Massive $925M jury verdict looms on the telemarketing landscape

Nutrition pyramid?

Multilevel marketing company ViSalus sells a variety of drinks, snacks, meals and supplements that are bundled into “kits” that the company claims promote health, well-being and weight loss. The company’s “Balance Kit,” for instance, offers a blend of “fast and medium release proteins,” that “[deliver] nutrients to your body quickly and effectively.” One of the products in the kit, the Vi-Shape Nutritional Shake, is branded by the company as “the Shake Mix that Tastes like a Cake Mix.”

That sounds amazing.

But accusations and legal actions involving the company have proven slightly less sweet and wholesome. ViSalus has been involved in, among other disputes, RICO suits alleging the computer hack of one of its competitors, in-depth investigations and class actions accusing the company of, among other things, running a pyramid scheme.

From molehill to mountain

Similar accusations sparked a separate Telephone Consumer Protection Act (TCPA) class action filed more than three years ago by Oregon consumer Lori Wakefield.

Wakefield’s suit claims that ViSalus’ sales and marketing force, heavily incentivized through promotions and contests, was spurred on to place “thousands of outbound telemarketing calls each day to consumers nationwide,” some of which reached consumers on the National Do Not Call Registry.

After a bitter class certification battle in 2017, ViSalus stood accused of making 1,850,436 prerecorded calls to an estimated class comprising 800,000 members. Yes, you read that correctly. More than 1.8 million calls (Wakefield claims to have received four).

The takeaway

ViSalus rolled the dice, went to trial and lost. Based on the alleged 1.8 million-plus calls, the TCPA’s $500 per-call fine creates possible damages of at least $925 million. If the court believes the violations were willful, the damages will be tripled – that’s $2.77 billion for anyone keeping score at home.

ViSalus still clings to hope, however. In their verdict, the jurors indicated that although the calls placed by the company targeted both residential and landline users, they “cannot tell” the exact number made to either group. The company’s counsel thinks that this indeterminate answer will undermine the whopping damages figures, if not the class itself.

As ViSalus’ defense lawyers told one outlet: “Whether there will even be a damages award, as well as whether the class should now be decertified as a result of the jury’s answers, will be the subject of further proceedings in the coming weeks and months.”

One thing we know for sure: This trial is destined to become yet another talking point in the current extended freak-out over the scope and purpose of the TCPA.