Last month a federal court found Dish Network liable for calls that were alleged by the Federal Trade Commission (“FTC”) to violate various provisions of the FTC’s Telemarketing Sales Rule (“TSR”).  Specifically, the FTC’s 2009 complaint asserted that Dish Network initiated, or caused a telemarketer to initiate, calls to numbers on the National Do Not Call (“DNC”) Registry and to consumers who previously declined to receive such calls whose numbers were on Dish Network’s entity-specific do-not-call list or were marked “DNC” by a telemarketing vendor.  The FTC also alleged that, in violation of the “abandoned-call” provision of the TSR, Dish Network abandoned or caused telemarketers to abandon phone calls.  In its complaint, the FTC seeks monetary civil penalties from Dish Network for every violation of the TSR, for which the court is entitled to award up to $16,000 for each violation.  At issue are tens of millions of calls, making the potential level of damages to be awarded at the trial stage staggering.

The court found Dish Network liable for calls it, or its vendors or retailers, made to numbers on the DNC Registry.  In making this finding, the court adopted the FTC’s interpretation of the meaning of “causing” a telemarketer to violate the TSR.  Under that interpretation, a seller “causes” the telemarketing activity of a telemarketer by (1) retaining the telemarketer, and (2) authorizing the telemarketer to market the seller’s products and services.

The court further ruled that, under the “entity-specific” provision of the TSR, Dish Network is liable for calls made to consumers who were on the company’s internal DNC list or were marked “DNC” by a telemarketing vendor.  On the question of abandoned calls, the court also found Dish Network liable for its own calls and for causing abandoned calls from its retailers.

On behalf of the FTC, the Department of Justice is jointly litigating the case with four state co-plaintiffs:  California, Illinois, Ohio, and North Carolina.  These states claim that Dish Network’s actions, including telemarketing robocalls to consumers,  violated the Telephone Consumer Protection Act and state law.  Other issues in the case remain to be determined at trial, scheduled for July.

As we previously have reported, the Federal Communications Commission also actively enforces its own telemarketing rules, and last year obtained an historic settlement with a major carrier for alleged DNC violations.