Ron Golan v. FreeEats.com, Inc. ( 2019 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 17-3156
___________________________
Ron Golan; Dorit Golan, individually and on behalf of all others similarly situated
lllllllllllllllllllllAppellants
v.
FreeEats.com, Inc., doing business as ccAdvertising; AIC Communications, LLC,
doing business as ccAdvertising; James R. Leininger
lllllllllllllllllllllDefendants - Appellees
____________
Appeal from United States District Court
for the Eastern District of Missouri - Eastern Division
____________
Submitted: December 12, 2018
Filed: July 16, 2019
____________
Before SMITH, Chief Judge, WOLLMAN and GRASZ, Circuit Judges.
____________
GRASZ, Circuit Judge.
Dr. James R. Leininger, through his business that invests in family-friendly
entertainment, helped finance Last Ounce of Courage, a film with religious and
political themes. The firm responsible for marketing the film hired ccAdvertising to
conduct a telephone marketing campaign. In conducting the campaign, ccAdvertising
made around 3.2 million phone calls in the course of a week. The named plaintiffs
in this class action (the Appellants here), who received two answering machine
messages, sued numerous parties involved with the film and marketing campaign for
violating the Telephone Consumer Protection Act (TCPA). At issue in this appeal is
whether the Appellants have standing based on the receipt of these two messages,
whether the district court1 abused its discretion by refusing to give one of the
Appellants’ requested jury instructions on Dr. Leininger’s personal liability, and
whether the district court erred by finding the statutory damages against
ccAdvertising to be unconstitutional and reducing them from $500 per call ($1.6
billion total) to $10 per call ($32 million total). We conclude the Appellants have
standing and affirm the district court.
I. Background
The film Last Ounce of Courage involved the themes of “faith, freedom, and
taking a stand for American values.” Courage 2012, LLC, was formed to manage the
ownership of the rights to the film. Enthuse Entertainment, an entity owned by Dr.
Leininger that invests in family-friendly entertainment businesses, invested around
$10 million to become a 2/3 owner of Courage 2012.
Courage 2012 hired Veritas Marketing Group to market and distribute Last
Ounce of Courage, which in turn hired ccAdvertising,2 a telemarketer in the political
arena, to conduct a telephone campaign to promote the film. The owner of
ccAdvertising, Gabriel S. Joseph, III, wrote a script for the telephone campaign and
sent it to former Arkansas Governor Mike Huckabee, who agreed to record it.
1
The Honorable E. Richard Webber, United States District Judge for the
Eastern District of Missouri.
2
ccAdvertising is the name under which AIC Communications, LLC and
FreeEats.com, Inc., do business.
-2-
In early September 2012, ccAdvertising conducted the telephone campaign
using Governor Huckabee’s recorded message. The phone calls were formatted as
a poll, with questions on such topics as “American freedom and liberty” and
“religious freedom.” After hearing two polling questions, the call recipients were
then asked if they would like to hear more about Last Ounce of Courage, which they
could opt into with a “yes” response. Those who opted in heard the following
message:
Thank you for your interest. Last Ounce of Courage opens in theaters
on Friday, September 14th. Last Ounce of Courage will inspire you and
your loved ones to celebrate our nation and the sacrifices made to
protect our liberties. It is a great story about taking a stand for religious
freedom. The film is a timely reminder of all that is worth defending in
our nation. Experience the Last Ounce of Courage trailer and see
audience reactions at www.lastouncethemovie.com, that’s
lastouncethemovie.com.
The phone calls were sent to phone numbers ccAdvertising already possessed.
ccAdvertising apparently believed the calls did not violate the TCPA because it had
prior consent from these recipients to be contacted about topics such as religious
liberty. During the week-long course of the campaign, 3,242,493 phone calls were
made.
Among the recipients were Ron and Dorit Golan, who received two phone
calls, but did not answer either one. They received two answering machine messages,
saying: “Liberty. This was a public survey call. We may call back later.”
In October 2012, the Golans filed a class action in Missouri state court. As
later amended, the complaint asserted a cause of action under the TCPA and named
numerous parties involved with the film and its marketing as defendants, including
ccAdvertising, Joseph, and Dr. Leininger.
