Antitrust Law Daily Dish Network ordered to pay $280 million in telemarketing penalties
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Tuesday, June 6, 2017

Dish Network ordered to pay $280 million in telemarketing penalties

By Jody Coultas, J.D.

The federal district court in Springfield, Illinois, has permanently enjoined Dish Network LLC from making illegal robocalls and has ordered the company to pay $280 million in penalties to the United States, California, Illinois, North Carolina, and Ohio for making millions of unwanted telemarketing calls (U.S. v. Dish Network LLC, June 5, 2017, Myerscough, S.).

Dish sells satellite television programming and related services to consumers. As part of its marketing practices, Dish employees directly engage in telemarketing, and Dish contracts with vendors and authorized dealers to provide telemarketing services. The United States filed suit, alleging that Dish violated the Telemarketing Sales Rule (TSR) by: (1) engaging in or causing a telemarketer to engage in initiating an outbound telephone call to a person’s telephone number on the National Do Not Call Registry; (2) engaging in or causing other telemarketers to engage in initiating an outbound telephone call to a person who has previously stated that he or she did not wish to receive such a call made by or on behalf of Dish Network; (3) abandoning or causing telemarketers to abandon an outbound telephone call by failing to connect the call to a sales representative within two seconds of the completed greeting of the person answering the call; and (4) providing substantial assistance or support to vendors even though Dish knew or consciously avoided knowing that certain vendors abandoned outbound telephone calls.

A Federal Trade Commission investigation determined that Dish Network violated the TSR, and referred the case to the Department of Justice, which filed suit in 2009.

On December 11, 2014, Dish Network was found liable for making over 50 million calls in violation of the TSR, the Telemarketing Act, and the FTC Act. The court also found that Dish Network was liable for the telemarketing violations of its so-called "retailers"—call centers that sold Dish Network programming by any means necessary—because it failed to vet or supervise the retailers.

The States moved for a permanent injunction and damages, with the states and the U.S. asking for over $1 billion in penalties.

The court awarded the U.S. $168 million to the U.S. and $112 million to the States based on violations of twelve federal and state laws and regulations prohibiting certain outbound telemarketing calls (Do-Not-Call Laws). The amount was appropriate given the millions of violations and that Dish Network minimized the significance of its own errors and denied any responsibility for the actions of its retailers. "The injury to consumers, the disregard for the law, and the steadfast refusal to accept responsibility require a significant and substantial monetary award," according to the court. The Justice Department noted that the penalty was the largest ever awarded in a telemarketing suit.

Based on the sheer number of illegal calls made by Dish Network, the court found a reasonable likelihood of future illegal calls without an injunction. The court prohibited Dish Network from violating the Do-Not-Call Laws going forward and imposed a 20-year plan for supervision of its telemarketing.

Dish Network, which will likely appeal, has maintained that independent contractors were responsible for the illegal calls.

The case is No. 09-3073.

Attorneys: Daniel Kadane Crane-Hirsch, U.S. Department of Justice, for the United States and the State of Illinois. Adelina Rosa Viviana Acuna, California Department of Justice, for the State of California. Catherine Emily James (Kelley Drye & Warren LLP) and Elyse D. Echtman (Orrick Herrington & Sutcliffe LLP) for Dish Network LLC.

Companies: Dish Network LLC

MainStory: TopStory ConsumerProtection Privacy AntitrustDivisionNews FederalTradeCommissionNews IllinoisNews

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