United States District Court, M.D. North Carolina
THOMAS H. KRAKAUER, Plaintiff,
DISH NETWORK L.L.C., Defendant.
MEMORANDUM OPINION AND ORDER
Catherine C. Eagles, District Judge.
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
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,
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.
on class issues began on January 10, 2017. Minute Entry
01/10/2017. 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. 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.Briefing is now complete.
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).
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.
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.
JUDGMENT AS A MATTER OF LAW
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 is appropriate 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).
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,
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.
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).
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. 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.
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's
telemarketing. 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) (stating that the jury has the power to determine
Scope of authority
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) (agent's knowledge not imputed
to principal if agent is acting adversely to principal's
interests). 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 element of 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. (“[i]n determining whether an agent's
action reflected a reasonable understanding of the
principal's manifestations of consent, it is relevant
whether the principal knew of prior similar actions by the
agent and acquiesced in them.”)
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 Dish's instruction to
maintain call records or its instruction to use a third-party
vendor, Possible Now, to scrub call lists against the
Registry. See Doc. 338 at 12-14, 16-17.
these red flags, Dish never took disciplinary action against
SSN and never threatened to terminate SSN. See Trial
Tr. Jan. 12, Doc. 303 at 20:11-21:12, 22:4-:21 (Musso
testimony). It never investigated whether SSN's conduct
violated telemarketing laws. See Id. at 41:12-42:7,
73:12-74:9, 78:4-:23 (Musso testimony). SSN was aware of the
complaints and Dish's lack of monitoring and enforcement;
by inference, SSN knew Dish was not going to terminate or
discipline SSN for these violations, knew that Dish's
compliance requirements were empty words, and knew that Dish
placed the financial gains from making sales ahead of TCPA
these circumstances, and based on Dish's words, conduct,
and inaction, SSN could reasonably believe that Dish
acquiesced or consented to SSN's telemarketing
violations, and SSN could reasonably conclude that its
telemarketing conduct was in Dish's best interests,
because it could result in sales to Dish. See Doc.
293 at 6-7. The evidence was well sufficient to support the
jury's finding that SSN's actions were within its
scope of authority.
maintains that SSN's telemarketing calls to persons on
the Registry were beyond its scope of authority. Dish
presented evidence that it told SSN not to contact any person
on the Registry and to scrub its lists with PossibleNow, and
Dish contends that it is not responsible for calls SSN made
thereafter to persons on the Registry. Doc. 319 at
13-14. Dish asserts that it never acquiesced to
SSN's conduct because it objected to every violation of
which it was aware. Id. at 14-20. Dish also contends
that calls to people on the Registry were outside any scope
of authority because those calls were adverse to Dish's
interests. Id. at 20.
evidence to the contrary, however, was significant, and while
a jury could have accepted Dish's evidence and
contentions, it was not required to do so. See,
e.g., Dimick, 293 U.S. at 486. Communications
between Dish and SSN in response to numerous complaints show
that Dish acquiesced to SSN's marketing practices. When
SSN twice told Dish that it was, in fact, not scrubbing all
its lists with PossibleNow, Dish's only response was to
ask SSN to stop calling the specific person who had
complained. See PX 15 at 7980-81, 8005; PX 52; PX
899 at 1. Dish did nothing to monitor SSN's compliance
with these requests or with the telemarketing laws generally.
See Trial Tr. Jan. 12, Doc. 303 at 41:12-42:7 (Musso
testimony). The evidence of Dish's silence about
scrubbing other numbers on the Registry from
SSN's call lists and its failure to monitor in the face
of its promises to the state attorneys general, about which
SSN knew, were sufficient to support an inference that Dish
acquiesced to SSN's practices. For the same reasons, SSN
could reasonably assume from Dish's knowledge and failure
to object that calls to numbers on the Registry were in
Dish's best interests- at least as long as the recipients
did not complain, as most did not. See Id. at
150:16-152:15 (Musso testimony); Restatement (Third) of
Agency § 2.02 cmt. e (2006) (in determining consent,
“it is relevant whether the principal knew of prior
similar actions by the agent and acquiesced in them”).
also contends that it instructed SSN not to call Dr. Krakauer
again and that SSN disobeyed this instruction. Doc. 319 at
11-13. Contrary to Dish's suggestion, a reasonable jury
could find that SSN's later calls to Dr. Krakauer in 2010
and 2011 were within the scope of the agency relationship.
The instructions to stop calling Dr. Krakauer came in
communications from Dish's compliance department. PX 15
at 7980-81, 8005. SSN knew from experience that instructions
from the compliance department were window dressing that SSN
could safely ignore. See Doc. 338 at 17-18, 24-26.
Furthermore, SSN had, in response to the 2009 complaint from
Dr. Krakauer, indicated to Dish that it was using a call list
that was last scrubbed in 2003. See Trial Tr. Jan.
12, Doc. 303 at 35:3-36:7, 38:16-39:17 (Musso testimony).
This suggests that anyone Dish had told SSN not to call in
the intervening six years was still on SSN's
call lists in 2009, and that Dish acquiesced to this practice
by not objecting to it. Dish did nothing to monitor or check
on whether SSN complied with its instructions about
scrubbing, even though it knew SSN had ignored such
instructions in the past. SSN could reasonably assume that
Dish was just going through the motions and that its words
meant nothing, so that calling Dr. Krakauer again was still
within the scope of SSN's actual authority.
maintains that there was insufficient evidence that the calls
at issue violated the TCPA, because the plaintiffs'
expert, Anya Verkhovskaya, gave unreliable testimony that was
“wildly speculative.” Doc. 319 at 20-22.