-3-
In May 2014, the district court dismissed the case, concluding that the Golans
lacked standing because the messages they received did not violate the TCPA. A
panel of this court reversed, concluding that even the brief messages qualified as
“telemarketing” in violation of the TCPA because their underlying purpose was to
promote a product or service. See Golan v. Veritas Entm’t, LLC, 788 F.3d 814,
818–21 (8th Cir. 2015).
The case eventually proceeded to trial in August 2017. The Golans’ pre-trial
proposed jury instructions did not seek to hold Dr. Leininger directly liable but
sought liability under an agency theory. Similarly, in the Golans’ pre-trial brief, they
stated that they had enough evidence to hold ccAdvertising and Joseph directly liable
and that “[t]he liability of the remaining defendants rests on principals [sic] of agency
and ratification.”3 But midway through trial, the Appellees accused the Golans of
shifting their theory of liability to also pursue a direct liability theory against Dr.
Leininger.
At the close of evidence, the district court granted the Golans’ motion for
judgment as a matter of law against ccAdvertising.
The next day, the district court held a jury instruction conference to discuss the
court’s proposed jury instructions, which it explained would “not necessarily be the
final instruction package.” They included instructions regarding Dr. Leininger under
both direct and agency liability theories. The court’s proposed direct liability
instruction required the Golans to prove both that ccAdvertising was acting as the
agent of Courage 2012 and that Dr. Leininger, as an officer of Courage 2012, “had
direct, personal participation in or personally authorized the conduct of ccAdvertising
found to have violated the TCPA.”
3
Before the case was submitted to the jury, the Golans declined to pursue a
ratification theory of liability against any defendants.
-4-
At the beginning of the conference, the Golans moved to voluntarily dismiss
their claims against Courage 2012 and two other defendants. They explained that this
dismissal was based on not getting the instruction they wanted with regard to Dr.
Leininger: “In terms of the instructions that Your Honor has prepared in terms of the
direct participation, not the agency but the direct participation, based on how the
Court is having us submit those claims, we made a decision based on that to dismiss
those parties.” The court asked: “Do you understand these are not necessarily, as I
mentioned, the final instructions? Would your actions be different if the proffered
instructions were modified?” to which the Golans answered “I don’t know at this
point, Your Honor.” The Golans also abandoned the direct liability theory against Dr.
Leininger, instead “only submitting an agency theory, [with] Dr. Leininger as the
principal, ccAdvertising as the agent.” The district court granted the motion to
voluntarily dismiss certain defendants. The district court also agreed to put the
Golans’ proposed instruction on direct liability in the record, which stated in relevant
part:
In addition to agency, an individual may be held personally or
individually liable for violations of the TCPA if the individual:
(1) had direct, personal participation in the conduct found to have
violated the TCPA, OR
(2) personally authorized the conduct found to have violated the
TCPA.
....
. . . [T]he personal liability of an individual must be founded upon
his active oversight of, or control over, the conduct that violated the
TCPA, rather than merely tangential involvement. Involvement is
“tangential” if it is routine, passive or ministerial.
-5-
The individual must have knowledge that he is directly
participating in or authorizing the telephone calls found to have violated
the [TCPA], but he need not know that the conduct violates the TCPA.
Whether the individual knows that the conduct violates the TCPA is not
relevant to your consideration.
....
The court wrote the following note on the Golans’ requested instruction:
Tendered by plaintiffs. Plaintiffs would submit this instruction if the
court would accept plaintiffs’ view of the law. The court offered the
instruction [that] there is corporate shield protection which plaintiff[s]
believe is an erroneous interpretation of the law.
Refused. 8/15/17
After the Golans declined to submit a direct liability theory against Dr.
Leininger, the only theory presented to the jury was the agency theory. The jury
returned a verdict in favor of Dr. Leininger and the other defendants. The district
court entered judgment against ccAdvertising based on its prior grant of the Golans’
motion for judgment as a matter of law. The court entered judgment in favor of the
remaining defendants.
ccAdvertising filed a post-trial motion for reduction of damages, arguing the
statutory damages of $500 per call for 3,242,493 calls — totaling $1,621,246,500 —
was so excessive it violated the Due Process Clause of the Fifth Amendment. The
district court concluded that the $1.6 billion award was “obviously unreasonable and
wholly disproportionate to the offense” and reduced the damages to $10 per call for
a total of $32,424,930.
