July 16, 2019

Eighth Circuit affirms plaintiffs’ standing in TCPA case, reduction in statutory damages

On July 16, 2019, the US Court of Appeals for the Eighth Circuit affirmed the trial court’s reduction of a damages award in a case brought under the Telephone Consumer Protection Act, 47 USC 227.  The defendants were involved in the production and marketing of a film.  Marketing efforts included 
3,242,493 telephone calls made by ccAdvertising over a period of seven days.  The plaintiffs sued in Missouri state court, where the court dismissed the case for lack of standing because the calls did not violate the TCPA.  On appeal to the Eighth Circuit, the court reversed the dismissal, concluding that even the brief messages received by the plaintiffs qualified as “telemarketing” in violation of the TCPA.  The plaintiffs prevailed at trial against ccAdvertising, but not against the other defendants named in the suit.  Statutory damages of $500 per call under the TCPA resulted in a judgment of $1,621,246,500.  CcAdvertising filed a post-trial motion for reduction of damages, arguing that such an excessive damages award violated the due process clause of the Fifth Amendment.  The district court granted the defendant’s post-trial motion, and reduced the damages to $10 per call ($32,424,930 total).

The class action plaintiffs appealed the reduction of damages.  On appeal, the Eighth Circuit considered, inter alia, standing under Spokeo and ccAdvertising’s due process challenge.  As to whether the appellants had standing to bring the claim based on the receipt on their answering machine of the two messages advertising the film, the court noted that although the law of the case doctrine would normally not allow it to revisit the issue of standing — which the court had decided in favor of the plaintiffs at an earlier stage in the case – the Supreme Court’s subsequent holding in Spokeo, Inc. v. Robins¸136 S.Ct. 1540 (2016), requiring “a concrete injury even in the case of a statutory violation,” Id. at 1549, required reconsideration of its earlier holding.  Even in light of Spokeo, however, the court concluded that the intangible harm suffered by the plaintiffs constituted a concrete injury and was sufficient to confer standing.

On the third issue considered on appeal, the reduction of statutory damages, while acknowledging the unambiguity of the TCPA’s damages provisions, the court agreed with the lower court’s finding that the $1.6 billion damages award violated the due process clause.  The “shockingly large amount,” compared with the defendant’s conduct, which lasted one week and for which the defendant thought it had consent, led the court to conclude that the district court did not err in reducing the award.