Microsoft Word - Dish 09-3073 FINAL FINDINGS OF FACT AND CONCLUSIONS OF LAW

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E-FILED

Monday, 05 June, 2017 02:16:37 PM

Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF ILLINOIS

SPRINGFIELD DIVISION

UNITED STATES OF AMERICA, )

and the STATES of CALIFORNIA, )

ILLINOIS, NORTH CAROLINA, )

and OHIO, )

)

Plaintiffs, )

)

v. ) No. 09-3073

)

DISH NETWORK LLC, )

)

Defendant. )

FINDINGS OF FACT AND CONCLUSIONS OF LAW

SUE E. MYERSCOUGH, U.S. District Judge:

This matter came before the Court on January 19, 2016, for a

bench trial. The first phase of the bench trial was completed on

February 17, 2016. The trial resumed on October 25, 2016. The

Court heard testimony on October 25-27, 2016 and November 2,

2016. The Plaintiff United States appeared by Assistant United

States Attorneys Patrick Runkle, Lisa Hsiao, and Sang Lee, and also

by Federal Trade Commission Attorney Russell Deitch and Gary

Ivens; the Plaintiff State of California appeared by Assistant

Attorneys General Jinsook Ohta, Jon Worm, and Adelina Acuna;

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the Plaintiff State of Illinois appeared by Assistant Attorneys

General Paul Isaac, Elizabeth Backston, and Philip Heimlich; the

Plaintiff State of North Carolina appeared by Assistant Attorney

General David Kirkman and Teresa Townsend; and the Plaintiff

State of Ohio appeared by Assistant Attorneys General Erin Leahy

and Jeff Loeser. The Defendant Dish Network, LLC (Dish) appeared

by attorneys Peter Bicks, Elyse Echtman, John Ewald, Jamie

Shookman, Shasha Zou, Louisa Irving, Joseph Boyle, and Lauri

Mazzuchetti.

Dish’s in-house counsel Stanton Dodge, Larry

Katzin, and Brett Kitei also appeared. On November 2, 2016, the

parties and the witness appeared by videoconference, except that

Dish in-house counsel Dodge’s and Kitei’s and California’s counsel

Ohta and Acuna appeared by telephone.

The Plaintiffs alleged twelve counts against Dish for violations

of federal and state laws and regulations prohibiting certain

outbound telemarketing calls (Do-Not-Call Laws). The term “Do-

Not-Call” is also sometimes referred to as “DNC.” The Plaintiffs

allege that Dish violated the Telemarketing Consumer Fraud and

Abuse Prevention Act (Telemarketing Act), 15 U.S.C. § 6101 et seq.;

Not all counsel appeared at every day of trial.

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the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227;

the Telephone Sales Rule (TSR) promulgated by the Federal Trade

Commission (FTC) pursuant to the Telemarketing Act, 16 C.F.R.

Part 310; the Rule (FCC Rule) promulgated by the Federal

Communications Commission (FCC) pursuant to the TCPA, 47

C.F.R. 64.1200 et seq.; the California Do-Not-Call Law, Cal. Bus. &

Prof. Code § 17592(c); the California Unfair Competition Law, Cal.

Bus. & Prof. Code § 17200; the North Carolina Do-Not-Call Law,

N.C. Gen. Stat. § 75-102(a); the North Carolina Automatic

Telephone Dialer Law, N.C. Gen. Stat. § 75-104; the Illinois

Automatic Telephone Dialers Act (IATDA), 815 ILCS 305/1 et seq.;

and the Ohio Consumer Sales Protection Act, Ohio Rev. Code §§

1345.02 and 1345.03. Third Amended Complaint (d/e 483), Count

I-XII. For a detailed discussion of the applicable statutes and rules,

see Opinion entered December 14, 2014 (d/e 445) (Opinion 445), at

10-32 and 215-25, 75 F.Supp.3d 942, 954-62, 1026-31 (C.D. Ill.

2014), vacated in part on reconsideration, 80 F.Supp.3d 917 (C.D.

Ill. 2015). The Court entered partial summary judgment on some

the Plaintiffs’ claims. Opinion 445, at 231-38.

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For the reasons set forth below, this Court enters judgment in

favor of the Plaintiffs United States and the States of California,

Illinois, North Carolina, and Ohio and against Defendant Dish on

Counts I, II, III, V, VI, VII, VIII, IX, X, and XII of the Third Amended

Complaint and judgment in favor of Plaintiff United States and

against Defendant Dish on the claim that Defendant provided

substantial assistance to Dish Order Entry Retailer Star Satellite as

alleged in Count IV of the Third Amended Complaint, and judgment

in favor of Defendant Dish and against the United States on the

claim that Dish provided substantial assistance to Dish Order Entry

Retailer Dish TV Now as alleged in Count IV of the Third Amended

Complaint. The Court enters judgment in favor of Defendant Dish

and against Plaintiff State of Illinois on Count XI of the Third

Amended Complaint.

The Court awards civil penalties and statutory damages in

favor of the Plaintiffs United States and the States of California,

Illinois, North Carolina, and Ohio and against Defendant Dish in

Counts I, II, III, IV, V, VI, VII, VIII, IX, X, and XII of the Third

Amended Complaint in the total sum of $280,000,000.00. The

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amount awarded in each Count is set forth below in the

Conclusion.

The Court also enters a Permanent Injunction in favor of the

Plaintiffs and against Defendant Dish Network, L.L.C. in the

manner set forth in the separate Permanent Injunction Order filed

with this Findings of Fact and Conclusions of Law.

The following constitutes findings of fact and conclusions of

law for the issues remaining for trial. Fed. R. Civ. P. 52(a).

This case is complex and covers years of telemarketing by Dish

and numerous related entities. The Court organizes the findings of

fact under various headings. The organizational structure does not

limit any findings to any particular issue. Unless otherwise

indicated, all findings of fact may be relevant to all issues.

JURISDICTION

This Court has jurisdiction to hear the United States’ claims in

Counts I-IV pursuant to 28 U.S.C. §§ 1331, 1337(a), 1345, and

1355; Federal Trade Commission Act (FTC Act), 15 U.S.C. §§

45(m)(1)(A), 53(b), 56(a), and 57(b); and the Telemarketing Act, 15

U.S.C. § 6105(a) & (b). The FTC authorized the Attorney General to

commence this action on behalf of the United States pursuant to

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FTC Act § 56(a). This Court has jurisdiction to hear the Plaintiff

States’ TCPA claims in Counts V & VI pursuant to 28 U.S.C. §§

1331, 1337(a), 1345, and 1355; and exclusive jurisdiction pursuant

to TCPA, 47 U.S.C. § 227(g)(2). This Court has supplemental

jurisdiction to hear the Plaintiff States’ state law claims in Counts

VII-XII pursuant to 28 U.S.C. § 1367(a).

Dish argues that the Plaintiff States lack standing to bring the

TCPA claims alleged in Counts V and VI. A lack of standing is

jurisdictional. Steel Co. v. Citizens for a Better Environment, 523

U.S. 83, 93 (1998). To establish standing, a plaintiff must have “(1)

suffered an injury in fact, (2) that is fairly traceable to the

challenged conduct of the defendant, and (3) that is likely to be

redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins,

__U.S.__, 136 S.Ct. 1540, 1547 (2016).

The TCPA § 227(g) authorizes the Plaintiff States to bring this

action. Section 227(g)(1) states that when the State Attorney

General, “has reason to believe that any person has engaged or is

engaging in a pattern or practice of telephone calls or other

transmissions to residents of that State in violation of this section

or the regulations prescribed under this section,” then “the State

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may bring a civil action on behalf of its residents.” 47 U.S.C.A. §

227(g)(1). The Plaintiff States, therefore, are bringing the claims in

Counts V and VI in parens patriae to protect the well-being of each

Plaintiff State’s populace. The Plaintiff States must demonstrate

Article III standing. The Plaintiff States must demonstrate some

concrete injury to its residents by Dish that can be redressed by the

claims in Counts V and VI. Alfred L. Snapp & Son, Inc., v. Puerto

Rico ex rel. Barez, 458 U.S. 592, 602-05 (1982). The Congressional

grant of a right to statutory damages in the TCPA § 227(g) is not

sufficient by itself to establish standing. The Plaintiff States must

show some injury in fact from the unwanted telemarketing calls.

Spokeo, 136 S.Ct. at 1543.

Several District Courts have considered whether unwanted

calls made in violation of the TCPA cause concrete injury necessary

to establish standing. Many of these District Courts have found

that the annoyance and distress caused by unwanted calls

established concrete injuries sufficient to establish standing. E.g.,

Krakauer v. Dish Network, L.L.C., 168 F.Supp.3d 843, 845 (M.D.

N.C. 2016); Wilkes v. CareSource Management Group Co., 2016 WL

7179298, at *3 (N.D. Ind. December 9, 2016); Mbazomo v.

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Etourandtravel, Inc., 2016 WL 7165693, at *2 (E.D. Cal. December

8, 2016); Griffith v. ContextMedia, Inc., 2016 WL 6092634, at *1-2

(N.D. Ill. October 19, 2016); LaVigne v. First Community

Bancshares, Inc., 2016 WL 6305992, at *3 (D. N.M. October 19,

2016); Espejo v. Santander Consumer USA, Inc., 2016 WL

6037625, at *9 n.3 (N.D. Ill. Oct. 14, 2016); Dolemba v. Illinois

Farmers Insurance Company, 2016 WL 5720377 (N.D. Ill.

September 30, 2016); Juarez v. Citibank, N.A., 2016 WL 4547914,

at *3 (N.D. Cal. September 1, 2016); Aranda v. Caribbean Cruise

Line, Inc., 2016 WL 4439935, at *5-*7 (N.D. Ill. August 23, 2016);

A.D. v. Credit One Bank, N.A., 2016 WL 4417077 (N.D. Ill. August

19, 2016). The Court in Aranda described how unwanted telephone

calls cause concrete injuries by invading the privacy of the home:

In any event, section 227 establishes substantive, not

procedural, rights to be free from telemarketing calls

consumers have not consented to receive. Both history

and the judgment of Congress suggest that violation of

this substantive right is sufficient to constitute a

concrete, de facto injury. As other courts have observed,

American and English courts have long heard cases in

which plaintiffs alleged that defendants affirmatively

directed their conduct at plaintiffs to invade their privacy

and disturb their solitude. See, e.g., Mey v. Got Warranty,

Inc., ––– F.Supp.3d ––––, ––––, 2016 WL 3645195, at *3

(N.D.W.V.2016) (“[T]he TCPA can be seen as merely

liberalizing and codifying the application of [a] common

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law tort to a particularly intrusive type of unwanted

telephone call.”); Caudill v. Wells Fargo Home Mort., Inc.,

No. 5:16–066–DCR, 2016 WL 3820195, at *2 (E.D.Ky.

July 11, 2016) (“[The] alleged harms, such as invasion of

privacy, have traditionally been regarded as providing a

basis for a lawsuit in the United States.”).

Aranda, 2016 WL 4439935, at *6. The Aranda Court noted that,

“Congress enacted the TCPA to protect consumers from the

annoyance, irritation, and unwanted nuisance of telemarketing

phone calls, granting protection to consumers' identifiable concrete

interests in preserving their rights to privacy and seclusion.” Id.

Each Plaintiff State further presented testimony from residents

who personally suffered injury from unwanted calls by Dish or its

related entities. E.g., Deposition David Slaby, at 6, 52-53, 69-70

(California resident); T 613: 24-26 (Skala (Illinois resident));

T 618:856-66 (Krakauer (North Carolina resident)); T 617: 574

(Kitner (Ohio resident)).

The Plaintiff States have demonstrated

that the calls at issue caused concrete injury necessary to establish

standing.

The Court references the trial transcript as follows: the letter T, the docket entry number of

the relevant portion of the transcript, the page number, and the last name of the witness in

parentheses. The Court references exhibits by the exhibit number used at trial. The

deposition excerpts cited have been admitted into evidence in lieu of live testimony.

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Dish has cited a District Court that found that receipt of

unwanted telephone calls did not cause concrete injury necessary

to established standing. Romero v. Department Stores National

Bank et al. v. Defendants, 2016 WL 41484099 (S.D. Cal. August 5,

2016). The Court respectfully disagrees with the reasoning in the

Romero decision and agrees with the reasoning in the Aranda

decision, the Krakauer decision, and the other cases cited

immediately above. The Plaintiff States therefore have standing to

proceed.

FINDINGS OF FACT

I. Background

In 1980, Charles Ergen and James DeFranco formed Dish’s

predecessor corporation called Ecosphere Corporation (Ecosphere).

Ecosphere sold and distributed large satellite dishes 12 feet in

diameter designed to receive television signals. T 621: 1478-79

(DeFranco); T 625: 2073 (Neylon). Ecosphere later changed its

name to Echostar Communications Corporation (Echostar).

Echostar developed a network of local retailers to sell, distribute,

and install satellite dishes. T 621: 1487 (DeFranco). In 1995,

Echostar made an initial public offering of stock. T 621: 1445

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(DeFranco). As discussed below, in 1996, Echostar started a

satellite television service called Dish Network. In 2008, Echostar

reorganized its business structure. Echostar became the Defendant

business entity Defendant Dish Network, LLC. Dish Network, LLC

continued the business of selling and providing Dish Network

programming. A business entity called Echostar continued to exist

as a separate corporation. Both became owned by a holding

company, Dish Network Corporation (Dish Corp.). Echostar

currently operates satellites used to transmit Dish Network

programming. See Opinion 445, at 2; PX1093, Dish Annual Report

dated December 31, 2011, at 6-7; T 621: 1482 (DeFranco). The

Court hereafter uses the term “Dish” to refer the business entity

selling Dish Network programming (Echostar before 2008 and Dish

Network, LLC thereafter).

In 1996, upon launching Dish Network, Dish went into direct

competition with DirecTV, another provider of residential satellite

pay television services. DirecTV started this type of service two

years before Dish. T 621: 1488 (DeFranco). Dish also competed

with cable television services and over-the-air broadcast services.

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T 621: 1488-89 (DeFranco). By 1999, Dish was offering a 500

channel satellite television service. T 621: 1442 (DeFranco).

Dish marketed Dish Network programming through various

means, including direct outbound telemarketing by Dish employees.

Dish also retained companies to perform outbound telemarketing

services for Dish (Telemarketing Vendors). T 617: 664 (Davis).

Outbound telemarketing means making telephone calls to existing

or prospective customers to sell products and services. Inbound

telemarketing involves advertising through various media (e.g.,

television, radio, print, direct mail) to generate inbound calls from

consumers seeking information about the possible purchase of

goods and services. Dish engaged in both inbound and outbound

telemarketing. See T 627: 2517 (Dexter). The Plaintiffs’ claims all

relate to outbound telemarketing only. Unless otherwise indicated,

the Court uses the term “telemarketing” to refer to outbound

telemarketing.

Dish divided its marketing structure into direct and indirect

marketing, sometime referred to as direct and indirect “channels.”

The direct channel consisted of Dish in-house, or direct marketing,

and marketing by Dish’s Telemarketing Vendors. The

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Telemarketing Vendors were telemarketing companies hired by Dish

to perform telemarketing services for Dish. The indirect channel

consisted of marketing by all other entities authorized by Dish to

market Dish Network programming. Within the indirect channel,

Dish continued to use its network of retailers, called TVRO or Full

Service Retailers, to sell Dish Network programming.

TVRO

Retailers generally sold, installed, and serviced satellite dishes and

related equipment. Some TVRO Retailers engaged in telemarketing.

T 626: 2294-95 (Ahmed).

The indirect channel also included national retailers and

telecommunications companies that marketed Dish Network

programming, such as Radio Shack, Sears, and AT&T. T 625: 2113

(Neylon).

Dish also developed an indirect marketing program called the

Order Entry Program. Through this program, Dish authorized

marketing businesses to market Dish Network programming

nationally. These marketing businesses secured consumers’ offers

to purchase Dish Network programming. Dish completed the sales

TVRO stands for Television Receive Only. See Opinion 445, at 57.

The national telephone company accounts were also called “Telco” accounts. See e.g., T 625:

2113 (Neylon).

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solicited by these businesses. Dish provided and installed the

satellite dishes and related equipment, and Dish provided the

programming and related services. Dish called these marketing

businesses Order Entry Retailers or OE Retailers. See T 626: 2358,

2283, 2296 (Ahmed); T 621: 1632 (Mills).

The Plaintiffs’ claims arise from: (1) Dish’s direct

telemarketing; (2) the telemarketing activities of Dish’s

Telemarketing Vendors EPLDT (also known as Libertad), and eCreek

Solutions Group (eCreek); and (3) telemarketing activities of certain

Order Entry Retailers.

II. Telemarketing by Dish and its Telemarketing Vendors

A. Telemarketing Practices Before 2003

In 1998, Dish began telemarketing Dish Network

programming. Dish used an automatic dialer called a predictive

dialer to make outbound telemarketing calls. DTX-650, Timeline

Email dated December 10, 2007 (Timeline Email). An automatic

dialer, or autodialer, can call large numbers of telephone numbers

automatically and can distinguish between possible results of each

call: either no answer, a busy signal, a response by an answering

machine, or an answer by a person. See T 627: 2527-28 (Dexter).

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When a person answers the call, the automatic dialer can connect

the call recipient either to a prerecorded message or a live sales

person. See T 627: 2655 (Bangert). Dish direct marketing had a

policy to connect answered telemarketing calls to live sales persons

and not prerecorded messages. T 627: 2690-91 (Bangert); T 617:

624 (Davis).

At the time that Dish began telemarketing in 1998, the TSR

and FCC Rule prohibited sellers and telemarketers from initiating

telemarketing calls to individuals who previously stated that they

did not wish to be called (a “Do-Not-Call Request”). The FCC Rule

required sellers and telemarketers to maintain an internal, or

entity-specific, Do-Not-Call List of the people who previously asked

not to be called again (”Internal Do-Not-Call List”). The FCC Rule

required telemarketers and sellers to honor a Do-Not-Call Request.

The TSR prohibited making calls to persons who made a Do-Not-

Call Request stating that they did not wish to receive telemarketing

calls by or on behalf of the seller. The TSR stated that sellers or

telemarketers that wished to comply with the TSR safe harbor

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provision had to maintain an Internal Do-Not-Call List.

See

Opinion 445, at 11, 26. The Court refers to calls made to persons

who previously made an Internal Do-Not-Call Request as “Internal

List Calls.”

Dish maintained an Internal Do-Not-Call List. Individuals

could have their telephone numbers placed on Dish’s Internal Do-

Not-Call List by calling or writing Dish; by telling a Dish

telemarketer during a sales call; by telling a Telemarketing Vendor

telemarketer during a sales call; by registering on Dish’s Internal

Do-Not-Call List on Dish’s website; or by calling a toll-free number.

If the automatic dialer failed to connect a call recipient to a sales

person within two seconds of the recipient’s answer of the call, the

automatic dialer played a prerecorded message that provided the

toll-free number. T 629: 3024-26 (Montano). Dish eventually

developed a PowerPoint presentation to explain how to handle an

Internal Do-Not-Call Request. Dish made the PowerPoint

presentation available to all employees who came in contact with

consumers, including telemarketing employees and customer

An Internal Do-Not-Call List is also called an “entity-specific do-not-call list.”

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service employees. DTX 14, PowerPoint Presentation; see T 627:

2504-16, 2590 (Dexter).

The FCC Rule also restricted making outbound telemarketing

calls that played prerecorded sales messages to recipients of

telemarketing calls. Calls that play prerecorded messages are

called by several different names, including “robocalls,”

“prerecorded calls,” “prerecorded messaging,” “message

broadcasting,” “automated messaging,” “automessaging,” “AM,” and

sometimes “autodialer calls.”

The Court refers to such calls as

“Prerecorded Calls.”

The FCC Rule allowed Prerecorded Calls to call recipients who

had Established Business Relationships with the seller or

telemarketer making the call, unless the recipient’s telephone

number was on the seller or telemarketer’s Internal Do-Not-Call

List. See Opinion 445, at 25-26.

The FCC Rule defined

Established Business Relationship as:

The term established business relationship for purposes

of telephone solicitations means a prior or existing

At least one witness used the term “autodialer” calls to refer to prerecorded calls. See T 622:

1871 (Goodale). Most witnesses used the term autodialer call to refer to any call made by

automatic dialing equipment regardless of whether the autodialer played a prerecorded

message or connected the call recipient to a live sales representative.

The FCC amended the FCC Rule in 2012 to eliminate the Established Business Relationship

exception. See Opinion 445, at 25.

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relationship formed by a voluntary two-way

communication between a person or entity and a

residential subscriber with or without an exchange of

consideration, on the basis of the subscriber's purchase

or transaction with the entity within the eighteen (18)

months immediately preceding the date of the telephone

call or on the basis of the subscriber's inquiry or

application regarding products or services offered by the

entity within the three months immediately preceding the

date of the call, which relationship has not been

previously terminated by either party.

47 C.F.R. § 64.1200(f)(5). Under this provision, a telemarketer had

an Established Business Relationship with a call recipient who was

a residential telephone subscriber under one of two conditions: (1)

the call recipient made a purchase or engaged in a transaction with

the seller within 18 months of the date of the call (Transaction-

based Established Business Relationship); or (2) the call recipient

made an inquiry or application for the seller’s good or services

within three months of the date of the call (Inquiry-based

Established Business Relationship).

In 1987, States began establishing Do-Not-Call registries for

state residents. See Telemarketing Sales Rule, Statement of Basis

and Pupose, 48 Fed. Reg. 4580, 4629 n. 592 (January 29, 2003)

(citing Fla. Stat. Ann. § 501.059) (2003 TSR Statement of Basis and

Purpose); Marguerite M. Sweeney, Do Not Call: The History of Do

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Not Call and How Telemarketing has Evolved, NAGTRTI J., Vol.1,

No. 4 (August 2016) available at

http://www.naag.org/publications/nagtri-journal/volume-1-

number-4/do-not-call-the-history-of-do-not-call-and-how-

telemarketing-has-evolved.php. Residents registered their

telephone numbers on the state registry if the residents did not

wish to receive unsolicited telemarketing calls. The state laws

restricted sellers and telemarketers from making certain

telemarketing calls to telephone numbers on the state registries

(State Do-Not-Call Lists). Dish began purchasing State Do-Not-Call

Lists in 2001. DTX 650, Timeline Email, at 1.

Dish directed almost all of its outbound telemarketing

campaigns at residences rather than businesses. T 628: 2810

(Bangert); T 627: 2555, 2639, 2641 (Dexter) (most campaigns to

residences, but some directed to businesses); T 617: 633-34 (Davis)

(same); see T 614: 450-51 (Yoeli); PX 38, Declaration of Dr. Erez

Yoeli dated December 18, 2013, Appendix C, Revised Rebuttal

Report of Dr. Erez Yoeli dated December 14, 2012 (Yoeli December

14, 2012 report), at 7-8 (Dish’s calling records from September

2007 to March 2010 indicate that .2% of Dish’s direct telemarketing

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calls which Dr. Yoeli opined were violations of the TSR were

answered by businesses.).

Dish organized its telemarketing into different types of calling

campaigns, depending on Dish’s relationship with the intended

recipients of the calls and the purposes of the calls. Campaigns

that Dish intended to direct at current customers were called

Average Revenue Per Unit (ARPU), Upsell, and Premium Upsell

campaigns. These campaigns offered additional or upgraded

programming or services to existing customers. See PX 0477, Email

dated May 9, 2002; T 628: 2708-09 (Bangert); T 617: 592 (Davis).

Through approximately July 2010, Dish presumed that it had a

Transaction-based Established Business Relationship with the

recipients of these calls. See PX 1248, Project Scope Document

dated February 2, 2010, (request by Outbound Operations to

modify PDialer to use last payment dates); DTX 972, Email thread

dated June 30, 2010 to July 2, 2010 between Dish and

PossibleNOW representatives; T 633: 3297-99 (Taylor); DTX 670,

Dish employee Joey Montano testified that Dish ran several calling campaigns directed at

businesses. T 628: 2960 (Montano). Montano did not testify that Dish directed a significant

portion of its telemarketing campaigns at businesses. To the extent that Montano attempted

to give the impression that campaigns directed at businesses made up a significant portion of

Dish’s outbound telemarketing, the Court finds that testimony not to be credible. The

overwhelming evidence shows that Dish directed almost all of its outbound telemarketing

campaigns at residential households.

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PDialer Meeting Minutes dated July 1, 2010, at 2 ¶ 7 (indicating

change to last payment date); T 629: 3014-15, 3130-34 (Montano).

Dish’s calling records from September 2007 through March 2010,

however, show that the lists of telephone numbers called (calling

lists) in these campaigns included numbers for individuals who had

not paid for any programming services from Dish for more than 18

months at the time that Dish called them. The records are

discussed in detail below.

Campaigns directed at former customers were called

“winback” campaigns. As the name implied, the campaigns sought

to win back former customers. The calling lists in winback

campaigns were supposed to consist of the telephone numbers of

former customers who had their Dish service disconnected on the

same day. Dish used disconnect dates to determine when the

customer relationship ended. T 633: 3297-99 (Taylor); T 629: 3014-

15, 3130-34 (Montano). Dish dialed winback campaign calling lists

periodically at certain intervals after the disconnect date, e.g., 48

hours, 30 days, 60 days, 6 months, 12 months, 18 months, and so

on up to as long as 61 months after the termination. Dish called

winback campaigns “trailing campaigns” because of the periodic

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calling process. T 627: 2637 (Dexter); see DTX 626A through 626D,

Summary Table of Dish Campaigns prepared by Dish Expert John

Taylor (Taylor Tables). Until approximately July 2010, Dish

presumed that it had a Transaction-based Established Business

Relationship with the recipients of these calls if the campaign calls

were made 18 or fewer months after the disconnect date for the

particular campaign. See T 628: 2969 and 629: 3130 (Montano);

PX 1248, Project Scope Document dated February 2, 2010

(requesting modification of PDialer to use last payment date); DTX

972, Email thread dated June 30, 2010 to July 2, 2010 between

Dish and PossibleNOW representatives; DTX 670, PDialer Meeting

Minutes dated July 1, 2010. The calling records from September

2007 to March 2010 discussed below, however, show that winback

calling lists included many individuals who had not paid for any

programming services from Dish for more than 18 months before

the date of the calls. The call records are discussed in detail below.

