Krakauer v. Dish Network L.L.C.
| Decision Date | 06 June 2017 |
| Docket Number | 1:14-CV-333 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | THOMAS H. KRAKAUER, Plaintiff, v. DISH NETWORK L.L.C., Defendant. |
In January 2017, after a six-day trial, a jury returned a verdict finding that the defendant Dish Network violated the Telephone Consumer Protection Act. Through its agent, Satellite Systems Network, Dish made over 51,000 telephone solicitations to a class of plaintiffs on the National Do Not Call Registry, in violation of the Act. Dish moves for judgment as a matter of law, contending that there was insufficient evidence SSN acted as Dish's agent, that the plaintiffs' expert was unreliable, and that the plaintiffs lacked standing. In the alternative, Dish moves for a new trial, contending that the jury's verdict is against the weight of the evidence and is a miscarriage of justice. Because the evidence fully supports the jury's verdict and Dish received a fair trial, the Court will deny the motions.
The plaintiff, Dr. Thomas Krakauer, filed suit in 2014 alleging that Dish violated the Telephone Consumer Protection Act, 47 U.S.C. § 227(c)(5), when its agent called thousands of numbers on the National Do Not Call Registry between 2009 and 2011. See Doc. 32 at ¶¶ 25, 47, 54.1 The Court certified the class, covering the period from May 2010 to August 2011, Doc. 111 at 4, 34, and largely denied summary judgment. See Docs. 113, 118, 169.
Trial on class issues began on January 10, 2017. Minute Entry 01/10/2017.2 On January 19, the jury returned a verdict in favor of the plaintiffs. Doc. 292. The jury found that SSN was Dish's agent and that, for every class member, SSN made "at least two telephone solicitations to a residential number" on the Registry. See id. at ¶¶ 1-2. The jury awarded $400 per call. Id. at ¶ 3.3 Dish filed motions for judgment as a matter of law under Rule 50(b) and for a new trial under Rule 59(a)(1)(A). Docs. 318, 320.4 Briefing is now complete.
In deciding a motion for judgment as a matter of law, the Court "view[s] the evidence in a light most favorable to the non-moving party and draw[s] every legitimate inference in that party's favor." Saunders v. Branch Banking & Trust Co. of Va., 526 F.3d 142, 147 (4th Cir. 2008) (citation omitted). In deciding a motion for a new trial, the Court is permitted to weigh the evidence and consider the credibility of witnesses. Cline v. Wal-Mart Stores, Inc., 144 F.3d 294, 301 (4th Cir. 1998).
The evidence at trial showed that Dish had broad contractual rights to control SSN's telemarketing practices; that it promised forty-six state attorneys general that it would monitor and control the telemarketing practices of its marketers, including SSN; that it was aware SSN had a long history of non-compliance with the TCPA; that it learned just before the class period began that SSN was soliciting people on the Do Not Call Registry and yet it took no action to prevent SSN from making those calls on Dish's behalf; and that during the class period SSN made thousands of phone calls to residential numbers on the Registry attempting to sell Dish products.
The Court further incorporates facts in its May 22, 2017, opinion, which found that Dish's violations of the TCPA were willful and knowing. Doc. 338 at 3-20. The Court will discuss additional facts as necessary.
"A court may award judgment as a matter of law only if there is no legally sufficient evidentiary basis for a reasonable jury to find for the non-moving party." Saunders, 526 F.3d at 147 (citing Fed. R. Civ. P. 50(a)). Judgment as a matter of law isappropriate only when "the court determines that the only conclusion a reasonable jury could have reached is one in favor of the moving party." Id. at 147 (citation omitted).
To prevail at trial on agency, the plaintiffs had to prove two things by the greater weight of the evidence: first, that SSN was Dish's agent; and second, that SSN acted in the course and scope of that agency when it made the calls at issue. Doc. 293 at 4-5. The Court instructed the jury on actual authority, including implied actual authority by consent or acquiescence. Id. at 5, 6-7.5 Dish contends that the evidence was insufficient to support the jury's finding that SSN was Dish's agent and insufficient to support the jury's finding that SSN acted within the scope of that agency.
i. Actual authority
For agency to exist, the principal must have the power to direct and control the agent's actions. Hollingsworth v. Perry, 133 S. Ct. 2652, 2666 (2013); Restatement (Third) of Agency § 1.01 & cmt. c (2006). An agent acts with actual authority when, at the time of the action, the agent reasonably believes, based on the principal's words or conduct, that the principal wishes the agent to so act. See Ashland Facility Operations, LLC v. NLRB, 701 F.3d 983, 990 (4th Cir. 2012). In most cases, "the existence and scope of agency relationships are factual matters." Metco Prods., Inc. v. NLRB, 884 F.2d 156, 159 (4th Cir. 1989).
