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Krakauer v. Dish Network, LLC

United States District Court, M.D. North Carolina

July 27, 2017

THOMAS H. KRAKAUER, Plaintiff,
v.
DISH NETWORK, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          Catherine C. Eagles, District Judge.

         The defendant, Dish Network, LLC, willfully violated the Telephone Consumer Protection Act when its agent made 51, 119 telephone solicitations to 18, 066 residential phone numbers on the National Do Not Call Registry. Each class member is entitled to damages of $1, 200 for each violative solicitation call. Having considered proposals from the parties, the Court by this order outlines a process for entry of judgment in favor of those class members who are clearly identified and a general claims administration process for all other class members. The Court directs the parties to confer and submit motions, forms, and proposed additional procedures that follow the Court's outline and schedule.

         I. Background

         This lawsuit was filed in 2014. The plaintiff, Dr. Thomas Krakauer, asserted that Dish's agent, Satellite Systems Network, made repeated telephone solicitations to phone numbers, including his own, that were listed on the National Do Not Call Registry. Doc.

         1. After discovery, the Court granted the plaintiffs' motion for class certification, and, as is relevant here, certified the following class:

All persons throughout the United States whose telephone numbers were listed on the federal Do Not Call registry for at least 30 days, but who received telemarketing calls from Satellite Systems Network, to promote the sale of Dish satellite television subscriptions from May 1, 2010 to August 1, 2011.

Doc. 47 at 1; see Doc. 111 at 4.[1]

         At the time of class certification, all the telephone numbers had been identified using business records maintained by Five9, the software company that provided the agent's dialing software. See Doc. 137 at 19-136; Doc. 137-1; Doc. 137-2 at 1-34. The Five9 records included names and addresses associated with many of the phone numbers, but not all. When those records were incomplete, the plaintiffs' expert located names and addresses associated with the phone numbers using a LexisNexis commercial database. See Doc. 103 at 129:24-131:6. After incorporating this data, about 4, 000 numbers still had incomplete name and address information. See Doc. 133-1 at ¶ 8.

         The plaintiffs notified class members of the lawsuit by sending postcards to these names and addresses in February 2016. Doc. 206-1 at ¶ 4; see Doc. 153 at 2. The plaintiffs successfully delivered postcards to names and addresses associated with about 75 percent of the phone numbers in the class. Doc. 206-1 at ¶¶ 11-12.

         In the lead-up to trial, the parties stipulated to remove several categories of phone numbers from the class. See Docs. 264, 266, 271. This left 18, 066 class phone numbers; the plaintiffs had delivered postcards to 13, 268 persons associated with these phone numbers, leaving 4, 798 not delivered. Doc. 331-1 at ¶¶ 6-7.

         At trial, the plaintiffs presented class-wide evidence that (1) Dr. Krakauer and the 18, 066 class members each received at least two telephone solicitations in any 12-month period, (2) the numbers called were residential numbers, (3) the calls were made on behalf of Dish, and (4) the calls were made when the telephone numbers were on the Registry for over thirty days. See Doc. 293 at 4. The jury answered all issues in favor of the plaintiffs, finding that Dish's agent “[made] and class members receive[d] at least two telephone solicitations to a residential number in any 12-month period by or on behalf of Dish, when their telephone numbers were listed on the National Do Not Call Registry.” Doc. 292 at ¶ 2. The jury also determined that statutory damages of $400 were appropriate for each violative call. Id. at ¶ 3. The Court thereafter trebled the damages because Dish's violations were willful and knowing, increasing the award to $1, 200 per call. Doc. 338; 47 U.S.C. § 227(c)(5).

         After the trial and at the Court's request, each party proposed procedures for moving the case to final judgment and responded to each other's proposals. See Docs. 329 to 331, 334 to 337. The Court heard oral argument on June 7, 2017.

