Consumer Finance Insights
June 20, 2019

4th Circuit Upholds $61 Million TCPA Verdict, Finding Standing Under Spokeo

On May 30, 2019, the Fourth Circuit upheld a $61 million Telephone Consumer Protection Act (TCPA) judgment in Krakauer v. Dish Network, L.L.C., No. 1518.  The plaintiff, Dr. Thomas Krakauer (Plaintiff), placed his name on the Do-Not-Call registry in 2003.  In 2009, he received calls from Satellite Systems Network (SSN), which Dish Network (Dish) retained to market Dish’s services, and filed a class action against Dish in 2015 for violation of the TCPA’s do-not-call provision.  Following a trial, the jury determined that Dish was liable for the calls placed by SSN, and awarded the class a $20 million verdict.  The court then determined that Dish’s violation of the do-not-call provision was willful, and trebled the jury verdict to more than $60 million.  Dish appealed the verdict to the Fourth Circuit.

On appeal, the Fourth Circuit upheld the district court’s decision.  The court acknowledged that showing a statutory violation alone—without some actual injury to the class members themselves—is insufficient to confer standing under Spokeo v. Robins (136 S.Ct. 1540 (2016)).  But the court found that Plaintiff had shown sufficient Article III injury in the form of his receipt of unwanted calls, which invaded his historically protected privacy interests, after he took affirmative steps to avoid the calls by signing up for the Do-Not-Call registry.  Dish argued that the class members must do more to show Article III injury, such as demonstrate that they were actually inconvenienced by the calls.  But the court rejected that argument, stating that to accept that proposition would “dismember the TCPA, converting a simple remedial scheme into a fact-intensive quarrel over how long a party was on the line or how irritated it felt when the phone rang.”

Dish also argued that it should not be held liable for the TCPA violations, because the calls were made by SSN, and not Dish.  The court rejected this argument, finding that the TCPA (47 U.S.C. § 227(c)(5)) contemplates holding an entity liable even where calls are made by an agent, authorizing claims by a “person who has received more than one telephone call within any 12-month period by or on behalf of the same entity.”  (emphasis added).  Dish further argued that it instructed SSN to follow the law, and that SSN acted outside the scope of its agency authority when it failed to do so.  The court, however, determined that the jury was properly instructed on both points, and did not see any reason to disturb the jury’s verdict on either count.

Finally, Dish argued that the district court improperly trebled the damage award.  The Fourth Circuit disagreed, finding that (1) under traditional agency principles, Dish was liable for the willful conduct of its agent, SSN, and (2) that Dish’s instructions to SSN not to violate the law were “halfhearted” and even a “cursory” investigation would have revealed the extent of SSN’s conduct.

The Fourth Circuit’s Krakauer opinion is another example of a decision holding that, depending on the nature of the statute at issue, a separate showing of injury—beyond the statutory violation itself—is not always needed to satisfy Article III standing under Spokeo.  The case also illustrates that businesses may not be insulated from TCPA liability merely because a third party is the one making the calls on its behalf.  Goodwin will continue to monitor TCPA developments, and will bring you the latest news as it occurs.