The plaintiffs offered substantial evidence that SSN had actual authority to act as Dish's agent when it made telemarketing calls. As set forth in more detail in the Court's opinion on the willful and knowing issue, the SSN-Dish contract gave Dish substantial control over SSN's marketing and gave Dish unilateral power to impose additional requirements about telemarketing on SSN. Doc. 338 at 8-9. Dish periodically imposed requirements on SSN and other OE retailers—i.e., marketers—about telemarketing. These included a requirement that the marketers use PossibleNow, a service that scrubbed phone lists against the Registry, and a requirement that marketers keep records of calls made. DX 2; DX 5.6 Less than a year before the class period began, Dish represented to forty-six state attorneys general in an Assurance of Voluntary Compliance (the Compliance Agreement) that it had the authority to and would monitor compliance of all its marketers, including SSN, with telemarketing laws. Doc. 338 at 14-15. Dish sent SSN a copy of that Compliance Agreement. See Trial Tr. Jan. 11, 2017, Doc. 302 at 73:25-74:10 (testimony by Amir Ahmed). Dish had the power to control and direct SSN's telemarketing activities, it had manifested that intent to and did exercise that power over SSN, and it had given SSN reasonable grounds to believe that Dish wished SSN to act as its agent in its telemarketing activities. See Doc. 293 at 6.
Dish points to the SSN-Dish contracts, written communications with SSN, and the testimony of Dish employees, all of which stated that SSN was an independent contractor. Doc. 319 at 7-8. Dish also contends that it lacked control over SSN'stelemarketing. Id. at 9-10. That the contract between Dish and SSN explicitly characterized the relationship as one of independent contractor, JX 1 at ¶ 11, is not binding on third parties. See, e.g., City of Chicago v. Matchmaker Real Estate Sales Ctr., Inc., 982 F.2d 1086, 1097-98 (7th Cir. 1992). As discussed supra, there was substantial evidence to the contrary that, if accepted by the jury, showed that SSN acted as Dish's agent. The jury was not required to accept Dish's evidence, and it resolved conflicts in the evidence in favor of the plaintiffs, as was its privilege. See, e.g., Dimick v. Schiedt, 293 U.S. 474, 486 (1935) ().
A principal is not bound by the act of an agent unless that act falls within the scope of actual authority granted by the principal to the agent. Restatement (Third) of Agency § 7.04 (2006). Actions taken against the principal's interest are generally not within the scope of the agent's authority. United States v. Hilton, 701 F.3d 959, 970 (4th Cir. 2012); cf. Tobacco Tech., Inc. v. Taiga Int'l N.V., 388 F. App'x 362, 373 (4th Cir. 2010) (unpublished) (). If the principal consents or acquiesces in a course of conduct, the agent may reasonably conclude that the conduct is in the principal's best interests. See Commodity Futures Trading Comm'n v. Gibraltar Monetary Corp., Inc., 575 F.3d 1180, 1189 (11th Cir. 2009) (per curiam); Restatement (Third) of Agency § 2.02 cmt. d (2006) ("questions of interpretation that determine whether an agent acted with actual authority have a temporal focus that moves through time as the agent decides how to act"); id. at cmt. e ("[a]n agent's understanding of the principal's interests and objectives is an elementof the agent's reasonable interpretation of the principal's conduct."). To decide that the principal acquiesced or consented, there must be evidence that the principal knew of earlier similar activities by the agent and consented or did not object to them. See id. ()
The plaintiffs presented substantial evidence that SSN acted within the scope of its authority when it made the telemarketing calls at issue. Obviously Dish benefitted, and SSN knew that Dish benefitted, when SSN made sales on Dish's behalf. Dish knew that government lawsuits and consumer complaints, including a complaint from Dr. Krakauer just a year before the class period began, had demonstrated problems with SSN's compliance with the do-not-call laws. PX 15 at 8060-62; Doc. 338 at 10-17. Dish knew that DirecTV, its primary competitor, had terminated SSN as a marketer. See PX 15 at 8002; Trial Tr. Jan. 12, Doc. 303 at 52:13-:21, 55:6-:8 (testimony of Reji Musso). SSN had told Dish that SSN was using a telemarketing list that contained people on the Registry. See PX 15 at 7980-81. Dish knew that SSN was not following...
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