Conservative activist Dr. James R. Leininger, through an entity he owned, helped finance a film called Last Ounce of Courage. A separate company, Courage 2012, LLC, which managed the ownership rights of the film, hired, among others, a company called ccAdvertising to market the film. In the course of its work, ccAdvertising made approximately 3.2 million calls over the course of one week, delivering an audio message prerecorded by former Arkansas Governor Mike Huckabee.
The two named plaintiffs received two voice messages resulting from these calls and brought a class action for violations of the Telephone Consumer Protection Act against Dr. Leininger, ccAdvertising and others involved in the marketing of the film. The district court (1) ruled that the two named plaintiffs had standing based on receiving the two voice messages, (2) reduced the damages awarded to plaintiffs from $1.6 billion ($500 per call) to $32 million ($10 per call), and (3) refused to give a jury instruction on Dr. Leininger’s personal liability. An appeal to the Eighth Circuit ensued.
Regarding the standing issue, the Eight Circuit had previously ruled, in a prior appeal in the same case, that the named plaintiffs had standing. See Golan v. Veritas Entm’t, LLC, 788 F.3d 814, 818–21 (8th Cir. 2015). But, given an intervening change in Supreme Court precedent, the court agreed to revisit that ruling. The court noted that “[t]he harm to be remedied by the TCPA was ‘the unwanted intrusion and nuisance of unsolicited telemarketing phone calls and fax advertisements.’” Analyzing standing under the Supreme Court’s subsequent opinion in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the court found that the “harm here was the receipt of two telemarketing messages without prior consent,” which harm “bear[s] a close relationship to the types of harms traditionally remedied by tort law, particularly the law of nuisance.”
Regarding the damages issues, the court noted that while nothing in the TCPA permits a reduction of damages, and the TCPA expressly provides for monetary damages “up to $500” per violation thereof, damages may nonetheless be reduced if they are found to be unconstitutional. Accordingly, the court found that the statutory damages of over $1.6 billion violate the Due Process Clause under the particular facts of this case because they are “so severe and oppressive [as] to be wholly disproportioned to the offense and obviously unreasonable.”
Regarding the jury instruction for direct liability to Dr. Leininger, the court noted that “to be held directly liable, the defendant must be the one who ‘initiates’ the call. . . . TCPA liability in this context generally does not extend to sellers who do not personally make the phone calls at issue, but only includes the telemarketers acting on behalf of those sellers.” The court, therefore, ruled that the district court did not abuse its discretion in refusing to give the jury an instruction on the direct liability of Dr. Leininger for violating the TCPA.
The Eight Circuit thus affirmed the district court’s orders.
To read the opinion in Golan, et al. v. FreeEats, Inc. et al., click here.
Why it matters: On the damages issue, recently appointed Judge Davis Stras, writing for a panel of the Eighth Circuit, found a judgment awarding the maximum amount of statutory damages per TCPA violation ($500) to be unconstitutional, given the cumulative total of over $1.6 billion. While Congress has authorized awards of up to $500 per violation, rarely do TCPA violations reach that maximum. The court here stressed that the particular facts of this case render the award unconstitutional and out of touch with the conduct complained of. On the issue of liability, the Eighth Circuit affirmed the narrow scope of who can be held liable for violations of the TCPA.