October 20, 2019

October 18, 2019

Subscribe to Latest Legal News and Analysis

Eighth Circuit Finds that Telemarketer’s Plausible Belief of Consent to Calls Supports Radical Reduction of Statutory Damages Award

In Golan v. FreeEats.com, Inc., No. 17-3156 (8th Cir. July 16, 2019), the Eighth Circuit affirmed a trial court’s radical, post-trial reduction of damages in a TCPA case.

Although the trial court originally awarded the plaintiffs more than $1.6 billion in statutory damages, it later slashed the award by 98 percent to approximately $32.4 million. The plaintiffs appealed that decision. (The plaintiffs also appealed the trial court’s rejection of their preferred jury instruction on direct liability, which the Eighth Circuit also affirmed.)

At issue in the case were more than 3 million marketing calls made within the course of a week to promote the movie Last Ounce of Courage, which was billed by defendants as a “story about taking a stand for religious freedom.” The calls were pre-recorded by former Arkansas Governor Mike Huckabee and were structured as a poll. Calls began by asking two initial questions on topics such as “American freedom and liberty” and “religious freedom.” If the recipients were still on the line after the two initial questions, they would then be given the option to hear about Last Ounce of Courage. If they opted in with a “yes” response, a message about the movie was played.

Defendant ccAdvertising, the firm hired to conduct the telemarketing campaign, had an existing call list and believed that the calls did not violate the TCPA. Specifically, ccAdvertising maintained that it had prior consent from the individuals on the call list to be contacted about topics such as religious liberty.

Finding that the TCPA-mandated damages of $1.6 billion—which were based on $500 per call under 47 U.S.C. § 227(b)(3)(B)—would violate the Due Process Clause, the trial court reduced the original damages award from $500 to $10 per call. In affirming this decision, the Eighth Circuit focused on the conduct of defendant ccAdvertising, which “plausibly believed it was not violating the TCPA” and “had prior consent to call the recipients about religious liberty, . . . a predominant theme” of the movie. The Eighth Circuit also considered that the marketing campaign was only one week long and that “only the recipients who voluntarily opted in during the call,” or about 7% of recipients, “heard the message about the film.”

The Eighth Circuit also rejected the plaintiffs’ argument that the Due Process analysis turns on the individual award ($500 under the statute) rather than the aggregate award (here, $1.6 billion). The aggregate award, it found, was so “severe and oppressive” and “wholly disproportioned to the offense” that it was “obviously unreasonable” under the test set forth by the Supreme Court in St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 67 (1919). The reduction in statutory damages ordered by the trial court was upheld.

Golan shines a hopeful light on courts’ ability—and willingness—to examine the totality of the circumstances in assessing TCPA damage awards.

©2019 Drinker Biddle & Reath LLP. All Rights Reserved

TRENDING LEGAL ANALYSIS


About this Author

Ingrid Johnson Litigation Lawyer
Senior Attorney

Ingrid D. Johnson has a diverse litigation practice, advocating on behalf of both corporate and individual clients in state and federal court and before government agencies. She has experience handling all aspects of complex litigation including shareholder disputes, products liability class actions, environmental claims, and employment litigation. On behalf of individual clients, she regularly handles estate disputes and guardianship matters.

Ingrid also has significant experience navigating government agencies and has handled matters related to public procurement...

609-716-6549
Michael Daly, Drinker Biddle Law Firm, Philadelphia, Litigation and Retail Attorney
Partner

Michael P. Daly defends class actions and other complex litigation matters, handles appeals in state and federal courts across the country, and counsels clients on maximizing the defensibility of their marketing and enforceability of their contracts. A recognized authority on class action and consumer protection litigation, he often speaks, comments, and writes on recent decisions and developments in the class action arena. He is also a founder of the firm’s TCPA Team; the senior editor of the TCPA Blog, which provides important information and insight about the Telephone Consumer Protection Act; and a senior member of the firm's Class Actions Team and interdisciplinary Retail Industry Team.

Committed to civil rights and civic engagement, Michael has spearheaded public interest matters meant to prevent racial discrimination, protect the rights of the disabled and incarcerated, prohibit the use of unverifiable voting systems, and preclude the misuse of our laws and abuse of our civil justice system. One of his most recent public interest matters resulted in a landmark settlement that put an end to decades of discrimination by administrative agencies that had refused to make important information about public benefits programs available in alternative formats that were accessible to the blind and visually impaired. As a result of the settlement, thousands of class members have already requested and received documents in accessible alternative formats.

215-988-2604