Antitrust Law Daily Wrap Up, PRIVACY—D. Colo.: TCPA claims against Dish Network mostly fail, class certification denied , (Feb 20, 2014)

By Peter Reap, J.D., LL.M.

Dish Network, LLC, was entitled to summary judgment with respect to five of the nine telephone calls that were the subject of Matthew Donaca’s claims against it for violation of the Telephone Consumer Protection Act of 1991 (“TCPA”), the federal district court in Denver has decided (Donaca v. Dish Network, LLC, February 18, 2014, Jackson, R.). In addition, Donaca’s revised motion for class certification was denied.

Background. Donaca considers himself to be a consumer rights advocate. He does regular research on telemarketers. He estimates that in 2011 he derived approximately 60% of his income from TCPA-related activity, meaning collecting money through settlements of claims he made against violators.

In the present case Donaca is aggrieved by nine calls he received between November 16, 2007, and March 25, 2009, marketing Dish’s goods and services. Although in one or two cases the source of the challenged calls to Donaca was not clear, his complaint focused not on calls made directly by Dish but on calls made either by Dish retailers or by telemarketers retained by Dish retailers. Dish contends that it cannot be said to have “initiated” calls that it did not physically make, and that it has no vicarious liability for calls initiated by others. Complicating the second question was the fact that section 227(c)(5) of the TCPA, concerning violations of the do-not-call registry regulation, authorized suits based on calls “by or on behalf of” the same entity, whereas section 227(b)(3), authorizing suits based upon unsolicited prerecorded calls, did not have the “on behalf of” language.

When this case was filed Dish had already raised the “initiate” and “on behalf of” issues in two other cases, and in both cases the courts had referred the issues to the Federal Communication Commission (FCC) for its interpretation of the TCPA and the FCC’s regulations applicable to the issues.

On May 9, 2013, the FCC released its long-awaited ruling on the interpretation of the terms “initiate” and “on behalf of.” The Commission’s construction of the term “initiate” sustained Dish’s position that calls are initiated only by the person who physically places the call. However, the Commission made it clear, contrary to Dish’s position, that a seller of goods and services such as Dish can be held vicariously liable for unlawful prerecorded calls and live calls under federal common law agency principles, the court noted.

On July 11, 2013, the court denied certification of the class proposed in Donaca’s reply brief (of which Donaca was not a member) but, at the parties’ request, granted Donaca leave to file a new motion for class certification. Before the court was Dish’s motion for summary judgment and Donaca’s revised motion for class certification.

Summary judgment. The court agreed with the FCC’s interpretation of the terms “initiate” and “on behalf of,” it observed.

Donaca failed to come forward with any evidence that Dish initiated any of the nine calls to Donaca that were the subjects of Donaca’s case, the court determined. In addition, Donaca failed to present any evidence that could link calls two (7/30/08), four (8/8/08), seven (3/20/09), eight (3/24/09) or nine (3/25/09) to Dish, to an authorized Dish retailer, or to anyone else whose acts arguably would trigger the vicarious liability of Dish for those calls. Thus, Dish was entitled to summary judgment with respect to those calls, the court held.

However, Donaca did present evidence with respect to the other four calls (one (11/16/07), three (7/31/08), five (8/19/08) and six (9/3/08)) that, if believed, could trigger Dish’s vicarious liability under federal common law agency principles, the court explained. Thus, Dish was denied summary judgment with respect to those four calls.

Class certification. The court denied Donaca’s previous certification motion because Donaca was not a member of the proposed class. At that time the proposed class was defined according to three calling platforms: the NetDotSolutions calling platform used by Dish dealers LA Activations on one specific day in 2009 and by alleged Dish dealer Satellite Services Utah (“SSU”) on certain dates in 2012; the Five9 platform used by Dish dealer Satellite Systems Network on certain dates in 2010 and 2011; the Dynamic Interactive calling platform used by Dish dealer Paramount Media on certain dates in 2011. Donaca did not receive telemarketing calls from any these dealers or platforms, i.e., he was not a member of the proposed class. The court denied class certification on that basis.

Donaca now attempted to solve the problem by expanding the class definition to include four calling platforms used by three dealers from whom Donaca did receive calls between November 17, 2007 and September 3, 2008: Apex Satellite (the authorized Dish dealer which placed Donaca call number one); Marketing Guru (the authorized Dish dealer which placed Donaca call number three); and Clear Interactive (the authorized Dish dealer which placed Donaca calls numbers five and six).

However, despite his counsel’s best efforts, Donaca failed to identify any individual or phone number that received a telemarketing call from those platforms or dealers on those dates other than Donaca himself. Apparently any records that could have identified such persons or calls have been lost or destroyed, the court observed. Because members in a class of individuals who received calls on the dates and from the dealers who called Donaca could not be ascertained, a class comprising such individuals could not be certified, the court ruled.

Donaca argued that this problem can be solved through notice by publication. However, during oral argument Donaca’s counsel conceded that it was very unlikely that people who received the same calls that Donaca received would have any evidence of that. At a minimum authentication of the bona fides of any responder to a publication notice would require individual investigation and fact-finding. For all practical purposes, therefore, such a class was not ascertainable, the court reasoned.

Even if one assumed, contrary to the court’s previous finding, that Donaca could be deemed a member of the proposed class, there were still problems with his proposed class, according to the court. The four groups of people he wished to represent (that is, the groups other than the unascertainable group called by the three dealers who called Donaca) were called by (1) LA Activations; (2) Satellite Systems Network; (3) Satellite Services Utah; and (4) Paramount Media Group.

First, the evidence did not show that there is an ascertainable group of individuals who received prerecorded calls from LA Activations pitching Dish on July 27, 2009, as alleged, the court held. Second, Donaca’s claims were not typical of the claims of the persons called by Satellite Systems Network or Satellite Services Utah. Finally, the court was not convinced that, with respect to the calls attributed to Paramount Media Group, that common questions of law or fact predominated over individual questions.

Superiority. Under Rule 23(b)(3), Donaca also must establish that “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy,” the court noted.

The facts did not convince the court that class treatment was necessarily superior to other methods for a fair and efficient adjudication of the TCPA claims. Donaca’s own example suggested the contrary. He has been generating something in the range of 60% of his income from suits or threats to sue telemarketers. Few people would make such claims for an occupation or avocation. But it did demonstrate that if one was sufficiently annoyed by unsolicited prerecorded calls (or live calls), there was a remedy that has actually and successfully been used, according to the court.

The case is No. 11-cv-02910-RBJ-KLM.

Attorneys: Edward A. Broderick (Broderick Law, P.C.) for Matthew Donaca. Benjamen Edward Kern (Benesch, Friedlander, Coplan & Aronoff LLP) for Dish Network, L.L.C.

Companies: Dish Network, L.L.C.

Cases: Privacy ColoradoNews