MDO | INSIGHTS
MDO | INSIGHTS
TCPA Violations Result in $61 Million in
Treble Damages for Dish Network
■ ■ ■ July 11, 2017
Last month, a federal court ruling found Dish Network liable for $61 million in treble damages for its service provider's Telephone Consumer Protection Act (TCPA) violations. The provider, Satellite Systems Network (SSN), had been violating the TCPA for years while Dish Network (Dish) knowingly looked the other way.
Between 2004 and 2010, Dish received and ignored multiple complaints from consumers who were receiving calls from SSN despite having registered their numbers on the Do-Not-Call (DNC) Registry. During the trial, which commenced earlier this year in January, it was discovered that SSN initiated more than 50,000 calls to about 18,000 consumers whose phone numbers appeared on the National DNC Registry. The court found that Dish knew that SSN had a history of making telemarketing calls without first checking if the recipient was on the DNC list, yet still allowed the vendor to make calls on its behalf.
U.S. District Judge Catherine C. Eagles held that Dish is responsible for any willful or knowing violation of the telemarketing laws by SSN as SSN was acting as an agent of Dish when it made the calls. She commented that "Dish did nothing to monitor, much less enforce, SSN's compliance with telemarketing laws." In January the jury awarded damages of $400 per call, totaling nearly $20.5 million. This past May, Judge Eagles tripled the damages to $1,200 per call, totaling more than $61 million.
Judge Eagles also noted that Dish had a contract with SSN giving it "virtually unlimited rights" to monitor and control SSN's telemarketing. However, its failure to do so made Dish's compliance department "a compliance department in name only." Dish released a statement expressing the company's disagreement with the opinion and stated that it is weighing its legal options.
This North Carolina case also had an influence on the decision by an Illinois federal judge to permanently block Dish from making illegal calls in violation of the do-not-call laws this Monday, June 5th. Judge Sue E. Myerscough ordered Dish to pay $280 million to the federal government and the states of California, Illinois, North Carolina, and Ohio and ordered Dish to undergo compliance monitoring. Dish spokesman John Hall stated that Dish "respectfully disagrees" with the decision and plans to appeal. However, in a letter to Judge Myerscough, the Justice Department stated that the outcome of the North Carolina SSN case is a "significant and persuasive indicator that such an agency relationship did, in fact, exist between Dish and its other retailers."
Similar cases include Wilkins v. HSBC, whereby HSBC Bank settled a TCPA class action for $40 million after being accused by its credit card users of repeatedly contacting them on cell phones with automated messages for non-emergency purposes in violation of the TCPA. Not to mention the largest TCPA settlement yet, in which Capital One and three collection agencies agreed to pay $75 million to settle TCPA litigation brought by credit card users for being contacted through an automated dialer. The Capital One settlement also noted that the core relief of the settlement was for Capital One to change its business practices and develop and implement significant enhancements to its calling systems.
Maintaining strong vendor oversight is an essential component of ensuring your company is in compliance with consumer protection laws. TCPA violations are easily avoidable with the implementation of a monitoring system. Keep in mind that third-party vendor violations become a liability to your company when the vendors are acting as your agents. Therefore, it is of utmost importance to maintain strong vendor oversight and strictly enforce your company's compliance program to guard the company against potential fees and fines. We encourage companies to establish robust internal controls and compliance programs to avoid and detect consumer law violations. Our attorneys and advisors have extensive experience advising clients on compliance programs in various countries.
Richard Montes de Oca is the founder and managing partner at MDO Partners, a law firm in Miami. Contact him at email@example.com. Claudia Herbello is a law clerk at the firm.
This article was written by Richard Montes de Oca and Claudia Herbello. It was featured in the Daily Business Review on July 7, 2017. Please visit the link below to read more: http://www.dailybusinessreview.com/id=1202792295978
About MDO Partners
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