For those embroiled in Telephone Consumer Protection Act (TCPA) class action litigation, the sum of the damages may not necessarily equal the whole.

In Wakefield v. ViSalus, Inc., the plaintiff and certified nationwide class obtained a jury verdict that defendant made 1,850,440 prerecorded message calls without the then-heightened prior express consent to make such calls. Because the TCPA’s minimum statutory damages are $500 per unlawful prerecorded message call, the damages award was a whopping $925,220,000.

After trial, ViSalus challenged, among other things, the damages award as unconstitutionally excessive. Specifically, ViSalus did not argue that the TCPA’s $500 per violation statutory penalty is unconstitutional in a vacuum, but, rather, that the “aggregate award” is so “severe and oppressive” that it violated ViSalus’s due process rights. Last Thursday, the Ninth Circuit agreed.

ViSalus primarily relied on St. Louis, I.M. & S. Ry. Co. v. Williams, in which the U.S. Supreme Courtcautioned that a statutory damages award could violate due process if “the penalty prescribed is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.” Under Williams,determining whether an award is disproportionate and unreasonable requires consideration of the “public interest,” “the opportunities for committing the offense,” and deterrence.

The ViSalus court applied the seven factors articulated by the Ninth Circuit previously in Six (6) Mexican Workers v. Arizona Citrus Growers, to determine whether a statutory damages award is, in the aggregate, disproportionately punitive:

  • The amount of award to each plaintiff
  • The total award
  • The nature and persistence of the violations
  • The extent of the defendant’s culpability
  • Damage awards in similar cases
  • The substantive or technical nature of the violations
  • The circumstances of each case

Against this background, the Ninth Circuit, after rejecting two other arguments concerning standing and retroactive consent, considered whether the $925,220,000 statutory damages award violated ViSalus’s Fifth Amendment due process rights. The court began by noting that “[s]uch constitutional due process concerns are heightened where, as here, statutory damages are awarded as a matter of strict liability when plaintiffs are unable to quantify any actual damages they have suffered from receiving the robocalls.”

The court then explained that the rationale of Williams was equally applicable to aggregated and per-violation awards because Williams commands that a court determine a “general reasonableness and proportionality limit on damages awarded pursuant to statutes, taking into account statutory goals.” To that end, the court continued, “the goals of a statute in imposing a per-violation award may become unduly punitive when aggregated,” because “[c]ompensation and deterrence aims can be overshadowed when damages are aggregated, leading to damages awards that are largely punitive and untethered to the statute’s purpose.” When the punitive goals “overshadow[ ]” the compensation and deterrence goals, and the punitive award is no longer reasonable or proportional, the court explained, constitutional limits are likely to apply.

The reasonableness and proportionality of a punitive award are important. The court was clear that “just because an aggregate award becomes predominantly punitive does not render it constitutionally unsound.” To determine whether the award is disproportionately punitive, the court remanded to the district court to consider the constitutionality of the award in light of the Six Mexican Workers factors.

That the Ninth Circuit held an aggregated TCPA damages award could be unconstitutional is surprising, to the say the least, but it seems a nine-digit damages award can cause even the typically plaintiff-friendly Ninth Circuit to pause. Still, it remains to be seen how much, if at all, the ViSalus award will be reduced, so avoiding such an award continues to be a party’s first priority. An ounce of TCPA compliance counseling now might just save 925 million pounds of pain later.

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