Dish also directed calling campaigns at individuals who

purchased Dish Network programming, but Dish did not complete

installation and activation of the services. Some of these calling

campaigns were called Canceled Work Order (CWO) campaigns.

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T 617: 588 (Davis); T 628:2708 (Bangert). Dish conducted Canceled

Work Order campaigns to reschedule the canceled work orders in

order to complete activation of service. T 629: 3075-76 (Montano).

Dish employees and former employees sometimes characterized

these calling campaigns as telemarketing campaigns and sometimes

as non-telemarketing scheduling calls or non-telemarketing calls to

collect information. See T 628: 2708-09 (Bangert); T 617: 591

(Davis); T 627: 2522 (Dexter); T 629: 3075-76 (Montano).

Dish

produced no scripts for any of these campaigns in discovery and

presented no scripts at trial. The limited evidence presented

establishes that these calling campaigns were directed at

individuals who initially agreed to purchase Dish Network

programming, but who canceled the installation. Dish ran Canceled

Work Order campaigns to reschedule the canceled work orders and

complete the installation of Dish Network programming.

During discovery, Montano told Plaintiffs’ representatives that Canceled Work Order

campaigns were telemarketing campaigns. Montano testified at trial that he changed his

opinion during discovery and decided that the campaigns were not for the purpose of

telemarketing. T 629: 3055-56 (Montano). Dish submitted a letter that Dish attorneys wrote

to Plaintiffs’ attorneys during discovery alerting Plaintiffs’ attorneys that Montano had changed

his opinion regarding these calls. DTX 1015, Letter from Mazzuchetti to Hsiao dated November

28, 2012. The Curt considers the as evidence of notice to Plaintiffs regarding Montano’s

change in opinion.

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Dish also conducted No Line of Sight (NLOS) and Held Work

Order (HWO) calling campaigns. No Line of Sight campaigns were

directed at individuals who agreed to purchase Dish programming,

but the installer could not find a place to install the satellite dish

that had a line of sight to receive the signal. Dish ran these calling

campaigns to schedule a time for a field service manager to come

out and see if he could find a line of sight to complete installation.

T 627: 2544 (Dexter). Held Work Order campaigns were directed to

an individual who agreed to purchase Dish programming, but

whose work order was placed on hold. Dish made Held Work Order

calls to reschedule the Work Order to complete activation of service.

T 627: 2546-47 (Dexter); T 629: 3075-76 (Montano). Dish

employees also sometimes characterized these campaigns as

telemarketing campaigns and sometimes as non-telemarketing

scheduling calls. Id.

Campaigns directed at individuals who never indicated any

interest in Dish programming or services were called “Cold Call” or

“Target Marketing” campaigns. See PX 0477, Email dated May 9,

2002; T 628: 2708-09 (Bangert); T 617: 592 (Davis); T 629: 3117

(Montano).

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Campaigns called LTS or Lead Tracking System campaigns

were directed at individuals who were not Dish customers, but who

came into contact with Dish and provided contact information.

Dish presented very little competent evidence on how the Lead

Tracking System was formulated or how calling lists were derived

from the Lead Tracking System. Dish’s Database Marketing

Department maintained the Lead Tracking System and created the

Lead Tracking System (or LTS) calling lists. T. 627: 2680

(Bangert).

Dish presented no testimony from any representative of

Database Marketing or anyone else who had personal knowledge of

the working of the Lead Tracking System.

Several witnesses summarily testified that Lead Tracking

System calling lists were made up of people who inquired about

Dish Network programming. Dish presumed that it had an Inquiry-

based Established Business Relationship with the recipients of

these calls. See T 627: 2681-82 (Bangert); T 628: 2709-10, 2808

(Bangert); T 627: 2643-44 (Dexter); T 617: 590 (Davis); T 629: 3163-

64 (Montano). Dish failed to establish that any of these witnesses

Dish may have changed the name of Database Marketing to Data Analytics or Marketing

Analytics. Data Analytics and Marketing Analytics may have also been different departments.

The evidence is unclear. The Court refers to this Department as Database Marketing.

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had sufficient personal knowledge to testify regarding the operation

of the Lead Tracking System or the make-up of the calling lists

derived from the Lead Tracking System. None of these witnesses

worked in Database Marketing or had any involvement in the

formulation of the Lead Tracking System or the Lead Tracking

System calling lists.

The only evidence from Database Marketing cited by the

parties that discussed the make-up of the Lead Tracking System

consisted of two emails from Database Marketing employees in a

single email thread from August 2004. PX117, Email thread

regarding Dish Taking a DTV Sale dated August 11, 2004, at

PX117-001, 005-006. These two emails indicate that the Lead

Tracking System collected the contact information of any

individuals who came into contact with Dish and provided such

information. According to these two emails, the Lead Tracking

System included individuals who requested information about Dish

Network programming, but also included individuals who already

received a telephone sales pitch for Dish programming and services

and did not buy, and individuals who began ordering Dish

programming online, but did not complete the purchase.

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See PX117, Email thread regarding Dish Taking a DTV Sale dated

August 11, 2004, at PX117-001, 005-006. At one point, the Lead

Tracking System included contact information for certain

individuals that Order Entry Retailers contacted to sell Dish

Network programming, but who decided not to buy. Dish

discontinued this latter practice when Order Entry Retailers

complained that Dish direct marketing was taking the Order Entry

Retailers’ leads. See PX 117, Email thread regarding Dish Taking a

DTV Sale dated August 11, 2004; T 629: 2711-12 (Bangert). The

Court finds that Dish failed to prove that the Lead Tracking System

consisted of contact information for the individuals who inquired

about Dish Network programming. Rather, the sparse evidence in

these two emails seems to indicate that the Lead Tracking System

included the contact information for anybody who came in contact

with Dish for almost any reason and provided contact information.

By May 2002, Dish had developed a process to scrub certain

calling lists. A calling list (or call list) was a list of numbers to be

called for a calling campaign. The term “scrubbing” or “scrub”

referred to removing from a calling list telephone numbers that

could not legally be called under the particular circumstances. In

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2002, Dish scrubbed certain calling lists against its Internal Do-

Not-Call List and State Do-Not-Call Lists. See T 627: 2660-61;

T 628: 2703-04 (Bangert); DTX 650, Timeline Email, at 1; T 617:

662-63 (Davis).

Dish had some problems with that scrubbing system. In May

2002, Dish was not scrubbing its calling lists against the Oregon

State Do-Not-Call List and was still researching the requirements of

the other States. Dish in-house attorneys knew that Oregon

officials were investigating Dish’s telemarketing. Dish in-house

attorneys knew that the Oregon statute authorized a $25,000.00

per call penalty on willful violations. In May 2002, Dish temporarily

stopped all telemarketing in Florida, Illinois, Oregon, and Colorado.

PX0477, Email from Vice President PJ Weyforth dated May 9, 2002

3:36 p.m.; PX1430, Email dated May 3, 2002, at 004.

In June 2002, Dish limited its outbound telemarketing to

residents in 25 states that did not have State Do-Not-Call Lists in

effect. PX0473, Email dated June 12, 2002 3:19 p.m. Dish

employees who conducted the scrubbing process in Dish’s

Outbound Operations Department testified that Dish could remove

telephone numbers of residents of particular states because Dish

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maintained residential address information associated with the

telephone numbers on its various calling lists. See T 628: 2740-41

(Bangert); T 629: 3209-10 (Montano); T 627: 2639-40 (Dexter);

T 617: 630 (Davis).

B. Dish Telemarketing Practices Beginning in October 2003

In 2001, Congress authorized the FTC to promulgate

regulations to establish a National Do-Not-Call Registry (Registry),

and to prohibit initiating outbound telemarketing calls to persons

whose telephone numbers were registered on the Registry. TSR, 16

C.F.R. § 310.4(b)(1)(iii)(B); see Opinion 445, at 14, 26-27. In 2003,

the FTC established the Registry. Individuals registered their

telephone numbers on the Registry if they did not wish to receive

telemarketing calls. The FTC and the FCC amended the TSR and

FCC Rule to prohibit calling a person whose number was on the

Registry (Registry Call). The prohibition did not apply if the person

had an Established Business Relationship with the seller or

telemarketer. The TSR defined Established Business Relationship

as follows:

(o) Established business relationship means a

relationship between a seller and a consumer based on:

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(1) the consumer's purchase, rental, or lease of the

seller's goods or services or a financial transaction

between the consumer and seller, within the eighteen

(18) months immediately preceding the date of a

telemarketing call; or

(2) the consumer's inquiry or application regarding a

product or service offered by the seller, within the

three (3) months immediately preceding the date of a

telemarketing call.

TSR 16 C.F.R. § 310.2(o); see Opinion 445, at 18, 75 F.Supp.3d at

957. Like the FCC Rule, the TSR definition established a

Transaction-based Established Business Relationship and an

Inquiry-based Established Business Relationship. The TSR

definition also used an 18-month time period from the last

purchase, rental, lease or financial transaction for the Transaction-

based Established Business Relationship and a three-month time

period from the last inquiry or application for the Inquiry-based

Established Business Relationship.

On September 29, 2003, Congress ratified the establishment

of the Registry. Pub. L. 108-82, 117, codified at 15 U.S.C. § 6151.

The Registry was scheduled to begin operations on October 1, 2003,

but the start of operations was delayed to October 17, 2003. See

F.T.C. v. Mainstream Marketing Services, Inc., 345 F.3d 850, 860-

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61 (10

Cir. 2003); see also Mainstream Marketing Services, Inc. v.

F.T.C., 358 F.3d 1228, 1250-51 (10

Cir. 2004).

The TSR and FCC Rule contained safe harbor provisions.

Sellers and telemarketers who followed the safe harbor procedures

would not be liable for certain illegal calls that resulted from errors

or mistakes. The safe harbor provisions required, among other

things, written procedures for implementing the requirement not to

call persons whose telephone numbers were on the Registry, and

maintenance of records documenting the use of a process to

prevent telemarketing to persons whose numbers were on the

Registry. The TSR safe harbor applied to Internal List Calls and

Registry Calls. The FCC Rule safe harbor only applied to Registry

Calls. 16 C.F.R. § 310.4(b)(3); 47 C.F.R. § 64.1200(c)(2)(i); see

Opinion 445, at 164-66, 210-11, 75 F.Supp.3d at 958, 961. Neither

safe harbor provision applied to Prerecorded Calls.

The 2003 amendments to the TSR also prohibited abandoning

calls. An outbound telemarketing call is abandoned if the person

answering a telemarketing call is not connected to a sales

representative within two seconds of the person’s completed

greeting. 16 C.F.R. § 310.4(b)(1)(iv). A Prerecorded Call that is

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answered by a person is an abandoned call under the TSR because

the person receiving the call is not connected to a sales

representative, but to a recording. See Opinion 445, at 21-22. This

Court refers to Prerecorded Calls that are answered by a person as

“Abandoned Prerecorded Calls.” The FTC Statement of Basis and

Purpose accompanying the final TSR stated that connecting the call

recipient to a prerecorded telemarketing message violated the

abandonment provisions:

[Under] the prohibition of abandoned calls, . . .

telemarketers must connect calls to a sales

representative within two seconds of the consumer's

completed greeting to avoid a violation of the Rule.

Clearly, telemarketers cannot avoid liability by

connecting calls to a recorded solicitation message rather

than a sales representative. The Rule distinguishes

between calls handled by a sales representative and

those handled by an automated dialing-announcing

device. The Rule specifies that telemarketers must

connect calls to a sales representative rather than a

recorded message.

2003 TSR Statement of Basis and Purpose, 68 Fed. Reg. at 4644.

On November 17, 2004, the FTC issued a Notice of Proposed

Rulemaking (2004 Notice) to amend the TSR to add an additional

safe harbor provision to allow some Abandoned Prerecorded Calls

under limited circumstances. 69 Fed. Reg. 67287 (November 17,

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2004). The proposed safe harbor amendment would have allowed a

seller or telemarketer to make an Abandoned Prerecorded Call to a

person with whom the seller or telemarketer had an Established

Business Relationship only if the prerecorded message: (1)

presented the person with the opportunity to communicate that he

or she did not want to be called again within two seconds of the

person’s completed greeting (e.g., by pushing a number on the

telephone keypad); (2) provided all required disclosures; and (3)

otherwise complied with all applicable state and federal laws. 69

Fed. Reg. at 67289; see Opinion 445, at 21-22.

The FTC further stated in the 2004 Notice that the FTC would

forbear from bringing enforcement actions for prerecorded calls that

resulted in abandoned calls if the telemarketer complied with the

proposed amendments to the safe harbor provisions:

Therefore, the Commission has determined that, pending

completion of this proceeding, the Commission will

forbear from bringing any enforcement action for

violation of the TSR's call abandonment prohibition, 16

CFR 310.4(b)(1)(iv), against a seller or telemarketer that

places telephone calls to deliver prerecorded

telemarketing messages to consumers with whom the

seller on whose behalf the telemarketing calls are placed

has an established business relationship, as defined in

the TSR, provided the seller or telemarketer conducts this

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activity in conformity with the terms of the proposed

amended call abandonment safe harbor.

69 Fed. Reg. at 67290. The FTC ultimately amended the TSR to

allow Abandoned Prerecorded Calls only to persons with whom the

seller had an Established Business Relationship and only with prior

written consent. Final Rule Amendments, 73 Fed. Reg. 51164

(August 29, 2008); see Opinion 445, at 22, 75 F.Supp.3d at 958.

Dish witness Russell Bangert opined that the TSR

abandonment provisions did not clearly apply to Abandoned

Prerecorded Calls. T 627: 2690 (Bangert). The Court finds this

testimony to be of no probative value. Bangert conceded at his

deposition that he had only a rudimentary understanding of the

federal Do-Not-Call Laws and regulations. T 627: 2686 (Bangert).

Bangert’s attempt to embellish his knowledge of these laws and

regulations at the trial was not credible. Further, FTC publicly

stated the 2003 TSR Statement of Basis and Purpose and the 2004

Notice that the TSR abandonment provision applied to Abandoned

Prerecorded Calls. Dish employed highly qualified attorneys

internally and externally. These attorneys would have been well

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aware that the TSR abandonment provision applied to Abandoned

Prerecorded Calls.

In addition, Dish employees understood that Prerecorded Calls

were prohibited. T 627, 2565-66, 2625 (Dexter) (Dish had a policy

not to make prerecorded telemarketing calls); T 617: 624-25 (Davis)

(Dish representatives understood that such calls were illegal.). See

also PX523, Email from Dexter to Davis dated May 3, 2010,

regarding FTC.gov statement regarding abandonment and safe

harbor provisions; DTX 662, Email dated March 23, 2010 from

Dexter (prerecorded telemarketing calls prohibited); T 619: 985

(Werner) (same).

In 2002, Dish began planning to adjust its telemarketing

practices in light of the upcoming launch of the Registry. T 627:

2658 (Bangert). Dish representatives expected the Registry to

increase the volume of telephone numbers affected by the Do-Not-

Call Laws. Dish put together a group of individuals from interested

departments (Working Group) to develop a process to comply with

the new regulations and to deal with the expected increase in the

size and scope of the process. See T 627: 2658-61 (Bangert).

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In April 2003, Dish entered into a settlement with the state of

Indiana for violations of Indiana’s Do-Not-Call Law. In connection

with that settlement, Dish entered into a court-approved Assurance

of Voluntary Compliance (AVC). PX 908, Indiana AVC dated April

11, 2003, and Court Order of Approval dated April 15, 2003. Dish

thereafter scrubbed lists to remove calls to Indiana residents from

its outbound telemarketing. T 628: 2742 (Bangert).

In August 2003, the state of Missouri filed suit against Dish

for violation of the Missouri Do-Not-Call Law. PX 52, Missouri

Complaint. The Missouri action was settled in 2005. Dish executed

an Assurance of Voluntary Compliance and agreed to pay

$50,000.00. PX 544, Missouri ex rel. Nixon v. Echostar

Communications Corp., St. Charles County, Mo., Circuit Ct. Case

No. 03CV129088, Petition for Approval of Assurance of Voluntary

Compliance dated May 4, 2005, attached Assurance of Voluntary

Compliance ¶ 16; see PX 53, Email dated April 19, 2006 between

Dish Corporate Counsel Steele and Dish SVP Deputy General

Counsel Dodge.

In August and September 2003, the Working Group continued

to put together a system to comply with the scheduled launch of the

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Registry on October 1, 2003. Dish in-house counsel Steve Novak

suggested not making any outbound telemarketing calls to any

number on the Registry, even if Dish had an Established Business

Relationship with the potential call recipient. PX 689, Email dated

September 4, 2003 from Steve Novak. The suggestion was not

adopted. Another participant suggested automating the process of

determining whether to scrub a calling list against a particular

restricted list such as the Registry, Dish’s internal Do-Not-Call List,

or a state Do-Not-Call List. This suggestion was also rejected.

PX1176, Email from Dish Employee Brian Pacini dated September

16, 2003; T 627: 2667-68 (Bangert). In September 2003, Novak

stated in an email that “no call center disconnected from the DNC

list [i.e., the Registry] should be making any outbound calls.”

PX688, Email September 10, 2003 from Steve Novak.

Dish cited no evidence that the Working Group ever discussed

the safe harbor provisions of the TSR or FCC Rule or developed a

plan to comply with those provisions.

Ultimately, Dish established two separate systems to address

the launch of the Registry and the amended Do-Not-Call Laws

generally. The first system addressed calling campaigns aimed at

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individuals who had Dish account numbers (Account Number

Campaigns). The second system addressed campaigns aimed at

individuals who never had an account with Dish, primarily Cold

Calls and Lead Tracking System Calls.

1. Account Number Campaigns

The Account Number Campaigns included campaigns to

existing Dish customers, such as Average Revenue Per Unit, Upsell,

and Premium Upsell; campaigns to former customers, such as

Winback; and campaigns to individuals who had agreed to

purchase Dish Network programming, but did not complete the

installation or activation. The last category included Canceled Work

Order, No Line of Sight, and Held Work Order campaigns. See Tr.

627: 2680 (Bangert).

Bangert was in charge of scrubbing Account Number

Campaign call lists. In 2006, Account Number Campaign

scrubbing operations were organized into the Outbound Operations

Department (Outbound Operations). T 628: 2949 (Montano). For

simplicity, the Court refers to the Dish personnel who performed

scrubbing operations for Account Number Campaigns both before

and after 2006 as Outbound Operations. Outbound Operations

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scrubbed lists for Dish’s call centers in Englewood, Colorado; El

Paso, Texas; Pinebrook, New Jersey; and the Philippines; and also

for Telemarketing Vendors eCreek and EPLDT. Employees at the

Dish call center in Bluefield, West Virginia scrubbed the Account

Number Campaign lists for calls made for that call center. Dish

employees who scrubbed lists in Bluefield reported to the manager

of Outbound Operations. T 617: 647, 680-811 (Davis); T 628: 2949

(Montano). In 2008, Dish moved all Account Number Campaign

scrubbing operations to Outbound Operations at Dish corporate

headquarters in Englewood, Colorado. T 617: 647, 680-81 (Davis);

T 628: 2951 (Montano).

Outbound Operations also operated Dish’s automatic

telephone dialers in Englewood, Colorado, and Bluefield, West

Virginia. T 627: 2499-2500 (Dexter); T 617: 647-48 (Davis); T 628:

2947-49 (Montano). In 2008, Dish also moved all dialing operations

to Outbound Operations in Englewood, Colorado. T 617: 680

(Davis); T 628: 2951 (Montano).

Outbound Operations also

Dish headquarters is sometimes referred to as the Meridian or Englewood campus, or

Meridian. T 628: 2952 (Montano). The offices are located on Meridian Boulevard in

Englewood, Colorado.

A few campaigns were dialed manually. T 627: 2636 (Dexter); PX 86, email thread dated

August 2011 between Dish Latino Marketing Group, Outbound Operations and Dish Legal

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maintained current, updated copies of the Registry, Dish’s internal

Do-Not-Call list, state Do-Not-Call lists, and lists of wireless

numbers. See Tr. 627: 2677-78 (Bangert); T 628: 2948-49

(Montano).

Other Dish departments sent proposed Account Number

Campaigns to Outbound Operations with descriptions of the

planned calling campaigns, proposed calling lists, and scripts.

T 627: 2518-19 (Dexter); T 617: 640-41 (Davis); see e.g., DTX 964,

Outbound Campaign Request Form. Outbound Operations did not

develop proposed calling lists or scripts. Dish’s Data Analytics

Department developed the calling lists for Account Number

Campaigns. T 627: 2551, 2607, 2610 (Dexter); see T 629: 3021

(Montano).

Dish cited no material evidence to the Court on the

process by which Dish departments developed proposed Account

Number Campaigns, how departments developed proposed scripts,

or how Data Analytics prepared the proposed calling lists. No

employee from the Data Analytics Department testified at trial.

Department. The evidence indicates that manually dialed calls were rare aberrations in Dish

procedures.

Montano elsewhere referred to the Marketing Analytics Department. It is unclear whether

these were two different departments, or whether the name changed at some point in time. It

is also unclear whether Database Marketing is related to Data Analytics.

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Outbound Operations personnel reviewed the campaign

descriptions and scripts to determine the type of campaign and the

particular scrubbing process to use to remove telephone numbers

that could not be called under the particular campaign. See DTX-

964, Outbound Campaign Request Form; T 627: 2679 (Bangert);

T 627: 2518-21, 2525-26, 2531-32 (Dexter); T 617: 628 (Davis).

Outbound Operations consulted with Dish’s legal department, if

necessary, to determine the appropriate scrubbing process to use.

T 627: 2684 (Bangert); T 2533: 2564-65 (Dexter); T 628: 2958 and

T 629: 3022-23 (Montano).

At some point, Outbound Operations required two individuals

in Outbound Operations to approve a campaign. Outbound

Operations instituted this policy because a situation occurred in

which a telemarketing campaign was allowed to make Prerecorded

Calls. PX46, Email dated November 9, 2007; T 617: 673-75 (Davis);

see T 629: 3044 (Montano). Prerecorded Calls were not allowed.

T 629: 3045 (Montano). Prerecorded messages could be used in

non-telemarketing calling campaigns, such as payment reminders,

or informational calls that did not involve the sale of additional

services. T 629: 3042 (Montano).

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Outbound Operations had no written policies or procedures

for scrubbing lists for compliance with Do-Not-Call Laws. T 628:

2807 (Bangert); T 627: 2596-97 (Dexter); see PX0302, Email thread

between Joey Montano and Amy Dexter, dated July 28, 2010. Dish

also did not produce in discovery any evidence of written scrubbing

procedures or documentation of scrubbing results. See Opinion

445, at 163-64. Dish maintained a written Do-Not-Call Policy, but

the Policy did not include any procedures for selecting telephone

numbers to call in compliance with the TSR and FCC Rule. See

Opinion 445, at 164.

In practice, Outbound Operations used three categories of

scrubs: (1) “All DNC” or “All Scrub;” (2) “No DNC” or “No Scrub;”

and (3) “Standard Scrub.” The “All DNC” or “All Scrub” scrubbed

proposed calling lists against all restricted lists, including Dish’s

Internal Do-Not-Call List, the Registry, State Do-Not-Call lists, and

wireless telephone numbers. A separate provision of the TCPA not

at issue in this case generally prohibited using an autodialer to call

wireless telephone numbers without prior written consent. 47

U.S.C. § 227(b)(1)(A)(iii). Outbound Operations intended to apply

the All Scrub to telemarketing campaigns directed to individuals

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with whom Dish concluded that it had no Established Business

Relationship.

The “No DNC” or “No Scrub” only scrubbed calling lists for

wireless numbers. Outbound Operations intended to apply the No

Scrub to non-telemarketing campaigns such as collection calls,

payment reminder calls, informational calls, or calls to schedule

service. T 627: 2638-39, 2648-49 (Dexter); T 617: 633-34 (Davis);

T 629: 3096, 3117, 3207 (Montano).

The “Standard Scrub” scrubbed calling lists to remove

telephone numbers on the Dish Internal Do-Not-Call List; numbers

of residents in states in which the state law did not allow for an

Established Business Relationship exception for calls to numbers

on State Do-Not-Call Lists; and wireless numbers. Outbound

Operations applied the Standard Scrub to telemarketing campaigns

directed to current or former customers with whom Dish concluded

that it had Transaction-based Established Business Relationships.

T 627: 2668-69 (Bangert); T 617: 638, 682-83 (Davis); T 629: 3096

(Montano). Outbound Operations scrubbed Canceled Work Order,

No Line of Sight, and Held Work Order campaigns with the

Standard Scrub. T 6278: 2546-47 (Dexter).

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Dish employees manually reviewed the Dish files to determine

whether Dish had a Transaction-based Established Business

Relationship with current and former customers whose telephone

numbers were listed in Account Number Campaigns. Dish

formulated calling campaign lists based on this manual review.

Dish employees, however, did not use the last dates that consumers

paid for Dish Network programming to calculate the 18 month

Established Business Relationship time period. Rather, Dish used

“the disconnect date that was associated with the file name” to

formulate these lists. T 629: 2969, 3130 (Montano). These lists of

former customers then became the basis for the trailing winback

campaign calling lists. Dish assumed that a person was a current

customer if his or her account did not have a disconnect date

regardless of when the person last paid for Dish Network

programming. Outbound Operations presumed that Dish had

Transaction-based Established Business Relationships with

persons whose numbers were on calling lists directed to current

customers and trailing winback calling lists until the lists were

more than 18 months old. T 629: 3014-15 (Montano); see T 627:

2608-09, 2624 (Dexter); T 617: 596-98 (Davis). Dish used this

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manual process until approximately July 2010. See PX 1248,

Project Scope Document dated February 2, 2010 (requesting

modification of PDialer to use last payment date); DTX 972, Email

thread dated June 30, 2010 to July 2, 2010 between Dish and

PossibleNOW representatives; DTX 670, PDialer Meeting Minutes

dated July 1, 2010, at 2 ¶ 7; T 628: 2969 and T 629: 3130

(Montano).

