iGolan v. FreeEats.com, Inc., 930 F.3d 950 (8th Cir. 2019)
Eighth Circuit finds that receiving telemarketing voice messages in violation of the TCPA creates standing, but that billion-dollar statutory penalty award violated due process.
This decision addresses two increasingly prominent issues arising in class actions: Article III standing and statutory penalties.
The court first addressed whether plaintiff’s receipt of telemarketing voice messages that violated the Telephone Consumer Protection Act (TCPA) qualified as a “concrete injury” sufficient for Article III standing. Relying on Supreme Court and sister circuit precedent, the panel held that the proper analysis required determining whether the suffered harm had a close relationship to a type of harm traditionally actionable at common law. Because the receipt of telemarketing messages without prior consent “bear[ed] a close relation to the types of harms traditionally remedied by tort law, particularly the law of nuisance,” 930 F.3d at 959, the panel held that the named plaintiffs suffered a concrete injury and thus had standing.
Next, the panel addressed whether the district court erred in remitting the statutory damages award from $1.6 billion ($500 per call) to $32 million ($10 per call). Because defendant plausibly believed it was not violating the TCPA, and only about 7% of calls relayed the violative message, the court held the $1.6 billion in statutory damages to be “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable,” and thus in violation of the Due Process Clause. Id. at 963 (quoting St. Louis, I. Mt. & So. Ry. Co. v. Williams, 251 U.S. 63, 67 (1919)). The court thus upheld the district court’s 98% reduction of statutory damages.
Part of the Fall 2019 Class Action Litigation Newsletter available here.
