By Maxine Bernstein | The Oregonian/OregonLive
A federal judge has upheld a record $925 million in damages awarded in a class-action case against a Michigan-based marketing company that a jury in Portland found had engaged in unlawful telemarketing.
ViSalus Inc. placed nearly 2 million recorded robocalls to potential customers across the country offering deals on weight-loss products, dietary supplements and energy drinks.
Lori Wakefield, a Molalla woman who had once been a promoter for the company but later quit, brought the class-action suit, arguing the outfit’s prerecorded calls violated the Telephone Consumer Protection Act.
Each violation called for a $500 penalty, and a jury in April 2019 determined the company made 1,850,436 unlawful automated calls to residential or cellphone numbers.
U.S. District Judge Michael H. Simon found the large award was based on simple math.
“Here, the jury found that ViSalus committed a stratospheric number of TCPA (Telephone Consumer Protection Act) violations. It is no surprise that the TCPA’s constitutionally valid minimum penalty of $500 for each violation has catapulted ViSalus’s penalty into the mesosphere,” Simon said in his opinion.
Attorney Benjamin G. Shatz, representing ViSalus, argued the damage award was “absurd” and would be the “death sentence” for the company. He urged the court to reduce the damages to less than a dollar per call, “to pass Constitutional muster.”
“ViSalus is in no position to pay any eight-digit judgment,” Shatz wrote to the court. “ViSalus is not Microsoft, Amazon, Facebook, or Google. It is a small direct sales company that sells nutritional supplements and weight loss products. It has no hard assets; all it possesses is a network and a brand.”
The judge dismissed the ViSalus argument.
“ViSalus’s understanding of the limitations on damages imposed by due process implies that a constitutional penalty for a single violation becomes unconstitutional if the defendant commits the violation enough times,” the judge wrote.
Simon cited a 2020 opinion by the 7th U.S. Circuit Court of Appeals in a case the government brought against Dish Network, which read: “Someone whose maximum penalty reaches the mesosphere only because the number of violations reaches the stratosphere can’t complain about the consequences of its own extensive misconduct.”
Jonas Jacobson, Wakefield’s attorney, said he hopes the ruling upholding the jury verdict – the largest damages award in a telephone consumer protection case -- will “make other robocallers think twice.”
“The Court rejected the argument that companies that violate the law millions of times should get a ‘volume discount’ on statutory damages,” Jacobson said.
The Telephone Consumer Protection Act was adopted to guard the interests of telephone users by placing restrictions on “unsolicited, automated telephone calls,” the plaintiffs argued.
The class action was certified as representing all those in the United States who received a recorded phone call made by or on behalf of ViSalus promoting its products, without providing express written consent for such calls to be made.