Dish ran some recurring outbound telemarketing campaigns.

The largest recurring telemarketing campaigns were the trailing

winback campaigns. Dish also ran recurring Average Revenue Per

Unit campaigns to market premium channels or other additional

services to current customers. Outbound Operations did not

require detailed script reviews of these recurring campaigns. T 627:

2637 (Dexter).

Outbound Operations used software called “PDialer” to scrub

Account Number Campaign calling lists. Tr. 627: 2669-70

(Bangert); T 629: 3010 (Montano). The PDialer software compared

proposed calling lists to the set of restricted lists included in the

selected scrub (All DNC, No DNC, or Standard Scrub) and removed

from the proposed calling lists numbers that were also on the

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applicable restricted lists. An employee in Outbound Operations

manually selected the applicable scrub. The PDialer also formatted

the calling lists so that they could be loaded into the automatic

dialer. T 627: 2670-71 (Bangert). After completing the scrub,

Outbound Operations then either: (1) loaded the scrubbed lists into

the automatic dialer, and the automatic dialer made the calls for

the various Dish call centers; or (2) sent the scrubbed list to a Dish

Telemarketing Vendor such as eCreek. T 627: 2678-79 (Bangert);

T 628: 2969 (Montano); T 627: 2581 (Dexter); T 617: 664-66 (Davis).

Telemarketing Vendor eCreek used its own automatic dialer.

Telemarketing Vendor EPLDT used Dish’s automatic dialer.

See T 627: 2602 (Dexter).

Outbound Operations’ unwritten practices allowed a scrubbed

calling list to be called for a 15-day period from the date of the

scrub. The 15-day limit addressed the possibility that the list

would become out-of-date. A person who had a telephone number

on a calling list could register that number on the Registry. The

TSR and FCC Rule safe harbor provisions required a telemarketer to

honor a registration on the Registry no later than 31 days after the

registration was made. TSR 16 C.F.R. § 310.4(b)(3); FCC Rule 47

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C.F.R. § 64.1200(c)(2)(i). Outbound Operations used a 15-day time

limit to decrease the possibility that a telephone number on the

scrubbed calling list would have been placed on the Registry more

than 31 days before the call. See T 627: 2580 (Dexter).

Outbound Operations checked scrub results manually.

Outbound Operations inserted into proposed calling lists numbers

that should be scrubbed by the process. Outbound Operations

checked the results to confirm that the scrub properly removed

those numbers. T 627: 2678-79 (Bangert); see T 627: 2542

(Dexter). Outbound Operations personnel testified that they tried to

fix any problems to improve the system. E.g., T 617: 649 (Davis);

T 629: 3137 (Montano).

Outbound Operations used disposition codes to keep track of

responses to calls such as no answer, busy signal, answering

machine, or answered call. See T 627: 2552-53 (Dexter ); DTX 671,

Email dated March 16, 2011, attached glossary of response

acronyms. The PDialer recorded some disposition codes

automatically such as no answer or busy signal. Dish sales

representatives (customer service agents) recorded some disposition

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codes at the time of the call such as wrong number or business

answered. See T 627: 2554 (Dexter).

Outbound Operations was responsible for reviewing and

approving Account Number Campaigns to customers interested in

foreign language programming. Between 2007 and 2010, Dish

employees made prerecorded calls to market foreign language

programming in 15 Account Number Campaigns. The

telemarketing messages were recorded in the language of the

programming offered for sale. The translations of the message

scripts show that the prerecorded messages were directed to

existing Dish customers. The messages offered additional foreign

language programming options. A total of 98,054 of these

prerecorded calls were answered by individuals and resulted in

Abandoned Prerecorded Calls in violation of the TSR. See Opinion

445, at 127, 193-94, 75 F.Supp.3d at 996-97, 1019.

Outbound Operations also monitored eCreek’s operations.

T 629: 3033 (Montano); see DTX-19, Email thread dated March 9-

Outbound Operations had other problems with the departments that conducted foreign

language telemarketing. In March 2008, the foreign language marketing department had to be

instructed that all calling lists had to be scrubbed by Outbound Operations. T 617: 611-12,

614-17 (Davis); PX 85, email dated March 14, 2008 (stating that all calling lists must be

scrubbed by Outbound Operations); DTX 626E, Dish Taylor Table, at 2.

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10, 2010.

Outbound Operations kept in daily communication

with eCreek. See T 629: 3028, 3205 (Montano). ECreek performed

an additional scrub on the lists it received from Dish. T 617: 666

(Davis). ECreek also collected names for its internal Do-Not-Call

list and for Dish’s internal Do-Not-Call list. T 627: 2581 (Dexter).

eCreek sent Outbound Operations feedback nightly. The feedback

included a “DNC” notation on those call recipients who wanted to

be on Dish’s internal Do-Not-Call list. T 617: 666-67 (Davis);

see T 629: 3026-27 (Montano).

Outbound Operations responded to consumer complaints

regarding eCreek’s telemarketing, but did not otherwise check

eCreek for Do-Not-Call Law compliance. T 627: 2612 (Dexter).

Problems existed with eCreek’s Do-Not-Call Law compliance in

2009, 2010, and 2011. If Outbound Operations became aware of

problems in eCreek’s telemarketing procedures, Outbound

Operations tried to correct the problem. See T 617: 603 (Davis);

T 627: 2617-19 (Dexter); PX59, Email from Montano dated January

28, 2010 regarding eCreek DNC call; PX1079, Email from Montano

to eCreek dated January 11, 2011 regarding Call Research.

ECreek was operated by a former Dish employee Scott Larson. Larson had run Dish’s call

center operations. T 629: 3034 (Montano).

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In July 2010, Outbound Operations asked eCreek for a copy of

its Do-Not-Call Law policy and procedures. Outbound Operations

employee Dexter sarcastically questioned whether eCreek had

policies and procedures. See PX302, Email from Dexter dated July

28, 2010, regarding Request for DNC/TCPA Policies and

Procedures; T 627, 2571-72 (Dexter). That same day, eCreek

provided a Do-Not-Call Policy consisting of two pages of text and a

flow chart. DTX 7, Email from eCreek dated July 28, 2010

regarding Request for DNC/TCPA Policies and Procedures. The

two-page document did not include procedures for scrubbing calling

lists to comply with the TSR or the FCC Rule.

2. Cold Call and Lead Tracking System Campaigns

Dish’s second Do-Not-Call Law compliance system addressed

Cold Call campaigns and Lead Tracking System campaigns.

Database Marketing was responsible for operating the Do-Not-Call

Law compliance system for these campaigns. Database Marketing

also formulated the calling lists for these campaigns. Bangert

testified Database Marketing incorporated the Do-Not-Call Law

compliance process into the process that it used to formulate these

calling lists. Tr. 627: 2680 (Bangert).

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Neither party presented any meaningful evidence on the

process Database Marketing used to comply with the Do-Not-Call

Laws. The scant evidence in the record indicates that Database

Marketing may have used a lead management system referred to as

CRM or a computer system called a Teradata System to perform

these tasks.

No one from Database Marketing testified, and no

exhibits cited by the parties or other competent testimony explained

how this process worked. See T 628: 2780 (Bangert) (used CRM to

scrub LTS leads); PX 471, Email from Tobias Plumley dated

December 29, 2005 (did not use CRM to scrub LTS leads); DTX 650,

Timeline Email, at 4; see also PX482, Email from Wade Osborne

dated April 17, 2003 regarding DNC Database (DNC scrubbing

must be done within CRM tool). Database Marketing did not use

the PDialer to scrub lists; the PDialer could only be used to scrub

lists of telephone numbers associated with Dish account numbers.

See DTX 670, PDialer Meeting Minutes dated July 1, 2010, at 5-6

¶ 29 PDialer Bypass (New contact and lead calling lists bypassed

the PDialer because the PDialer deleted any telephone number not

associated with an account number).

The term CRM apparently means “Customer Relations Management.” See e.g., U2Logic, Inc.

v. American Auto Shield, LLC, 2014 WL 4852094, at *1 (D. Colo. September 30, 2014).

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Dish witness Russell Bangert testified that Database

Marketing used the same scrubbing options as Outbound

Operations. Bangert testified that Cold Call campaigns received an

ALL DNC scrub and that Lead Tracking System campaigns received

a Standard scrub. T 627: 2680-82 (Bangert). Dish failed to

establish that Bangert had personal knowledge on which to base

these assertions. Bangert worked in Outbound Operations, and so,

did not participate in Database Marketing compliance processes.

Database Marketing did not use the PDialer because the PDialer

required account numbers. The Court finds that Bangert’s

testimony about the process used by Database Marketing was not

based on sufficient personal knowledge and has no probative value.

The Court finds an absence of proof on the methods used by

Database Marketing to process Lead Tracking System calling lists

and Cold Call lists to comply with the TSR, TCPA, FCC Rule, or any

other Do-Not-Call Law. As noted above, the Court also found an

absence of proof on the methods used to formulate the Lead

Tracking System calling lists.

Database Marketing sent the finished Lead Tracking System

and Cold Call calling lists to Outbound Operations. Outbound

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Operations bypassed scrubbing these files with the PDialer and

loaded the lists into the automatic dialer or sent these lists to

eCreek. T 629: 3088 (Montano); see DTX 670, PDialer Meeting

Minutes, at 5-6 ¶ 29 PDialer Bypass. Outbound Operations

received Lead Tracking System campaign lists on a daily basis.

T 629: 3165 (Montano). Outbound Operations dialed Lead Tracking

System campaign calling lists within 24 to 48 hours of receipt.

Dish presumed that it had Inquiry-based Established Business

Relationships with the recipients of Lead Tracking System

campaigns because the calls were made within 24 to 48 hours of

receipt. T 629:3087-88 (Montano).

C. PossibleNOW

In December 2007, Dish retained a company called

PossibleNOW, Inc. (PossibleNOW) to assist it in complying with

Do-Not-Call Laws. T 617: 649-52 (Davis); see Opinion 445, at 71.

PossibleNOW operated a number of web-hosted services to sellers

and telemarketers to help them comply with the Do-Not-Call Laws.

Beginning in early 2008, Outbound Operations used PossibleNOW’s

scrubbing services. See DTX 144, Master Services Agreement dated

December 14, 2007. Outbound Operations scrubbed lists with the

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PDialer and then sent the scrubbed lists to PossibleNOW for a

second scrubbing. See e.g., T 617: 655 (Davis); T 628: 2967-68

(Montano).

PossibleNOW scrubbed and returned the scrubbed

lists, and Outbound Operations loaded the lists into the automatic

dialer or sent the list to eCreek. T 627: 2539 (Dexter); T 617: 652-

55 (Davis); T 628: 2967-68, and T 629: 3129 (Montano).

PossibleNOW also maintained Dish’s Internal Do-Not-Call List,

Dish’s copy of the Registry, and Dish’s copies of State Do-Not-Call

Lists. T 617: 653 (Davis); T. 628: 2966-67, 2972-76 (Montano).

PossibleNOW also maintained lists of wireless numbers. Dish used

PossibleNOW’s services to scrub against all these lists. T 617: 634

(Davis); see T 628: 2972 (Montano).

Beginning in April 2008, PossibleNOW began maintaining a

combined Internal Do-Not-Call List for Dish, eCreek, and certain

Order Entry Retailers. Dish, eCreek, and participating Order Entry

Retailers uploaded Internal Do-Not-Call Lists to PossibleNOW.

T 617: 654-55 (Davis); T 627: 2573 (Dexter); T 628: 2975-76, 3027

(Montano); T 622: 1842 (Mills). Dish required Order Entry Retailers

PossibleNOW customers usually used logins and passwords to access PossibleNOW products

and services to conduct list scrubbing or other processes. In rare instances, PossibleNOW

performed the scrubbing. See T 618:746-48 (Stauffer). Outbound Operations personnel

testified that PossibleNOW performed the scrubbing services for Dish.

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making 50 activations a month to submit Internal Do-Not-Call Lists

to PossibleNOW. T 619: 1018-19 (Werner). PossibleNOW kept an

Internal Do-Not-Call List for Dish, an Internal Do-Not-Call List for

eCreek, and a combined Internal Do-Not-Call List for all

participating Order Entry Retailers. Dish began scrubbing its own

calling lists against all three Lists in 2008. T 628: 2975-80

(Montano). Dish also required Order Entry Retailers with 600

activations a year to use PossibleNOW’s scrubbing services. T 622:

1841-43 (Mills).

PossibleNOW’s scrubbing services also checked calling lists to

determine whether telephone numbers were associated with

individuals who had Established Business Relationships with Dish.

PX-1248, Project Scope Document dated February 2, 2010.

PossibleNOW did not use Dish’s manually prepared lists of current

customers and lists of former customers based on disconnect dates

to identify telephone numbers associated with individuals who had

Established Business Relationships with Dish. Instead,

PossibleNOW required Dish to add two additional fields to calling

lists before conducting scrubs: (1) the last payment date; and (2)

the date that a person inquired about Dish programming. During

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the scrubbing process, PossibleNOW identified numbers with whom

Dish had: (1) a Transaction-based Established Business

Relationship if the last payment date was within 18 months of the

campaign calling date, or (2) an Inquiry-based Established Business

Relationship if the inquiry date was within three months of the

campaign calling date. Id.

In approximately July 2010, Dish modified the PDialer to also

use the last payment date to check for Transaction-based

Established Business Relationships. Dish stopped presuming that

it had a Transaction-based Established Business Relationship with

all persons whose numbers were on campaigns directed to current

customers and winback campaigns that were less than 18 months

old. Dish added a field to its calling lists for a last payment date.

Dish modified the PDialer to check for this field in a manner similar

to the PossibleNOW process. T 629: 3011-15 (Montano); see T 633:

3297-99 (Taylor); PX 1248, Project Scope Document dated February

2, 2010 (request by Outbound Operations to modify PDialer to use

last payment dates); DTX 972, Email thread dated June 30, 2010 to

Some states had shorter time periods for determining Established Business Relationships.

PossibleNOW scrubbed for those shorter time periods also, when applicable. T 628: 2969

(Montano); PX-1248, Project Scope Document dated February 2, 2010.

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July 2, 2010 between Dish and PossibleNOW representatives

regarding use of last payment dates; DTX 670, PDialer Meeting

Minutes dated July 1, 2010, at 2 ¶ 7 (indicating change to last

payment date).

Dish did not add a field for inquiry dates to the PDialer. Dish

employee Montano testified that one field was added for simplicity.

Montano testified that inquiry dates, if applicable, were entered into

the Last Payment Date field. T 629: 3015-16 (Montano). The Court

finds this testimony not to be credible. The Court finds that Dish

only added a Last Payment Date because Dish only used the

PDialer to scrub Account Number Campaigns. Account Number

Campaigns were addressed to current and former customers, not

individuals inquiring about Dish Network programming. Thus,

Dish did not need to add a field for inquiry dates to campaigns run

through the PDialer. See T 628: 2780 (Bangert); DTX 670 PDialer

Meeting Minutes, at 6 ¶ 29.

The testimony is also not credible because it makes no sense to enter an inquiry date into a

last payment date field. The length of time that Dish had a Transaction-based Established

Business Relationship with a former customer was 18 months from the last payment, and the

time that Dish had an Inquiry-based Established Business Relationship was only three months

from the inquiry. Placing an inquiry date in the field would erroneously indicate that Dish had

an Established Business Relationship with the inquiring party for 18 months. Montano’s

testimony on this point is not credible.

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It is unclear whether Dish used PossibleNOW to scrub Lead

Tracking System and Cold Call calling list. Witnesses testified that

Outbound Operations scrubbed lists with the PDialer and then sent

lists to PossibleNOW for a second scrubbing. See e.g., T 617:655

(Davis); T628:2967-68 (Montano). Outbound Operations only

scrubbed Account Number Campaign calling lists through the

PDialer. This testimony tends to indicate that Outbound

Operations only sent Account Number Calling Lists to

PossibleNOW. PossibleNOW’s process, however, included a field for

inquiry dates. PX 1248, Project Scope Document dated February 2,

2010. Inquiry dates would be used to determine Inquiry-based

Established Business Relationships in Lead Tracking System and

Cold Call calling campaigns. Dish, however, never provided any

inquiry dates to either its expert Taylor or to the Plaintiffs.

See T 633: 3300 (Taylor); T 614: 333-35 (Yoeli) (Dish provided

activation dates to Plaintiffs, not inquiry dates). The Court finds

that the scant, ambiguous evidence does not establish whether

Dish used PossibleNOW to scrub Lead Tracking System calling lists

or Cold Call calling lists.

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D. Safe Harbor

The Court found at summary judgment that Dish did not

comply with the TSR or FCC Rule safe harbor. Opinion 445, at

163-65, 75 F.Supp.3d at 1008-09. Dish employee Montano testified

that Dish met all requirements for compliance with TSR and TCPA

safe harbor provisions. T 628: 2962-65 (Montano). Montano

testified that Outbound Operations maintained documentation of

its scrubs. T 629: 3183 (Montano). Dish, however, failed to

produce in discovery or at trial written scrubbing procedures or

documentation that such scrubbing procedures were followed.

Such documentation is required to meet safe harbor requirements.

See Opinion 445, at 164-66, 210-11. Dish, in fact, had no written

scrubbing procedures. T 628: 2807 (Bangert); T 627: 2596-97

(Dexter); see PX0302, Email thread between Joey Montano and Amy

Dexter, dated July 28, 2010. Montano’s testimony on this point

contradicted Dexter’s and Davis’s testimony and is not credible.

The Court also barred Dish from producing evidence of

scrubbing procedures that was not produced in discovery. Opinion

entered April 24, 2013 (d/e 279) (Opinion 279), at 43-44. To the

extent that Dish presented Montano’s testimony at trial (or any

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other witness’s testimony not produced in discovery) to prove the

Dish maintained documentation to comply with safe harbor

procedures, the testimony is barred by Opinion 279.

E. Notice to Dish of Calls to Numbers on the Registry and

Internal Do-Not-Call Lists

Beginning in October 2003, Dish personnel periodically

discovered that Dish’s direct telemarketing operations made

Registry Calls and Internal List Calls. On October 7, 2003, Dish

personnel tested the scrubbing process and discovered the process

failed to remove numerous telephone numbers from the test call list

that were on the Registry. PX 478, Email from Todd Binns dated

October 7, 2003, regarding Denver DMA DNC Test.

In February and May 2004, Dish personnel investigated

consumer complaints and discovered that Dish made Internal List

Calls. PX 438, Email from David Murphy dated February 12, 2004,

regarding Consumer Complaint; PX 439, Email from John Dy dated

May 2, 2004, regarding Do Not Call Issue. In March 2004, Dish

personnel discovered Dish made an Internal List Call. PX 440,

Email from Leanna Sultan dated March 16, 2004 regarding

Telemarketing Calls to Current Subscribers.

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In December 2005, Lead Tracking System calling lists were not

being scrubbed because whatever process Database Marketing was

using was not working. PX 471, Email from Tobias Plumley dated

December 29, 2005, regarding Casper and Cheyenne.

In October 2006, Dish personnel investigated a consumer

complaint and discovered Dish made a Registry Call. PX 566,

Email from John Greaney dated October 2, 2006, regarding

Telemarketing Complaint.

In November 2007, Dish personnel investigated a consumer

complaint and discovered that Dish made an Internal List Call. The

investigators determined that the calling campaign was improperly

scrubbed because the campaign was improperly classified as a non-

telemarketing campaign. PX 46, Email from Bob Davis dated

November 9, 2007 regarding Tahira Sial.

In 2007, Dish conducted an internal audit of telemarketing

calling records. The 2007 audit showed that Dish made 2,334,

5,324, and 3,405 Registry Calls in June, July, and August 2005

respectively. The 2007 audit also showed that Database Marketing

campaigns “were scrubbed but the DNC records were not removed.”

PX 695, Email from Todd Binns dated February 1, 2007, regarding

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Notes from DNC Meeting, January 30; see T 617: 626-27 (Davis);

see PX 696, Email thread dated January 18-26, 2007regarding

2007 audit; PX 1404, Email dated January 23, 2007 regarding

2007 audit.

In 2009, Dish conducted another internal audit of its

telemarketing call records. The audit showed that Dish made

291,000 Registry Calls from October to December 2008. PX733,

Email thread regarding 2009 Audit dated June 2, 2009 to January

5, 2010.

Outbound Operations also knew that eCreek made illegal

Registry and Internal List Calls. Dexter testified that eCreek did a

good job, but Outbound Operations personnel knew that eCreek’s

scrubbing process did not work effectively all the time. T 627: 2618

(Dexter). In January 2010, Dish personnel investigated a consumer

complaint and discovered eCreek made a Registry Call. PX 59,

Email thread regarding eCreek DNC dated January 25, 2010 to

January 28, 2010.

In January 2008, an eCreek telemarketer manually called a person who asked not to be

called again, and then the eCreek telemarketer who made the call had two other eCreek

telemarketers call to the person that same day. PX 1079, Email Thread Regarding eCreek

Calling Procedures Dated January 10, 2010 to January 11, 2010.

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III. Dish Order Entry Program

A. Dish’s Relationship with Order Entry Retailers Generally

By 2003, Dish had developed a website interface called the

Order Entry (OE) Tool to facilitate the sale of Dish Network products

and services by national companies such as Radio Shack and

AT&T.

The Order Entry Tool was designed for telephone sales to

residential customers and could not be used to open commercial

accounts. Dish controlled the programming packages available for

sale through the Order Entry Tool and set the pricing and terms of

sale, including all promotions. T 626: 2225 (Neylon). Dish

controlled access to the Order Entry Tool by issuing specific logins

and passwords (collectively logins) to the national companies.

The Order Entry Tool prompted the sales person to ask a

series of questions to offer the appropriate programming and

services, secure the necessary information, and make the required

disclosures to make the sale. T 626: 2358 (Ahmed); T 621: 1628-

32, 1668 and T 622: 1671-73 (Mills); T 626, 2225 (Neylon);

PX 1208, Dish Order Entry Tool Instructional Training Guide. The

necessary information included customers’ addresses, Social

The Order Entry Tool was also called the Partner Order Entry Tool or POET. See e.g., PX

1294 Email to Werner from YourDish.tv dated June 3, 2010.

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Security Numbers, and credit card account numbers. The

disclosures included the terms and conditions of sale and legally

required disclosures. Dish provided the language for all disclosures

and terms and conditions of sale. T 621: 1629-30 (Mills).

Once the customer’s information was uploaded onto the Order

Entry Tool, Dish performed the credit check, approved the sales,

supplied all equipment, and performed the installation or arranged

for the installation and activation of service. New customers paid

Dish directly. See T 626: 2293-94 (Ahmed); T 621: 1626, and

T 622: 1668-72 (Mills); PX 61, Letter from Ahmed to David Hagen

dated October 7, 2003. The term “activation” referred to activating

new service in a residence; the sale was complete when the service

was activated. See T 628:2718 (Bangert); T 629:3052 (Montano).

In 2003, Dish began the Order Entry (OE) program to expand

the use of the Order Entry Tool beyond national companies like

Radio Shack and AT&T. Under the Order Entry program, Dish

authorized marketing businesses to use the Order Entry Tool to sell

Dish Network programming. T 626: 2283 (Ahmed). Dish controlled

access by issuing logins to the marketing businesses. T 621: 1627

(Mills). Dish called these marketing businesses Order Entry

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Retailers.

The name Order Entry Retailer was a misnomer. These

businesses were not retailers. A retailer acquires inventory at

wholesale and markets that inventory to the public at retail. A

TVRO Retailer, for example, acquired inventory of satellite dishes,

DVRs, cable decoding boxes, and other equipment, and sold or

leased that equipment to customers who bought Dish Network

programming. The Order Entry “Retailers” acquired no inventory

and sold no product. Rather, these businesses marketed Dish

Network programming for Dish. The businesses completed the

solicitation and provided the customer information to Dish through

the Order Entry Tool. Dish ran the credit check; Dish approved the

sale; Dish installed the equipment; Dish sold the programming and

services directly to the customer; the customers became Dish

subscribers; and the customers paid Dish directly. The Order Entry

“Retailers” were marketing businesses. Dish engaged these

marketing businesses to sell Dish Network programming.

The

Court will use the misnomer “Order Entry Retailer” because the

Dish also referred to Order Entry Retailers as National Sales Partners. See Opinion 445, at

57, 75 F.Supp.3d. at 971.

Some Order Entry Retailers were also TVRO Retailers. Dish, however, completed the sale

and installed the equipment for all of the sales these Retailers made through the Order Entry

program just like all the other Order Entry Retailers. See Deposition of Walter Eric Myers, at

80-84. Deposition excerpts cited by the Court were admitted at trial in lieu of live testimony.

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term pervades the exhibits and trial testimony, but the businesses

were not retailers.

Dish paid the Order Entry Retailers commissions called

“incentives” for activations.

Dish established the Order Entry

program to compete with DirecTV. DirecTV had already

implemented a similar program, and Dish was trying to catch up.

T 626: 2296 (Ahmed); T 621: 1632 (Mills).

Order Entry Retailers could market nationally because Dish

installed the satellites and related equipment. Existing TVRO

Retailers could only market in the geographic areas in which the

Retailer could deliver and install Dish satellites and related

equipment. See T 626: 2295, 2385 (Ahmed). Order Entry Retailers

also had no inventory costs and no costs related to installation and

delivery because Dish provided those services to the customer.

T 626: 2295-96 (Ahmed); see Deposition of Walter Eric Myers, at 82.

Dish employees testified that Dish developed the Order Entry

program to “leverage . . . entrepreneurial resources . . . in the

marketplace.” T 626:2223 (Neylon). Dish wanted to take advantage

Order Entry Retailers were subject to a charge back of the incentive fee if a customer

terminated Dish Network within 180 days of subscribing to Dish Network. T 626: 2380

(Ahmed).

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of the expertise of marketing companies to sell products.

