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TCPA Class Action Update: Eighth Circuit Upholds a 98% Reduction in Statutory Damages Because the Calling Party Reasonably Believed that it Had Consent to Call

On July 16, 2019, the Eighth Circuit affirmed a trial court’s post-trial reduction of damages in a TCPA case. In Golan v. FreeEats.com, Inc., No. 17-3156 (8th Cir. July 16, 2019), the trial court originally awarded the plaintiffs more than $1.6 billion in statutory damages; however, it later reduced the award by more than 90% to approximately $32.4 million. Unsurprisingly, the plaintiffs appealed the decision.

The case arose from approximately 3.2 million calls made over the course of one week by a marketing company concerning a film. The plaintiffs received two voice messages as a result of these calls and brought a class action for violations of the TCPA against the filmmaker and the entities involved in the marketing of the film. Importantly, the marketing firm used an existing call list to market the film and believed that the owners of these numbers had provided prior consent to be contacted about topics such as religious liberty (the focus of the film).

The trial court found that the TCPA-mandated damages of $1.6 billion (i.e. $500 per call) violated the Due Process Clause. The trial court therefore reduced the original damages award from $500 to $10 per call. The Eighth Circuit affirmed.

In its decision, the Eighth Circuit found that the defendant marketing-firm “plausibly believed it was not violating the TCPA” and that it “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 about 7% of recipients “heard the message about the film.”

Plaintiffs also attempted to argue that the Due Process analysis turns on the individual award ($500 under the statute) rather than the aggregate award ($1.6 billion). The court found that the aggregate award was so “severe and oppressive” and “wholly disproportioned to the offense” that it was “obviously unreasonable.” The Eighth Circuit agreed and upheld the trial court’s reduction of statutory damages.

Golan provides hope that courts can and will examine the totality of the circumstances in assessing TCPA damage awards. Courts can now deviate from the statutory damages of $500-$1,500 per call, giving defendants some comfort and lessening the fear of a TCPA lawsuit.

 

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Monthly TCPA Digest – July 2019

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Author

Nicole V. Ozeran is a litigator in Mintz’s complex Corporate Litigation Group, where her practice focuses on consumer fraud, online and telephone marketing, false advertising, and regulatory and statutory compliance issues. She's also part of the Consumer Privacy and TCPA Class Action Defense Group.