Court Reduces TCPA Damages From $1.6B to $32M

TCPA Connect

Finding $32 million to be a more reasonable award than $1.6 billion, a Missouri federal court judge ordered the producers of “Last Ounce of Courage” to pay for phone calls promoting the movie that ran afoul of the Telephone Consumer Protection Act (TCPA).

Between Sept. 9 and Sept. 15, 2012, a marketing company made more than 3 million robocalls. Those who did not answer received prerecorded messages stating, “Liberty. This is a public survey call. We may call back later.”

If the call was answered, the script began: “Hello, this is Governor Mike Huckabee, with a 45-second survey. Do you believe in American freedom and liberty? … Would you, like me, Mike Huckabee, like to see Hollywood respect and promote traditional American values? I am an enthusiastic supporter of a new movie called ‘Last Ounce of Courage.’ It is a film about faith, freedom, and taking a stand for American values. May I tell you more about why I recommend that you … see this movie?”

Ron and Dorit Golan—whose number was registered on both the National Do Not Call Registry and the Missouri No-Call List—received two of the robocall messages. They filed suit against the marketing company, the film company behind the movie, and various individuals, including Huckabee, alleging violations of the TCPA and Missouri’s No-Call law.

The defendants moved to dismiss the suit, arguing that the Golans had not suffered an injury-in-fact because none of the messages they received contained an advertisement and they never heard the entire script of the call. A district court judge granted the motion, but the U.S. Court of Appeals, Eighth Circuit, reversed.

On remand, U.S. District Judge E. Richard Webber ruled that the calls violated the TCPA because their primary purpose was advertising the movie and not conducting a political survey. “[T]here is no way to interpret this script as anything other than an attempt to convince consumers to go see the movie,” he wrote. “This is telemarketing; the telephone calls are for the purpose of encouraging the purchase of a product, here, a movie.”

At the close of a jury trial, the court granted the plaintiffs’ motion for judgment as a matter of law, reserving the issue of damages.

The plaintiffs requested statutory damages of $500 per call for the approximately 3.2 million calls, a total of $1,621,246,500. The defendants objected, arguing that such an award was excessive and unconstitutional, proposing damages be set at $0.10 per call, or $324,249.

Judge Webber was not persuaded by the defendants’ contention that the TCPA’s damages provision violates the due process clause of the Fifth Amendment. Congress has a “wide latitude” of discretion to prescribe penalties for violations of its law, the court said.

“Specifically in relation to the TCPA, the $500 per violation damages provision is meant to address harms that are otherwise unquantifiable such as invasions of privacy, unwanted disruptions, tied-up phone lines, and wasted time spent answering unwanted phone calls,” the court wrote.

The defendants also pointed to three courts that have reduced damages in TCPA cases. Judge Webber rejected one that read the statute to provide for “up to” $500 per violation and a second with “far different” facts and circumstances than the Golan case.

However, the court found guidance in the third case, an action brought by the United States and several attorneys general against Dish Network, where the federal court judge ordered $280 million in penalties—a discount from the $2.1 billion in statutory damages requested by the plaintiffs.

“The Court’s review of the applicable case law … indicates the TCPA’s statutory damages clause is constitutional, but a specific damages award may be unconstitutional if it is ‘so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable,’” Judge Webber wrote.

Calling the $1.6 billion statutory damages at issue “obviously unreasonable and wholly disproportionate to the offense,” the court elected to reduce the statutory award per call to $10, for a total of $32,424,930.

“This reflects the severity of the offense, a six-day telemarketing campaign which placed 3.2 million telephone calls, as well as respecting the purpose of the TCPA to have a deterrent effect and to account for unquantifiable losses including the invasions of privacy, unwanted interruptions and disruptions at home, and the wasted time spent answering unwanted solicitation calls or unwanted voice messages,” the court said. “This amount also takes into account the significant time and expense needed to notify the class and distribute the damages to the class.”

To read the memorandum and order in Golan v. Veritas Entertainment, LLC, click here.

Why it matters: While the court did not find the TCPA’s damages provision itself unconstitutional, it held that a specific award under the statute may be “unreasonable and wholly disproportionate to the offense,” necessitating a decrease. In this case, that meant a drop from $1.6 billion to $32.4 million.

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