Appeals Court Upholds 98% Reduction of TCPA Damage Award

Award limited to $10 per call as opposed to statutory minimum of $500 on due process grounds

The Court of Appeals for the Eighth Circuit recently affirmed a lower court’s ruling that dramatically reduced the amount awarded to plaintiffs in a class-action lawsuit alleging violations of the Telephone Consumer Protection Act.

The court in Golan v. ccAdvertising refrained from applying the statutory damage award of $500 per call, which would have resulted in a “shockingly large amount” of damages that would have violated the Due Process clause of the 5th Amendment to the US Constitution.

The defendant was accused of making 3.2 million calls during the course of a week to promote a religious movie called The Last Ounce of Courage, which was marketed by ccAdvertising. The calls were scripted as a poll that concerned topics such as “American freedom and liberty” and “religious freedom.” After hearing two polling questions, call recipients were asked if they would like to hear more information about the film. The plaintiffs received two calls, neither of which were answered. The defendant left messages that stated “Liberty. This was a public survey call. We may call back later.”

The plaintiffs sued, alleging the calls violated the TCPA. A District Court judge dismissed the case, and the plaintiffs appealed . The Eighth Circuit overturned the dismissal, saying the calls constituted telemarketing in violation of the TCPA, and remanded the case back to the District Court, where it later went to trial.

At the trial, the jury ruled in favor of the plaintiffs, and, based on the TCPA’s statutory damages provision of $500 per call, awarded damages in the amount of $1.6 billion. The defendant filed a motion for reduction of damages, saying the amount violated the Due Process clause, and the District Court judge lowered the amount to $10 per call, or $32 million. That ruling, among others, was appealed to the Eighth Circuit.

The plaintiffs argued that rather than looking at the total, the court should focus on the amount per violation. But the case the plaintiff relied on in making its argument only had one plaintiff, and not the 3.2 million that were involved in this case. In its ruling, the Eighth Circuit concurred with the District Court judge that awarding $1.6 billion in damages was simply too excessive: “To state the obvious, $1.6 billion is a shockingly large amount,” the Appeals Court wrote. The award is “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”

“The aggregate award is still relevant,” the Appeals Court wrote, and few can argue that $32 million is a sizable chunk of change- more than enough to send a message to this and any other would be defendant. Indeed, the fact that statutory damages can be reduced by an astounding 98% and still result in a massive windfall for the plaintiff’s attorneys underscores how absurdly high statutory damages really are under the TCPA.

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