-6-
The Golans appealed the judgment, specifically challenging the district court’s
refusal to give their requested jury instruction on direct liability and its reduction of
damages.
II. Analysis
A. Standing
We previously concluded the Golans have Article III standing to bring the
TCPA claim. See Golan, 788 F.3d at 818–21. Under the law of the case doctrine, we
normally do not revisit decisions of law decided at earlier stages of the same case.
But there is an exception to that rule “when an intervening decision from a superior
tribunal clearly demonstrates the law of the case is wrong.” Kinman v. Omaha Pub.
Sch. Dist., 171 F.3d 607, 610 (8th Cir. 1999) (quoting Morris v. American Nat’l Can
Corp., 988 F.2d 50, 52 (8th Cir. 1993)); see also Bryan A. Garner et al., The Law of
Judicial Precedent 483–85 (2016). An indispensable requirement for Article III
standing is that “the plaintiff must have suffered an ‘injury in fact.’” Lujan v. Defs.
of Wildlife, 504 U.S. 555, 560 (1992). Our prior statement that “[i]njury in fact may
thus be shown ‘solely by the invasion of a legal right that Congress created,’” Golan,
788 F.3d at 819 (quoting Hammer v. Sam’s East, Inc., 754 F.3d 492, 498 (8th Cir.
2014)) is no longer good law in light of the Supreme Court’s subsequent holding in
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016) (“Article III standing requires
a concrete injury even in the context of a statutory violation.”). We thus revisit4 our
prior holding but conclude that, even under Spokeo, the Golans suffered a concrete
injury and thus have standing.5
4
We grant ccAdvertising’s motion to supplement the record that was filed in
connection with the supplemental briefing we ordered on standing.
5
The certified class was defined as all persons to whom the defendants initiated
the calls at issue here. We conclude only that the Golans, the named plaintiffs, have
-7-
The Spokeo opinion clarified that the requirements that an “injury in fact” be
“concrete” and “particularized” are separate inquiries. Id. at 1548. That case
involved an alleged violation of the Fair Credit Reporting Act based on the listing of
incorrect information about the plaintiff online. See id. at 1544–45. The alleged
violation was particularized (because the incorrect information related to the plaintiff
in particular) but the Supreme Court remanded for a determination of whether the
violation was concrete. See id. at 1548–50.
The Spokeo opinion explained that for an injury to be concrete, it must be
“‘real’ and not ‘abstract.’” Id. at 1548 (quoting Webster’s Third New International
Dictionary 472 (1971)). A plaintiff does not “automatically satisf[y] the injury-in-fact
requirement whenever a statute grants a person a statutory right and purports to
authorize that person to sue to vindicate that right. . . . [A plaintiff cannot,] for
example, allege a bare procedural violation, divorced from any concrete harm, and
satisfy the injury-in-fact requirement of Article III.” Id. at 1549. But the Court
clarified that this does not rule out all intangible injuries — even “intangible injuries
can nevertheless be concrete.” Id.standing. We do not consider whether the significant portion of absent class members
who neither answered the call nor received answering machine messages would have
standing — a group that is likely based in part on calls that rang while no one was
home or calls to disconnected phone numbers. See Frank v. Gaos, 139 S. Ct. 1041,
1046 (2019) (“[F]ederal courts lack jurisdiction if no named plaintiff has standing.”);
In re SuperValu, Inc., 870 F.3d 763, 768 (8th Cir. 2017) (“A putative class action can
proceed as long as one named plaintiff has standing.”). None of the defendants have
cross-appealed to challenge the certification of the class to include the recipients of
calls that never connected with a person or answering machine. See Stuart v. State
Farm Fire & Cas. Co., 910 F.3d 371, 377 (8th Cir. 2018) (“[A] class must be defined
‘in such a way that anyone within it would have standing.’” (quoting Avritt v.
Reliastar Life Ins. Co., 615 F.3d 1023, 1034 (8th Cir. 2010))).
