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Krakauer v. Dish Network L.L.C.

United States District Court, M.D. North Carolina

October 3, 2017



          Catherine C. Eagles, District Judge.

         In this nationwide class action brought pursuant to the Telephone Consumer Protection Act, a jury found that the defendant, Dish Network, LLC, was liable to the named plaintiff, Dr. Thomas Krakauer, and several thousand class members for more than 50, 000 telemarketing calls made on behalf of Dish to phone numbers on the National Do Not Call Registry. The Court determined that Dish willfully and knowingly violated the TCPA and trebled the damages.

         Dish now seeks to set aside the verdict and dismiss this action because, Dish contends, the judgment of the United States District Court for the Central District of Illinois in United States v. DISH Network, LLC, No. 3:09-3073 (C.D. Ill.), constitutes res judicata. The Court will deny the motion for judgment as a matter of law because Dish waived its right to assert res judicata in this case and has failed to establish that it applies.

         Dish also renews its request for remittitur, asserting that the treble damages awarded are excessive and duplicative under the Due Process Clause in light of the Illinois Action. Because the treble damages awarded are neither excessive nor duplicative in any meaningful way, Dish is not entitled to remittitur.


         Congress enacted the TCPA to curb abusive telemarketing practices that threatened consumer privacy. See 47 U.S.C. § 227 (2012); Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 372 (2012). Among other things, the TCPA prohibits telemarketers from repeatedly calling people who list their phone numbers on the National Do Not Call Registry. See Hannabury v. Hilton Grand Vacations Co., LLC, 174 F.Supp.3d 768, 771 (W.D.N.Y. 2016). The TCPA creates a private right of action for injunctive and monetary relief for any “person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the [TCPA] regulations.” 47 U.S.C. § 227(c)(5); see Hannabury, 174 F.Supp.3d at 771-72. The TCPA also authorizes state Attorneys General to bring actions against persons “engaging in a pattern or practice of” TCPA violations. § 227(g). Section 227(g) also authorizes injunctive relief and damages. Under both § 227(c) and § 227(g), the court may treble damages if the defendant willfully or knowingly violated the TCPA. § 227(c)(5), (g)(1).

         I. The Illinois Action[1]

         In March 2009, the United States of America, together with the States of Ohio, North Carolina, Illinois, and California, filed a lawsuit against Dish in the United States District Court for the Central District of Illinois. Doc. 347-3. Count V of the complaint, as amended, alleged that Dish violated the TCPA by engaging in a pattern or practice of initiating telephone solicitations to residential subscribers who reside in the plaintiff States and whose telephone numbers were on the Registry. Doc. 347-1 at 358.[2] Pursuant to § 227(g), the plaintiff States sought injunctive relief, monetary relief, statutory penalties, and attorney's fees. Doc. 347-3 at ¶¶ 66-69, at pp. 24-25. There was one other TCPA count, Doc. 347-1 at 3-4, 367, along with ten other counts brought pursuant to the Federal Trade Commission Act, the Telemarketing Act, and analogous state laws.[3]

         In December 2014, the Illinois Court entered partial summary judgment. United States v. Dish Network, LLC, 75 F.Supp.3d 942 (C.D. Ill. 2014), vacated in part on other grounds on reconsideration, 80 F.Supp.3d 917 (C.D. Ill. 2015). That decision did not fully resolve any claims. Id. The Illinois Court heard the remaining issues in a bench trial held in February, October, and November of 2016. See Doc. 347-1 at 1-2.

         On June 5, 2017, the Illinois Court entered judgment in favor of the plaintiffs and against Dish on eleven counts, including the TCPA claim in Count V. Doc. 347-1 at 5-6. The Illinois Court entered a permanent injunction against Dish to protect against future illegal calls. Id. It also awarded civil penalties and statutory damages in favor of the plaintiffs and against Dish in the total sum of $280, 000, 000. Id. Of that sum, $84, 000, 000 was awarded for the two TCPA violations. Id. at 452.

         For Count V, the Illinois Court found that Dish engaged in a pattern or practice of initiating telephone solicitations to residential subscribers who reside in North Carolina, Illinois, Ohio and California and whose telephone numbers were on the Registry. Specifically, Dish was found liable to the plaintiff States for 2, 651, 957 calls made in violation of the TCPA. Doc. 347-1 at 367.

         The Illinois Court awarded damages significantly lower than the calculated statutory damages of $500 per call. Calculated damages for the two TCPA claims were more than $8.1 billion. Doc. 347-1 at 444-45. The Illinois Court reduced the statutory damages after considering damages awarded for other counts and also because standing alone $8.1 billion “would be excessive and in violation of due process.” Doc. 347-1 at 375-76. The Illinois Court also decided not to determine whether the TCPA violations were knowing and willful so as to warrant treble damages, because the calculated damages were substantial. Id. at 378-79.

         II. The Present Action

         In 2014, Dr. Krakauer, the plaintiff and class representative, sued Dish pursuant to § 227(c) alleging that he and others on the Registry received more than one telephone call within a 12-month period in violation of the TCPA and that the calls were made on behalf of Dish. Doc. 1 at 10. Dr. Krakauer sought injunctive and monetary relief on behalf of himself and the class. On September 9, 2015, the Court certified the following class:

(a) all persons whose telephone numbers were on the [Registry] for at least 30 days, but who received telemarketing calls from [Satellite Service Network (“SSN”)] to promote DISH between May 1, 2010, and August 1, 2011 … .

