Courts will often lay a heavy hand on a major corporation that fails to comply with the TCPA or, in Dish Network’s case, monitor the telemarketing practices of its agents. On October 3rd, we learned that courts are also not afraid to impose double liability, requiring TCPA defendants to fork over millions more for the same violations against the same individuals. The Dish saga continues.
Dish Network Remains in the Spotlight
In a May 2017 blog post, we discussed the judgment reached in Krakauer v. Dish Network, LLC. There, a jury found Dish liable to the tune of $20.5 million for failing to monitor its agent, Satellite Systems Network (“SSN”), which made over 50,000 calls to individuals listed on the National Do-Not-Call Registry. The court later tripled the damages to $61 million, finding that Dish had willfully violated the TCPA when it neglected to supervise SSN’s practices despite previously promising regulators that it would.
Dish, of course, disagreed with the result and challenged the judgment using what appeared to be a solid legal theory. According to Dish, at least a portion of the claims in Krakauer were precluded by a TCPA action brought by the federal government and several states—United States v. Dish Network, LLC—in which the federal trial court in Chicago handed down a $280 million judgment against Dish. As Dish noted in its post-trial motion in Krakauer, at least 10,000 calls from the Illinois case were also at issue in Krakauer, and it made no sense to pay twice for the same violations. The court, however, would have none of it.
In its latest ruling, the court pointed to Dish’s silence throughout the litigation, finding that “Dish never moved to dismiss, ask for a stay, sought a transfer, or otherwise informed the Court that the Illinois Action was duplicative of or identical to the [Krakauer] class members’ claims.” What was perhaps more interesting, though, was the court’s determination that the interests involved in both suits were not aligned—even though it agreed that both suits involved the same 10,000 calls to the same people.
Federal law mandates that a case should be precluded where, among other things, the same parties are involved or the parties are related in some material way (called “privity”) and where the interests in both suits are aligned. The court, however, concluded that the Illinois case and the Krakauer case did not involve identical parties or interests, as the plaintiffs in the Illinois case were governmental entities (the states of North Carolina, Ohio, Illinois, and California) while the plaintiffs in the Krakauer case were individuals. Further, the court rejected Dish’s contention that the states and the individual plaintiffs shared a material relationship that authorized preclusion:
The interests of the class members in this case and of the plaintiff States in the Illinois Action are not aligned…. [T]he class members seek individual monetary relief payable to them for violations of their individual privacy rights. The plaintiff States in the Illinois Action sought injunctive relief and damages payable to the States, designed to protect the state population as a whole. These are different interests.
Order at 15.
More Questions than Answers
The court’s decision in Krakauer is a fairly harsh application of federal law; it claims that the TCPA allows the type of double liability that was imposed on Dish because the TCPA statute did not foreclose such liability, while other statutes more clearly have. But this appears to be a novel conclusion, as, based on our research and proprietary TCPA opinion database, no other TCPA defendant has ever been subject to separate lawsuits (by states and individuals) for the same phone calls to the same individuals. Indeed, one would think the states would take advantage of such an opportunity given the number of major TCPA lawsuits that occur annually throughout the United States.
It seems that the conclusion reached in Krakauer presents more questions than answers, creating another gray area in the TCPA landscape that could potentially subject callers to even more liability than was once thought possible.
- Is the court’s conclusion in Krakauer a correct interpretation of the TCPA’s intent?
- If it is, will states begin to target major TCPA violators in a quest to supplement their own coffers?
These are not only important questions moving forward but also consequential theories that callers and counsel should be cognizant of.