         II. Overview of issues

         The plaintiffs contend that liability and aggregate damages were established at trial, that no more proof is necessary, and that judgment can be entered now against Dish in favor of the class. Plaintiffs seek to mail checks to the class members for whom they successfully delivered a class notice postcard and to have a claims administrator identify the remaining class members in a non-adversarial, practical process. Dish, on the other hand, asserts that more proof is required before any individual class members have established liability. Dish suggests mailing claim forms to the class notice addresses and then allowing the parties to litigate each recipient's membership in the class in an adversarial process with discovery, depositions, and jury trials.

         These disputes break down into three basic issues. The first is whether the verdict established all issues of liability and whether the Court should enter judgment in an aggregate amount, at $1, 200 for each of the 51, 119 violations. The second issue, which depends on the answer to the first issue, is what claims process is appropriate. The third issue is whether any unclaimed damages revert to Dish.

         III. Liability and judgment

         The plaintiffs contend that the jury's verdict satisfied all elements of the TCPA claims and ask the Court to enter judgment against Dish and in favor of the class in the amount of $61, 342, 800, based on a total liability of $1, 200 per call multiplied by 51, 119 calls. See Doc. 331 at 9-11.[2] Dish contends that it is entitled to individual discovery and jury trials on the issue of the identity of the subscriber or recipient of each violative phone call. Doc. 330 at 14-15. Dish phrases this argument in several different ways, but it essentially claims that identity is an element of the cause of action and of statutory standing. The plaintiffs, on the other hand, contend that the jury by its verdict determined that each class member received the calls, that the plaintiffs' expert identified most of the class members as part of the class certification process, and that only a small number of phone numbers remain unlinked to a particular individual.

         A. Statutory standing

         To the extent Dish contends that statutory standing is an element that individual class members must prove to show liability, Dish is correct. However, the plaintiffs already proved the statutory standing of each class member at trial.

         Statutory standing is “best understood as not even standing at all, ” CGM, LLC v. BellSouth Telecommc'ns, Inc., 664 F.3d 46, 52 (4th Cir. 2011), but as an “element of proof” for a claim. Sullivan v. DB Invs., Inc., 667 F.3d 273, 307 (3d Cir. 2011) (en banc) (statutory standing in antitrust context). In considering whether an individual has statutory standing, courts consider whether the individual “is a member of the class given authority by a statute to bring suit.” CGM, 664 F.3d at 52 (quotation omitted). “Normally, where the statutory language provides a clear answer, [the] analysis begins and ends with that language.” Id. at 53 (quotation omitted).

         The class definition, the evidence, the jury instructions, and the jury verdict establish that this element was proven at trial. The standing provision at issue here, 47 U.S.C. § 227(c)(5), states that “[a] person who has received” calls in violation of the § 227(c) provisions may sue.[3] By its plain language, the determinative question for statutory standing is whether a call to a class member was received. The jury answered “Yes” to this question for all class members:

Did [Dish's agent] make and class members receive at least two telephone solicitations to a residential number in any 12-month period by or on behalf of Dish, when their telephone numbers were listed on the National Do Not Call Registry?
[ X ] YES as to Dr. Krakauer and all class members

Doc. 292 at ¶ 2 (emphasis added). The jury instructions also repeatedly referred to receiving calls and stated that “the plaintiff must prove . . . that he and the class members each received at least two telephone solicitations.” Doc. 293 at 4 (emphasis added); see also Id. at 3, 8, 10-12.[4]

         As the Court told the jury, “a person whose residential number is on the National Do Not Call Registry and who receives at least two telephone calls within any 12-month period by or on behalf of [Dish]” is entitled to damages. Id. at 3. The jury found that the plaintiffs proved all of these elements at trial. See Doc. 292. Dish is not entitled to undermine the jury's verdict by second-chance challenges to the fact that the calls were received.