See T 626: 2289-90 (Ahmed) (“[Order Entry Retailers] bring specific

expertise, just like all the independent satellite dealers do to their

specific niche. And that’s why these guys were very valuable, and

they still are today.”); see also Portela Deposition, at 76 (Dish

sought out direct marketers who were good at selling anything.).

The Order Entry program generated large numbers of

activations for Dish. By 2005, Order Entry Retailers passed Dish’s

direct marketing in producing activations. By 2007, Order Entry

Retailers accounted for 30 percent of all of Dish’s activations.

PX 486, Dish Quality Assurance Program Presentation, at 7. As of

mid-2007, the Order Entry Retailers were producing 70,000 to

90,000 activations per month. Dish direct sales were averaging

45,000 to 60,000 activations per month at the same time period.

PX 99, Dish Gross Sales Update Report dated August 6, 2007.

From 2004 to 2010, 60 percent of new activations came from

Retailers, and the lion’s share of those came from Order Entry

Retailers. T 618: 899 (Werner); see also Portela Deposition, at 84.

The number of companies in the Order Entry program was

always relatively small. At its peak, Dish had approximately 80

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Order Entry Retailers, compared to 8,000 TVRO Retailers at the

same time. T 619: 1157 (Werner). By the end of 2009, Dish

reduced the number of Order Entry Retailers to 32. PX 730, 2009

Sales Partner Review, at 13; see also T 619: 1157-58 (Werner). In

January 2016, Dish about 3,000 TVRO Retailers and 10 to 20

Order Entry Retailers. T 621: 1558 (DeFranco). As of October

2016, Dish had 17 Order Entry Retailers. T 711; 330 (Mills).

The relationship between Dish and Order Entry Retailers was

governed by a standard Retail Agreement. All Order Entry Retailers

signed a substantially similar form Retailer Agreement. See PX

152, 180, 200, and 238, Retailer Agreements with various Order

Entry Retailers. The Retailer Agreements referred to Order Entry

Retailers as “Retailers.” The Retailer Agreements appointed Order

Entry Retailers as “Authorized Dealers” for Dish, and authorized

Order Entry Retailers to “market, promote, and solicit” orders for

Dish throughout the United States. PX 152, Retailer Agreement

with Dish TV Now, §§ 3.1-3.2. The Retailer Agreement authorized

Order Entry Retailers to use Dish trademarks in their marketing;

and gave Dish access to each Retailer’s records with respect to its

Dish dealership. Id. § 8.

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Sections 7.1, 7.2, and 7.3 provided as follows:

7.1 Retailer agrees to use its best efforts to promote and

enhance EchoStar's business, reputation and goodwiIl.

Retailer shall allow only its employees, and shall not use

any independent contractors, Affiliates or sub-agents, to

fulfill its obligations hereunder without EchoStar's

specific prior written consent, which consent may be

withheld in EchoStar's sole and absolute discretion for

any reason or no reason. In the event Echostar does

grant consent to Retailer to use persons not employed by

Retailer to perform activities contemplated hereunder,

Retailer shall be responsible for the acts and omissions of

such persons under this Agreement to the same extent it

is responsible for the acts and omissions of its own

employees.

7.2 Retailer shall not sell Programming under any

circumstances. All sales of Programming are transactions

solely between EchoStar and DISH Network Subscribers.

Retailer shall promptly forward to EchoStar all orders for

Programming in the manner prescribed by EchoStar from

time to time. Retailer understands that EchoStar shall

have the right, in its sole and absolute discretion and for

any reason or no reason, to accept or reject, in whole or

in part, all orders for Programming. Retailer also agrees

that it shall not condition, tie or otherwise bundle any

purchase of Programming with the purchase of other

services or products other than as specifically consented

to in writing by EchoStar in advance, which consent may

be withheld in EchoStar's sole and absolute discretion for

any reason or no reason.

7.3 Retailer shall comply with all Business Rules,

including without limitation all Business Rules which

govern or are applicable to any Promotional Program in

which Retailer participates. Retailer shall disclose to each

prospective DISH Network Subscriber the relevant terms

of the Promotional Programming which the prospective

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DISH Network Subscriber is interested as well as any

other terms as set forth in any applicable Business Rule.

Furthermore, Retailer shall take all actions and refrain

from taking any action, as requested by EchoStar in

connection with the marketing, advertisement, promotion

and/or solicitation of orders for Programming and the

sale of DISH DBS Systems, and Retailer shall cooperate

by supplying EchoStar with information relating to those

actions as EchoStar reasonably requests. Failure of

Retailer to adhere to any Business Rules may result in

disciplinary action up to and including termination of

this Agreement and/or any Other Agreement in the sole

and absolute discretion of EchoStar for any reason or no

reason, and the exercise by EchoStar of any other remedy

provided in this Agreement, at law, in equity or

otherwise.

Id. §§ 7.1, 7.2, and 7.3 (emphasis added). The Retailer Agreement

defined Business Rules as:

1.6 "Business Rule{s)" means any term, requirement,

condition, condition precedent, process or procedure

associated with a Promotional Program or otherwise

identified as a Business Rule by Echostar which is

communicated to Retailer by EchoStar or an Affiliate of

EchoStar either directly (including e-mail) or through any

method of mass communication reasonably directed to

EchoStar's retailer base, including, without limitation, a

"Charlie Chat", e-mail, facts blast, or posting on

EchoStar's retailer web site. Retailer agrees that

EchoStar has the right to modify any Business Rule at

any time and from time to time in its sole and absolute

discretion for any reason or no reason, upon notice to

Retailer.

Id. § 1.6.

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Section 17.9 of the Retailer Agreement authorized Dish to

audit Retailers on two days’ notice:

17.9 Records and Audit Rights. During the Term of this

Agreement and for a period of three (3) years thereafter,

Retailer shall keep and maintain at its principal place of

business complete and accurate records and books of

account, as well as all documentation of all material

processes and procedures in connection with: (i) its

performance under this Agreement. . . . EchoStar shall

have the right, upon two (2) days prior written notice, to

review, audit and make copies of Retailer's books, records

and documentation for the purposes of: (a) determining

Retailer's compliance with its duties and obligations

under this Agreement, . . . . Any audit conducted by

EchoStar shall be conducted by EchoStar or its

representative(s) at Retailer's offices during normal

business hours. . . .

Id. § 17.9.

The Retailer Agreement provided for automatic termination if

an Order Entry Retailer violated the terms of the Retailer Agreement

or “any applicable federal, state or local law or regulation.”

Id. § 10.4.

The Retailer Agreement also contained a provision entitled

Independent Contractor:

11. INDEPENDENT CONTRACTOR. The relationship of

the parties hereto is that of independent contractors.

Retailer shall conduct its business as an independent

contractor, and all persons employed in the conduct of

such business shall be Retailer's employees only, and not

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employees or agents of EchoStar or its Affiliates. Retailer

shall prominently state its business name, address and

phone number in all communications with the public,

including, without limitation, marketing materials, flyers,

print ads, television or radio spots, web sites, e-mails,

invoices, sales slips, and the like. Notwithstanding

anything in this Agreement to the contrary, Retailer

(including without limitation its officers, directors,

permitted subcontractors, permitted agents and

employees) shall not, under any circumstances, hold

itself out to the public or represent that it is an agent,

employee, subcontractor or Affiliate of EchoStar or any

Echostar Affiliate. In furtherance of (and without limiting)

the foregoing, in no event shall Retailer use EchoStar's

name or the name of any EchoStar Affiliate in any

manner which would tend to imply that Retailer is an

Affiliate of EchoStar or that Retailer is an agent,

subcontractor or employee of EchoStar or one of its

Affiliates or that Retailer is acting or is authorized to act

on behalf of EchoStar or one of its Affiliates. This

Agreement does not constitute any joint venture or

partnership. It is further understood and agreed that

Retailer has no right or authority to make any

representation, promise or agreement or take any action

on behalf of EchoStar or an EchoStar Affiliate.

Id. § 11(emphasis added).

Order Entry Retailers represented themselves to the public as

Dish authorized Retailers. See T 622: 1821-22 (Mills). Order Entry

Retailers could use the Dish Network logo with the added words

“Dish Authorized Retailer.” T 625: 2226 (Neylon); T 620: 1215-16

(Musso). Some Order Entry Retailers improperly represented

themselves to the public to be Dish. See e.g., PX 120 Email Thread

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with Sweeney of Indiana Attorney General’s Office regarding

Satellite Systems dated September 23-30, 2005 (Order Entry

Retailer claims to be Dish); PX 1361, Email thread regarding calls to

existing customers, at 8-10; PX 650, Email thread dated August 7,

2006 regarding consumer complaint; T 621: 1474-75 (DeFranco).

Order Entry Retailers set up their own facilities, purchased

their own equipment, paid their own rents, hired and fired their

own employees, secured their own leads and calling lists, wrote

telemarketing scripts, and prepared marketing materials. Some

Order Entry Retailers also sold other products, including competing

services such as DirecTV programming. See T 626: 2290-91, 2293

(Ahmed); T 619: 1088-94 (Werner); T 622: 1916-19 (Goodale);

T 625: 2099-2100 (Neylon); T 622: 1793-94 (Mills); see DTX 737,

Letter from JSR Enterprises to Musso, undated; T 620: 1357-58

(Castillo).

Contrary to § 10.4 of the Retailer Agreement, Order Entry

Retailers were not automatically terminated when they violated the

On one occasion in 2011, Dish could not keep up with the volume of calls it was receiving.

Dish representatives discussed diverting some calls to certain Order Entry Retailers. Dish

personnel discussed authorizing those Retailers on that occasion to state that they were Dish.

PX 331, Email from Dish marketing head Lana Luth dated October 28, 2011. The proposed use

of Order Entry Retailers was not implemented. T 622: 1758-60 (Mills).

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terms of the Retailer Agreement or applicable law. E.g., T 625:

2124-25 (Neylon); T 619: 1170-71 (Werner). Rather, Dish employed

an array of disciplinary measures that included warnings,

probation, fines, withholding access to the Order Entry Tool (known

as putting on hold), and termination. See T 625: 2136 (Neylon);

T 1627 (Mills).

Dish’s Sales Department ran the Order Entry program. T 626:

2301-02 (Ahmed). The Sales Department was responsible for the

indirect marketing channel. As discussed above, the indirect

channel included Order Entry Retailers, TVRO Retailers, and

national accounts such as Sears and AT&T (collectively Indirect

Marketers). Dish Vice President of Sales Amir Ahmed developed the

Order Entry program. T 626: 2358 (Ahmed). In 2005, Ahmed was

promoted to Senior Vice President of Sales and Distribution.

Ahmed left Dish on January 31, 2006 and went to work for a Dish

Order Entry Retailer called Marketing Guru. T 626: 2283-85

(Ahmed). Dish Vice President for Sales and Distribution Brian

Neylon took over direct responsibility for indirect sales, including

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the Order Entry program, after Ahmed left. T 625: 2075-76, 2112-

13 (Neylon).

The Sales Department looked for companies to become Order

Entry Retailers that demonstrated the ability to generate large

numbers of activations of new Dish subscribers. Ahmed solicited

the first Order Entry Retailer, Dish TV Now, because its principal

David Hagen operated a very large call center that produced

thousands of activations for DirecTV. See T 626: 2304-05 (Ahmed);

PX 61, Letter from Ahmed to Hagen dated October 7, 2003; PX 148,

Dish TV Now proposal dated October 7, 2003 (Dish TV Proposal)

(Hagen’s DirecTV Retailer Prime TV generated 27,000 new DirecTV

subscribers per month). Dish did not perform any background

checks on these companies or their principals (such as checking

Dunn & Bradstreet Reports or criminal background checks) before

making them Order Entry Retailers. E.g., T 626: 2311, 2361, 2477-

78 (Ahmed); T 625: 2230-31 (Neylon). The goal was to find outside

companies that could generate activations.

Neylon left Dish for a brief period while Ahmed was gone, but returned before Ahmed

returned. T 621: 1690 (Mills). At the time of trial, Neylon was an Executive Vice President of

Dish.

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Dish Sales personnel knew that many Order Entry Retailers

used outbound telemarketing to generate high volumes of

activations. T 622: 1677-78 (Mills). Dish Sales personnel assumed

that Retailers selling more than 150 activations per month were

using outbound telemarketing. PX 620, Email Thread dated August

17,2007 regarding Retailers. Dish Sales personnel regularly

learned that Order Entry Retailers used telemarketing. See DTX

223, Email Thread between Ahmed and Hagen dated September 16,

2004 (Ahmed informed that the first Order Entry Retailer Dish TV

Now was using outbound telemarketing); PX80, Email thread

between Nick Meyers and Neylon and Ahmed, dated March 10-11,

2002 (Dish knew in 2002 that then TVRO Retailer Satellite System

used Prerecorded Calls); T 626: 2410-11, 2417 (Ahmed); PX 190,

Email thread between Ergen and Ahmed dated June 28, 2004, and

PX 656, Email thread regarding Satellite Systems dated September

14-15, 2004; T 627: 2475-76 (Ahmed knew Satellite Systems used

Prerecorded Calls to generate sales for DirecTV, and Ahmed made

Satellite Systems an Order Entry Retailer); PX 265, Email from Mills

to Neylon dated December 21, 2006 (Order Entry Retailer JSR

Enterprises principal Richard Goodale told Mills that JSR planned

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on using outbound telemarketing when JSR became an Order Entry

Retailer); PX 129, Email thread between Mills and Werner dated

May 17, 2007 (Order Entry Retailer outbound telemarketing

accounted for 12,000 activations per month); PX 598, Email to Van

Emst re Secret Shopping dated April 8, 2008 (lists several Order

Entry Retailers using outbound telemarketing); PX 1347, TCPA

Tracker Report dated September 16, 2008 (identified consumer

complaints resulted from Order Entry Retailer Prerecorded Calls);

see also Deposition of Shawn Portela, at 81-82 (Dish was actively

prospecting for call centers to sell Dish Network programming);

T 711: 339-40 (Mills) (Mills knew that 9 of 17 current Order Entry

Retailers used outbound telemarketing); T 710: 231 (DeFranco)

(about half of Order Entry Retailers in October 2016 used outbound

telemarketing). The testimony of various Dish witnesses that Dish

did not know whether particular Order Entry Retailers used

outbound telemarketing was not credible.

The Sales Department was divided into two parts, Retail Sales

and Retail Services. Retail Sales worked with Indirect Marketers to

facilitate sales. Michael Mills was Vice President in charge of Retail

Sales. Retail Services handled the payments to Indirect Marketers.

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Blake Van Emst was Vice President in charge of Retail Services.

Rob Origer was Director of Retail Services.

Retail Sales employed Regional Sales Managers and Area Sales

Managers (collectively Sales Managers), Account Managers or

Account Representatives (Account Managers), and Field Sales

Development Representatives (“Field Representatives” or “FSDRs”),

all of whom visited locations that sold Dish through the indirect

channel. See T 711: 284-86 (Van Emst). Account Managers and

Field Representatives reported to Sales Managers who reported up

the chain to Mills in Retail Sales. Initially, Account Managers

handled Order Entry Retailers, and Field Representatives handled

TVRO Retailers and national accounts. By 2006, Account

Managers and Field Representatives both worked with Order Entry

Retailers. T 620: 1320-21 (Castillo).

Account Managers and Field Representatives provided training

and marketing materials on Dish products and services at Order

Entry Retailer facilities. T 621: 1627, 1632 (Mills); T 620: 1302

(Castillo); T621: 1632-34 and T 622: 1703 (Mills); Deposition of

Michael Oberbillig, at 68, 83. Account Managers and Field

Representatives pitched marketing ideas to Order Entry Retailers.

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See Oberbillig Deposition, at 81. Dish Sales personnel, on

occasion, provided sales scripts to Order Entry Retailers and

revised Order Entry Retailers’ sales scripts. T 621: 1636 and T 622:

1707 (Mills). Mills made comments on scripts regularly. T 621:

1637 (Mills) (quoting deposition testimony).

Dish shared lead lists with Retailers on a few occasions.

T 622: 1767-72 (Mills); PX 704, Email thread between Dish Legal

Department and Marketing dated May 31- June 7, 2007; PX 58,

Email from Davis to Pastorius dated June 6, 2008; PX 621, Email

from Erik Carlson to DeFranco and others dated March 20, 2006;

T 621: 1519-20, 1560 (DeFranco); PX 621, Email from DeFranco to

Carlson, dated March 20, 2006; PX 1220, Email thread from

Defender to Eric Carlson dated June 22- July 18, 2007.

Retail Sales employees’ compensation, from Field

Representatives and Account Managers up to Vice President Mills,

was tied to the number of new activations generated by Indirect

Marketers, including Order Entry Retailers. See e.g., T 622: 1798

The Plaintiffs present some evidence about an additional set of leads called Glen Gary leads.

Dexter in Outbound Operations had heard that Glen Gary leads were distributed to Order

Entry Retailers, but she never confirmed this. T 627: 2539-41, 2610 (Dexter); PX1181, Email

from Dexter dated June 16, 2011 regarding Glen Gary Leads. Bangert testified that the Glen

Gary leads were used in Dish direct marketing. T 628:2714-15 (Bangert). The scant evidence

fails to establish whether Glen Gary leads were distributed to Order Entry Retailers.

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(Mills) (part of annual bonus based on number of new activations);

T 620: 1299, 1303-04, 13-7-09 (Castillo) (Field Representatives and

Account Managers’ compensation tied to regional activation goals);

Oberbillig Deposition, at 38-39; see also T 626: 2368 (Ahmed)

(“[L]ove to see the activation numbers.”).

The Retail Services division of the Sales Department included

a Risk and Audit unit. T 618: 926 (Werner). Bruce Werner was in

charge of Risk and Audit. Risk and Audit audited Indirect

Marketers to look for attempts to defraud Dish. Risk and Audit also

kept information on “churn.” The term “churn” meant the rate at

which new customers solicited by a particular marketer terminated

their Dish subscriptions. A high churn rate meant that a large

percentage of the new customers solicited by particular marketer

(either in the direct or indirect channel) terminated their

subscriptions after only a brief period of time. See T 618: 915

(Werner); Oberbillig Deposition, at 47-48. High churn rates cost

Dish money. Dish incurred significant upfront costs with each

activation in the form of equipment costs, installation costs, and

promotional discounts. Dish recouped the initial investment over

two to three years. Dish could not recoup these upfront costs if the

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customer cancelled after only a short period of time. As a result,

Dish lost money on activations from Order Entry Retailers with high

churn rates. See e.g., T 626: 2325-28 (Ahmed); T 621: 1692 (Mills);

T 621: 1486-86 (DeFranco). Risk and Audit could compare Order

Entry Retailer churn rates to the churn rate of Dish’s direct

marketing. See e.g., PX 1144, Retailer Audit Notification &

Summary dated December 20, 2005 (comparing Dish TV Now churn

rate with Dish direct marketing churn rate).

For the first several years of the Order Entry program, Dish

made little or no effort to monitor or supervise Order Entry

Retailers’ sales methods. Risk and Audit audited Order Entry

Retailers to detect fraud on Dish, and Dish terminated Order Entry

Retailers for fraud. T 618: 919 and T 619: 1072 (Werner); PX 1355,

Email from Werner dated January 26, 2010. T 618: 916-19 and

T 619: 1116 (Werner). Risk and Audit also responded to consumer

complaints, but did not otherwise monitor Order Entry Retailers’

marketing practices. Sales Managers, Field Representatives, and

Account Managers visited Order Entry Retailer facilities to assist in

marketing, but they did not closely monitor marketing practices.

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Some of the Order Entry Retailers took advantage of the

situation to engage in corrupt practices. The corrupt practices

generated problems in at least six areas: fraud on Dish; deceptive,

incomplete, or inaccurate representations made to consumers

during telephone solicitations; Do-Not-Call Law violations;

unauthorized use of third-party affiliates; high churn; and

increasing consumer complaints.

Some Order Entry Retailers used various means to defraud

Dish. Order Entry Retailers sometimes opened duplicate accounts

for existing Dish customers to secure additional commissions.

Order Entry Retailers sometimes closed current accounts and

opened new accounts for existing customers to secure additional

commissions. Order Entry Retailers sometimes submitted false

information on the Order Entry Tool to secure Dish approval of

customers who would not otherwise be approved for a Dish

subscription. Order Entry Retailers sometimes submitted fake

Social Security numbers. At least one Order Entry Retailer,

American Satellite, Inc. (American Satellite or Am Sat), sometimes

put $1.00 on prepaid debit cards and then falsely submitted

numbers from the prepaid cards as the credit card numbers of new

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customers who did not have credit cards. See T 618: 902-14

(Werner); T 621: 1511-12, 1515-17 (DeFranco); PX220, Email

Thread dated January 7, 2009 regarding Order Entry Retailers

Allegro and American Satellite; see also PX 1306 Email dated

September 5, 2008 from Steve McElroy to Bruce Werner and others

regarding More Cactus Follow-up.

In addition to defrauding Dish, some Order Entry Retailers

made false or misleading statements to consumers during sales

presentations. See e.g., T 621:1511-12, 1515-17, 1589 (DeFranco);

DTX 746, Collective Exhibit of Five Press Releases dated October 8,

2008 through March 5, 2009, Announcing Terminations of 40

Retailers. Some Order Entry Retailers did not provide required

disclosures. Dish incorporated into the Order Entry Tool a set of

disclosures that were supposed to be read to purchasers as part of

completing the sale. Some disclosures were required by statute or

regulation. Some were required by settlements that Dish made with

state attorneys general. See e.g., PX 1202, Risk Summary—

TCPA/Disclosures for week ending September 12, 2006 (2006 Risk

Summary); PX 1044, Letter from Mike Oberbillig to Jerry Grider

dated August 10, 2006 (required disclosures enclosed); T 626: 2259

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(Neylon). Some Order Entry Retailers did not give the disclosures.

See e.g., PX 1202, 2006 Risk Summary.

Order Entry Retailers also violated the Do-Not-Call Laws. Dish

Retail Sales Vice President Mills knew that Order Entry Retailers

could be a source of serious Do-Not-Call Law violations. T 621:

1678-79 (Mills). Several Order Entry Retailers initiated Prerecorded

Calls in violation of the TSR and the TCPA. These included, among

others, Dish TV Now, Satellite Systems, Star Satellite, JSR,

American Satellite, United Satellite, Vision Satellite, LA Activations,

Dish Nation, and Atlas Assets. See T 625: 2110, 2117, 2170-71

(Neylon); T 620: 2110 (Musso); T 621:1693-95 and T 622: 1728-29

(Mills); T 622: 1883 (Goodale); PX205, Email thread between

Bangert and Dish Retailer Escalations, dated May 25-27 2005;

PX 120, Email thread between Oberbillig, Ahmed and Novak dated

September 26-30, 2005 regarding Dish Network autodialer calls, at

PX 120-001, 003-004; PX 168, Letter from Consumer Ryan

Swanberg, dated July 26, 2004; PX 1299, Letter from attorney Chad

Austin to Dish Senior Corporate Counsel Dana Steele dated March

27, 2007; PX 1298, Letter from North Dakota Assistant Attorney

General James Thomas to Echostar and Dish Nation LLC dated

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June 25, 2007, with enclosed North Dakota ex rel. Stenehjem v.

Creative Concepts Group, Inc., N.D. Dist. Ct., South Central

Judicial Dist., Civ. No. 07C1307, Assurance of Voluntary

Compliance Order entered June 21, 2007. Many of these

companies used a type of prerecorded call known as a “press 1” or

“p-1” call. The prerecorded message asked the call recipient to

press the number 1 on the telephone number pad if the recipient

was interested in the product. The call recipient who pressed 1 was

connected to a live sales person. See e.g., T 622: 1871-72

(Goodale).

Order Entry Retailers also made Registry Calls and Internal

List Calls. Some Order Entry Retailers did not maintain Internal

Do-Not-Call Lists in direct violation of the TCPA. Some companies

hung up on individuals who asked to be put on an Internal Do-Not-

Call List and then called the individuals back in direct

contravention to the call recipients’ requests. See T 622: 1873

(Goodale); PX 250, Email from Musso dated December 20, 2006

Regarding E-Mail Notice of TCPA Violation.

Some Order Entry Retailers hid their identities through a

process called spoofing. Spoofing means falsifying identifying

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information. Telephone spoofing is a process by which the caller

causes false identifying information to appear on the call recipient’s

Caller ID display and phone records. See T 620: 1221-22 (Musso).

As a result, the call recipient cannot readily determine the source of

the illegal call.

Many Order Entry Retailers engaged third-party affiliates

without authorization from Dish. The Retailer Agreement provided

that Order Entry Retailers could not use third-party affiliates

without prior approval from Dish. Many Order Entry Retailers

disregarded this requirement. Many provided their Order Entry

Tool Logins to individuals and call centers in this country as well as

call centers in the Philippines or other countries. These third

parties often made Do-Not-Call Law violations and used

misrepresentations to sell Dish Network programming. See DTX

947, Dish Facts Blast, dated October 10, 2007 (warning Order

Entry Retailers about the use of unauthorized affiliates); T 620:

1314 (Castillo) (Order Entry Retailers shared logins with other

Retailers); T 622: 1875-76 (Goodale) (worked under other Order

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Entry Retailer Logins).

Dish Sales personnel were aware of the

use of affiliates by at least some Order Entry Retailers. See e.g., PX

239, Email from Steven Keller dated September 8, 2006, attached

Spread Sheet (September 2006 Spread Sheet); PX 1045, Email from

Mills dated October 10, 2006, regarding Affiliate Calls (October

2006 Affiliate Calls Email).

Customers who purchased Dish Network Programming from

these unscrupulous Order Entry Retailers often canceled their

services. As a result, many of these Order Entry Retailers had high

churn rates. Dish lost money on activations from Order Entry

Retailers with high churn rates because Dish could not recoup over

time its initial investment in equipment costs, installation costs,

and promotional discounts. See e.g., T 626: 2325-28 (Ahmed);

T 621: 1692 (Mills); T 621: 1486-86 (DeFranco).

