Judge won't budge on $283M penalty assessed vs Dish Network over 3rd-party telemarketer misdeeds

By Dan Churney | Aug 16, 2017

A downstate federal judge has agreed to slightly modify an injunction against Dish Network, but refused to yield on her order the company pay $283 million in penalties for not keeping a better eye on its telemarketers, who allegedly violated consumer protection laws by making millions of unsolicited calls for Dish.

The Aug. 10 decision was issued by Judge Sue Myerscough, of U. S. District Court for the Central District of Illinois, which sits in Springfield. Dish Network provides direct-broadcast satellite TV service to more than 14 million subscribers. The company is based in Meridian, Colo.

In 2009, a lawsuit was lodged against Dish Network by the U.S. Justice Department and the attorneys general of Illinois, California, Ohio and North Carolina, saying third-party telemarketers working on Dish's behalf violated the federal Telephone Consumer Protection Act and the Telemarketing Sales Rule.

Specifically, the government attorneys said telemarketers placed millions of unsolicited calls, with recorded messages, to recipients on another company's do-not-call list.

Dish countered it did not know the telemarketers were working as its agents, much less that it authorized them to make the calls. Further, Dish maintained it urged its second-party order entry contractors not to place such calls. Dish said its policy was to never dial numbers on its own do-not-call list, unless an exemption was granted. and to never make pre-recorded calls to live phone recipients.

The case went to a bench trial in 2016, with Myerscough finding Dish was responsible for the telemarketers' actions, even if the company was unaware the telemarketers were its agents.  Myerscough then imposed $283 million in penalties several months later against Dish, to be paid in varying portions to the federal government and the four states. An injunction also commanded Dish to take a number of steps to head off any other improper telemarketing.

Dish asked Myerscough to soften the requirements of the injunction and reconsider the penalty, contending $283 million was "extraordinarily disproportionate" to Dish's "inadvertent" conduct and was consequently unconstitutional.

The U.S. Justice Department and state attorneys general called Dish's request "procedurally infirm and legally meritless," adding "Dish still resists accepting responsibility" and "Dish still doesn't get it."

The government attorneys further argued that Dish, instead of going to trial, could have proposed its own version of an injunction. Having lost at trial, Dish is now belatedly trying to frame a more agreeable injunction, they asserted.

Judge Myerscough agreed to change certain language in the injunction to Dish's liking, but refused to budge on the $283 million, writing off Dish's motion as failing to identify any "manifest errors of law or fact" and its arguments as "not persuasive."

Dish Network has been defended by the New York City office of San Francisco-based Orrick Herrington & Sutcliffe, of N.Y., as well as by Kelley, Drye & Warren, which has offices in Parsippany, N.J., Chicago and Los Angeles.

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Organizations in this Story

Dish Network LLC Illinois Attorney General Kelley Drye and Warren LLP Orrick, Herrington & Sutcliffe LLP U.S. Department of Justice U.S. District Court for the Central District of Illinois

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