Affirming a North Carolina federal court’s judgment awarding $61 million in damages for Telephone Consumer Protection Act (TCPA) violations, the U.S. Court of Appeals, Fourth Circuit, rejected Dish Network’s attempts to evade the award.
Thomas Krakauer filed suit against Dish Network, alleging that he received dozens of calls from Satellite Systems Network (SSN) on behalf of Dish, despite the fact that his number was registered on the National Do Not Call (DNC) Registry, and even after he complained to Dish about the calls and the company said it had placed him on its internal do-not-call list.
A jury sided with Krakauer in January, finding that SSN acted as Dish’s agent when it made the calls at issue and violated the TCPA. The jury awarded $400 for each of 51,119 calls, for a total of approximately $20.47 million.
U.S. District Court Judge Catherine C. Eagles then found that Dish willfully violated the statute, and she trebled the damage award, entering judgment in the amount of $61 million. She later denied Dish’s motion to reduce or set aside the award.
Dish appealed to the Fourth Circuit, objecting to class certification on both standing grounds and as a matter of civil procedure, and challenging its own liability for the improper calls placed by SSN. None of the arguments swayed the federal appellate panel, which upheld the trebled damages award.
Tackling the jurisdictional argument, the court relied on the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins to hold that the class definition, by its terms, stated an injury that was sufficient to support federal jurisdiction.
“In enacting § 227(c)(5) of the TCPA, Congress responded to the harms of actual people by creating a cause of action that protects their particular and concrete privacy interests,” the panel wrote, and Krakauer satisfied this requirement by receiving unwanted calls on multiple occasions to a residential number listed on the DNC Registry.
As for class certification, the panel found no issue with the fact that some of the absent class members may not be telephone subscribers and were instead the persons who received the call. “The question of who can sue under a statutory cause of action turns on whether the party is within the statute’s ‘zone of interests,’” the court said. “The text, purpose and history all cut against reading the statute as protecting only subscribers.”
Finding the right of action “not as narrow as Dish and its amici suggest,” the court said that “there is simply not a large number of uninjured persons included within the plaintiffs’ class.” While Dish devoted “a great deal of attention to the larger debates that are swirling around class certification,” the case at hand was not the correct vehicle for such a discussion, according to the panel.
“The actual plaintiffs in this case can satisfy the requirements of class certification under well-settled and broadly accepted principles,” the court wrote. “Anyone looking for some grand pronouncement of law in this case has simply picked the wrong horse.”
Finally, the panel turned to Dish’s own liability and the determination that its violations of the TCPA were knowing and willful. Reviewing the trial procedures and the evidence presented, “the district court interpreted the statute to apply legal principles. The question was then presented to the jury, which ultimately held Dish liable. Despite Dish’s assertions that the district court somehow engaged in legal errors on this point, its challenges bottom out on no more than a disagreement about the facts.”
The evidence supporting an agency relationship between Dish and SSN was “considerable,” and Dish fell “far short” of showing that the jury’s conclusion lacked meaningful support, the court said. Nor was there any basis—either with regard to the legal standard or the facts—for disturbing the district court’s treble damages award.
“Dish’s arguments against treble damages are simply reassertions of those that were rejected elsewhere,” the panel wrote. “Dish seems to think that so long as it includes certain language in a contract or issues the occasional perfunctory warning to a retailer the court will not look past the formalities and examine the actual control exercised by Dish. Moreover, Dish fails to recognize that repeated expressions of ignorance as to a widespread problem can evince more than simply negligence; they can also be a sign that the violations are known, tolerated and even encouraged.”
The Fourth Circuit affirmed the $61 million judgment.
To read the opinion in Krakauer v. Dish Network, LLC, click here.
Why it matters: The Fourth Circuit’s affirmation of the $61 million award provides a valuable reminder to companies to ensure TCPA compliance—particularly on the part of third parties—or face significant penalties. The federal appellate panel emphasized that courts will look beyond the formalities found in contracts in determining whether an agency relationship exists with vendors and that turning a blind eye to repeated violations can form the basis of willful behavior, leading to treble damages.