The unscrupulous practices of largely unsupervised Order

Entry Retailers also generated customer complaints. Dish had a

long-term problem with consumer complaints about Order Entry

Retailers. T 621: 1685 (Mills). Retail Sales, Retail Services, and

Dish’s Legal Department worked with Dish’s Escalations

Dish Exhibit DTX 947 is also admitted as Plaintiffs’ Exhibit PX 570.

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Department to respond to consumer complaints. See T 620: 1220

(Werner); Deposition of Marciedes Metzger, at 31. The Escalations

Department included the Executive Resolution Team (ERT). The

Executive Resolution Team handled customer complaints that had

been “escalated.” The term “escalated” meant that the customer’s

complaint had not been resolved by the customer service

representative who initially received the complaint and so was sent

up, or escalated, to the Executive Resolution Team. Metzger

Deposition, at 26-27.

Representatives of the Executive Resolution Team investigated

complaints to ascertain the source of the call that sparked the

complaint and whether the complaining consumer’s telephone

number was on the Registry. The Executive Resolution Team put

the complaining consumer’s telephone number on Dish’s Internal

Do-Not-Call List. If Dish direct marketing did not make the call, the

Executive Resolution Team attempted to identify the Order Entry

Retailer that made the call. In such instances, the Executive

Resolution Team told the complaining customer that Dish did not

make the call and told the consumer the identity of the Order Entry

Dish’s Escalations Department also had a Dispute Resolution Team (DRT). The Dispute

Resolution Team handled written complaints. Metzger Deposition, at 31.

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Retailer that made the call, if known. The complaint was then filed

and marked resolved. PX 1361, Email from July 11-19, 2006,

regarding Calls to Existing Dish Network Customers, at 001-002.

Dish dealt with Order Entry Retailers that generated consumer

complaints on an ad-hoc, case-by-case basis. T 619: 996 (Werner).

If Dish identified the Order Entry Retailer that dealt with a

complaining consumer, executives in Retail Sales and Retail

Services discussed the complaint among themselves and with

members of Dish’s Legal Department. A person from either the

Legal Department or Retail Sales contacted the Order Entry

Retailer. See Oberbillig Deposition, at 79-80. The Order Entry

Retailer generally gave some explanation, denial, or apology, and

the matter was closed.

Dish’s basic approach in matters not involving fraud on Dish

was to accept the excuse the Order Entry Retailer gave. For

example, Satellite Systems repeatedly violated the Do-Not-Call Laws

from 2002 to 2005. Satellite System’s principal Alex Tehranchi

repeatedly said he would stop the practice. Dish repeatedly

accepted Tehranchi’s excuses even though Tehranchi repeatedly

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demonstrated that he would not stop the practice. PX 120, Email

thread, Email from Novak to Ahmed dated September 26, 2005.

In another example, Dish was told several times in the first

eight months of 2005 that Order Entry Retailer Star Satellite was

making illegal telemarketing calls. Dish did nothing. In October

2005, the office of a United States Congressman contacted Ahmed

about Star Satellite making Registry Calls. In response, Ahmed

yelled at Star Satellite’s principle Walter Eric Myers and told Myers

not to do it again. Ahmed took no other action to stop the illegal

calls or to discipline Star Satellite. T 626: 2323-24 (Ahmed); T 622:

1818 (Mills); Myers Deposition, at 138, 184.

Dish witnesses testified that Dish could not discipline an

Order Entry Retailer based on isolated consumer complaints. They

testified that Dish had to build a case to terminate an Order Entry

Retailer or put an Order Entry Retailer on hold. See e.g., T 619:

1125 (Werner); see also T 625: 2254 (Neylon) (placing Order Entry

Retailer on hold was a last resort because a hold effectively put the

Retailer out of business). Dish may have needed to investigate and

verify Order Entry Retailers’ excuses and explanations to impose

discipline. Dish, however, did not investigate complaints. In most

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cases, Dish uncritically accepted Order Entry Retailers’

explanations, told consumers that Dish was not responsible,

marked the complaint resolved, and moved on. See PX 1361, Email

from July 11-19, 2006, regarding Calls to existing Dish Network

Customers, at 001-002. (Once the Executive Resolution Team gave

the consumer the name of the Order Entry Retailer involved, if

known, and told the consumer that Dish was not responsible, the

matter was marked resolved).

By mid-2006, the number of consumer complaints generated

by Order Entry Retailers increased dramatically. Werner testified

that consumer complaints went “crazy.” T 619: 983 (Werner);

see T 625: 2129 (Neylon); T 618: 978 (Werner) (the “car came off the

wheels”). See also T 621: 1682-83 (Mills). The Sales Department

decided that Dish needed a more systematic way to address the

practices of Order Entry Retailers to try to reduce the number of

consumer complaints.

In August 2006, Retail Services added a Compliance

Department to deal with problems associated with Order Entry

Retailers in a more systematic way. Reji Musso was hired as Dish’s

Compliance Manager. Musso reported to Werner in Risk and Audit

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within Retail Services.

PX 130, Email dated August 21, 2006

announcing hiring of Compliance Manager Reji Musso. The

Compliance Department sought to monitor Order Entry Retailers’

compliance with the standard Retailer Agreement, Dish’s rules, and

applicable laws and regulations. T 620: 993-94 (Musso). The

Compliance Department was tasked with ensuring that Order Entry

Retailers accurately described the terms and conditions of Dish

Network programming packages and made all required disclosures

during telephone sales presentations. T 619: 993-94 (Werner);

T 620: 1194 (Musso). The Compliance Department also handled

consumer complaints about Order Entry Retailers. T 625: 2130

(Neylon); T 619: 983 (Werner.).

In September 2006 the Compliance Department started a

Quality Assurance (QA) Program. T 620: 1204 (Musso). The

Quality Assurance Program was supposed to improve the quality of

sales calls by insuring that Order Entry Retailers were making

accurate representations and making all required disclosures in

their sales presentations. T 621: 1638 (Mills); T 620: 1205 (Musso);

PX 1202, Risk Summary—TCPA/Disclosures for week ending

Risk and Audit at some point became known as Risk Management. See T 620: 1194 (Musso).

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September 12, 2006; PX 1044, Letter from Mike Oberbillig to Jerry

Grider dated August 10, 2006 (required disclosures enclosed).

Order Entry Retailers were required to participate in the Quality

Assurance Program. T 619: 994 (Werner).

The Quality Assurance program required Order Entry Retailers

to allow Field Representatives and Account Managers to listen to

sales presentations, either live presentations at the Order Entry

Retailer facility or recorded presentations provided by the Order

Entry Retailers, and to score the presentations. See T 620: 1310-11

(Castillo); T 620: 1209 (Musso); T 619: 992 (Werner); PX 486, Dish

Quality Assurance Field Sales Development document issued on or

about March 1, 2007 (2007 Quality Assurance Report), at 9, 17-

23.

Field Representatives scored Order Entry sales personnel on

whether they identified themselves properly, asked customers about

television usage, offered responsive packages of services and

programming, made appropriate disclosures, secured necessary

information to complete a sale, and made “a polite professional

closing on all calls, regardless of if a sale is made.” PX 486, 2007

Quality Assurance Report, at 18, 19, 23.

PX 486 is undated, but based on its content, the documents seems to have been issued

shortly after JSR’s termination in February 2007.

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The Compliance Department also sent out updated disclosures

that Retailers were required to give during sales presentations.

See T 620:1242 (Musso); PX 744, Email from Musso dated October

22, 2006. One such update was entitled, “Agency T&Cs – Q1 2007

Release.” PX 1139.

The term “T&Cs” meant terms and conditions.

T 621: 1652 (Mills).

Musso also worked with the Legal Department, the Executive

Resolution Team, and Dish’s DNC Investigation Team to run a sting

program. The sting program sought to identify Order Entry

Retailers that generated consumer complaints, but hid their

identities by spoofing or otherwise. Upon receiving a consumer

complaint, Dish attempted to identify the responsible Order Entry

Retailer. If the participating Dish Departments could not identify

the Retailer, Dish representatives asked the complaining consumer

to participate in the sting program. If the offending telemarketer

called again, the participating consumer agreed to purchase Dish

Network programming using a credit card provided by Dish along

with specified identifying information. When the order came

through on the Order Entry Tool, Dish could identify the Order

The footer on PX 1139 identified the document as a Microsoft Word document entitled “Retail

OE TCs Q1 2007.” See T 621: 1652 (Mills).

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Entry Retailer involved in the participating consumer’s “sting”

transaction. See PX 1362, Outline of Sting Process, undated;

T 619: 989 (Werner); T 620: 1246 (Werner).

Through the sting

program, Dish identified several Order Entry Retailers that were

violating the Do-Not-Call Laws. T 619: 919 (Werner). PX 1082,

Tracker spreadsheet on stings; T 620: 1234-36, 1386 (Musso).

Musso also established a systematic way to notify Order Entry

Retailers about consumer complaints. The Compliance Department

sent a letter explaining the complaint and requesting a response

within seven days. The Compliance Department followed up every

week. The Compliance Department placed the response in its files

and forwarded copies to the Legal Department and executives

within Retail Services and Retail Sales. See T 620: 1238-39

(Musso); T 619: 1022-27 (Werner). Musso kept a tracker

spreadsheet of consumer complaints and the results of

investigations, and issued weekly TCPA Tracker Reports. T 619:

1027-31 (Werner); PX 1347, TCPA Tracker Report dated September

16, 2008.

The sting program may have predated the establishment of the Compliance Department in

2006.

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In 2007, the Compliance Department started the Partner

Order Entry (POE) list. The POE list was a list of complaining

consumers whose complaints had been unresolved after being

escalated to the highest levels of Dish’s consumer complaint

resolution system. Compliance sent the POE list to Outbound

Operations and all companies in the indirect channel, including all

Order Entry Retailers. All Dish direct marketing and all entities in

the indirect channel were to “suppress” telephone numbers on the

POE list. Suppressing a telephone number meant that the number

should not be called at all for any reason. T 619: 995-96, 1099

(Werner); T 620: 1213-15 (Musso); see PX 1107, Email dated

January 4, 2007 (example POE Notice).

The Compliance Department also began supervising the use of

third-party affiliates by Order Entry Retailers. In October 2006, the

Sales Department started collecting information from the top eleven

Order Entry Retailers on the use of affiliates. At least four of the

top eleven admitted using third-parties to make telemarketing calls.

PX 1045, Email thread between Mills and Neylon dated October 3-

10, 2006 regarding Affiliate Calls. Thereafter, Dish began efforts to

enforce the requirement in § 7.2 of the Retailer Agreement that all

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affiliates had to be approved by Dish. On October 10, 2007, Dish

issued a Facts Blast notice to Order Entry Retailers warning against

using affiliates without prior approval from Dish. DTX 947, Facts

Blast dated October 10, 2007; see also PX 1051, Undated Facts

Blast (also warning against using unapproved affiliates).

Dish

began performing background checks on proposed affiliates and

denied approval of some proposed affiliates. Musso tracked

information on third-party affiliates used by Order Entry Retailers.

Musso’s tracker included information on whether the affiliate had

been approved in the past. T 620: 1201-03 (Musso); e.g., PX 1271

and PX 1272, Affiliate Tracker Spreadsheets identifying affiliates in

2008-11. Pursuant to § 7.2 of the Retailer Agreement, Dish took

the position that Order Entry Retailers were liable for the actions of

their third-party affiliates. T 619: 1013-14 (Werner); see PX 724,

April 15, 2011 Draft Script on Risk Management, Audit, and

Compliance, at 1.

The Compliance Department, however, did not audit Order

Entry Retailers with respect to Do-Not-Call compliance. The

Compliance Department did not review Order Entry Retailer calling

The undated Facts Blast, PX 1051, referred to Dish as EchoStar, and so, was distributed

before Dish changed its name to Dish Network in January 2008.

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records or calling lists. T 625: 2252 (Neylon). The Compliance

Department also did not incorporate into the Quality Assurance

Program any monitoring for Do-Not-Call compliance. The Quality

Assurance Program focused on the accuracy and completeness of

statements made during telemarketing calls.

The Compliance Department had weekly meetings with Dish’s

Legal Department. The meetings covered all areas of Order Entry

Retailer compliance, including telemarketing. See; PX 548, Agenda

for Legal TCPA Meeting dated October 2006; PX 536, Retail Services

Audit and Risk Q4 2006 Report.

Even though Musso and the Compliance Department secured

the information more systematically, Dish continued to respond to

Order Entry Retailer misconduct through an ad hoc, case-by-case

approach. T 620: 1239 (Musso); T 619: 1042 (Werner). Musso and

Werner could make recommendations to discipline Order Entry

Retailers, but more senior executives in the Sales Department (or

even higher level management in some cases) had to approve

discipline. T 619: 1032-37 and 1104 (Werner); T 625: 2130-31

(Neylon); T 620: 1260 (Musso); PX 1083, Email thread between

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Musso, Neylon, and Origer dated February 8, 2007; PX 492, Email

thread between Musso and Van Emst dated September 2, 2008.

In November 2006, Musso suggested using more stings and

imposing more fines on Order Entry Retailers. As she put it,

“Anything to stop the madness . . . so to speak.” PX 72, Email

thread between Musso, Werner, Neylon, and Origer dated November

14, 2006. Between August 2006 and February 2007, Dish fined

Order Entry Retailers Blu Kiwi, LLC and American Satellite

$10,000.00 each, and fined Sterling Satellite $53,901.00. From

February 2007 to July 2008, Dish did not impose any fines. In July

2008, Musso reported that the Compliance Department had made

two recommendations for fines that were pending. PX 143, Email

thread between Musso and Werner dated July 22, 2008. The Court

cannot determine whether Dish imposed these two recommended

fines.

Dish terminated some Order Entry Retailers after starting the

Compliance Department. In February 2007, Dish announced that

it had terminated three Order Entry Retailers for Do-Not-Call

violations. PX 99, Gross Sales Update Report dated August 6,

2007, at 2 (stating that Dish terminated Order Entry Retailers JSR,

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United Satellite, and Atlas Assets for Do-Not-Call violations);

see DTX 674, Press Release dated February 14, 2007 (announcing

JSR’s termination). In early October 2007, two additional Order

Entry Retailers were terminated for using unauthorized third party

affiliates for lead generation. DTX 947, Facts Blast dated October

10, 2007. In July 2008, Musso identified two additional Order

Entry Retailers that had been terminated since she started the

Compliance Department and two more that were not renewed but

would have been terminated. Musso did not state the reasons for

these terminations. PX 143, Email thread between Musso and

Werner dated July 22, 2008.

As a result of the on-going problems with corrupt practices,

the Order Entry program had a negative reputation within Dish.

PX 658, Email from Ahmed to DeFranco, Thomas Cullen, and

Neylon dated March 24, 2009. In 2007, Dish legal department

paralegal Denise Hargen asked to be kept informed about Do-Not-

Call violations because the Order Entry Retailers or Dish marketing

personnel tried to get around the Do-Not-Call Laws: “It would really

help to make sure I’m always in the loop on these matters based on

my DNC involvement and knowledge base. Makes it harder for

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these folks to get around the ‘rules’ – which they try to do –

especially marketing.” PX 704 Email thread dated May 31 – June

7, 2007 between Hargen, Dish in-house counsel Emily Pastorius,

and Brian Pacini (emoji in the original). By 2009, the Legal

Department complained that Order Entry Retailers were engaging in

“shady/illegal activity.” Order Entry Retailers continued to make

Prerecorded Calls in 2009. PX 730, 2009 Sales Partner Review, at

2, 3.

By 2008, Dish was also the subject of investigations for Do-

Not-Call Law violations by the FTC and state consumer protections

officials. Dish was also a defendant in several lawsuits brought by

both individual consumers and state officials. See e.g., PX 1131,

FTC Civil Investigative Demand dated July 21, 2005 (FTC Demand);

PX 54, Legal and RS Project Report dated October 7, 2004; T 618:

935-38 (Werner) (listing pending legal investigations and lawsuits);

PX 1340, Vermont Attorney General Investigative Subpoena

Regarding Order Entry Retailer Satellite Systems Now is sued

October 2005; PX 538, Texas Notice of Violation of Texas Do-Not-

Call Law dated January 3, 2006; PX 669, December 10, 2007 Email

from Dish attorney Jeffrey Blum (referencing ongoing FTC and 31-

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state investigation). The FTC and multi-state investigations

culminated in the commencement of this action on March 25, 2009,

and the entry of a court approved Assurance of Voluntary

Compliance (AVC) on July 16, 2009, between Dish and the forty-six

states that are not Plaintiffs in this action. PX 55, Assurance of

Voluntary Compliance dated July 16, 2009.

During this time frame in 2008 and 2009, Dish started to

impose more control over the Order Entry program. Dish required

Order Entry Retailers making fifty activations a month to send their

Internal Do-Not-Call Lists to PossibleNOW for compilation into a

combined Retailer Do-Not-Call List. See T 619: 1018-21 (Werner).

Dish also arranged for Order Entry Retailers to use PossibleNOW

scrubbing services. Dish required some Order Entry Retailers to

use PossibleNOW scrubbing services. T 622: 1841-43 (Mills); see

DTX 741, Email thread between Dish Vendor Inquiries and Satellite

Systems dated April 8, 2009. Dish Sales Department maintained

information on sales and money spent on advertising on a monthly

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basis, as well as monthly updates on each Order Entry Retailer.

See PX 409, Monthly Update; T 626, 2265-66 (Neylon).

From October 2008 until March 2009, Dish terminated 40

Retailers, some of which were Order Entry Retailers, for defrauding

Dish or for making misrepresentations to consumers. DTX 746,

Collective Exhibit of 5 Press Releases dated October 8, 2008

through March 5, 2009, Announcing Terminations of 40 Order

Entry Retailers. In 2009, Dish reduced the number of Order Entry

Retailers from to 76 to 32. Dish eliminated Order Entry Retailers

for fraud and high churn. Dish representatives focused on

eliminating fraud and reducing churn rates of the remaining Order

Entry Retailers. The result was an increase in monthly activations

from 71,000 to 100,000 and a significant reduction in churn rates.

PX 730, 2009 Dish Sales Partner Review, at 13.

In May 2009, Ahmed returned to Dish as Senior Vice President

of Sales and Distribution. He again had responsibility for the Order

Entry Program. Neylon was Vice President in charge of the Order

It is unclear from the evidence when this monthly tracking process started.

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Entry Program and Mills was Director of the Order Entry program.

T 626: 2286-88 (Ahmed).

By 2009, Dish used the Quality Assurance program for both

Dish direct telemarketing calls and Order Entry Retailer calls. Dish

scored telemarketing calls on 45 criteria. The Quality Assurance

criteria focused on accurately describing Dish products and

promotions (including any limitations on promotional pricing), and

providing complete, accurate disclosures during sales calls. The

Quality Assurance criteria also covered “right sizing” customers.

Right sizing involved asking questions about the household

television watching patterns to accurately evaluate the potential

customer’s needs in order to offer the appropriate Dish

programming packages. The Quality Assurance program also

sought to ensure that the sales agents interacted with the

consumer in an appropriate, professional manner. T 625: 2137-38,

2175-77, 2182-84, 2226 (Neylon); T 621: 1642 (Mills); T 627: 2473-

74 (Ahmed); PX 560, Email thread regarding Quality Assurance

scores dated August 18, 2009; PX 1048, QA Action Plan, at 7.

In 2013, Ahmed’s duties changed. He became in charge of door-to-door sales. T 626: 2288

(Ahmed).

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A Dish Business Rule required Order Entry Retailers to

participate in the Order Entry Program. T 620: 1213 (Musso).

Order Entry Retailers were evaluated weekly on their Quality

Assurance scores. Order Entry Retailers were required to modify

their practices to conform to the Quality Assurance Program.

T 621: 1639-40 and 622: 1701 (Mills); T 625: 2137-38, 2171-75

(Neylon); see T 620: 1210 (Musso); PX 559, Email thread between

Neylon, Musso, and Ahmed dated August 13, 2009 (Ahmed wanted

“no nonsense from my employees or my Retailers” regarding the

Quality Assurance program); PX 616, Email thread between Neylon

and Mills dated August 13, 2011. Initially, Field Representatives

and Account Managers scored calls. At some point, a separate

national team within Dish scored all the recorded calls from both

Order Entry Retailers and Dish direct marketing. T 620: 1211-12

(Musso).

By August 2009, Ahmed and Neylon wanted the Sales

Department to emphasize Order Entry Retailer compliance with

Quality Assurance program. Neylon wanted Field Representatives

and Account Managers to be “110%” involved in improving Quality

Assurance scores. Ahmed also stated that he would hold Account

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Managers responsible. Ahmed stated that he would not tolerate

high churn or misrepresentations. PX 559, Email thread between

Neylon, Musso, and Ahmed dated August 12, 2009.

Thereafter, Dish Field Representatives, Account Managers,

and Sales Managers worked with Order Entry Retailers to get and

keep Quality Assurance scores over 90 percent. Field

Representatives and Account Managers visited with Order Entry

facilities to ensure compliance. Field Representatives and Account

Managers coached Order Entry Retailers on how to improve Quality

Assurance scores. T 625: 2179 (Neylon). Field Representatives and

Account Managers met with Order Entry Retailer salespersons to

discuss sales presentations. On occasion, Sales Managers required

Order Entry sales staff who worked at home to come to the office

once a week so that their calls could be monitored. T 625: 2210

(Neylon); PX 1048, QA Action Plan, at 4. On occasion, Order Entry

Retailer personnel who had consistently had failing Quality

Assurance scores were removed from the telephones and fined.

PX 1048, QA Action Plan, at 6.

Sales Managers, Field Representatives, and Account Managers

reviewed and rewrote scripts and ordered Order Entry Retailers to

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change sales procedures to keep scores up. See T 625: 2177-79

(Neylon); T 6212: 1640 (Mills); PX 1048, QA Action Plan, at 3, 5. On

one occasion, a Dish Sales Manager wrote a call flow for an Order

Entry Retailer who did not use a written sales script and required

the Order Entry Retailer to follow the call flow. PX 1048, QA Action

Plan, at 4.

Dish could discipline Order Entry Retailers who did not

comply with the Quality Assurance Program. Dish Sales Managers,

at least, could withhold promotional offers from non-compliant

Order Entry Retailers. PX 1048, QA Action Plan, at 3. Mills opined

that a Sales Manager’s statement in a QA Action Plan (PX 1048)

about withholding programming was a flippant comment. T 621:

1641 (Mills). Mills’ opinion on this matter is not credible. The QA

Action Plan contained a detailed plan of steps to improve an Order

Retailer’s Quality Assurance score. The Court sees nothing flippant

about anything in the document. In addition to restricting

available programming, Dish could disable Order Entry Retailer

logins to restrict access to the Order Entry Tool. T 625: 2208-09

(Neylon).

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One Dish Sales Manager William (Brett) Mason asked Musso

for contractual authority for the Quality Assurance Program.

Mason quoted Retailer Agreement § 7.3 as a possible source of

authority in the email. Section 7.3 required Order Entry Retailers

to “take all actions and refrain from taking any action, as requested

by [Dish] in connection with the marketing, advertisement,

promotion and/or solicitation of orders for” Dish Network

programming. Mason then stated that he could use the “absolute

power” clause, but it was not his first choice. Musso confirmed that

§ 7.3 of the Retailer Agreement authorized the Quality Assurance

program. PX 553, Email thread between Musso and Mason dated

October 25, 2011. See also T 625: 2198-99 (Neylon) (Under Retailer

Agreement, Dish personnel could ask Retailers to take any action,

or to refrain from taking any action relating to marketing.).

The Plaintiffs suggest that the “absolute power” clause was §

7.3 of the Retailer Agreement. Musso testified that the “absolute

power clause” meant that Mason could tell the Retailer, “Because I

said so.” T. 620: 1289 (Musso). Musso’s testimony on this point is

consistent with Mason’s email. Mason distinguished between

Section 7.3 and the “absolute power” clause. Mason quoted 7.3 in

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the email, and then said, as an alternative, that he guessed he

could invoke the absolute power clause. Musso’s testimony is also

consistent with the statement of Dish employee Carlos Prado.

Prado told Field Representative Manuel Castillo, “Dish, the way they

do things is they have all the power, and then if they – if they want

to, they can squash you like a bug.” T 620: 1333 (Castillo). Prado

was in charge of setting up new Order Entry Retailers at the time

that he made the statement. Id. The Court finds that the “absolute

power” clause meant that Dish Sales Managers could direct Order

Entry Retailers to act by telling Order Entry Retailers, “Because I

said so.”

Even with the purge of half of the Order Entry Retailers and

the imposition of the revised Quality Assurance Program, Dish

retained the ad hoc, case-by-case approach to Do-Not-Call Law

violations. In 2009, a class-action law suit was filed against Dish

for Registry Calls made by Order Entry Retailer Satellite Systems.

See T 618: 868-69 (Kraukauer). By 2011, Dish had so many

complaints about Satellite Systems that Dish’s Legal Department

had developed a “standard go after Satellite Systems Network” letter

to send complaining consumers. See PX 199, Email from Dish

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litigation paralegal Kimberly Berridge to Dish Corporate Counsel

Brett Kitei dated August 18, 2011. No evidence cited by either

party indicates that Dish disciplined Satellite Systems for these

calls. Satellite Systems remained an Order Entry Retailer until

2013. T 625: 2149-50 (Neylon).

B. Dish’s Relationship with Specific Order Entry Retailers

This Court found at summary judgment under Counts I and

III that Dish violated the TSR by causing the following illegal calls

by Order Entry Retailers: causing Dish TV Now to make 6,637,196

Abandoned Prerecorded Calls; causing Satellite Systems to make

381,811 Registry Calls; causing Star Satellite to make 43,100,876

Abandoned Prerecorded Calls; causing JSR to make 2,349,031

Registry calls; and causing American Satellite to make one

Abandoned Prerecorded Call. Opinion 445, at 232-33, 75

F.Supp.3d at 1032-33. At trial, the Plaintiffs presented evidence

about these Order Entry Retailers, as well as Order Entry Retailer

Dish Nation.

