio Supreme Court agreed with the Tenth District Court of Appeals that a conflict existed and agreed to address the meaning of "knowingly" and "willfully" as used in the TCPA for purposes of awarding treble damages and the meaning of "knowingly" as used in the CSPA for purposes of awarding attorney damages.
With respect to the TCPA the Court found:
- Definition of "Knowingly": The Ohio Supreme Court held that for purposes of an award of treble damages under the TCPA, "the term 'knowingly' requires that liability be imposed even without appellees' knowledge that the conduct violated the statute." (Emphasis added) Charvat at 18.
- Definition of "Willful": The Ohio Supreme Court held "a plaintiff must prove that the defendant consciously and deliberately committed or omitted an act that violated the statute, irrespective of any intent to violate the law." Charvat at 21. However, the Court went on to point out that despite a "willful" violation, the TCPA provides a court discretion with respect to whether or not to award treble damages and therefore, the court may, but is not required to, award such damages.
With respect to the CSPA, the Court found:
Definition of "Knowingly": The Ohio Supreme Court held that to establish a knowing violation of the CSPA, "a plaintiff need prove only that the defendant acted in a manner that violated the CSPA and need not prove that the defendant knew that the conduct violated the law," However, similar to the discretion afforded to courts in imposing treble damages under the TCPA, the CSPA does not mandate an award of attorney fees upon a finding of "knowingly." R.C. 1345.09. Consequently, trial courts may determine whether or not attorney fees are appropriate given the facts of each particular case. Charvat at 27.
In closing, the Court held that "to establish a knowing or willful violation under the TCPA for the award of treble damages, or under the CSPA for an award of attorney fees, a plaintiff need not prove that the defendant knew that conduct violated the law but only that the defendant knew the underlying facts of the conduct. However, whether or not to actually award treble damages or attorney fees is within the discretion of the trial court.
This decision is significant for all business - large and small - that use telephone solicitations to market goods and services in Ohio and nationwide. Despite the discretion that remains with the trial court, under this decision a plaintiff need only show that a defendant knew the underlying facts of the conduct to establish a knowing or willful violation under the TCPA for a potential award of treble damages, or under the CSPA for an award of attorney fees. Charvat at 28.