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Appeals Court Upholds 98% Reduction of Damages in TCPA Suit

The Court of Appeals for the Eighth Circuit has 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 because applying the statutory damage award of $500 per call in this case resulted in a “shockingly large amount” of damages that ultimately violated the Due Process clause of the Constitution.

A copy of the ruling in the case of Golan v. ccAdvertising can be accessed by clicking here.

The defendant was accused of making 3.2 million calls during the course of a week to promote a religious movie. The named plaintiffs received two calls, which resulted in two answering machine messages. The plaintiffs sued, alleging the calls violated the TCPA. A District Court judge dismissed the case, which was appealed. The Eighth Circuit overturned the dismissal, saying the calls constituted telemarketing and violated the TCPA, and remanded the case back to the District Court. The case went to trial and a jury found for the plaintiffs. Based on the statutory damages in the TCPA of $500 per call, the total damages in the case amounted to $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.

In its ruling, the Eighth Circuit concurred with the District Court judge that awarding $1.6 billion in damages was just 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 plaintiffs argued that rather than looking at the total, the court should focus on the amount per violation. But the case the plaintiff cited in making its argument only had one plaintiff, and not the 3.2 million that are involved in this case, the court ruled. “The aggregate award is still relevant,” the Appeals Court wrote.

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