         Statutory standing is an element of the claim, but the jury determined it in the plaintiffs' favor for every class member.[5] No additional procedures are required to satisfy that element.[6]

         B. Identity of class members

          Dish similarly contends that due process entitles it to discovery and a trial on whether the class member was the “subscriber” to the phone number and whether the phone number was residential. See Doc. 330 at 4-5, 14. Dish is correct that the jury did not pair phone numbers with particular names or addresses, nor did the jury determine the identity of the persons who received the calls.[7] But that does not mean that Dish is entitled to discovery from thousands of individual class members and jury trials on the identities of thousands of class members when a verdict has already determined that Dish's agent made tens of thousands of violative calls, each received by a class member.[8]

         The Court has previously found that the class members were ascertainable, Doc. 111 at 9-14, and that the business records of Dish's agent-supplemented by the LexisNexis database-identified most of them by name and address. See Id. at 11; Doc. 153 at 2. Likewise, it has been established that Dish violated the TCPA when its agent made and class members received 51, 119 telephone calls to residential numbers on the Registry, see Doc. 292 at ¶¶ 1-2, that each class member is entitled to $400 in statutory damages per call, id. at ¶ 3, and that because Dish acted willfully, the damages should be trebled. Doc. 338.

         Thus, Dish violated the TCPA and the class members-those persons whose telephone numbers were listed on the Registry-are entitled to up to $1, 200 for each violative call. There may be some questions about who is a class member, but that does not create a right to full-blown discovery and a jury trial on identity for each and every class member. Rule 23 contemplates that the court will make the decision about who the class members are. See Fed. R. Civ. P. 23(c)(3)(B) (in a Rule 23(b)(3) class action, the judgment must “specify or describe those to whom the Rule 23(c)(2) notice was directed, who have not requested exclusion, and whom the court finds to be class members.” (emphasis added)).

         In other class actions fully litigated through post-trial proceedings, courts have not found that due process or any other principle entitled defendants to a jury trial on individual class members' identity. For example, in Six Mexican Workers v. Arizona Citrus Growers, 641 F.Supp. 259, 261 (D. Ariz. 1986), after trial, the court created a procedure using claim forms for the parties to identify the unnamed migrant farmworkers who made up the class. The court did not treat class members' identities as an element. Instead, it indicated it would take “reasonable measures” to check that class members' identities were correct, and it held that verifying class members' identities “needs to be tailored to this particular situation.” Id. at 262-63.[9]

         Similarly, in Allapattah Services, Inc. v. Exxon Corp., 157 F.Supp.2d 1291 (S.D. Fla. 2001), aff'd, 333 F.3d 1248 (11th Cir. 2003), aff'd, 545 U.S. 546 (2005), the court used a claims administration process that evaluated claims using a special master and a summary judgment process. “The goal of the Claims Administration Process [was] to determine whether a claimant is the proper owner of the interest in the damage award for the period of ownership asserted on the claimant's respective proof of claim form.” Exxon, No. 91-0986-CIV, 2006 WL 1132371, at *3 (S.D. Fla. Apr. 7, 2006).[10] While the details of the process are not set forth in the decision, there is nothing to indicate that the Court authorized discovery pursuant to the Rules of Civil Procedure or contemplated jury trials, even though the issues to be determined in the claims process were significantly more complicated than the simple question of class membership left to resolve in this case. See infra pp. 12-13.

         As the trial already established all of the elements necessary to prove a violation- indeed, 51, 119 violations-Dish is not entitled to discovery and trials on the identities of class members. Whether a claimant is a class member is a question that can be more appropriately, fairly, and efficiently resolved through a claims administration process as authorized by Rule 23.

         Like Dish, the Court is interested in insuring that only class members receive the damages awarded by the jury. The Court intends to establish a fair claims administration process that will weed out any unjustified claims by non-class members. As discussed infra p. 14, the Court agrees that Dish has some due process rights to a reasonable opportunity to participate in the claims administration process. In the circumstances of this case, the Court rejects the plaintiffs' contention that Dish has no right at all to participate in the process of identifying class members and accurately distributing class funds. See Doc. 334 at 10-11. So long as Dish's ...


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