A recent settlement between the U.S. Department of Justice and a media conglomerate underscores the importance of implementing robust Telephone Consumer Protection Act compliance measures, including for third-party vendors. In 2017, a jury found DISH Network LLC liable for its vendors’ violations of the Telemarketing Sales Rule and the Telephone Consumer Protection Act, as well as several state statutes. Earlier this year, the Seventh Circuit affirmed DISH’s liability, but vacated the award and remanded for a recalculation of damages.
Now, following the Seventh Circuit’s remand, the Department of Justice’s Civil Division has announced a $210 million settlement with DISH for over sixty-six million telemarketing calls made by DISH and retailers that marketed DISH’s products and services in violation of the TSR, the TCPA, and other statutes. The Stipulated Judgment requires DISH to pay $126 million in civil penalties to the United States (which is the largest civil penalty ever paid) for TSR violations, and $84 million to four states (California, Illinois, North Carolina, and Ohio) for TCPA and various state statutory violations. The settlement also obligates DISH to continue robust compliance measures imposed by the court in 2017, including prohibitions on future telemarketing violations and significantly restricts DISH’s telemarketing practices. DISH has also been ordered to prepare a telemarketing plan, submit compliance materials to the Department of Justice and the Federal Trade Commission for review through 2027, and provide compliance reports upon request by the agencies.
The lawsuit was originally filed in 2009, with the federal and state governments alleging that DISH repeatedly initiated calls to phone numbers on the DNC registry, violated the TSR’s prohibition on abandoned calls, enabled and assisted telemarketing violations by the retailers marketing DISH’s products and services, violated the TCPA’s ban on autodialed phone calls, and violated a handful of state statutes. The district court awarded the plaintiffs a record-breaking $280 million in civil penalties and damages in 2017. DISH’s liability was affirmed on appeal by the Seventh Circuit, but the $280 million award was vacated and remanded for recalculation. DISH, the DOJ, and the States reached this expansive settlement on remand.
The government’s suit, and this historic settlement, underscore the necessity of a strong compliance regime, including with respect to third-party vendors, to insure that “unscrupulous sales persons” do not use “illegal practices to sell” products.