An Oregon jury last month found that a telemarketing company made 1.85 million unsolicited telephone calls to customers and promoters—a decision that could lead to a $925 million verdict, the largest ever under the U.S. Telephone Consumer Protection Act.
Now, that verdict could get even bigger.
That’s because a federal judge must decide whether ViSalus Inc., the defendant, made the calls “willfully and knowingly,” in violation of the TCPA. Such a finding could treble the damages to more than $2.7 billion, a stratospheric jury award that would send shock waves among lawyers who handle cases brought under the TCPA.
Lawyers on both sides filed briefs May 10 as to whether there should be enhanced damages.
Plaintiffs lawyers argued for at least $185 million more, resulting in a total verdict of more than $1.1 billion.
“Here, ViSalus did not just violate the TCPA intentionally,” wrote plaintiffs lawyer Simon Franzini, of Dovel & Luner in Santa Monica, California. “It did so with a culpable state of mind, knowing full well that its actions violated the law. Moreover, ViSalus did not violate the TCPA just a little bit. It violated the TCPA on a massive scale.”
ViSalus, which refers to itself as a “multi-level marketing company,” based in Detroit, that sells weight loss products, said there should be no enhanced damages because the statutory penalties already are “excessively punitive” and violate due process.
ViSalus lawyer John O’Neal wrote, “At $500 per call, a judgment exceeding $900 million in statutory damages will destroy ViSalus, based on little more than a technical deficiency with its intake forms.”
O’Neal, of Quarles & Brady in Phoenix, told Law.com that plaintiffs lawyers were relying on a standard that was far too lenient when determining enhanced damages under the TCPA.
“Plaintiffs are arguing the enhanced damages/willfully and knowingly standard need only be ‘you’re consciously aware of violating the act,’” O’Neal said. “The only time willful and knowing would not apply would be if a call was made by accident. We don’t believe that’s the case.”
Franzini, who is handling the case alongside Rafey Balabanian, in the San Francisco office of Edelson PC, declined to comment.
The case, filed in 2015, alleged that ViSalus, which sells weight loss products and dietary supplements, made unsolicited calls in violation of the TCPA to Lori Wakefield, a former “affiliate” promoter of its products, after she canceled her account and told them to stop calling her. The TCPA is a 1991 statute that prohibits companies from using unsolicited text messages, faxes or phone calls to market their business.
A previous judge in the case, U.S. District Judge Anna Brown of the District of Oregon, certified a nationwide class in 2017 composed of anyone who received a call with an “artificial or prerecorded voice” from ViSalus without “prior express written consent.” U.S. District Judge Michael Simon, in Portland, Oregon, took over the case last year.
In an April 8 pretrial order, Simon ruled that, in the event of a plaintiffs verdict, he, and not the jury, would determine whether ViSalus made the calls “willfully or knowingly” in violation of the TCPA.
On April 12, a jury found that ViSalus made four phone calls, with a prerecorded voice, to Wakefield’s number. It also found ViSalus made 1,850,436 such phone calls to cellphone and residential numbers belonging to other class members—though jurors couldn’t determine how many there were of each.
In its May 10 brief, ViSalus indicated it would move to decertify the class on the basis that the judge should not have certified given the myriad individualized differences among the class members.
It also argued that it had stopped using automated technology with its calls in 2016, which made enhanced damages unnecessary, and O’Neal added that there was no evidence during trial of calls made after that. Plus, ViSalus said it had permission to make the calls because customers and promoters had checked a box voluntarily providing their phone numbers. Such written consent was permissible under the TCPA until 2013, when the Federal Communications Commission came out with rules that were more stringent. (ViSalus, in fact, attached to its brief a pending petition asking the FCC for a retroactive waiver of those rules).
“Here, the evidence hardly shows that ViSalus knew or should have known its actions violated the TCPA,” O’Neal wrote.
That argument was hard to believe, plaintiffs lawyers wrote. For one thing, ViSalus made calls to phone numbers on an internal “Do Not Call” list and to class members who had canceled their accounts.
“ViSalus’ disregard for TCPA compliance generally confirms that its violations in this case were the result of a total disregard for complying with the requirements of the TCPA and not an innocent misunderstanding of what the TCPA requires,” Franzini wrote.
Further, the company has a compliance analyst and in-house attorneys, one of whom attended the trial.
“ViSalus knew it was breaking the law, or was willfully blind to that fact,” he wrote. “It is simply not believable that ViSalus did not check the law before placing millions of telemarketing calls using recorded voices to class members.”