-8-
At issue here is whether the intangible injury claimed by the Golans — the
receipt of two answering machine messages — is a concrete injury. The Supreme
Court in Spokeo instructed that “[i]n determining whether an intangible harm
constitutes an injury in fact, both history and the judgment of Congress play
important roles.” Id. Conduct that is actionable under the TCPA has, of course, been
identified as a cognizable injury by Congress. This is not dispositive, but is relevant
to whether such conduct creates a concrete injury. See Spokeo, 136 S. Ct. at 1549.
“Because the doctrine of standing derives from the case-or-controversy
requirement, and because that requirement in turn is grounded in historical practice,”
courts should “consider whether an alleged intangible harm has a close relationship
to a harm that has traditionally been regarded as providing a basis for a lawsuit in
English or American courts.” Id. An alleged harm need not actually have been
actionable at common law to satisfy this inquiry, rather it must have a “close
relationship” to the type of harm that has traditionally been recognized as actionable.
See Susinno v. Work Out World Inc., 862 F.3d 346, 351 (3d Cir. 2017) (discussing
Spokeo, 136 S. Ct. at 1549).
The harm to be remedied by the TCPA was “the unwanted intrusion and
nuisance of unsolicited telemarketing phone calls and fax advertisements.” Van
Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1043 (9th Cir. 2017). The harm
here was the receipt of two telemarketing messages without prior consent. These
harms bear a close relationship to the types of harms traditionally remedied by tort
law, particularly the law of nuisance. See id. at 1043–44; Melito v. Experian Mktg.
Sols., Inc., 923 F.3d 85 (2d Cir. 2019); Susinno, 862 F.3d at 350–52. It is not
dispositive whether unsolicited telephone calls are actually actionable under any
common law tort because “Congress may ‘elevat[e] to the status of legally cognizable
injuries concrete, de facto injuries that were previously inadequate in law.’” Spokeo,
-9-
136 S. Ct. at 1549 (alteration in original) (quoting Lujan, 504 U.S. at 578). Nor does
it matter that the harm suffered here was minimal; in the standing analysis we
consider the nature or type of the harm, not its extent. See generally id. We thus
conclude the Golans suffered a concrete injury and have standing.
B. Jury Instruction
The Golans argue the district court abused its discretion by refusing to give the
jury their preferred instruction on direct liability against Dr. Leininger.6 We disagree.
“We review for abuse of discretion a court’s jury instructions.” Wurster v.
Plastics Grp., Inc., 917 F.3d 608, 614 (8th Cir. 2019). For an appellant to prevail
when challenging the denial of a proposed jury instruction, “the proposed instruction
must (1) correctly state the applicable law; (2) address matters not adequately covered
by the charge; and (3) involve a point ‘so important that failure to give the instruction
seriously impaired the party’s ability to present an effective case.’” Id. (quoting Cox
v. Dubuque Bank & Tr. Co., 163 F.3d 492, 496 (8th Cir. 1998)). Moreover, the
tendered instruction must be “warranted by the evidence.” Kozlov v. Associated
Wholesale Grocers, Inc., 818 F.3d 380, 389 (8th Cir. 2016).
The district court did not abuse its discretion by refusing to give the Golans’
requested instruction on Dr. Leininger’s direct liability under the TCPA. The Golans
are correct that establishing liability against a business is not a prerequisite to finding
an officer (or employee) of that business liable. Nevertheless, they were not entitled
6
While it appears the Golans likely waived this argument by refusing to submit
the direct liability theory to the jury, see Galena v. Leone, 638 F.3d 186, 200 (3d Cir.
2011); cf. Richison v. Ernest Grp., Inc., 634 F.3d 1123, 1130 (10th Cir. 2011), we
need not decide that issue because the Golans’ argument fails on the merits.
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to their instruction because it did not “correctly state the applicable law.” Wurster,
917 F.3d at 614. The proposed instruction articulated too loose a standard for direct
liability and blurred the line between direct and agency liability. And there was also
insufficient evidence to give an instruction regarding Dr. Leininger under a correctly
articulated direct liability theory.
The TCPA prohibits, among other things, “initiat[ing] any telephone call to any
residential telephone line using an artificial or prerecorded voice to deliver a message
without the prior express consent of the called party,” subject to certain exceptions
including where the call “is exempted by rule or order by the [Federal
Communications] Commission [(the “FCC”)7].” 47 U.S.C. § 227(b)(1)(B). The FCC
has exempted calls “made for a commercial purpose but [which do] not include or
introduce an advertisement or constitute telemarketing.” 47 C.F.R.