The Court makes findings regarding Dish Nation

along with the other five Order Entry Retailers.

The Plaintiffs presented evidence at summary judgment about a TVRO retailer named New

Edge Satellite and an Order Entry Retailer named National Satellite Systems. See Opinion 445,

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1. Dish TV Now

In late 2003 or early 2004, Dish TV Now became Dish’s first

Order Entry Retailer. T 626: 2304 (Ahmed). On October 7, 2003,

Ahmed contacted the principal of Dish TV Now David Hagen to offer

him the opportunity to become an Order Entry Retailer. PX 61,

Letter from Ahmed to Hagen dated October 7, 2003. At the time,

Hagen operated a company called Prime TV that sold DirecTV.

The same day, October 7, 2003, Hagen sent Ahmed a proposal

in which he projected that within a year of operation, Dish TV Now

would generate 27,000 Dish Network activations per month. Hagen

represented in the proposal that Dish TV Now would use television

advertising, direct mail, and online advertising to secure inbound

telemarketing calls from interested customers. PX 148, Dish TV

Now Proposal Letter; DTX 959, Retailer Application from Dish TV

Now. Dish did not perform any background checks on Hagen or

Dish TV Now. Ahmed did not learn that Hagen was a convicted

felon who had been permanently enjoined from committing

deceptive practices in actions brought by the FTC. See T 626:2359-

62 (Ahmed); PX 145, FTC v. David DeFusco a/k/a David Hagen,

at 114-16. The Plaintiffs have asked for no findings of fact or conclusions of law regarding the

activities of New Edge Satellite or National Satellite Systems at trial.

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C.D. Va. Case No 89-1046, Permanent Injunction Order, entered

November 3, 1989. In 2004, Hagen was also enjoined by North

Carolina in a separate action. PX 150, North Carolina v. Prime TV,

LLC, N.C. Wake County, North Carolina Superior Court Case No.

04CVS008148, Consent Judgment, entered June 14, 2004.

Dish TV Now hired a company called Guardian

Communications (Guardian) to make “press 1” Prerecorded Calls to

market Dish Network programming. From May 2004 to August 10,

2004, Guardian made on behalf of Dish TV Now 6,637,196

Prerecorded Calls that were answered and became Abandoned

Prerecorded Calls for which Dish is liable in Count III. Opinion

445, at 88-89. Guardian stopped making these calls because Dish

TV Now stopped payment on checks to Guardian. See Opinion 445,

at 89-90.

On August 2, 2004, Dish received a consumer complaint

about Dish TV Now’s prerecorded telemarketing calls. PX 168,

Letter from Consumer Ryan Swanberg, dated July 26, 2004, and

marked received August 2, 2004.

On September 16, 2004, Ahmed sent Dish TV Now’s principal

Hagen an email which said,

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David,

This is simple. Is Dish TV Now telemarketing customers

over the phone, or are you guys using predictive dialers

and leaving messages trying to sell the customers DISH

Network. We're not interested in this type of marketing.

We're receiving complaints on your department doing just

this kind of marketing.

Hagen responded,

Amir,

Dish TV Now uses a predictive dialer to make outbound

calls to consumers who have previously inquired with us

about satellite TV service or are current Dish TV Now

DISH Network customers. The intelligent dialer knows

the difference between a No Answer, Busy, Answering

Machine, or Live Connect. The dialer only connects live

customers to a live Dish TV Now agent. We do not leave

messages. We have a list of over 5 million past and

current customers that we scrub against the do not call

list. In addition, we maintain a Dish TV Now do not call

list. Any customer who wishes to opt out on future

solicitations is immediately added to the list. Dish TV

fully complies with the TCPA.

DTX 223, Email thread between Ahmed and Hagen dated

September 16, 2004.

Ahmed learned from the September 16, 2004, email that Dish

TV Now engaged in outbound telemarketing. Ahmed further

learned that Hagen misrepresented in the original marketing plan

the methods that Dish TV Now would use to sell Dish Network

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programming. Dish, however, did not take any disciplinary actions

against Dish TV Now. T 626: 2370-71 (Ahmed). Dish allowed Dish

TV Now to continue operating as an Order Entry Retailer even

though Ahmed knew that Hagen misrepresented his marketing

methods.

Ahmed also did not check the accuracy of Hagen’s

representations about Dish TV Now’s telemarketing practices, and

so, did not learn that Hagen was lying about the use of Prerecorded

Calls. Hagen told Ahmed that calls answered by a person were

connected to a live sales agent. That was false. The calls were

connected to a prerecorded press 1 message. Ahmed did nothing to

check Hagen’s explanation. He just accepted it and went on.

Dish TV Now continued operating as an Order Entry Retailer

until January 2006. On or about December 20, 2005, Dish put

Dish TV Now on hold for failure to promote Dish Network

programming. While on hold, Dish TV Now could not place orders

through the Order Entry Tool. Dish TV Now also had a high churn

rate, almost double the Dish direct marketing churn rate. In

January 2006, Dish terminated Dish TV Now as an Order Entry

Retailer for high churn and failure to promote Dish Network. Dish

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TV Now produced 485 activations in 2002; 2,765 activations in

2003; 78,339 activations in 2004; and 41,688 activations in 2005.

T 626: 2376 (Ahmed); PX 1144, Retailer Audit Notification &

Summary dated December 20, 2005;see PX 165, Email from Mills to

Ahmed dated December 22, 2005.

2. Satellite Systems Network

In March 2002, Satellite Systems was a TVRO Retailer.

Satellite Systems was making Prerecorded Calls. Dish’s regional

sales director Nick Meyers stated in an email that Satellite Systems’

use of Prerecorded Calls “has caused a few concerning calls, but

seems to be greatly outweighed by the results.” PX80, Email thread

between Nick Meyers and Neylon and Ahmed, dated March 10-11,

2002; T 625: 2139 (Neylon); T 626: 2332, 2329 (Ahmed). Meyers

made this statement when the TCPA prohibited Prerecorded Calls

but before the TSR prohibited abandoned calls. In June 2002, Dish

sent Satellite System a notice to comply with telemarketing laws,

but took no other action. PX 187, letter dated June 12, 2002.

In June 28, 2004, Dish’s co-founder and Chief Executive

Officer Charlie Ergen received a Prerecorded Call from Satellite

Systems offering DirecTV programming. Ergen contacted Ahmed

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about the call. Ahmed told Ergen that Satellite System was also a

Dish Retailer and that Satellite System used “message broadcasting

with [DirecTV] as their primary source to generate sales.” At trial,

Ahmed denied knowing that Satellite Systems used Prerecorded

Calls. T 626: 2337 (Ahmed). The Court finds that denial to not be

credible. Ahmed’s statement in the email was unequivocal.

Ergen asked why Dish could not copy Satellite Systems’

technique. Ahmed directed Dish Regional Sales Manager Mike

Oberbillig to contact Satellite Systems to ask for the script. Satellite

Systems’ principal Alex Tehranchi refused to give Dish the scripts

and denied using Prerecorded Calls. Tehranchi stated that Satellite

Systems was moving away from telemarketing. PX 190, Email

Thread between Ergen, Ahmed, and a Dish West Coast Account

Manager Mike Oberbillig, dated June 28-30, 2004.

In July 2004, Satellite System became an Order Entry

Retailer. T 626: 2409-10 (Ahmed). Satellite System was selling

Dish Network and DirecTV. By the end of July 2004, Ahmed began

receiving complaints about Satellite Systems’ outbound

telemarketing. PX 503, Email from Ahmed dated July 29, 2004.

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In September 2004, Satellite Systems was averaging 9,000

DirecTV activations a month, but only 350 Dish Network activations

a month. Ahmed raised the commission paid to Satellite System to

increase Dish Network activations. Ahmed stated that Dish needed

activations from Satellite Systems. PX 656, Email thread between

Ahmed, DeFranco, and Dish Regional Director for West Coast Jim

Spritzer, dated September 14-15, 2004.

In November 2004, a Florida state court ordered Satellite

Systems to pay $25,500 in civil penalties under its other name

Vitana Financial Group, Inc. (Vitana) for violating Florida Do-Not-

Call Laws. PX 191, Florida Department of Agriculture and

Consumer Services Press Release dated November 4, 2004.

In March 2005, Tehranchi and Vitana agreed to pay $15,000

in civil penalties to North Carolina for violating state Do-Not-Call

Laws. PX 186, North Carolina v. Vitana Financial Group and

Tehranchi, et al., Wake County, North Carolina Superior Court,

Case No. 04-8799, Consent Judgment entered March 21, 2005.

In October 2005, Dish again received notice that Satellite

Systems was using Prerecorded Calls. PX 504, Email thread dated

October 27, 2005. A month earlier in September 2005, Dish in-

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house attorney Novak stated that Satellite Systems had been

making Prerecorded Calls for years:

We know that SSN [Satellite Systems] is using

autodialers and automessages. Terachi [sic] been warned

time and again (by me, by you, by the region, by phone,

in writing, in person) that these activities could violate

the law. Last time, Teranchi [sic] blamed a “rogue

employee,” who he claimed was terminated, but the

activities continue. Charter knows he’s doing it, and

several state AG’s know he’s doing it as well.

In the past, we have successfully resisted the argument

that we are responsible for the conduct of independent

Retailers, however, SSN is a problem because we know

what he is doing and have cautioned him to stop. There

is risk in continuing to give warnings without a follow-

through action. Eventually, someone will try to use that

against us.

On the range of options, you could give him another

written warning, you could put him on probation for a

period of time, you could put him on hold and withhold

money (presumably to cover “potential fines” running

from SSN to us under some agency theory), or you could

terminate him now.

I favor probation, provided that there is unanimous

understanding that if EchoStar becomes aware of ANY

ONE addition (sic) violation, he’s terminated.

PX 120, Email thread, Email from Novak to Ahmed dated

September 26, 2005 at 1:24 p.m., at PX 120-003-004 (emphasis in

original). Novak made this comment in September 2005 in

connection with an initial investigation of a different Prerecorded

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Call. The September 2005 call was made by another Order Entry

Retailer, United Satellite. PX 120, Email Thread with Indiana

Attorney General’s Office dated September 23-30, 2005. However, a

month later, in October 2005, Dish did not follow Novak’s

recommendation when Satellite Systems was again caught making

Prerecorded Calls. Oberbillig orally told Tehranchi to stop using

Prerecorded Calls. Dish did not impose any other consequences.

T 626: 2348-50 (Ahmed); see Oberbillig Deposition, at 78.

On or before September 21, 2006, Dish knew that Satellite

Systems had been fined $25,500.00 for Do-Not-Call law violations.

PX 1086, Email from Ron Dufault of Retail Services dated

September 21, 2006 (at 023 of the collective exhibit).

Dish took

no action against Satellite Systems.

In February 2007, two of Dish’s stings identified Satellite

Systems as violating Do-Not-Call Laws. PX 1086, Email dated

February 7-15, 2007, regarding stings involving consumers Jeffrey

Mitchell and Gregory Fisher (at 016-018 of the collective exhibit).

Dish took no disciplinary action against Satellite Systems.

The email, PX1086 at 023, erroneously stated that North Carolina imposed the $25,500 fine

instead of Florida.

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In September 2009, Dish’s investigation of a consumer

complaint showed Satellite Systems was making Registry Calls.

PX 282, Email thread dated May 10-19, 2009. The complainant,

Dr. Thomas Kraukauer, filed a class action lawsuit against Dish as

a result of these calls. T 618:865-66 (Kraukauer).

In 2010 and 2011, Satellite Systems made 381,811 illegal

Registry calls. Opinion 445, at 133, 232. Satellite Systems also

made 22,946 Internal List Calls to telephone numbers on the

Internal Do-Not-Call Lists of Dish and the Telemarketing Vendors.

Satellite Systems also made 42,990 Internal List Calls to numbers

on the Internal Do-Not-Call Lists of other Order Entry Retailers

compiled by PossibleNOW. PX 28, Taylor November 6, 2013 Report,

at 13-14d Tables 5b and 5c.

By 2011, Dish had developed a standard letter to send out to

consumers complaining about Satellite Systems’ violations of Do-

Not-Call Laws. The Dish legal department referred to the letter as

the “standard go after SSN letter.” PX 199, Email from Dish

litigation paralegal Kimberly Berridge to Dish Corporate Counsel

Brett Kitei dated August 18, 2011. Dish terminated Satellite

Systems Network in 2013. T 625: 2149-50 (Neylon).

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3. Star Satellite

Star Satellite became a TVRO Retailer in March 2003. Walter

Eric Myers (Myers) was in charge of Star Satellite. Myers previously

ran TVRO Retailer called Tenaya Marketing (Tenaya). Tenaya did

door-to-door sales primarily. Dish began penalizing Tenaya for high

churn rates, so Myers arranged for his brother to start Star

Satellite. Deposition of Walter Eric Myers, at 38-40. Myers ran

Star Satellite. Star Satellite stated in its application to Dish that it

planned to use newspapers and direct mail advertising. Star

Satellite did not indicate that it would engage in telemarketing.

DTX 335, Retailer Business Questionnaire dated March 11, 2003.

At some point in time, Dish representatives learned that Star

Satellite was engaged in telemarketing. Dish representatives sent

Myers parts of a script to use in these sales. Dish representatives

wanted Retailers to make all of the required disclosures to

consumers. Myers Deposition, at 42-43. Myers testified that Star

Satellite called telephone numbers from the phone book. Myers

Deposition, at 124.

In May 2004, Star Satellite hired Guardian to make

Prerecorded Calls on its behalf to sell Dish Network programming.

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Guardian started making prerecorded “press 1” telemarketing calls

selling Dish products and services for Star Satellite. Myers used

the name Tenaya in Star Satellite’s dealings with Guardian. Myers

did not tell Dish that Star Satellite used Guardian’s services. Myers

considered marketing methods to be trade secrets that he did not

want to share with any competitor. Myers viewed Dish as a

competitor because Dish had its own internal marketing

department. Myers believed that he could choose the marketing

methods because Star Satellite was a separate business from Dish.

Myers Deposition, at 73, 76-77, 106, 141, 174-80, 182-83.

In 2004, Star Satellite applied to be an Order Entry Retailer.

Myers testified that he basically begged to be approved for the Order

Entry program. Dish personnel asked Myers questions about

proposed marketing methods. Myers represented that Star Satellite

would primarily use direct mail, with some phone sales. Myers

believed telemarketing carried a stigma. He suspected that Dish

did not like telephone sales. Myers did not want scrutiny from Dish

about whether Myers was complying with Do-Not-Call Laws. Myers

Dish cites the deposition of Guardian’s principal Kevin Baker for the proposition that Star

Satellite suspended prerecorded calls periodically when Dish personnel were at Star Satellite’s

offices. See Deposition of Kevin Baker, at 71, 177-78. The testimony is inadmissible hearsay

to prove the truth of Baker’s assertions.

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Deposition, at 92-95. Guardian’s principal Kevin Baker stated that

he told Myers a rumor that Dish did not allow Order Entry Retailers

to make Prerecorded Calls. Deposition of Kevin Baker, at 70.

Myers, however, believed that Dish became aware of the fact that

Star Satellite was using telemarketing. Myers Deposition, at 181.

Star Satellite became an Order Entry Retailer in late 2004 or

early 2005. Star Satellite set up an office and call center in Provo,

Utah. Star Satellite still engaged in door-to-door sales in the Los

Angeles, California area. T 622: 1815 (Mills); Myers Deposition, at

81, 83, 91. Star Satellite only sold Dish Network except for a brief

period of up to three months in 2005 when Star Satellite also sold

DirecTV programming and services. Even when Star Satellite sold

DirecTV, its sales staff offered Dish Network programming first to

customers, and then offered DirecTV if the person was not

interested in Dish Network or for some reason could not purchase

Dish Network. Myers Deposition, at 143-46.

Dish personnel trained Star Satellite staff on how to use the

Order Entry Tool. Dish personnel provided a recommended script

to use for telephone sales. Dish provided detailed disclosures to be

Baker referred to the use of prerecorded calls as autodialing. Baker Deposition, at 70.

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read to customers during telephone sales. Dish representatives

visited Star Satellite’s call center in Provo, Utah, weekly. Michael

Mills went to Star Satellite’s offices a few times. Myers Deposition,

at 87-90, 93-94. Mills worked on Star Satellite scripts to include

disclosures required by Dish. PX 207, Email thread between Mills

and Walter Eric Myers dated November 2-3, 2005.

Star Satellite had Guardian make 400,000 to 600,000 “press-

1” Prerecorded Calls a day. Myers Deposition, at 103-05, 129-30.

Baker testified that Guardian called published numbers “off a CD-

Rom you could buy down at Office Max.” Baker Deposition, at 50.

Star Satellite greatly increased its sales as a result of the

Prerecorded Calls. Myers told Dish personnel, “We’re just doing a

lot of phone sales and we’re having a lot of success.” Myers told

Dish personnel that Star Satellite’s calling lists were scrubbed for

the Registry, but did not give any details on Star Satellite’s

telemarketing. Myers relied on Guardian to scrub the calling lists.

Myers Deposition, at 103-05, 129-30.

Dish personnel learned in the first half of 2005 that Star

Satellite was using Prerecorded Calls. On January 25, 2005, Dish

received a consumer letter complaining that Star Satellite was using

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Prerecorded Calls. PX 203, Letter from Dennis Caplan, dated

January 25, 2007. On February 18, 2005, Dish received another

consumer complaint about Star Satellite Prerecorded Calls.

PX 204, Email from David Hyde to DeFranco and others dated

February 18, 2005. The parties presented no evidence that Dish

took any action on either complaint.

In May 2005, Dish Outbound Manager Bangert told Dish

employee Mark Duffy that an Order Entry Retailer in Provo, Utah,

was using “automated messaging.” Bangert asked Duffy to pass the

information on to Retail Services. PX 205, Email thread between

Bangert and Dish Retail Escalations, dated May 25-27 2005.

Bangert testified that, when he wrote the email, he did not know

that Star Satellite was using Prerecorded Calls. Bangert’s

testimony in this regard was not credible. T 628: 2722-23

(Bangert). The email is unequivocal. Bangert knew an Order Entry

Retailer in Provo, Utah, was making Prerecorded Calls. Star

Satellite was Dish’s Order Entry Retailer in Provo, Utah.

Duffy forwarded Bangert’s email to Jeff Medina in Dish’s Retail

Escalations Department. Medina forwarded the email to Margot

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Williams in Retail Escalations. Medina wrote in his email, “Are

these your boys again?” Williams responded to Medina,

Jeff,

I forwarded this information to Regina Thomas for further

investigation. We have received a few complaints for other

issues on this Retailer that have also been sent to her for

review and assistance.

PX 205, Email thread between Bangert and Dish Retailer

Escalations dated May 25-27 2005. Dish took no disciplinary

action against Star Satellite.

In August 2005, an individual consumer sued Dish and Star

Satellite for Star Satellite’s use of Prerecorded Calls to sell Dish

Network programming. Dish knew of the suit on August 12, 2005.

PX 208, Letter from Dish Counsel Dana Steele to Star Satellite

dated August 12, 2005. Dish took no disciplinary action against

Star Satellite.

From July 30, 2005, to November 22, 2005, Star Satellite

made 43,100,876 completed Abandoned Prerecorded Calls through

Guardian selling Dish Network programming. The Court found at

summary judgment that these calls violated the TSR. Opinion 445,

at 102.

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In October 2005, Ahmed received a complaint from

Congressman Fred Upton of Michigan about Star Satellite calling

numbers on the Registry. Ahmed had a conference call with Star

Satellite’s principal Myers about this complaint. Ahmed was very

upset about receiving a complaint from a Congressman. Ahmed

told Myers not to violate the Do-Not-Call Laws. Ahmed used foul

language and raised his voice at the meeting. According to Myers,

Ahmed told Myers that he would shut Star Satellite down if he

received another complaint like this. T 626: 2323-24 (Ahmed);

T 622: 1818 (Mills); Myers Deposition, at 138. Ahmed followed up

with a letter to Myers. PX 212 (DTX 237), Letter dated October 26,

2005. Dish took no other disciplinary action against Star Satellite.

Myers, however, took Ahmed’s threat seriously. Myers Deposition,

at 184.

Star Satellite stopped using Guardian on November 22, 2005.

Myers Deposition, at 76. Star Satellite stopped because Guardian’s

principal Kevin Baker received a Civil Investigative Demand from

the FTC for telemarketing call records. Myers Deposition, at 148-

49.

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On January 20, 2006, Star Satellite was terminated as Order

Entry Retailer, but remained a TVRO Retailer. T 622: 1820-21

(Mills). However, in September 8, 2006, Dish was notified by

another Order Entry Retailer that Star Satellite was still using

Prerecorded Calls. PX 386, Email thread dated September 8, 2006;

see T 622: 1742 (Mills). Star Satellite remained a TVRO Retailer at

least through February 24, 2014, the date of Myer’s deposition.

Myers Deposition, at 160.

4. JSR Enterprises

In 2006, Jerry Grider, Shaun “Blaze” Gazzara, and Richard

Goodale formed JSR Enterprises to sell Dish Network programming.

The name JSR came from the initial from each man’s first name.

T 622: 12877 (Goodale). Goodale had previously worked for ten

days at Dish Order Entry Retailer United Satellite in southern

California. Gazzara had also worked at United Satellite. T 622:

1874-75 (Goodale). United Satellite used “press 1” Prerecorded

Calls. T 625: 2117 (Neylon); see PX 120, Email Thread with Indiana

Attorney General’s Office dated September 23-30, 2005. Goodale

testified that Dish Representative Doug Tchang knew that United

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Satellite used illegal Prerecorded Calls. T 622: 1870-74 (Goodale).

Dish terminated United Satellite as an Order Entry Retailer on

August 20, 2006, for making Prerecorded Calls. T 625:2117

(Neylon); see PX 239, Email thread between Neylon and Steven

Keller dated September 8, 2006 regarding United Satellite Closed

Doors.

Goodale asked Tchang how he could start his own company.

Tchang referred Goodale to Shawn Portela. Portela formerly worked

for Dish. Portela operated two Order Entry Retailers, Dish Nation

and Cactus Concepts.

Tchang told Goodale to set up a call center

and work through one of Portela’s companies. Goodale and his

partners set up JSR and started working through Portela’s company

Dish Nation. T 622: 1870-76 (Goodale); PX 239, September 2006

Spreadsheet..

On August 10, 2006, Dish authorized JSR to be an Order

Entry Retailer. PX 1044, Letter from Mike Oberbillig to Jerry Grider

Based on Goodale’s testimony, Tchang was either an Account Manager or a Field

Representative. Doug Tchang’s last name is spelled “Chang” in the trial transcript. See e.g., T

622: 1875 (Goodale). The United States spelled the name “Tchang” in its proposed Findings of

Facts and Conclusions of Law. See e.g., United States Amended Proposed Findings of Fact (d/e

667), at 53. No witness testified about the correct spelling. The Court adopts the United

States’ spelling.

Goodale testified that Portela’s companies were called Dish Nation and Cactus Satellite. T

622: 1875-76 (Goodale). Cactus Concepts was the correct name. See e.g., PX 653, Email

thread regarding Cactus Concepts dated October 26, 2007.

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dated August 10, 2006. JSR’s written application stated that JSR

would use print, telemarketing, and direct mail. PX 235, JSR

Business Plan dated February 9, 2006. Goodale, however, told

Mills that JSR was going to engage in outbound telemarketing.

T 622: 1746 (Mills); PX 265, Email from Mills to Neylon dated

December 21, 2006; T 622: 1881 (Goodale).

Mills, Oberbillig, Portela, and Tchang came to JSR’s offices

when it became an Order Entry Retailer. Goodale testified that

Mills, Oberbillig, and Tchang all knew that JSR was going to use

“press 1” Prerecorded Calls. Goodale testified that Mills and

Oberbillig told him not to use the name of Dish Network in the

prerecorded message. T 622: 1883 (Goodale). Mills admitted that

Goodale told him JSR used outbound telemarketing. T 622: 12746

(Mills).

Once JSR became an Order Entry Retailer, JSR purchased

fifteen more autodialers. JSR had over 1,500 phone lines making

prerecorded “press 1” telemarketing calls fifteen hours a day.

T 622:1882 (Goodale). By September 2006, Dish knew JSR was

using automatic dialers to produce 1,000,000 connected calls per

month, and knew that JSR “brought along an ex-employee of

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United Satellite who has great experience in OE Tool program.”

Dish also knew that JSR worked “under Dish Nation’s umbrella”

before it became an Order Entry Retailer. T 622: 1748-50 (Mills);

PX 239, September 2006 Spreadsheet. JSR was making somewhere

between 2,500,000 to 10,000,000 calls per month to get 1,000,000

connected calls. See T 622: 1892 (Goodale) (Goodale estimated four

out of ten calls were answered by a live person.); T 633: 3342

(Taylor) (Dish’s expert Taylor opined that in his experience one in

ten telemarketing calls are answered).

Based on all the evidence, the Court finds that Dish

Representatives Tchang, Mills, and Oberbillig knew that JSR was

using automatic dialers to make “press 1” prerecorded

telemarketing calls. Dish knew from the high volume of connected

calls that JSR was using automatic dialers to make outbound

telemarketing calls. Numerous Dish Order Entry Retailers in

Southern California used Prerecorded Calls, including United

Satellite, Vision Satellite, LA Activations, Dish Nation, and Atlas

Assets. T 625:2110, 2170-71 (Neylon); T 620:2110 (Musso);

T 621:1693-95 and T 622:1728-29 (Mills); PX 1299, Letter from

attorney Chad Austin to Dish Senior Corporate Counsel Dana

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Steele dated March 27, 2007; PX 1298, Letter from North Dakota

Assistant Attorney General James Thomas to Echostar and Dish

Nation LLC dated June 25, 2007, with enclosed North Dakota ex

rel. Stenehjem v. Creative Concepts Group, Inc., N.D. Dist. Ct.,

South Central Judicial Dist., Civ. No. 07C1307, Assurance of

Voluntary Compliance Order entered June 21, 2007. Tchang was a

Dish sales representative in the area, and Oberbillig was the

Regional Sales Manager. Tchang was responsible for knowing what

was going on in their region. Tchang also had an incentive to allow

the practice because his compensation was tied to the activations

that these Order Entry Retailers produced. Goodale testified that

Tchang knew what was going on at United Satellite. Tchang told

Goodale how to start his own shop. Goodale testified that Tchang,

Mills, and Oberbillig knew JSR was making “press 1” Prerecorded

Calls. The Court finds this aspect of Goodale’s testimony to be

credible. These Dish representatives knew from the start that JSR

planned to violate the Do-Not-Call Laws by using “press 1”

Prerecorded Calls. Further, their knowledge of JSR’s telemarketing

practices was gained within the scope of their employment with

Dish. Further, Mills and Oberbillig at least had managerial

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authority for Dish when they knew and allowed JSR to engage in

illegal Prerecorded Calls. Testimony to the contrary by Mills and

Oberbillig was not credible.

