Ninth Circuit Issues Two Significant TCPA Decisions Concerning Mixed-Use Cellphones And Statutory Damages Awards

• Published date: 02 November 2022
• Subject Matter: Consumer Protection, Media, Telecoms, IT, Entertainment, Mobile & Cable Communications, Dodd-Frank, Consumer Protection Act
• Law Firm: Goodwin Procter LLP
• Author: Ms Angelica Rankins

In the past few weeks, the United States Court of Appeals for the Ninth Circuit (Ninth Circuit) has issued significant decisions concerning the Telephone Consumer Protection Act (TCPA) and its application to unwanted text messages sent to cell phones used for both personal and business use, and the constitutionality of excessive aggregate statutory damages awards.

In one of the more highly watched TCPA cases in recent years, on October 20, 2022, the Ninth Circuit vacated a jury's $925,225,000 verdict against a Defendant for violations of the TCPA as excessive and sent it back to the lower court for reconsideration. Wakefield v. ViSalus, Inc., Case No. 21-35201 (9th Cir. Oct. 20, 2022) (Wakefield).

In Wakefield, Plaintiff brought suit against Defendant, a multi-level marketing company that sells weight loss products, alleging Defendant violated the TCPA by sending her and the class unsolicited, automated telemarketing calls featuring an artificial or prerecorded voice message without their prior express consent.

In April 2019, a jury returned a verdict against Defendant, finding it had made over 1,850,440 calls in violation of the TCPA and, as the TCPA sets minimum statutory damages at $500 per call, the jury set the total damage award at $925,220,000.

Defendant filed a post-trial motion arguing, among other things, that the nearly 1 billion dollar statutory damage award was unconstitutionally excessive. The United States District Court for the District of Oregon refused to reduce the statutory damage award finding that no Ninth Circuit precedent existed to guide lower courts in reducing statutory damage awards that are found to be unconstitutionally excessive. Defendant appealed, arguing that, in the aggregate, the statutory award was so "severe and oppressive" that it violated its due process rights.

Citing the Supreme Court decision St. Louis, I. M. & S. Ry. Co. v. Williams, 251 U.S. 63, 67 (1919), the Ninth Circuit held that even where the per violation penalty is constitutional, the aggregated statutory damages are subject to constitutional limitation in extreme situations, for example, "when they are 'wholly disproportioned' and 'obviously unreasonable' in relation to the goals of the statute and the conduct the statute permits." The Ninth Circuit then pointed to Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1309 (9th Cir. 1990) which sets out factors to consider when assessing the proportionality and reasonableness of a particular...