Specifically, Dish challenges Ms. Verkhovskaya's
testimony that the class members' phone numbers were on
the Registry at the time of the calls and that they were
Verkhovskaya testified that she had worked for eighteen years
at a data analysis organization that manages data for class
action lawsuits. Trial Tr. Jan. 12, Doc. 303 at 166:21-167:9,
172:4-:25. She has worked on more than a thousand class
actions, Trial Tr. Jan. 13, Doc. 304 at 21:13-:15, including
several large international cases. Trial Tr. Jan. 12, Doc.
303 at 171:2-:25. She testified that her analysis of the call
data was based on her experience in the data industry and her
understanding of the practices of several data vendors on
whose data she regularly relies. See, e.g.,
id. at 179:18-180:18, 182:2-:22.
Verkhovskaya began her analysis with an examination of call
records for the class period from Five9, a software service
used by SSN to make calls and connect them with SSN's
call center. See Id. at 167:15-168:4; Dep. Tr. of
David Hill, Doc. 332 at 15:25-16:5. These call records, which
Ms. Verkhovskaya received in electronic form, showed the
number called, date, time, length of the call, and other
information. Trial Tr. Jan. 12, Doc. 303 at 174:3-:13,
176:13-:21. After downloading the records into a database,
she determined that SSN made 1.6 million calls during the
class period. Id. at 175:11-:14.
Verkhovskaya testified that she first removed inbound calls
and calls that were not connected. Id. at
177:3-178:5. This left approximately 230, 000 connected,
outbound calls. Id. at 178:6-:8. She then removed
calls to numbers that SSN called only once, since a TCPA
violation requires more than one call. Id. at
178:11-:17; 47 U.S.C. § 227(c)(5). This left
approximately 164, 500 calls to 58, 150 numbers. Trial Tr.
Jan. 12, Doc. 303 at 178:21-179:3.
she removed calls to numbers that were not on the Registry as
of 30 days before the class period began, or April 1, 2010.
Trial Tr. Jan. 13, Doc. 304 at 30:15-:21. She obtained
information about what numbers were on the Registry from
Nexxa, which she testified was an “industry
standard.” Trial Tr. Jan. 12, Doc. 303 at
179:18-180:6.She also testified that the data from Nexxa
would indicate if a number had later come off the Registry.
Trial Tr. Jan. 13, Doc. 304 at 32:1-33:21. After comparing
the numbers, she removed 34, 526 numbers that were not on the
Registry, Trial Tr. Jan. 12, Doc. 303 at 179:14-:17, leaving
66, 468 calls to 23, 625 numbers. See PX 2008; Trial
Tr. Jan. 13, Doc. 304 at 31:7-:11.
Verkhovskaya then took several steps to remove any numbers
from the list that were not residential. She testified that
she used data from LexisNexis and from the call records to
determine whether the numbers called were
residential. She removed all numbers that the Five9
call records themselves marked as “business.”
Trial Tr. Jan. 12, Doc. 303 at 181:10-182:1. She also used
the LexisNexis database to remove additional business and
government numbers from the class. See Id. at
Verkhovskaya testified that based on her experience, once
business and government numbers were eliminated, the
remaining numbers must be residential. See, e.g.,
Id. at 190:25-191:6. She also considered that SSN
was focused on selling Dish to residences, which suggested
that most of their calls would be to residential numbers.
E.g., Trial Tr. Jan. 13, Doc. 304 at 13:22-14:5. As
a result of this review, she removed 1, 393 business numbers,
leaving calls to 22, 232 numbers that she concluded were
residential numbers. Trial Tr. Jan. 12, Doc. 303 at
181:10-:17, 183:8-:10. Finally, she removed numbers that the
Five9 data identified as existing Dish customers, leaving 57,
900 calls to 20, 450 numbers. Id. at 183:11-:23.
Verkhovskaya provided clear, cogent testimony explaining her
methodology and the bases for her opinions. To the extent
there was conflicting evidence that questioned the validity,
credibility, and weight of Ms. Verkhovskaya's opinions,
the jury weighed that evidence and rejected Dish's
contends that Ms. Verkhovskaya's analysis was flawed
because she did not check to see if class members'
numbers were on the Registry on the actual date that SSN
called. Doc. 319 at 21. Dish suggests that some of the
numbers could have come off the Registry between April 1,
2010, and the date of the call. However, Dish points to no
evidence that any identified phone number actually did come
off the Registry after April 1, and Ms. Verkhovskaya
testified that Nexxa would have removed those numbers from
the list it provided her. Trial Tr. Jan. 13, Doc. 304 at
32:1-33:21. This evidence was sufficient to support the
jury's finding that the numbers of the class members were
on the Registry at the time the calls were made.
asserts that Ms. Verkhovskaya was speculating when she
testified that the class numbers were residential. Doc. 319
at 21-22. As Dish points out, Ms. Verkhovskaya could not
identify all of the sources of data LexisNexis uses to
classify numbers as residential or business. Trial Tr. Jan.
13, Doc. 304 at 71:10-:23; see Trial Tr. Jan. 17,
Doc. 305 at 39:9-:22 (testimony of Dr. Debra Aron that
LexisNexis uses many sources in a proprietary process). That,
however, is not the test. See Fed. R. Evid. 702.
Moreover, Ms. Verkhovskaya considered the Five9 records and
SSN's telemarketing goals along with the LexisNexis data
to conclude that the numbers were residential, as discussed