Judge Rejects Due Process Arguments and Enters $925 Mil TCPA Award

A federal judge in Oregon recently found that a $925 million award in a Telephone Consumer Protection Act (TCPA) class action did not violate due process.  The marketing company argued that the aggregate amount was disproportionate to the harm suffered by the plaintiffs.  However, the judge rejected the company’s argument, finding that the $500 penalty amount for a single statutory violation was constitutional.

The lead plaintiff sued the company after the company had called her four times without her consent. Following a three-day jury trial, where the company did not present any evidence or witnesses, the jury found that the company had made 1,850,440 telemarketing calls to the plaintiffs.  The minimum statutory penalty under the TCPA was $500, which brought the aggregate statutory damages to $925,220,000.  The company challenged the aggregate award, arguing that it was unconstitutionally excessive.

The judge found that due process did not warrant the reduction of the aggregate damages.  If the penalty for the single statutory violation was excessively disproportionate to the offense, due process could reduce the aggregate damages.  However, the judge found that the $500 penalty amount was not excessively disproportionate, and declined to use the number of violations the company was found to have committed as a mitigating factor. 

The plain language and legislative history of the TCPA did not support a reduction in the aggregate damages.  The TCPA did not limit the aggregate damages or the number of times a single defendant could be sued. The TCPA also did not suggest any circumstances in which courts could use an amount less than the $500 penalty, and the legislature did not cap damages.

The company’s proposed method of reducing the award was rejected as arbitrary.  The company proposed paying up to $1 for each call, citing its ability to pay a $2 million award.  However, the judge found that the company did not explain why a $2 million award was proportional to the offense, or why the award should have been reduced to $2 million and not some other amount.

The case is Lori Wakefield v. ViSalus, Inc., No. 3:15-cv-1857-SI, (D. Or. August 14, 2020)