JSR’s calling lists consisted of all published residential

numbers in a selected geographical region. JSR secured copies of

white pages in electronic format. JSR used call centers in the

Philippines (“off-shore calling”) and an automatic dialing facility in

Texas to make “press 1” Prerecorded Calls. Goodale at one point

testified that he knew JSR was calling numbers on the Registry.

T 622: 1879-80, 1887 (Goodale). Goodale later stated that he

scrubbed the lists for numbers on the Registry, but his business

partners may not have done so. T 622:1906, 1907-08 (Goodale).

The Court finds that JSR did not scrub at least some calling lists,

and so, made Registry Calls. Goodale further knew that JSR was

making Registry Calls and that Registry Calls were illegal.

From September through December 2006, Dish received

several consumer complaints that JSR made Prerecorded Calls and

Registry Calls. Dish also caught JSR five to seven times in stings

violating Do-Not-Call Laws, including Registry Calls. Each time, the

Dish Compliance Department or Legal Department notified JSR of

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the complaint. T 619: 991(Werner); PX 510, Letter to Jerry Grider

dated October 6, 2006; PX 247, Memorandum from Wallace to Dish

demanding payment for TCPA violations dated October 19, 2006;

PX 513 Letter dated October 31, 2006, from Origer to JSR; PX 248

Email to Metzger dated November 15, 2006; PX 420 Musso letter to

JSR about consumer complaint, dated December 11, 2006; PX 250

Email from Musso to Goodale requesting information on the

complaint dated December 20, 2006; PX 420, Letter to JSR dated

December 11, 2006.

Goodale, on behalf of JSR, provided an explanation for each

complaint to Dish’s Compliance Department or Legal Department.

PX 420, Email from Goodale to Dana Steele dated September 28,

2006; DTX 737, Letter from Goodale to Musso, undated; DTX 750,

Email from JSR to Musso dated November 6, 2011; DTX 753, Letter

from Goodale to Musso, undated. Dish generally did not investigate

further after receiving JSR’s explanations. T 625: 2117 (Neylon);

see e.g., T 620: 1388 (Musso) (JSR explanation was plausible so

Dish accepted it on face value).

Goodale testified that he told Musso in the Compliance

Department what she wanted to hear without regard to its

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accuracy. He did not consider her to be of any importance at Dish.

T 622: 1906-07 (Goodale). Goodale later said that he gave accurate

explanations to Musso. T 622: 1912-13 (Goodale). Regardless,

Tchang, Mills, and Oberbillig knew that JSR was violating the Do-

Not-Call Laws through the use of Prerecorded Calls.

Goodale’s explanations to Musso sometimes admitted

violations of the Do-Not-Call laws. Goodale sometimes blamed an

off-shore affiliate, and sometimes admitted that JSR made an illegal

call by mistake. Musso knew that using unauthorized affiliates

violated the Retailer Agreement, and also knew that some of

Goodale’s explanations effectively admitted Do-Not-Call Law

violations. On December 21, 2006 Neylon, Mills, and Musso

exchanged a series of emails discussing JSR’s unauthorized use of

off-shore affiliates that were making illegal calls. Neylon asked a

series of questions:

What is his volume? Why would I not just

terminate? Where is he located? I assume he was made

aware when launched on the OE tool that violations of

the telemarketing laws of the United States will not be

tolerated????

Mills responded that JSR was producing 1,500 to 2,000 activations

per month. Mills also stated that JSR had stopped off-shore calling.

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Mills recommended against termination. PX 265, Email thread

between Mills, Neylon, and Musso dated December 21, 2006.

Musso stated that Goodale told her that JSR stopped using the

offshore calling center and would just use people in his office.

PX 255 and PX 1135, Email thread between Musso and Neylon

dated December 21, 2006; see PX 253, email between From Mills to

Musso dated December 20, 2006 (Goodale told Musso that JSR was

deactivating off-shore affiliates’ logins to Order Entry Tool). Dish

took no action against JSR in December 2006.

In January 2007, the Louisiana Attorney General’s office

contacted Dish about repeated telemarketing calls to an individual

who had already asked to be put on the telemarketer’s Internal Do-

Not-Call List. The individual reported that the telemarketer hung

up when she asked to be put an Internal Do-Not-Call List and

called back repeatedly. Musso researched the complaint and

determined that JSR had made the calls. Musso provided JSR

contact information to the Louisiana Attorney General’s office.

T 620:1404 (Musso). See PX 1113, Transmittal email from Musso

to JSR re Louisiana AG complaint dated January 17, 2007.

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On January 17, 2007, Musso sent letter to JSR with list of five

consumer complaints for Do-Not-Call Law violation. PX 420, Letter

dated January 17, 2007, at exhibit page 015. On January 22,

2007, Goodale responded. Goodale said two of the five were not on

the Registry. Goodale said two of the other three calls were from

affiliates and the fifth was a mistake. PX 256 letter from Goodale to

Musso dated January 22, 2007. Musso thought there was reason

to be cautious. T 620: 1406-08 (Musso); see DTX 756, Copy of PX

256 letter from Goodale to Musso with Musso’s typed comments.

Dish took no action against JSR in January 2007.

February 8, 2007, Musso sent an email to her superiors which

included a copy of a Missouri Attorney General press release. The

press release announced that on December 7, 2006, a Missouri

court issued a temporary restraining order (TRO) against JSR and

other Dish Retailers. Upon receiving the email, Neylon directed that

JSR be terminated. Neylon also wanted to publicize the termination

to other Retailers to put them on notice. T 625: 2096-97 (Neylon);

T 619: 1129 (Werner); PX 1083, Email thread between Musso,

Neylon, and Robb Origer dated February 8, 2007.

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JSR was terminated as an Order Entry Retailer on February

14, 2007. DTX 139, Retailer Audit Notification & Summary dated

February 14, 2007. The Retailer Audit Notification & Summary

stated that JSR was terminated due to TCPA violations. Dish’s

press release stated that Dish terminated JSR for Do-Not-Call

violations. DTX 674, Press release dated February 14, 2007.

After February 14, 2007, JSR continued to sell Dish Network

programming through another Order Entry Retailer. Goodale did

not identify the Order Entry Retailer that JSR worked through at

this time. JSR quit operating in March 2007 when it stopped

getting paid, either by Dish or the Order Entry Retailer through

whom JSR worked. T 622: 1894 (Goodale).

From August 2006 through March 2007, JSR made 1,186,924

Internal List Calls to persons who were on Internal Do-Not-Call

Lists of either Dish or a Telemarketing Vendor. Prior to August 10,

2006, JSR placed some of these calls as an affiliate of Dish Nation.

PX 28, Taylor November 6, 2013 Report, at 14, Table 6b; PX 239,

September 2006 Spreadsheet.

The press release also stated that United Satellite was terminated for Do-Not-Call Law

violations. That termination had occurred in August 2006.

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From July to December 2006, JSR made 2,349,031 Registry

Calls that the Court found violated TSR at summary judgment.

Opinion 445, at 171, 232, 75 F.Supp.3d at 1011, 1032. Of these

Registry Calls, JSR made:

369,384 calls to telephone numbers with area codes

associated with Plaintiff Illinois (Illinois area codes);

129,004 calls to telephone numbers with area codes

associated with Plaintiff Ohio (Ohio area codes);

18,240 calls to telephone numbers with area codes associated

with Plaintiff North Carolina (North Carolina area codes); and

473,102 calls to telephone numbers with area codes

associated with Plaintiff California (California area codes).

JSR made some of these calls through Dish Nation prior to

becoming an Order Entry Retailer on August 10, 2006. PX 28,

Taylor November 6, 2013 Report, at 14 Table 6a; T 622: 1894

(Goodale).

From January to March 2007, JSR made 3,315,242 Registry

Calls. Of these calls, JSR made:

557,336 calls to Illinois area codes;

338,352 calls to Ohio area codes;

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4,936 calls to North Carolina area codes; and

50 calls to California area codes.

JSR made at least some of these calls after February 14, 2007,

through an unidentified Order Entry Retailer. PX 28, Taylor

November 6, 2013 Report, at 14 Table 6a; T 622: 1894 (Goodale).

5. American Satellite

In September 2006, American Satellite made a Prerecorded

Call to consumer Robert Parker at his residence on his home

telephone. Parker answered the call while participating in a Dish

sting operation. The sting identified American Satellite as the

telemarketer making the call. The Court found at summary

judgment that when Parker answered the call, the call became an

Abandoned Prerecorded Call in violation of the TSR. Opinion 445,

at 107, 194, 233, 75 F.Supp.3d at 989, 1019, 1033.

In February 2007, Dish fined American Satellite $10,000 for

Do-Not-Call Law violations. T 620: 1409-11 (Musso); DTX 825,

Email from Musso to Neylon, Origer, Werner, and Mills Dated

February 9, 2007. American Satellite blamed the violations on

affiliates. American Satellite promised to terminate all affiliates and

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handle all telemarketing in-house. DTX 825, Email from Tim Pyle

to Musso dated February 20, 2007.

In 2008, Manuel Castillo was a Dish Field Representative who

visited American Satellite on behalf of Dish. At that time, Castillo

left Dish to work for American Satellite. Castillo worked at

American Satellite for less than a year. Castillo discovered that

American Satellite was using a Philippine call center to make “press

1” Prerecorded Calls. T 620: 1328-29 (Castillo).

Castillo discovered that American Satellite also defrauded Dish

in various ways. Dish required a consumer to have a credit card in

order to qualify for Dish Network programming. American Satellite

circumvented this requirement to make sales to individuals who did

not have credit cards. American Satellite put $1.00 on prepaid

debit cards. If a customer did not have a credit card, American

Satellite sales personnel uploaded the numbers on one of the debit

cards onto the Order Entry Tool, misrepresenting the numbers as

the credit card number of a new customer. T 602: 1331 (Castillo).

Sometime in late 2008, American Satellite fired Castillo.

Within a day or two of being fired, Castillo told Musso about

American Satellite’s fraudulent and illegal practices. Musso

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referred Castillo to a Dish internal auditor Bert Eichhorn. Castillo

told Eichhorn that American Satellite was making Prerecorded Calls

and making a massive number of calls to numbers on the Registry.

Eichhorn, however, was not interested in Castillo’s information

about Do-Not-Call Law violations. He was interested in evidence

that American Satellite was defrauding Dish. T 620: 1334-42, 1357

(Castillo); PX 222, Email thread between Castillo and Eichhorn

dated January 7, 2009. Castillo provided Dish with this

information because he wanted to go back to work for Dish. Dish

did not rehire Castillo, and eventually Castillo stopped providing

information to Dish. T 620:1345-50 (Castillo).

Castillo testified that when he visited American Satellite as a

Dish Field Representative he did not see anything to indicate that

American Satellite was engaged in illegal telemarketing. T 620:

1332-34 (Castillo). Once he went to work for American Satellite, he

discovered that American Satellite hid its activities from Dish

representatives. As he put it, American Satellite put on a show for

Dish representatives. T 620: 1334 (Castillo). Castillo testified that

American Satellite went so far as to send Dish fake recorded sales

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calls for the Quality Assurance program. T 620: 1328-36, 1360-61

(Castillo).

6. Dish Nation

Dish Nation was an Order Entry Retailer operated by a former

Dish employee Shawn Portela. The Plaintiffs take the position that

Dish caused both JSR and Dish Nation to make all of the calls

reflected in JSR’s telephone records. However, the evidence does

not support this position. From July 2006 through August 10,

2006, JSR ran its telemarketing calls through Dish Nation.

Thereafter, JSR operated as a separate Order Entry Retailer until

Dish terminated it on February 14, 2007. After February 14, 2007,

JSR continued to operate through another Order Entry Retailer

until sometime in March 2007. JSR stopped because it was not

getting paid.

The evidence also shows that Dish Nation made Abandoned

Prerecorded Calls in 2007. PX 1299, Letter from attorney Chad

Austin to Dish Senior Corporate Counsel Dana Steele dated March

27, 2007; PX 1298, Letter from North Dakota Assistant Attorney

General James Thomas to Echostar and Dish Nation LLC dated

June 25, 2007, with enclosed North Dakota ex rel. Stenehjem v.

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Creative Concepts Group, Inc., N.D. Dist. Ct., South Central

Judicial Dist., Civ. No. 07C1307, Assurance of Voluntary

Compliance Order entered June 21, 2007.

Plaintiffs, however, have not presented any evidence of that

JSR made calls after February 14, 2007 through Dish Nation. The

evidence only supports a finding that JSR made calls through Dish

Nation from July 2006 until August 10, 2006. The evidence does

not show that Dish Nation had any connection with the calls that

JSR made after it became an Order Entry Retailer on August 10,

2006.

The evidence supports a finding that Dish allowed Dish Nation

to use third party affiliates in 2006. Tchang knew that Dish Nation

used affiliates. He told Goodale to operate JSR through one of

Portela’s Order Entry Retailers. The September 2006 Spreadsheet

listed JSR and a company called Direct Promotions as Dish Nation

affiliates. The September 2006 Spreadsheet said JSR worked under

Dish “Nation’s umbrella,” and Direct Promotions was part of “Dish

Nation’s affiliate program.” PX 239, September 2006 Spreadsheet.

Dish had not formally approved JSR as a Dish Nation affiliate, yet

the Dish Sales Department knew that JSR was a third-party

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affiliate of Dish Nation and allowed the practice. In addition,

Musso told Neylon on December 21, 2006, that Dish Nation was

using an off-shore call center in the Philippines. PX 1135, Email

thread between Musso and Neylon dated December 21, 2006.

IV. Telemarketing Calling Records

The Plaintiffs presented the following telephone call records:

(1) calls made by Dish from October 2003 through August 2007

(2003-2007 Calling Records), and from September 2007 through

March 10, 2010 (2007-2010 Calling Records); (2) calls made by

Guardian on behalf of Star Satellite and Dish TV Now; (3) calls

made by JSR through JSR’ automatic dialing operation in Texas,

and (4) calls made by Satellite Systems. See PX 745-60, 772-74,

776-77, 779-89, 791-805, 807-14, 817, 820-21, 824, 826, 828,

831-85, 890-902, 914-47, Calling Records.

The Court entered

partial summary judgment in favor of the Plaintiff United States

finding liability for violations of the TSR on some calls listed in most

of these calling records. The Court further made findings at

summary judgment regarding the Plaintiff States’ claims, but did

not enter judgment on those claims. Opinion 445, at 231-38. The

Some of the calls on Dish’s calling records could have been made by Telemarketing Vendor

EPLDT because it made calls through Dish’s automatic dialer.

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Plaintiffs did not seek summary judgment on any of the calls in the

2003-2007 Calling Records. The Plaintiffs now seek to prove Dish’s

liability for the 2003-2007 Calling Records and for additional calls

in the other records. The Court makes the following findings of fact

regarding these call records.

A. 2003-2007 Calling Records

In July 2005, the FTC sent Dish a Civil Investigative Demand

(FTC Demand). The FTC Demand sought information regarding

possible violations of the TSR and the FTC Act. In 2005, Dish was

still known as EchoStar. The FTC Demand asked for the following

call records:

1. Magnetically recorded documents sufficient to show all

telemarketing calls to consumers made by EchoStar

relating to the marketing of Dish Network. These

documents should include the telephone numbers,

and the dates of the calls;

PX 1131, FTC Demand dated July 21, 2005, at 6.

In response to the FTC Demand, Dish provided the 2003-2007

Calling Records, consisting of records of calls made from October

2003 through September 2005, December 2005 through December

2006, and January 2007 through August 2007. The cover letter

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accompanying the production for the October 2003 through

September 2005 records stated, in part,

Per our prior conversation, please find enclosed the

following in response to the CID . . . .

1. 1 DVD with listing of all outbound telemarketing

calls made on behalf of EchoStar From October 17,

2003 through December 31,2004*

(CONFIDENTIAL);

. . . .

*A second DVD with the listing of calls from January 1,

2005 to the date of the CID request was damaged during

copying and will be forwarded to you upon its

completion.

PX 317, Letter dated September 22, 2005, from Dana E. Steele,

Corporate Counsel, to Russell Deitch, Esq., FTC Counsel (emphasis

in the original).

The Court finds that the transmittal letter from Dish in-house

counsel Steele constitutes an admission by Dish that the 2003-

2007 calling records produced were records of Dish’s outbound

telemarketing calls. Steele stated in her letter that the records

Dish’s Vice President and Associate General Counsel Jeffrey Blum wrote the other two

transmittal letters. Blum stated in the second transmittal letter, “[E]nclosed find nine (9) CD-

Rom’s (sic) containing EchoStar Call Data” from December, 2005 through December, 2006.”

Blum stated in the third transmittal letter, “[E]nclosed find six (6) CDRom’s (sic) containing

EchoStar Call Data from January, 2007 through August, 2007.” Plaintiffs’ Third Motion to

Compel Discover Responses (d/e 143, Exhibits 22 and 23, Letters from Jeffrey Blum to Russell

Deitch dated August 1, 2007, and September 10, 2007. Attorney Blum’s letters do not appear

to be admitted as evidence at trial, and no party cited them. The Court does not consider them

for purposes of this Findings of Fact and Conclusions of Law. Blum’s letters would not change

the Court’s findings or conclusions even if they were considered.

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provided with her letter were records of telemarketing calls. Steele

was an agent of Dish at the time she made the statement, and the

statement was within the scope of her agency. The transmittal

letter, therefore, constitutes a non-hearsay admission of Dish that

the 2003-2007 Calling Records were records of outbound

telemarketing calls. Fed. R. Evid. 801(d)(2)(D).

Furthermore, the FTC Demand asked for records of

“telemarketing calls made by EchoStar relating to the marketing of

Dish Network.” Dish responded by producing the 2003-2007

Calling Records. Dish’s response implies that the records produced

were records of telemarketing calls made by Dish (then known as

EchoStar) “relating to the marketing of Dish Network.” PX 1131,

FTC Demand, at 6.

Dish argues that the 2003-2007 Calling Records contained

records of non-telemarketing calls. Dish relies on employee

Bangert’s testimony that he doubted that the 2003-2007 Calling

Records were all records of telemarketing calls. T 628: 2715-18

(Bangert). Dish also relies on the evidence that the 2007-2010

Calling Records produced in discovery in this case included both

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telemarketing and non-telemarketing calls. The 2007-2010 Calling

Records are discussed in detail below.

Bangert’s speculation regarding the make-up of the 2003-2007

Calling Records has no probative value. Bangert had no personal

knowledge of the content of the 2003-2007 Calling Records.

Additionally, Bangert did not participate in preparing the response

to the FTC Demand. T 628: 2715-18, 2792-94 (Bangert).

The existence of non-telemarketing calls in the 2007-2010

Calling Records may tend to show the 2003-2007 Calling Records

may have included non-telemarketing calls. However, the probative

value is slight. The two sets of records were produced at different

times in response to different document demands. The 2007-2010

Calling Records also included campaign codes. The campaign

codes indicated the purpose of the calls made during the particular

campaign, such as telemarketing, collection, payment notice,

scheduling, etc. See PX 26, Taylor September 20, 2012 Report, at

6. The 2003-2007 Calling Records did not contain campaign codes.

See T 613: 219 (Yoeli); see e.g., PX 859 through 861, July 2006

Dish Calling Record. The 2003-2007 Calling Records, therefore, do

not indicate that the records included multiple types of calls.

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Dish’s expert Taylor stated that he was told by Dish personnel

that the 2003-2007 Calling Records included both inbound and

outbound telemarketing call records. PX 28, Taylor November 6,

2013 Report, at 7-9. Taylor’s recitation of this information is

inadmissible hearsay. Taylor may use hearsay as a basis of his

opinions under the correct circumstances, but Dish must present

competent evidence to prove the truth of the assertion. Fed. R.

Evid. 703, 802. Dish has not done so.

In light of the fact that the FTC Demand asked for outbound

telemarketing records, Dish attorney Steele stated that the records

she sent were records of telemarketing calls, and only minimal

competent admissible evidence exists to the contrary, the Court

finds that it is more likely than not that the 2003-2007 Calling

Records were records of outbound telemarketing calls made by Dish

or its Telemarketing Vendors.

The FTC sent the 2003-2007 Calling Records to InterImage,

Inc. (InterImage), for processing. InterImage compared each calling

record on 2003-2007 Calling Records that had a valid telephone

number with the telephone numbers that had been on the Registry

for at least 31 days at the date of the call. T 615: 497-500 (L.

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Steele).

InterImage referred to each match of a telephone number

on the 2003-2007 Calling Records with a number on the Registry as

a “Hit” or “Registry Hit.” T 615: 497 (L. Steele). InterImage’s

comparison of the 2003-2007 Calling Records with the Registry

showed the following:

Total Calls Hits

In Record

October 17, 2003 –

March 31, 2004 30,328,309 4,770,433

January 3 – May 31, 2005 61,295,734 12,533,684

June 1 – 30, 2005 18,140,971 2,784,629

July 1 – 31, 2005 18,398,923 2,575,019

August 1 –

September 18, 2005 30,328,309 4,000,815

December 1, 2005 –

January 31, 2006 31,420,403 6,916,143

February 1 – 28, 2006 14,477,981 3,375,472

March 1 – April 30, 2006 32,178,915 4,641,828

May 1 – June 30, 2006 31,368,431 7,586,596

July 1 – August 15, 2006 20,836,297 5,080,115

The trial witness Leslie Steele was CEO of InterImage. Dana Steele was a Corporate Counsel

for Dish.

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August 16 –

September 30, 2006 20,238,913 4,710,270

October 1 – 31, 2006 18,389,496 3,624,432

November 1– 30, 2006 19,597,026 3,712,816

December 1– 30, 2006 17,462,891 3,002,123

January 2 –

February 28, 2007 24,388,302 2,994,525

March 1 – April 30, 2007 26,170,553 4,046,178

May 1 – 31, 2007 15,968,120 3,389,113

June 1 – 30, 2007 18,669,378 4,938,258

July 1 – 31, 2007 17,823,512 4,627,426

August 1 – 31, 2007 20,452,928 5,494,133

Totals 501,513,302 94,804,008

T 615: 501-16 (L. Steele); PX 1417, Summary Chart of InterImage

Results. InterImage did not perform any further analysis of the

94,804,008 Registry Hits.

The InterImage Hits files (Hits Files) from the 2003-2007

Calling Records included at least some duplicate entries in which

the same call was included two or more times. See T 615: 542 (L.

Steele); PX 772, June 2005 Hits File. The June 2005 Hits File

contained both the dates and times of the calls. The June 2005

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Hits File showed duplicate entries of the same call on the same date

and time.

Most of the InterImage Hits Files from the 2003-2007 Calling

Records only identified the dates of calls, but not the times of calls.

See e.g., PX 792, February 2006 Hits Files; see also T 613:225-26,

264-65 (Yoeli). As a result, the Hits Files frequently listed multiple

calls to the same number on the same date. The 2003-2007 Calling

Records produced by Dish contained both the dates and the times

of the calls. See e.g., PX 859 through 861, July 2006 Dish Calling

Record.

The parties’ experts Dr. Yoeli and John Taylor analyzed the

Dish calling records for the period. Plaintiffs’ expert Dr. Yoeli

analyzed the InterImage Hits Files from the 2003-2007 Calling

Records. Again, most of the Hits Files provided only the dates of

the calls, but not the specific times of the calls. Dr. Yoeli decided to

count all calls to the same number on the same date as one call.

T 613:225-26, 264-65 (Yoeli). Dr. Yoeli found that 3,022,355 such

calls were both Registry Calls and Internal List Calls made to

persons whose telephone numbers were on both the Registry and

Dish’s Internal Do-Not-Call Lists at the times of the call. PX 38,

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Appendix C, Yoeli December 14, 2012 Report, at PX38-112. Dr.

Yoeli did not opine on the number of Registry Calls alone even if the

numbers were not on an Internal Do-Not-Call List. Dr. Yoeli did not

make any comparison of the Hits Files with the Dish 2003-2007

Calling Records to attempt to identify the specific times of the calls

on the Hits Files.

The Plaintiffs did not rely on Dr. Yoeli’s opinions with respect

to the 2003-2007 Calling Records to prove their claims at trial. See

State Plaintiffs’ Additional Post-Trial Proposed Findings of Fact, at

8-9 ¶¶ 73-80 (Plaintiff States relying on Taylor); United States

Amended Proposed Findings of Fact (d/e 667), at 5-7 ¶ 16 (Plaintiff

United States relying on Leslie Steele’s InterImage analysis). Dish

inquired on cross-examination of Dr. Yoeli regarding his opinions of

the United States’ claims based on the 2003-2007 Calling Records

and cited to his opinions in Dish’s proposed Findings of Fact. See

T 614: 376-77 (Yoeli); Dish Proposed Findings of Fact (d/e 665), at

76 ¶ 276.

Dish’s counsel provided its expert Taylor with 581,401,271

calling records from October 17, 2003, to August 31, 2007. Dish

provided 501,513,302 calling records to the FTC from this period

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pursuant to the FTC Demand, which made up the 2003-2007

Calling Records. Taylor removed duplicate entries (“de-duplicated”)

from the records provided to him. Taylor also removed records with

invalid telephone numbers. Taylor eliminated 378,147 calls

because the disposition codes indicated calls did not go through

due to dialer errors. Taylor eliminated 231,966 calls because he

was told that the disposition codes indicated that the calls were

inbound telemarketing calls. Taylor eliminated 30,017 calls

because the disposition codes indicated that the calls were non-

telemarketing calls such as calls for collections or scheduling

service. PX 28, Taylor November 6, 2013 Report, at 7-9.

