As if Dish Network’s year couldn’t get much worse, the order in the government’s case against Dish followed on the heels of a class action based on similar claims in North Carolina federal court. There, Thomas Krakauer filed suit against Dish, alleging that he received dozens of calls from Satellite Systems Network on behalf of Dish, despite the fact his number was registered on the National Do Not Call 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 Telephone Consumer Protection Act (TCPA), awarding $400 for each of the 51,119 calls at issue for a total of approximately $20.47 million. After the verdict, the parties submitted arguments on willfulness. U.S. District Court Judge Catherine C. Eagles had little trouble holding that Dish willfully violated the statute and trebled the damage award.
“On paper, Dish was committed to monitoring its marketers’ compliance with telemarketing laws and investigating complaints of violations,” the court said. “In reality, however, Dish repeatedly looked the other way when SSN violated the telemarketing laws and when SSN disregarded contractual duties related to compliance.”
Dish confirmed in a 2009 settlement with 46 state attorneys general that its contracts with telemarketers, including SSN, gave it virtually unlimited rights to monitor and control the third parties’ activities, the court noted. But despite numerous complaints about SSN—and knowledge of at least three lawsuits against SSN over its telemarketing calls that resulted in monetary damages and injunctive relief—Dish turned a blind eye, Judge Eagles said.
The court found willful and knowing violations based not only on the actions of SSN imputed to Dish, but also on the company’s own conduct. Dish “knew SSN was not scrubbing all its lists or keeping call records. It ignored SSN’s misconduct and, despite promises to forty-six state attorneys general, it made no effort to monitor SSN’s compliance with telemarketing laws. Dish had the power to control SSN’s telemarketing; it simply did not care whether SSN complied with the law or not,” the court wrote.
Treble damages were therefore appropriate “because of the need to deter Dish from future violations and the need to give appropriate weight to the scope of the violations,” the court said, taking issue with the company’s description of the harm to consumers as “a minor nuisance” and an “inconvenience.”
“Dish’s description has left out ‘illegal,’ not to mention ‘infuriating,’” the court said. “Dish’s argument shows a failure to recognize the purpose of the law and is demeaning to consumers who put their names on the Do Not Call Registry and who are entitled by law to have their privacy respected. It also reflects a lack of appreciation for the seriousness of the violations found by the jury: over 50,000 connected calls to over 18,000 private individuals.”
Judge Eagles trebled the jury’s damage award to $1,200 per call, bringing the total to roughly $61.3 million.
To read the memorandum opinion and order in Krakauer v. Dish Network LLC, click here.
Why it matters: TCPA class actions rarely make it to a jury trial, and this case is an apt illustration why. When put into the hands of a jury, uncertainty ensues and damages can be huge. Moreover, for those cases that do make it to trial, treble damage awards are not the norm. To be sure, the past couple of months have been tough for Dish Network—being hit with this trebled damage award as well as the record $280 million penalty owed to various government entities discussed above. But perhaps the best lesson that can be learned from all this is that good compliance remains key, as it is the best way to avoid lawsuits and potentially ruinous damages.