Doc. 111 at 4, 34.[4]

         Summary judgment was denied in substantial part, Docs. 113, 118 and 169, and the matter was tried to the jury in January 2017. See Minute Entry 01/10/2017. The Court heard the evidence about willfulness at the same time. See Doc. 222 at 6. After a six-day trial, the jury returned a verdict finding that through its agent, SSN, Dish made over 51, 000 telephone solicitations to a class of plaintiffs on the Registry, in violation of the TCPA. The jury awarded $400.00 per call. Doc. 292 at 2. The Court, after finding the violations were willful, trebled the damages to deter Dish from future violations and to give appropriate weight to the scope of the violations. See Doc. 338 at 28. Judgment has not been entered, pending a claims process. Doc. 351 at 26-28; Doc. 360; Doc. 361.


         I. Res Judicata

         “Under the doctrine of res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.” Pueschel v. United States, 369 F.3d 345, 354 (4th Cir. 2004).[5] Dish asks the Court to apply res judicata to two categories of claims in this case: (1) claims based on 10, 208 calls that also supported the Count V TCPA claim in the Illinois Action, and (2) claims based on 12, 315 calls that were not in the Illinois Action, but that Dish alleges “aris[e] from the same course of conduct.” Doc. 347 at 7-8. Dr. Krakauer contends that Dish waived its right to assert res judicata and that in any event the requirements for res judicata are not met.

         A. The Parties' Prior Positions on the Illinois Action

         Dr. Krakauer and Dish discussed the Illinois Action with the Court throughout the course of this litigation. Until July 19, 2017, Dish never informed the Court that it believed any of the claims in the present action were the same as claims in the Illinois Action or inextricably tied to them. See, e.g., Doc. 204 at 37-38, 105-08, 115; Doc. 231 at 123, 127-30. Dish never moved to dismiss, asked for a stay, sought a transfer, or otherwise informed the Court that the Illinois Action was duplicative of or identical to the class members' claims. Rather, Dish indicated its view that the Illinois Action was a totally different case and that the results would not bind Dish, much less bar the plaintiffs from recovering damages in this case. See, e.g., Doc. 82 at 6; Doc. 172 at 33-35; Doc. 231 at 129-30; Doc. 343 at 4-5. These representations include the following:

• In May 2015, Dr. Krakauer asserted in summary judgment briefing that Dish should be collaterally estopped from asserting various affirmative defenses based on the Illinois Court's December 2014 summary judgment decision. Doc. 72 at 5. Dish took the position that collateral estoppel did not apply because, among other things, the Illinois Action “involve[d] a different statute, different issues, and different plaintiffs.” Doc. 82 at 6.[6]
• At a later pretrial conference, the Court and Dr. Krakauer's counsel mentioned in passing that the Illinois Action could not bind Dr. Krakauer and the class members because they were not parties to it, see Doc. 172 at 14-15; Dish's counsel was present, had an opportunity to address the issue, and did not contradict these views. Id. Rather, counsel for Dish essentially agreed that the plaintiffs would not be precluded: after indicating that there had been discussions with the plaintiffs' counsel about a stay while the Illinois Action was decided, Dish's counsel commented that “it always strikes me as a bit unfair that they get multiple bites at the apple and Dish is potentially bound by what's happened.” Doc. 172 at 33-34.
• At that same conference, Dish contended that it had affirmative defenses in this case, that it had not raised those defenses in the Illinois Action, and that issue preclusion did not apply to prevent those defenses. Doc. 172 at 26.
• In another pretrial conference, the Court again asked the parties how the Illinois Action might affect this case and whether the parties were “willing to be bound by some of the conclusions in those proceedings.” See Doc. 231 at 127-28. In response, Dish refused to commit to being bound by the Illinois Action. Id. at 129-30 (“To your question about the impact of what may or may not happen [in the Illinois Action] … I suspect it will be informative and helpful to this case, but it is hard to commit to, without knowing what the judge is going to do.”).

         In sum, Dish consistently took the position that the issues in the Illinois Action were different, never hinted that the Illinois Action would support application of res judicata in this case, never conceded that an adverse decision in the Illinois Action would estop or preclude Dish from litigating the same issues in this case, and agreed with the plaintiffs' position that a decision in the Illinois Action would not preclude the class from litigating the same issues in this case.

         B. Waiver

         A “principal purpose of … res judicata is to protect the defendant from the burden of relitigating the same claim in different suits.” Pueschel, 369 F.3d at 356. “The failure of the defendant to object to the prosecution of dual proceedings while both proceedings are pending … constitutes waiver.” Clements v. Airport Auth. of Washoe Cty., 69 F.3d 321, 328 (9th Cir. 1995); see also Beazer East, Inc. v. U.S. Navy, 1997 WL 173225, *3 (4th Cir. Apr. 11, 1997) (noting that “acquiescence to the filing of two separate lawsuits has … been determined to constitute consent.”); accord, Pueschel, 369 F.3d at 356 (holding that a defendant waives his right to assert res judicata if he consents, “in express words or otherwise, to the splitting of the claim.”) (relying on Restatement (Second) of Judgments § 26(1)(a), cmt. a) and Keith v. Aldridge, 900 F.2d 736, 740 (4th Cir. 1990)). Calderon Rosado v. Gen. Elec. Circuit Breakers, Inc., 805 F.2d 1085, 1087 (1st Cir. 1986) (same).

         While there are “no precise rules” that govern how a court responds when claims arising from the same transaction or occurrence are pending before two separate courts, courts seek to ensure “wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.” Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817-18 (1976). To this end, a court has discretion to “weigh competing interests and maintain an even balance.” Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936) (discussing the court's inherent power to stay one federal lawsuit while another proceeds to resolution). Courts necessarily rely on the parties to learn of related litigation. See Young-Henderson v. Spartanburg Area Mental Health Ctr.,945 F.2d ...

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