In the closing days of May, the Fourth Circuit issued an opinion on Thomas Krakauer v. Dish Network, a class action filed in 2014 in the Middle District of North Carolina. It’s an important opinion in a Telephone Consumer Protection Act landscape that’s still in upheaval over the consequences of the Supreme Court’s 2016 Spokeo decision.
It’s also quite clear-cut and emphatic.
Here are the facts of the original case. Dr. Krakauer alleges he began receiving calls in 2009 urging him to buy Dish Network’s services. The calls were placed by Satellite Systems Network (SSN), a company that made sales calls on behalf of TV service providers. Dr. Krakauer claims – wait for it – that he placed his number on the national Do Not Call (DNC) registry six years prior. Hence, the lawsuit.
The case went to trial in early January 2017, with the jury deciding that SSN was acting as Dish’s agent, that Dr. Krakauer and other class members received two calls within a 12-month period despite being on the DNC registry, and that each call merited a $400 fine under the TCPA. The court trebled the fine for knowing violations. After a year of contentious claims process, the court entered a final judgment of $61 million.
The Appeal
Dish appealed on three points, and the Fourth Circuit answered each forcefully.
First, on standing, Dish argued that Krakauer and company had not suffered concrete and particular harm as demanded by Spokeo, a suggestion the Fourth Circuit rejected handily. “Rather than paying heed to Congress’s judgment of what sort of particular and concrete harms ought to count,” the court wrote, “the appellants ask that we import the elements of common law torts, piece by piece, into any scheme Congress may devise. … Since [the harm caused by disregarding the DNC] is both particular to each person and imposes a concrete burden on his privacy, it is sufficient to confer standing. The appellant’s suggestion otherwise is nothing more than an attempt to dismember the TCPA.”
Dish also took aim at class certification. “Dish argues that the class necessarily includes a large number of people who have no statutory claim at all,” the court wrote, explaining that Dish wanted to narrow the class to subscribers alone, rather than anyone who received an improper call. Again, the appeals court was firm: “A non-subscriber who receives a call can suffer a privacy intrusion just as easily as a subscriber can. The extensive legislative history accompanying the TCPA confirms its broad reach.”
Finally, Dish challenged the jury’s ruling that it was liable for the calls placed by SSN, arguing that it had occasionally admonished the company to obey the TCPA, and in any case its contract kept SSN at arm’s length as an independent contractor rather than as an agent.
But that simply wasn’t enough for the court: “It may be that Dish believes that its warnings and admonitions should have been given greater weight by the jury,” the opinion states. “Because the jury resolved this question and had extensive evidentiary support for its conclusion, it does not matter whether Dish now believes its argument to be convincing. Dish had its chance to persuade the jury, and it lost.”
In addition, the contract between Dish and SSN shouldn’t have been the sole focus of a jury: “parties cannot avoid the legal obligations of agency by simply contracting out of them.”
