October 16, 2017

October 13, 2017

Subscribe to Latest Legal News and Analysis

Court Reduces Aggregate Award of Statutory Damages Deemed “Obviously Unreasonable and Wholly Disproportionate”

After awarding a judgment as a matter of law at the close of plaintiffs’ case, Judge E. Richard Webber of the Eastern District of Missouri reduced the award because statutory damages of $500 per call would have been “obviously unreasonable and wholly disproportionate to the offense,” making it unconstitutional as applied to the facts of the case. Golan v. Veritas Entm’t, LLC, No. 14-0069, 2017 WL 3923162, at *4 (E.D. Mo. Sept. 7, 2017).

The plaintiffs’ claims concerned a marketing campaign for the 2012 film Last Ounce of Courage, which included making 3,242,493 phone calls. If a recipient answered the call, a pre-recorded speech by Governor Mike Huckabee asked if the recipient believed in freedom and liberty, wanted Hollywood to promote “traditional American values,” and wanted to learn more about the film that Governor Huckabee was endorsing. If the recipient responded yes, Governor Huckabee’s pre-recorded summary would be played. If a recipient did not answer the call, a message would be left stating “Liberty. This is a public survey call. We may call back later.” Golan v. Veritas Entm’t, LLC, 788 F.3d 814, 817 (8th Cir. 2015).

After the Eighth Circuit reversed an earlier dismissal for lack of Article III standing, the case proceeded to trial in August 2017. At the close of plaintiffs’ case, the court entered judgment as a matter of law in favor of the plaintiffs. The defendants then filed a motion for reduction of excessive damages, as a statutory penalty of $500 per phone call would result in an aggregate award of $1,621,246,500. The court granted that motion, holding that such an award would be “obviously unreasonable and wholly disproportionate to the offense” and therefore unconstitutional. Golan, 2017 WL 3923162, at *4. Instead, the court reduced the award to $32,424,930, which amounts to $10 per call. The court reasoned:

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. This amount also takes into account the significant time and expense needed to notify the class and distribute the damages to the class.

Id.

The decision will be helpful to defendants seeking to reduce the draconian awards for which they may be deemed liable. But even after a roughly 98% reduction the award is still significant—especially considering that it is nearly ten times greater than the $3.3 million that the film reportedly made at the box office.

©2017 Drinker Biddle & Reath LLP. All Rights Reserved

TRENDING LEGAL ANALYSIS


About this Author

Associate

Andrew L. Van Houter is an associate in the firm’s Litigation Group based in the Florham Park office. Andrew focuses his practice on financial services, class actions, antitrust matters and commercial litigation. 

Andrew has represented global financial institutions and corporations in multiple types of litigation, including breach of contract matters, federal and state securities claims relating to mortgage-backed securities and “naked” short sales, shareholder derivative actions, antitrust and commodity manipulation class...

973-549-7018
Michael P. Daly, Consumer Class Action Attorney, Drinker Biddle Law firm
Partner

Michael Daly is a partner whose practice focuses on class action and appellate litigation.

Class Action Litigation. Michael defends consumer class actions involving issues such as advertising, labeling, billing, telemarketing, credit reporting and debt collecting. He counsels clients on all aspects of class actions, including removing actions, compelling arbitration, coordinating multidistrict litigation, enjoining parallel proceedings, striking class action allegations, opposing certification, negotiating settlements, designing notice and claims programs, and defending settlements from objections and attacks. He often writes and speaks about class actions and served as the Chair of the Planning Committee for the American Law Institute’s Forum on Class Actions and Aggregate Litigation.

215-988-2604