DISH Hit with Record $280 Million Fine for TCPA Violations

The United States District Court for the Central District of Illinois ordered DISH Network (“DISH” or “Company”) to pay $168 million to the federal government and $112 million to the states of California, Illinois, North Carolina, and Ohio over violations of the Telephone Consumer Protection Act (“TCPA”). The $280 million penalty is the largest ever for violations of telemarketing laws. In addition to the record penalty, the District Court also imposed a 20-year supervisory plan of the Company’s telemarketing, and issued an injunction prohibiting the Company from making further calls in violation of FTC telemarketing laws.

DISH’s telemarketing calls were made by both the Company and its vendors, as well as outside contractors. DISH was found liable for an estimated 55 million calls and more than 66 million violations of the FTC’s Telemarketing Sales Rules, which implement the TCPA. A violation of the TCPA, which prohibits telemarketing calls to phone numbers on the National Do Not Call Registry, carries a penalty of $500 in statutory damages per call, and courts have discretion to award a penalty of $1500 per call for willful violations. The district court found statutory damages to be unreasonably high, given that such damages would total in the billions of dollars, and consequently ordered a civil penalty of $280 million.

In a 475-page opinion, District Judge Sue E. Myerscough stated that that the historic penalty amount was deserved, given that “DISH caused millions and millions of violations of the Do Not Call Laws.” Although the judge did not impose the immediate telemarketing ban sought by the plaintiffs, she imposed court-ordered supervision over DISH’s telemarketing for the next 20 years.

While damages for violations of the TCPA may seem small, class actions have settled in the tens of millions of dollars when there are thousands of plaintiffs and thousands of calls. Given this potentially massive liability, companies should be particularly careful about monitoring their compliance with the requirements of the TCPA, including both the FCC and FTC rules that implement the TCPA, before engaging in any telephone marketing activities.

If you have any additional questions regarding the above or if you have any questions with respect to TCPA compliance issues, please contact Jim Falvey at 202.659.6655 (jfalvey@eckertseamans.com) or Rob Gastner at 202.659.6674 (rgastner@eckertseamans.com).

This Utilities and Telecommunications Alert is intended to keep readers current on matters affecting businesses and is not legal advice.