A federal court recently held that Dish Network (Dish) willfully and knowingly violated the Telephone Consumer Protection Act (TCPA) for failing to take an active enough role in the monitoring of and enforcement against its telemarketing vendor, which it knew had repeatedly violated the TCPA. The court ordered the jury-awarded statutory damages be trebled to approximately $61.3 million in total damages.

The court concluded that it was enough that the vendor knew it was violating the TCPA when the vendor placed repeated unwanted calls to numbers on the National Do Not Call Registry, which was then imputed to Dish. But the court continued, concluding Dish’s conduct alone demonstrated willful or knowing violations of the TCPA because it knew or should have known of its marketer’s TCPA violations. Specifically, Dish received numerous complaints about the vendor between 2004 and 2010 and was aware of three lawsuits against the vendor over its telemarketing calls that resulted in monetary damages and injunctive relief. The court noted that Dish never followed up on its investigation of consumer complaints after the vendor failed to respond to its initial investigatory emails. Further, Dish did not enforce its contract terms even when the vendor failed to keep records as required by its contract with Dish. The court characterized Dish’s strategy in responding to a customer complaint as (1) identifying the marketer who made the call, if it could, (2) asking the marketer for call records and proof that the number had been scrubbed, and (3) regardless of the response—or lack of response—merely asking the marketer not to call that specific person again. But Dish never took the extra step to review call records or actively confirm the vendor was scrubbing the vendor’s call lists against the National Do Not Call list as Dish instructed, nor did Dish modify or terminate its contract with the vendor as a result of TCPA violations, recordkeeping breaches, lawsuits, or complaints.

TIP: Companies working with vendors should have procedures in place to monitor, investigate, and enforce penalties against non-compliant telemarketing vendors or risk being held responsible for treble statutory damages under the TCPA, particularly where the company is aware of complaints and lawsuits concerning the vendor.