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Krakauer v. Dish Network, L.L.C.

United States Court of Appeals, Fourth Circuit

May 30, 2019

THOMAS H. KRAKAUER, on behalf of a class of persons, Plaintiff - Appellee,

          Argued: May 9, 2019

          Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Catherine C. Eagles, District Judge. (1:14-cv-00333-CCE-JEP)


          E. Joshua Rosenkranz, ORRICK, HERRINGTON & SUTCLIFFE, LLP, New York, New York, for Appellant.

          John William Barrett, BAILEY & GLASSER LLP, Charleston, West Virginia, for Appellee.

         ON BRIEF:

          Peter A. Bicks, Elyse D. Echtman, John L. Ewald, Christopher J. Cariello, New York, New York, Eric A. Shumsky, Kelsi Brown Corkran, Jeremy R. Peterman, Washington, D.C., Paul David Meyer, ORRICK, HERRINGTON & SUTCLIFFE LLP, San Francisco, California, for Appellant.

          Brian A. Glasser, BAILEY & GLASSER LLP, Charleston, West Virginia; Deepak Gupta, Jonathan E. Taylor, GUPTA WESSLER PLLC, Washington, D.C., for Appellee.

          Richard D. Kelley, BEAN KINNEY & KORMAN, Arlington, Virginia; Deirdre A. Fox, Stephanie Scharf, SCHARF BANKS MARMOR LLC, Chicago, Illinois, for Amicus Product Liability Advisory Council.

          David M. Axelrad, Felix Shafir, HORVITZ & LEVY LLP, Burbank, California; John F. Kuppens, President, DRI-THE VOICE OF THE DEFENSE BAR, Chicago, Illinois, for Amicus DRI-The Voice of the Defense Bar.

          Before WILKINSON and KING, Circuit Judges, and Irene C. BERGER, United States District Judge for the Southern District of West Virginia, sitting by designation.


         Congress enacted the Telephone Consumer Protection Act (TCPA) to prevent abusive telephone marketing practices. As part of this effort, the TCPA prohibits calls to numbers on the national Do-Not-Call registry. Dr. Thomas Krakauer brought suit against Dish Network, alleging that its sales representative, Satellite Systems Network (SSN), routinely flouted this prohibition. He sought to pursue his claim on behalf of all persons who, like him, had received calls on numbers listed in the Do-Not-Call registry. The district court certified the class and the case went to trial, where Dish ultimately lost. Dish now appeals, raising several objections to the proceeding below. Because we hold that the district court properly applied the law and prudently exercised its discretion, we affirm.



         Telemarketing is big business, especially for television providers. Calls made on behalf of cable and satellite television companies have become ubiquitous. Many Americans are now accustomed to the standard sales pitch, asking them to make an upgrade or take advantage of a limited time offer. These calls are obviously effective, as consumers spend billions of dollars each year on television services marketed over the phone.

         Telemarketing calls are also intrusive. A great many people object to these calls, which interfere with their lives, tie up their phone lines, and cause confusion and disruption on phone records. Faced with growing public criticism of abusive telephone marketing practices, Congress enacted the Telephone Consumer Protection Act of 1991. Pub. L. No. 102-243, 105 Stat. 2394 (1991) (codified at 47 U.S.C. § 227 (2012)). As Congress explained, the law was a response to Americans "outraged over the proliferation of intrusive, nuisance calls to their homes from telemarketers," id. § 2(6), and sought to strike a balance between "[i]ndividuals' privacy rights, public safety interests, and commercial freedoms," id. § 2(9). To meet these ends, the TCPA first imposed a number of restrictions on the use of automated telephone equipment, such as "robocalls." 47 U.S.C. § 227(b); see Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 373 (2012). For in-person telemarketing calls, on the other hand, the law opted for a consumer-driven process that would allow objecting individuals to prevent unwanted calls to their homes.

         The result of the telemarketing regulations was the national Do-Not-Call registry. See 47 C.F.R. § 64.1200(c)(2). Within the federal government's web of indecipherable acronyms and byzantine programs, the Do-Not-Call registry stands out as a model of clarity. It means what it says. If a person wishes to no longer receive telephone solicitations, he can add his number to the list. The TCPA then restricts the telephone solicitations that can be made to that number. See id.; 16 C.F.R. § 310.4(b)(iii)(B) ("It is an abusive telemarketing act or practice and a violation of this Rule for a telemarketer to . . . initiat[e] any outbound telephone call to a person when . . . [t]hat person's telephone number is on the "do-not-call" registry, maintained by the Commission."). There are limited exceptions. For instance, a call does not count as a "telephone solicitation" if the caller and the recipient have an established business relationship, see 16 C.F.R. § 310.2(q), or if the recipient invited the call, see 47 U.S.C. § 227(a)(4). Barring an exception, however, telemarketers are expected to check the list and avoid bothering those who have asked to be left alone. In addition to the national registry, companies are also expected to keep individual Do-Not-Call lists, reflecting persons who have directly told the company that they do not wish to receive further solicitations. See 47 C.F.R. § 64.1200(d).

