Philip Charvat (“Charvat”) filed suit against NMP, LLC and Media Synergy Group, LLC (together “Defendants”) after receiving thirty-three unsolicited telemarketing calls to his home over a three month period in 2008 inviting him to join the NASCAR Membership Club. The first call was prerecorded, the next two were made by live agents and the following thirty calls were prerecorded messages. Charvat alleged that these calls violated the Telephone Consumer Protection Act (“TCPA”), 42 U.S.C. § 227 and the Ohio Consumer Sales Practices Act (“OCSPA”), Ohio Rev. Code Ann. § 1345.02, and constituted an invasion of privacy under state law. A federal district court granted Defendants motion to dismiss Charvat’s claims, finding that there is no federal question jurisdiction over claims brought by private persons under the TCPA and that there was no diversity jurisdiction over Charvat’s state law claims because his damages did not meet the $75,000 amount-in-controversy requirement.
In Charvat v. NMP, LLC, No. 10-3390 (6th Cir. Aug. 30, 2011) (PDF), the Sixth Circuit issued a decision that will have a significant impact on the business practices of telemarketing companies and provides private persons with significant ammunition in bringing lawsuits against such companies. First, the Sixth Circuit disagreed with the federal district court and held that there is federal question jurisdiction over private TCPA claims. Second, and more significantly, the Sixth Circuit engaged in an extended discussion regarding the statutory damages available under the TCPA. Charvat brought four counts related to the Defendants’ failure to meet certain minimum procedures for maintaining a do-not-call list. Specifically, Charvat claimed that the calls he received did not reveal the entities on whose behalf they were made, did not provide contact information for those entities, that Defendants failed to maintain records of his requests to be placed on the do-not-call list and also failed to honor his do-not-call request. As a result, Charvat claimed that he was entitled to treble statutory damages of $1500 for each of the multiple violations of the do-not-call requirements in each call. However, the Sixth Circuit disagreed and held that with respect to the do-not-call requirements “Charvat is . . . limited to $46,500 of damages for violation of these regulations: $1500 for each of the thirty-one telephone calls that he alleges Defendants initiated without having implemented the minimum procedures for maintaining a do-not-call list.” With respect to the do-not-call list subsection of the TCPA, 47 U.S.C. § 227(c), the Sixth Circuit determined that recovery of damages is limited to a “per call basis.”
The Sixth Circuit also considered whether a plaintiff may recover statutory damages for the same call “under both the automated-call subsection of the TCPA . . . and the do-not-call-list subsection.” Upon reviewing the statutory language of the TCPA, the Sixth Circuit determined that congressional intent was “that a person be able to recover for the telemarketer’s failure to institute the minimum procedures for maintaining a do-not-call list as well as the additional harm of the call being automated.” Accordingly, “a person may recover statutory damages of $1500 for a willful and knowing violation of the automated-call requirements, § 227(b)(3), and $1500 for a willful and knowing violation of the do-not-call-list requirements, § 227(c)(5) – even if both violations occurred in the same telephone call.”
Also noteworthy is the fact that the Sixth Circuit disagreed with the district court’s finding that the state law invasion of privacy claim failed as a matter of law. Based on the significant number of calls involved and because thirty of those calls were placed after Charvat requested to be put on the do-not-call list, the Court held that “the calls could outrage or be highly offensive to a reasonable person” and that as a result, the invasion of privacy claim was viable.
In the aftermath of this decision, telemarketing companies should be aware that continued unsolicited telemarketing calls may expose them to significant liability under both the TCPA and state consumer protection laws. In addition, a single telemarketing call can result in multiple violations of federal law and each violation in a call can result in statutory damages. Finally, the Sixth Circuit’s decision recognizes that a persistent pattern of unsolicited calls, over the recipient’s request to be placed on a do-not-call list, may qualify as outrageous or highly offensive conduct for purposes of a state law invasion of privacy claim. The lesson from the Sixth Circuit’s most recent decision in this area appears to be clear: telemarketers beware.