§ 64.1200(a)(3)(iii). A prior panel of this court held the messages at issue here, while
possibly not “advertisements,” did constitute “telemarketing” because their purpose
was to promote Last Ounce of Courage. See Golan, 788 F.3d at 819–20.
The scope of direct liability is determined by the statutory text. See New Prime
Inc. v. Oliveira, 139 S. Ct. 532, 543 (2019); Henson v. Santander Consumer USA
Inc., 137 S. Ct. 1718, 1721 (2017). The TCPA makes it “unlawful for any
person . . . to initiate any telephone call” that violates its relevant prohibitions.
§ 227(b)(1)(B). Thus, to be held directly liable, the defendant must be the one who
“initiates” the call. Neither the TCPA nor the FCC rules define the term “initiate.”
See In re Dish Network, LLC, 28 F.C.C. Rcd. 6574, 6583 (2013). But the FCC has
7
The FCC is authorized by the TCPA to exempt calls “not made for a
commercial purpose” as well as calls made for a commercial purpose that “will not
adversely affect . . . privacy rights” and “do not include . . . any unsolicited
advertisement.” 47 U.S.C. § 227(b)(2)(B).
-11-
concluded that “a person or entity ‘initiates’ a telephone call when it takes the steps
necessary to physically place a telephone call.” Id. This “generally does not include
persons or entities, such as third-party [entities on whose behalf the call is made], that
might merely have some role, however minor, in the causal chain that results in the
making of a telephone call.” Id. The FCC said direct TCPA liability in this context
generally does not extend to sellers who do not personally make the phone calls at
issue, but only includes the telemarketers acting on behalf of those sellers. See id.We agree.8
Direct liability under the TCPA does not depend on one’s status as a corporate
officer (or employee). The text of the TCPA makes no distinction between
individuals who initiate calls in their personal capacities and those who do so in their
capacities as corporate officers. See § 227(b)(1)(B). Rather, the statute simply makes
it unlawful for “any person” to make prohibited calls. § 227(b)(1). In the portion of
the TCPA creating a private cause of action, the TCPA does not specify against
whom the action may be brought. See § 227(b)(3). In the analogous context of tort
law, individuals are generally liable for any torts they commit, even those committed
in the scope of their employment or in their role as corporate officers. See Texas v.
Am. Blastfax, Inc., 164 F. Supp. 2d 892, 898 (W.D. Tex. 2001). Nor does the TCPA
require that an officer’s business be found liable before the officer may be held liable,
8
Our decision is not impacted by the recent Supreme Court opinion in PDR
Network, LLC, et al. v. Carlton & Harris Chiropractic, Inc., __ S.Ct. __ (2019). We
agree with the FCC not because we believe we are bound to do so but because we
find this portion of their interpretation of the statute to be persuasive.
-12-
as the defendants argued here.9 Simply put, “any person” who violates the TCPA
may be liable. § 227(b)(1).
But as will be explained below, the Golans’ proposed instruction improperly
blurred the line between direct and agency liability. Under an agency theory of
liability, a party may be held liable even if he or she does not “initiate” the violating
call, but the direct violator acts as the party’s agent.10 See Meyer v. Holley, 537 U.S.
280, 285 (2003); Dan B. Dobbs et al., The Law of Torts § 425 (2d ed.
2019); Restatement (Third) Of Agency § 1.01 (2006). “[W]hen Congress creates a
tort action, it legislates against a legal background of ordinary tort-related vicarious
liability rules,” Meyer, 537 U.S. at 285, and such background legal principles apply
unless the statute’s text or context indicate otherwise. See Staub v. Proctor Hosp.,
562 U.S. 411, 417 (2011) (“[W]hen Congress creates a federal tort it adopts the
background of general tort law.”).
9
While establishing liability against a business is not a prerequisite for
establishing the liability of its officer (or employee), the business may be liable for
the officer’s TCPA violation under a respondeat superior agency theory. See Dan B.