         The TCPA can be enforced by federal agencies, state attorneys general, and private citizens. Mims, 565 U.S. at 370. Relevant to this appeal, the law allows a private right of action for violations of the Do-Not-Call registry regulations. Specifically, claims can be brought by "[a] person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed under this subsection . . . ." 47 U.S.C. § 227(c)(5). These private suits can seek either monetary or injunctive relief. Id. If damages are sought, the plaintiff is entitled to receive the greater of either his actual loss or statutory damages up to $500. Id. If the defendant's violation of the law was willful and knowing, those damages can be trebled, within the district court's discretion. Id. "[T]he court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph.")

         This private cause of action is a straightforward provision designed to achieve a straightforward result. Congress enacted the law to protect against invasions of privacy that were harming people. The law empowers each person to protect his own personal rights. Violations of the law are clear, as is the remedy. Put simply, the TCPA affords relief to those persons who, despite efforts to avoid it, have suffered an intrusion upon their domestic peace.


         Dr. Thomas Krakauer is just such a person. In May of 2009, he started getting telemarketing calls, asking him to buy services from Dish Network. These calls were placed by a firm called Satellite Systems Network (SSN), whose entire business model was to make calls like these on behalf of television service providers. During the time that SSN was calling Krakauer, the company only marketed Dish. J.A. 172. Krakauer called Dish to complain about the calls, and he was placed on the company's individual Do-Not-Call list. Fortunately for Krakauer, he had registered his phone number on the national Do-Not-Call registry in 2003. SSN's calls to him were therefore not only annoying, they were illegal. In 2015, Krakauer sued Dish Network for the improper calls under the TCPA, seeking redress for the calls made on its behalf by SSN.

         In the years since, this litigation has wound its way through an array of pre-trial motions, a full jury trial, and a detailed post-trial claims process. In September of 2015, the court certified a class that closely followed the text of the TCPA, allowing Krakauer to bring his claim on behalf all persons (1) whose numbers were on the national Do-Not-Call registry or the individual Do-Not-Call lists of either Dish or SSN for at least 30 days and (2) received two calls in a single year. J.A. 202-03. The court concluded that this definition satisfied the requirements for class certification. A few of the court's findings on this point are particularly relevant for this appeal. First, the court held that the class-wide issues raised by the plaintiffs were susceptible to common proof. Id. at 191, 195-96. As the court saw it, "[t]he essential elements of the class members' claim can be proven at trial with common, as opposed to individualized, evidence." J.A. 200. Looking to our court's precedents, the district court also concluded that the members of Krakauer's proposed class could be easily identified. Id. at 178 (citing EQT Prod. Co. v. Adair, 764 F.3d 347, 358 (4th Cir. 2014)).

         Nearly a year after the initial certification, Dish moved to dismiss the entire case on the grounds that the class lacked Article III standing. The court rejected this argument, holding that "Dr. Krakauer's allegations show a concrete injury to him and to each class member," J.A. 246, and allowed the case to move forward. Prior to trial, the court granted a motion to further narrow the class in response to new class-wide data provided by the parties. Id. at 279-80. When the trial arrived, the court instructed the jury to resolve three factual disputes. First, the jury had to determine whether SSN was acting as Dish's agent at the time that it made the improper calls. Second, it had to determine whether SSN made, and the class members received, multiple calls to numbers on the national Do-Not-Call registry within a given period. Third, if it found that such calls were in fact made, the jury was also asked to assign a damages award for each improper call. Id. at 510-28.

         Ultimately, the jury returned a verdict in favor of Krakauer and the class plaintiffs. After finding that the telemarketing practices violated the TCPA and that Dish was liable for the calls placed by SSN, the jury awarded damages of $400 per call. Id. at 508. Once the trial was complete, the district court examined whether Dish's violations were willful and knowing, as provided for in the statute. The court found that they were, and trebled the damages award. Id. at 549-50. Dish responded with a motion for a new trial and renewed motion for judgment as a matter of law, raising many of the arguments that had been rejected at the class certification stage and in its earlier motions. All of these arguments were rejected, and the court began to process the class members' claims.

         In developing a process to ensure that the money went to the right people, the parties presented wildly divergent proposals to the court. Dish asked the court to require a claims form for every single class member, even those for whom the class-wide evidence clearly established a valid claim. The plaintiffs on the other hand, asked for judgment to be entered immediately and for checks to be mailed to class members who had already responded to the class solicitation, without the need for adversarial process. J.A. 615-16.

         The court opted for a middle position, declining to enter an immediate judgment and instead allowing Dish to participate in the process and contest some individual claims. Id. at 626. Under this process, the court would appoint an administrator to oversee the distribution and completion of individual claims forms. The court left open the possibility that the plaintiffs could point to "class members who are identified fully and without contradiction in the data," for whom judgment without a claims form would be appropriate. Id. at 628. Applying this method, the district court granted judgment for approximately 11, 000 plaintiffs without a claims form, finding that their entitlement to damages was clear. J.A. 671.

         Many months later, and more than a year after the jury trial had concluded, the district court entered a final judgment in the case.[1] In entering the order, the district court noted that Dish had not participated in the claims process in good faith, instead choosing to "bombard the court with irrelevant and voluminous materials," "repeat arguments the court has rejected many times," and "seek a second bite at the apple when it loses on grounds it could have raised the first time the apple was presented." J.A. 685. Given the futility of continuing a process that was only initiated to give Dish a seat at the table, the court "conclude[d] ...

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