Antitrust Law Daily Wrap Up, ADVERTISING NEWS: $500K punitive damages award stands in Westgate Resorts misrepresentation, TCPA suit, (Nov 9, 2015)

By Greg Hammond, J.D.

The U.S. Supreme Court denied review today of Westgate Resorts’ challenge to a punitive damage award of $500,000 in a misrepresentation and Telephone Consumer Protection Act (TCPA) action (Westgate Resorts, Ltd., L.P. v. Overton, Dkt. 15-327).

Nathan and Patricia Overton paid nearly $40,000 for an all-season “floating” timeshare interval, claiming that salespersons misrepresented that the Overtons would be able to request and obtain a reservation for a certain unit for the same week in December each year, and have the right to book unlimited “Owners’ Nights” at any Westgate resort for certain fees. The trial court concluded that Westgate intentionally failed to provide the Overtons with an accurate public offering statement and intentionally refused to rescind the contract, in violation of the Time-Share Act; that Westgate engaged in deceptive practices in violation of the TCPA; and that Westgate was guilty of common law fraud and misrepresentation with regard to the promise of unlimited Owners’ Nights.

The Tennessee trial court granted rescission of the contract, ordered Westgate to refund the Overtons’ purchase money, and awarded $600,000 in punitive damages. The Tennessee Court of Appeals affirmed the punitive damages, noting that the lower court did not err in focusing on Westgate’s wealth in determining the amount, but nevertheless remitted the punitive damages to $500,000 to comport with Tennessee’s statutory punitive damages cap. Westgate’s Petition for Permission to Appeal the Decision in the Supreme Court of Tennessee was denied in June 2015, and Westgate petitioned the U.S. Supreme Court for review in September 2015.

The questions presented were: (1) Whether a punitive damages award that is nearly fourteen times the compensatory damages, primarily based upon the defendant’s nationwide wealth, violates the due process clause of the Constitution and (2) Whether awarding punitive damages that are nearly fourteen times compensatory damages based on conduct meeting only one of the Campbell reprehensibility factors violates the due process clause of the Constitution.

Attorneys: John H. Pelzer (Greenspoon Marder, P.A.) for Westgate Resorts, Ltd., L.P. John O. Belcher (Farmer, Purcell, White & Lassiter, PLLC) for the Respondents.

Companies: Westgate Resorts, Ltd., L.P.

News: Advertising ConsumerProtection