Dobbs et al., The Law of Torts §§ 425–29 (2d ed. 2019). Thus, it is true there can be
a potential risk of inconsistent verdicts in cases where a plaintiff sues both the officer
and the business, but this does not mean establishing liability against the business is
a prerequisite to the officer’s liability.
10
Relevant to this case, where a business entity’s officer (or employee) acts on
behalf of the business to create an agency relationship with a direct violator, the
agency relationship is between the direct violator and the business — not between the
direct violator and the officer, unless the officer created the agency relationship in his
or her personal capacity (and not on behalf of the business). Cf. Restatement (Third)
Of Agency §§ 1.01, 6.01. Thus, to the extent Dr. Leininger was acting in his capacity
as an officer of Enthuse or Courage 2012, and not in his personal capacity, he created
(if any) an agency relationship between ccAdvertising and Enthuse or Courage 2012,
not between ccAdvertising and himself.
-13-
The Golans’ instruction did not accurately state the law because it would allow
direct liability even where the defendant did not “initiate” the calls. § 227(b)(1)(B).
It would have allowed the jury to find Dr. Leininger directly liable based on “direct,
personal participation,” defined as “active oversight of, or control over” the TCPA
violation, or if he “personally authorized” it. But to be held directly liable, a person
must actually “initiate” the offending phone call, meaning the person “takes the steps
necessary to physically place a telephone call.” In re Dish Network, 28 F.C.C. Rcd.
at 6583; see also § 227(b)(1)(B). The Golans’ instruction does not “correctly state
the applicable law,” Wurster, 917 F.3d at 614 (quoting Cox, 163 F.3d at 496) because
it would stretch the liability imposed by the TCPA beyond the bounds of those who
“initiate” the phone call. Of course, an individual like Dr. Leininger, if acting in his
personal capacity, could potentially be held liable for the authorization, oversight, and
control of conduct violating the TCPA under an agency theory. But the district court
separately gave an adequate jury instruction regarding agency liability, an instruction
the Golans do not challenge on appeal. See W. Plains, L.L.C. v. Retzlaff Grain Co.
Inc., 870 F.3d 774, 792 (8th Cir. 2017) (“A party ‘is not entitled to a particularly
worded instruction.’” (quoting Retz v. Seaton, 741 F.3d 913, 919 (8th Cir. 2014))).
Further, the evidence did not warrant instructing the jury regarding Dr.
Leininger on a correctly understood direct liability theory. The Golans argue to the
contrary because they claim he hired the direct violator, was involved in editing the
call script, obtained Governor Huckabee to record the script, and approved and paid
for the calls. Again, while such facts could show a significant level of control that
might be sufficient to establish liability under an agency theory if he was acting in his
personal capacity (though the jury rejected the Golans’ agency theory at trial), see
Restatement (Third) of Agency § 1.01, they do not show Dr. Leininger actually
initiated the calls. Only Joseph and ccAdvertising, who made the calls at issue here,
initiated the calls by “tak[ing] the steps necessary to physically place [the] telephone
call[s].” In re Dish Network, 28 F.C.C. Rcd. at 6583; see also § 227(b)(1)(B). The
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district court did not abuse its discretion by refusing to give the Golans’ requested
instruction.
C. Reduction of Statutory Damages
The Golans argue the district court erred by reducing the award of statutory
damages against ccAdvertising. We disagree.
As a threshold matter, we agree with the Golans that nothing in the relevant
provision of the TCPA itself — which provides for recovery of “actual monetary
loss” or “$500 in damages” per violation, whichever is greater — allows for the
reduction of statutory damages. § 227(b)(3)(B). As they correctly argue, “$500
means $500.” A separate provision of the TCPA allows damages of “up to $500 in
damages” per violation, illustrating well that Congress knows how to create
flexibility in statutory damages, but did not do so here. § 227(c)(5)(B) (emphasis
added). Thus, statutory damages under § 227(b)(3)(B) may only be reduced if the
award would be unconstitutional.
The Supreme Court long ago held that a penalty assessed pursuant to a statute
violates the Due Process Clause if it is “so severe and oppressive as to be wholly
disproportioned to the offense and obviously unreasonable.” St. Louis, I.M. & S. Ry.
