On January 21, 2015, the Federal Trade Commission announced that the U.S. District Court for the Central District of Illinois granted partial summary judgment on December 12, 2014, to the federal government in its action against Dish Network LLC (“Dish”), alleging that Dish violated certain aspects of the Telemarketing Sales Rule (“TSR”) that restrict placing calls to numbers on the National Do-Not-Call Registry and an entity’s internal Do-Not-Call list. The federal government is joined in the action against Dish by four state attorneys general alleging violations of the Telephone Consumer Protection Act and certain state laws related to telemarketing.
The government’s complaint stated that Dish directly telemarketed, and contracted with several “authorized dealers” to telemarket, Dish’s products, which primarily include satellite television programming. The government alleged that Dish, either directly or through its authorized dealers, placed millions of calls to numbers that were on the National Do-Not-Call Registry or on Dish’s internal Do-Not-Call list, both of which constituted violations of the TSR. Among other defenses, Dish argued that it was not responsible for its authorized dealers violations of the TSR because the company’s authorized dealers are independent contractors. The court was not persuaded by Dish’s argument, however, because Dish retained the relevant entities and authorized them to market Dish’s products. Thus, the court granted summary judgment to the plaintiffs with respect to Dish’s liability for the calls placed by certain of Dish’s authorized retailers.
Due to the existence of issues of fact, the court held that it could not grant summary judgment regarding the remedies available to the action’s plaintiffs. In their motion for summary judgment, which alleged 65 million impermissible calls, the federal government and four attorneys general claimed that the resulting civil penalty would be more than $725 billion. Although they acknowledged that “a smaller penalty is appropriate,” they also stated that a substantial award “was justified in light of Dish’s extraordinary culpability” and “poor compliance history.” They further noted that a $1 billion penalty “represents a mere 0.15% of the maximum penalty.”