Co. v. Williams, 251 U.S. 63, 67 (1919). More recently, we affirmed that this
standard is still good law. See Capitol Records, Inc. v. Thomas-Rasset, 692 F.3d 899,
907 (8th Cir. 2012). While courts may review for constitutionality, states and
Congress “still possess a wide latitude of discretion in” setting statutory penalties and
damages. Williams, 251 U.S. at 66.
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We review de novo11 the district court’s legal determination that the TCPA-
mandated statutory damages of $1.6 billion would violate the Due Process Clause.
Cf. Cooper Indus., Inc. v. Leatherman Tool Grp., Inc., 532 U.S. 424, 435–36 (2001)
(concluding that “courts of appeals should apply a de novo standard of review when
passing on district courts’ determinations of the constitutionality of punitive damages
awards”).12 The underlying facts are not in dispute.
We agree with the district court that the statutory damages here of $1.6 billion
violate the Due Process Clause. To state the obvious, $1.6 billion is a shockingly
large amount. Compare that to the conduct of ccAdvertising. It plausibly believed
11
The Golans challenge the district court’s conclusion that the statutory
damages ($500 per call, equaling $1.6 billion) would violate the Due Process Clause,
and do not argue in the alternative that the reduced amount awarded by the district
court ($10 per call, equaling $32 million) should have been more (but less than the
statutory amount). Thus, we only address the standard of review for the district
court’s conclusion on the Due Process Clause issue. A district court’s decision of
what alternative amount to award may well call for a more deferential standard of
review, an issue we need not reach here.
12
We have not previously determined the proper standard of review for
determinations of the constitutionality of statutory damages. It is true in one case
involving such a review we stated that “damages awarded under the Copyright Act
[are reviewed] for clear error,” citing a case that articulated the standard of review for
actual damages in a copyright case. See Warner Bros. Entm’t v. X One X Prods., 840
F.3d 971, 977 (8th Cir. 2016) (citing Pfanenstiel Architects, Inc. v. Chouteau
Petroleum Co., 978 F.2d 430, 432 (8th Cir. 1992)). But this case is not a copyright
case nor does it involve actual damages. Thus, we rely on the closest analogous
circumstance, review of the constitutionality of punitive damages, to conclude de
novo review is applicable. The substantive standards for review of punitive damages
and statutory damages under the Due Process Clause are different, see Capitol
Records, 692 F.3d at 907–08, but they are analogous for purposes of the standard of
review.
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it was not violating the TCPA.13 It had prior consent to call the recipients about
religious liberty, and a predominant theme of Last Ounce of Courage is religious
liberty. Moreover, only the recipients who voluntarily opted in during the call heard
the message about the film. The call campaign was conducted for only about a week.
And the harm to the recipients was not severe — only about 7% of the calls made it
to the third question, the one about the film. Under these facts, $1.6 billion is “so
severe and oppressive as to be wholly disproportioned to the offense and obviously
unreasonable.” Williams, 251 U.S. at 67.
The Golans argue that we may not consider the aggregate award here, but only
the amount per violation. But this argument is plainly foreclosed by our precedents.
See Capitol Records, 692 F.3d at 910 (“The absolute amount of the award, not just
the amount per violation, is relevant to whether the award is ‘so severe and
oppressive as to be wholly disproportioned to the offense and obviously
unreasonable.’” (quoting Williams, 251 U.S. at 67)); see also Warner Bros. Entm’t
v. X One X Prods., 840 F.3d 971, 977 (8th Cir. 2016) (same). We are unpersuaded
by the Golans’ attempt to distinguish Capitol Records on the basis that there was only
one plaintiff there, whereas there are multiple plaintiffs in the class here. The
aggregate award is still relevant. The district court did not err in concluding the
statutory damages would violate the Due Process Clause and reducing the award.
13
We note that ccAdvertising has not cross-appealed to argue that its dual
purpose calls (having both political and commercial purposes) do not qualify as
advertisements, that the recipients’ consent to calls regarding religious liberty
included consent to calls regarding a commercial film relating to religious liberty, or
that the opt-in prior to the information about the film supplied the necessary consent.
Thus, we express no opinion on the merits of such arguments.
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III. Conclusion
For the reasons set forth herein, we affirm.
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