Taylor opined that the remaining 3,220,602 remaining calls

were made to persons whose telephone numbers were on the

Registry more than 31 days at the time of the call. Taylor opined

that of that number, the following calls were made to telephone

numbers with area codes associated with the Plaintiff States:

 327,986 calls to California area codes, of which 93,986

were made in 2006 and 172,930 were made in 2007,

for a total of 266,514 in 2006 and 2007;

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 141,620 calls to Illinois area codes, of which 39,459

were made in 2006 and 73,310 were made in 2007, for

a total of 112,769 in 2006 and 2007;

 101,500 calls to North Carolina area codes, of which

25,169 were made in 2006 and 59,924 were made in

2007, for a total of 85,093 in 2006 and 2007; and

 121,853 calls to Ohio area codes, of which 32,223

were made in 2006 and 65,984 were made in 2007, for

a total of 98,207 calls in 2006 and 2007.

PX 28, Taylor November 6, 2013 Report, at 9. The Court finds

Taylor analysis of 2003-2007 calls to be probative of the number of

Registry calls Dish made from October 2003 thourgh August 2007.

No party presented any evidence regarding whether Dish had

either a Transaction-based or Inquiry-based Established Business

Relationship with any of the recipients of any of the calls in either

the 2003-2007 Calling Records produced to the FTC or the

581,401,271 calling records provided to Taylor.

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B. 2007-2010 Calling Records

1. Calls to Numbers on the Registry

Dish produced the 2007-2010 Calling Records in discovery.

The 2007-2010 Calling Records included campaign codes with each

calling record. The campaign codes indicated the type of calling

campaign. Dish representatives and the Plaintiffs’ expert Dr. Yoeli

worked together to identify the telemarketing campaign codes in the

2007-2010 Calling Records. Dish also provided Dr. Yoeli with the

last payment date, if any, associated with each calling record, and

the activation date, if any, associated with each calling record. See

PX 1418, Yoeli July 19, 2012 Report, at 3-4.

Dr. Yoeli analyzed the 2007-2010 Calling Records to identify

the Registry Calls. Dr. Yoeli received the records in two sets, one

with 357,058,136 call records and a second with 76,026,757 call

records. Dr. Yoeli combined the two sets and removed any

duplicates that were on both lists. Dr. Yoeli also removed any

records with invalid telephone numbers. Dr. Yoeli then identified

the call records that were on calling campaigns with telemarketing

campaign codes. This process resulted in 134,295,177 call records

with telemarketing calling campaign codes. Dr. Yoeli’s report stated

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that he included campaigns with telemarketing or unknown

campaign codes. T 613: 163-65 (Yoeli); PX 1418, Yoeli July 19,

2012 Report, at 8; see T 614: 330-31, 334-35 (Yoeli). Dr. Yoeli

testified at trial that the report was in error. He only included

records on campaigns with telemarketing campaign codes. T 614:

442-43, 472 (Yoeli). The Court finds Dr. Yoeli’s testimony on this

point to be credible.

Dr. Yoeli sent the 134,295,177 call records to InterImage to

find the total number of Registry Hits. Dr. Yoeli removed the

duplicate records in the Registry Hits provided by InterImage. The

result was 32.4 million Hits. Dr. Yoeli removed calls made to

telephone numbers associated with accounts on which payments

were made within 558 days immediately preceding the dates of the

calls. The 558 day period is 18 times 31 days, representing the 18

month period in which a seller has a Transaction-based Established

Business Relationship with a customer. TSR, 16 C.F.R. § 310.2(o);

FCC Rule, 47 C.F.R. § 64.1200(f)(5). Dr. Yoeli also removed calls

with no payment records, but with activation dates within 93 days

immediately preceding the dates of the calls. The 93 days is three

times 31 days, representing the three-month period in which a

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seller has an Inquiry-based Established Business Relationship with

a person who made an inquiry about the seller’s goods and services.

Id. Dr. Yoeli opined as a result that the 2007-2010 Calling Records

contained 3,342,415 telemarketing Registry Calls to persons with

whom Dish did not have either Transaction-based or Inquiry-based

Established Business Relationships (Yoeli July 2012 Call Set). PX

1418, July 19, 2012 Yoeli Report, at 7-10; T 613: 166-71 (Yoeli).

Dish representatives told Dr. Yoeli to use the activation date

as an inquiry date. T 614: 330-31, 334-35 (Yoeli). Montano denies

this. T 269: 3052-53 (Montano). The Court credits Dr. Yoeli’s

testimony on this point. Montano’s testimony has not been credible

on Dish’s use of inquiry dates. Montano testified that Dish put

inquiry dates in the last payment field in its new procedures

adopted in 2010 for scrubbing for Established Business

Relationship. T 629: 3015-16 (Montano). This testimony was not

credible for the reasons discussed above. Based on the demeanor

of the two witnesses and the fact that Montano provided testimony

on a related matter that was not credible, the Court credits Dr.

Yoeli’s testimony in this regard.

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Dish’s expert John Taylor prepared a rebuttal report to Dr.

Yoeli’s analysis. PX 26, Revised Expert Report of John Taylor,

dated September 20, 2012 (Taylor September 12, 2012 Report).

Taylor examined the results of Dr. Yoeli’s analysis. Taylor opined

that certain calls did not violate the TSR or the FCC Rule. Taylor

“eliminated” or subtracted those calls from the total violations

found by Dr. Yoeli.

Taylor first looked at disposition codes for calls. Taylor opined

that certain disposition codes indicated that calls did not violate the

Do-Not-Call Laws:

 309,931 calls with disposition codes that indicated that

the calls did not go through to ring the recipients’ phones

(such as busy, no dial tone, etc.) (referred to by Taylor as

dialer errors);

 42,716 calls with disposition codes that indicated that

the recipients were businesses or that the call was made

for non-telemarketing purposes, such as payment

reminders; and

Taylor is employed by CompliancePoint, a wholly owned subsidiary of PossibleNOW.

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 12,561 calls with disposition codes of wrong number or

no English, indicating that the call recipients did not

speak English.

PX 26, Taylor September 20, 2012 Report, at 2-8. Taylor eliminated

these types of calls on the instructions of Dish’s attorneys. T 633:

3292 (Taylor).

Taylor also eliminated 62,679 calls in which the campaign

code indicated that the calls were non-telemarketing calls, such as

scheduling or confirming work orders. PX 26, Taylor September 20,

2012 Report, at 2-8.

Taylor then eliminated 1,265,359 calls in which the campaign

codes indicated that the calls were made to current customers.

Taylor stated that these calling records were associated with valid

Dish account numbers and did not have disconnect dates. Taylor

opined that Dish had a Transaction-based Established Business

Relationship with the call recipients. Taylor did not use the last

payment data that Dish provided to Dr. Yoeli because Taylor

reviewed the data and found it to be unreliable. Taylor stated that

campaign codes were not the preferred way to calculate

Transaction-based Established Business Relationships, but that

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was all he had. T 633: 3297-98 (Taylor); PX 26, Taylor September

20, 2012 Report, at 2-8.

Taylor eliminated 873,551 calls on Lead Tracking Systems

calling campaigns. Taylor was informed that the Lead Tracking

System contained telephone numbers of people who inquired of

information regarding Dish Network programming and that Dish

placed these calls within a day or two of each inquiry. Dish did not

provide specific dates of inquiries to Taylor. T 633: 3300 (Taylor).

Taylor opined that Dish had an Inquiry-based Established Business

Relationship with the recipients of these calls. T 633: 3302-03; PX

26, Taylor September 20, 2012 Report, at 2-8.

Taylor then eliminated 67 calls by applying the 558 day limit

to calls with activation dates, but no payment date. Taylor opined

that an activation was a transaction between Dish and a customer,

and so, Dish had a Transaction-based Established Business

Relationship with these customers for 18 months. PX 26, Taylor

September 20, 2012 Report, at 2-8.

Taylor then eliminated 10,029 intrastate calls. Taylor testified

that he eliminated these calls based on instructions from Dish’s

counsel. T 633:3292 (Taylor).

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Taylor opined that he could not eliminate 765,531 calls found

by Dr. Yoeli to be Registry Calls that Dish did not have either

Transaction-based or Inquiry-based Established Business

Relationships with the intended call recipients. PX 26, Taylor

September 20, 2012 Report, at 2-8.

On December 14, 2012, Dr. Yoeli prepared a revised report.

PX 38, Appendix C, Revised Rebuttal Report, dated December 14,

2012 (Yoeli December 14, 2012 Report), at 101-116. Dr. Yoeli had

mistakenly failed to include a significant number of call records in

his first analysis. He incorrectly believed that one of discs provided

in the production of the 2007-2010 Calling Records was a

duplicate. Dr. Yoeli performed his same analysis with the

additional data. Dr. Yoeli also revised his method of determining

whether Dish had an Established Business Relationship with a call

recipient. Dr. Yoeli applied the 558 day period if the telephone

number had an activation date and a payment date even if the

activation date was after the payment date. Dr. Yoeli found that

Dish made 18,039,631 Registry Calls to persons with whom: (1)

Dish did not have any payment date or activation date information;

or (2) the call was more than (a) 558 days after the latter of the last

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payment date or activation date associated with the numbers, or (b)

more than 93 days after the activation date in those cases in which

Dish had an activation date, but no payment date. PX 38, at 105,

Yoeli December 14, 2012 Report.

Taylor again prepared a response to Dr. Yoeli’s revised report.

PX 16, Expert Report of John T. Taylor, dated October 14, 2013

(Taylor October 14, 2013 Report). This time, Taylor did not critique

Dr. Yoeli’s results. Rather, Taylor performed his own separate

analysis of the Dish’s calling records and Telemarketing Vendor

eCreek’s calling records for the years 2007-2010. Taylor concluded

that Dish made 501,650 Registry Calls for which he had no basis to

believe that the calls were permitted under the Do-Not-Call Laws.

PX 16, Taylor October 14, 2013 Report, at 8. The Court discusses

Taylor’s analysis in this report in detail below.

The United States moved for partial summary judgment on the

501,650 calls remaining at the end of Taylor’s October 14, 2013

analysis. The United States also moved for partial summary

judgment on the following calls that Taylor eliminated from Dr.

Yoeli’s finding of 3,342,415 Registry calls in the Yoeli July 2012 Call

Set:

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 873,551 calls Taylor excluded as calls on Lead

Tracking Systems calling campaigns;

 309,931 calls Taylor excluded based on disposition

codes that showed that the calls were not completed;

 12,552 calls to wrong numbers or individuals who did

not speak English; and

 10,029 intrastate calls.

Plaintiffs’ Motion for Summary Judgment (d/e 341), at 88-113.

The Court entered partial summary judgment on all these

calls. The Court explained that the TSR prohibited initiating

telemarketing calls; therefore, dispositions codes showing wrong

numbers, no English, or the failure of a phone to ring are not

relevant. The violations occurred when the calls were initiated. The

Court also explained that the TSR covered intrastate telemarketing

calls. The Court also found that Dish failed to present evidence to

show that the Lead Tracking System leads were in fact inquiry leads

and that the calls were placed within three months of the

consumers’ inquiries. The Court entered partial summary

judgment on 1,707,713 calls made by Dish or its Telemarketing

Vendors. See Opinion 445, at 158-70, 231-32.

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The portions of the 1,707,713 calls made to telephone

numbers with area codes associated with the Plaintiff States

(Plaintiff State area codes) are as follows:

 501,650 Calls from Taylor’s Analysis:

o 53,617 calls made to California area codes, of which

42,019 were made more than 90 days after the numbers

were registered on the Registry;

o 24,096 calls made to Illinois area codes;

o 1,375 calls made to North Carolina area codes; and

o 23,853 calls made to Ohio area codes.

T 633: 3323-24 (Taylor); PX 28, Taylor November 6, 2013 Report, at

10.

 873,551 Lead Tracking System Calls:

o 126,150 calls made to California area codes;

o 44,191 calls made to Illinois area codes;

o 39,413 calls made to North Carolina area codes; and

o 40,401 calls made to Ohio area codes.

T 613: 209 (Yoeli).

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 309,931 calls that were not completed:

o 34,997 calls made to California area codes, of which

33,970 were made more than 93 days after the numbers

were registered on the Registry;

o 15,228 calls made to Illinois area codes;

o 11,718 calls made to North Carolina area codes; and

o 13,294 calls made to Ohio area codes.

T 613: 209, 211 (Yoeli).

 12,552 calls made to wrong numbers:

o 2,103 calls made to California area codes of which 1,955

were made more than 93 days after the numbers were

registered on the Registry;

o 470 calls made to Illinois area codes;

o 455 calls made to North Carolina area codes; and

o 443 calls made to Ohio area codes.

T 613: 209-12 (Yoeli).

 Totals of Breakdowns of Summary Judgment Calls by Plaintiff

States’ Area Codes:

o 216,867 summary judgment Registry Calls made to

California area codes;

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o 83,895 summary judgment Registry Calls made to Illinois

area codes;

o 52,961 summary judgment Registry Calls made to North

Carolina area codes; and

o 77,991 summary judgment Registry Calls made to Ohio

area codes.

T 613: 209 (Yoeli). The Plaintiff States did not present evidence

identifying intrastate calls made to numbers with area codes

associated with them.

The parties stipulated at trial that the United States is seeking

liability for a maximum of 1,634,702 additional Registry Calls from

the 3,342,415 calls in the Yoeli July 2012 Call Set. The parties

calculated the stipulated maximum of 1,634,702 calls by

subtracting the 1,707,713 calls which the Court found to be TSR

violations at summary judgment from the 3,342,415 calls in the

Yoeli July 2012 Call Set. T 614: 426-30 (Yoeli) (attorneys Runkle

and Echtman affirming the stipulation). The Plaintiff States and

Dish stipulated to a proportional reduction in the maximum

number of calls that the Plaintiff States were seeking liability from

Yoeli July 2012 Call Set for illegal Registry Calls beyond those on

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which the Court granted the United States partial summary

judgment. T 614: 432 (Yoeli) (attorneys Ohta and Echtman

affirming the stipulation).

The United States originally sought to establish liability for

2,864,896 additional Registry Calls from the Yoeli July 2012 Call

Set. T 614: 313, 425-26 (Yoeli) (attorney Runkle speaking). The

United States’ stipulated maximum of 1,634,702 calls is 57% of the

2,864,896 additional calls in the Yoeli July 2012 Call Set for which

the United States was seeking liability. Pursuant to the stipulation

of the parties, the maximum liability that the Plaintiff States are

seeking for Registry Calls from the Yoeli July 2012 Calls Set beyond

those on which the Court granted the United States partial

summary judgment will be proportionally reduced to 57% of the

total amount sought.

Taylor testified at trial that all but 167,848 of the United

States’ stipulated maximum of 1,634,702 calls were either not

telemarketing calls or were telemarketing calls to persons with

whom Dish had a Transaction-based Established Business

Relationship at the time of the call. Taylor testified that Dr. Yoeli

erred in using an activation date as a date that a person inquired

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about Dish Network programming. Taylor opined that an activation

date should be considered a customer transaction with Dish. He

opined that the relevant time period in which Dish had a

Transaction-based Established Business Relationship with such a

customer was 18 months, not three months. Taylor opined that Dr.

Yoeli erroneously included 96,100 calls in his counts due to this

error. The United States conceded that the 96,100 calls should not

be included as illegal telemarketing Registry Calls. T 633: 3281

(Taylor); T 633: 3320 (Taylor) (Attorney Runkle conceding the issue).

Taylor also opined at trial that the 1,265,359 calls to

individuals on calling campaigns directed at current customers

were calls to persons with Transaction-based Established Business

Relationships with Dish. Taylor relied on the calling campaign

name or code to identify calls made to current customers. Taylor

stated that he was told that the intended recipients of these calls

had valid Dish account numbers and did not have disconnect dates

with Dish. PX 26, Taylor September 20, 2012 Report, at 4. Taylor

again used the campaign codes to find Transaction-based

Established Business Relationships because he concluded that he

had nothing else available. T 633 : 3296-99 (Taylor).

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Campaign names and codes based on disconnect dates are not

a valid basis to determine Transaction-based Established Business

Relationships. The TSR and FCC Rule define Transaction-based

Established Business Relationship for customers as 18 months

from the last purchase of goods or services. TSR 16 C.F.R. §

310.2(o); FCC Rule 47 C.F.R. § 64.1200(f)(5). Dish’s experts Taylor

and Kenneth Sponsler both agreed that the proper way to determine

whether Dish had a Transaction-based Established Business

Relationship with the intended call recipient was to measure from

specific data points that would establish the date of the last

purchase of goods or services by the intended call recipient. T 633:

3295-96 (Taylor); T 633 : 3454, 3476 (Sponsler).

Disconnect dates

could easily be long after the last purchase date. Campaign codes

based on disconnect dates are not a reliable basis for calculated

whether a call recipient had a Transaction-based Established

Business Relationship with Dish. Taylor used the campaign codes

because he did not have anything else. That justification is not

based on his expertise and is insufficient to support his opinion.

Taylor’s reliance on campaign codes is not sufficient to show that

Sponsler was also employed by CompliancePoint, a wholly owned subsidiary of PossibleNOW.

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Dish had Transaction-based Established Business Relationships

with Dish.

If Taylor is correct that the date-of-last-payment information

that Dish provided to Dr. Yoeli is unreliable, then no evidence

presented shows the last dates purchase of goods or services by the

intended recipients of Dish’s telemarketing calls, and so, no

evidence shows that Dish had any Transaction-based Established

Business Relationships with any of its call recipients in the 2007-

2010 Calling Records.

The Plaintiffs do not argue for such a finding. The Plaintiffs

relied on Dr. Yoeli’s use of the last payment data supplied by Dish.

The Court, therefore, will give Dish the benefit of the doubt and

credit the last payment data that Dish supplied in discovery. The

Court notes that Taylor actually used the date-of-last-payment

information. Taylor started with Dr. Yoeli’s conclusions in the July

2012 Report and reduced the number of violations further by his

various opinions, including the campaign codes. He therefore

started with Dr. Yoeli’s figures that were already reduced by the last

payment date. See T 633: 3298 (Taylor). Taylor also explicitly used

both last-payment-date information in his October 14, 2013 Report.

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See PX 16, Report of John Taylor dated October 14, 2013, (Taylor

October 14, 2013 Report), at 6. The Court, therefore, will credit

last-payment-date information as reliable for purposes of

calculating Transaction-based Established Business Relationship

exceptions to liability.

Dish’s practice of using calling campaign names or disconnect

dates, however, was not a reliable method of determining whether

Dish had a Transaction-based Established Business Relationship

with intended call recipients. Taylor’s reliance on this method in

his opinions was similarly not reliable was not based on sufficient

facts and data. See Fed. R. Evid. 702(b) and (c). Taylor’s opinion

regarding the 1,265,359 calls has no probative value. His

testimony did not establish that Dish had a Transaction-based

Established Business Relationship with the intended recipients of

these calls.

The Court credits Taylor’s opinion to exclude 42,716 calls as

non-telemarketing calls based on disposition codes, and his opinion

to exclude 62,679 calls as non-telemarketing calls based on

campaign codes. The disposition codes cited by Taylor indicate that

the 42,716 calls were received by businesses or were made for non-

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telemarketing purposes. Business and non-telemarketing calls are

not covered by the TSR and the relevant portions of the TCPA. The

campaign codes on which Taylor relies indicate that the 62,679

calls were made primarily in Held Work Order and Canceled Work

Order campaigns. The testimony from Bangert, Davis, Dexter, and

Montano was ambiguous concerning whether some of these calls

were telemarketing calls designed to close pending sales or just

scheduling calls. The Plaintiffs have the burden to prove that a call

is a telemarketing call. Given the ambiguity, the Court will credit

Taylor’s opinion that the calls made in these campaigns were not

telemarketing calls. The Court, therefore, finds that 1,433,207 of

the remaining 1,634,702 in the Yoeli July 2012 Call Set were

Registry Calls to persons whom Dish has not shown had a

Transaction-based or Inquiry-based Established Business

Relationships with Dish at the times of the calls. The figure

1,433,207 is the sum of the 167,848 calls on which Taylor offered

no opinions to exclude from liability plus the 1,265,359 calls for

which Taylor offered an opinion that had no probative value.

Plaintiffs’ expert Dr. Yoeli also presented an opinion at trial

regarding the portion of the 3,342,415 calls in the Yoeli July 2012

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Call Set that were not ruled on by the Court at summary judgment.

Dr. Yoeli compared the 3,342,415 call records in the Yoeli July 20-

12 Call Set with a set of 4,075,766 call records that the Plaintiffs

provided to him. The Plaintiffs told Dr. Yoeli that the set of

4,075,766 call records were the September 2007 to March 2010 call

records analyzed by Taylor and on which the Court granted partial

summary judgment. See T 616: 172-73, 282-84 (Yoeli). Plaintiffs’

demonstrative exhibit entitled “Yoeli Demonstrative Exhibit 2”

described the 4,075,766 calls records as, “Appended and de-

duplicated Dish 2007-2010 call records for which Dish was found

liable in summary judgment (Taylor’s 501K National Registry, 10K

Interstate (sic), 12K No English / Wrong Number, 310K Not

Completed, 873K Lead).” Y-DEM02-001, Yoeli Demonstrative

Exhibit 2, 2007-2010 Violations Not Yet Granted in Summary

Judgment. By comparing, or merging, the specific call records in

these two sets, Dr. Yoeli determined that 2,475,432 of the call

records in the Yoeli July 2012 Call Set were not included in the set

of 4,075,766 call records. T 613: 173, 293-94 (Yoeli).

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Dr. Yoeli testified that of that of the 2,475,432 calls, the

following calls were made to telephone numbers with area codes

associated with the Plaintiff States:

 332,115 calls made California area codes, of which

326,125 were made more than 93 days after the numbers

were registered on the Registry;

 114,234 calls made to Illinois area codes;

 33,496 calls made to North Carolina area codes; and

 96,531 calls made to Ohio area codes.

T 613: 205-06 (Yoeli). Pursuant to the stipulation discussed above,

the maximum sought by the Plaintiff States is stipulated to be 57%

of these figures.

The Court finds, however, that Dr. Yoeli’s opinion about the

2,475,432 Registry Calls in the Yoeli July 2012 Call Set has no

probative value. Dr. Yoeli used a sound methodology to isolate the

call records that were not been ruled upon by the Court at

summary judgment. He compared the 4,075,766 calls records with

The Court recognizes that the 57% proportionate reduction figure was calculated from a

maximum number of 2,864,896 calls for which the United States sought liability, not the

2,475,432 calls to which Dr. Yoeli testified. The parties, however, based the United States’

stipulation with Dish on the 2,864,896 figure, and the Plaintiff States and Dish agreed to a

proportionate reduction based on the United States’ stipulation with Dish. The 57%

proportionate reduction figure, therefore, is correct.

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calls in the Yoeli July 2012 Call Set to identify those that were not

in the 4,075,766 calls records. The data Dr. Yoeli used, however,

was flawed. The Plaintiffs failed to prove or even adequately explain

the source of the set of 4,075,766 call records provided to Dr. Yoeli.

Dr. Yoeli’s testimony and the quote from Yoeli Demonstrative

Exhibit 2 both stated that the source was the calls from the 2007-

2010 Calling Records on which the Court granted partial summary

judgment. The Court entered partial summary judgment on at

total of 1,707,713 call records from 2007-2010, not 4,075,766.

Dr. Yoeli’s conclusions based on this unproven, unexplained data

have no probative value.

2. Internal List Calls to Persons with Telephone Numbers on

Dish and Order Entry Internal Do-Not-Call Lists

Dish’s expert Taylor compared the 2007-2010 Calling Records

with the Internal Do-Not-Call lists of Dish, Dish’s Telemarketing

Vendor eCreek, and the PossibleNOW combined Internal-Do-Not-

Call List for Order Entry Retailers. PossibleNOW had collected

The Court initially surmised that the 4,075,766 figure was the sum of the 1,707,713 calls

and the additional 2,386,386 on which the Court initially granted partial summary judgment,

but vacated on reconsideration. See Opinion 445, at 231-32; Opinion entered February 17,

2015 (d/e 478), at 2-11. These two numbers total 4,094,099, not 4,075,766. The Court

cannot tell the source of the set of 4,075,766 call records from the evidence.

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these lists beginning in 2008 as part of its services for Dish.

PossibleNOW combined all of the Order Entry Retailers’ Internal Do-

Not-Call Lists into a single combined list. PossibleNOW maintained

the Dish Internal Do-Not-Call List and the eCreek Internal Do-Not-

Call List separately. Taylor found that Dish made 903,246 Internal

List Calls to numbers on the internal do-not-call lists of Dish and

eCreek. The Court granted partial summary judgment in Count II

for these calls. Opinion 445, at 191-92, 232-33. Taylor also found

that Dish made 7,321,163 telemarketing calls to numbers on the

Order Entry Retailer combined Internal Do-Not-Call Lists. The

number of telemarketing calls to all Internal Do-Not-Call Lists

found by Taylor totaled 8,244,409 calls (7,321,163 plus 903,246).

T 633: 3284-85 (Taylor); PX 28, Taylor November 6, 2013 Report, at

11.

The Court credits Taylor’s opinion that Dish or its

Telemarketing Vendors made 8,244,409 Internal List Calls to

persons who previously stated that they did not wish to receive

telemarketing calls by or on behalf of Dish Network.

Taylor testified that some overlap in the set of 903,246 calls

found violations at summary judgment and the set of 7,321,163

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calls to numbers on the Order Entry Retailer combined internal do-

not-call lists. T 633: 3285 (Taylor). Taylor did not explain the

nature of the overlap, that basis for this statement, or the number

of call records that overlapped. The Court does not credit this

testimony because Taylor did not provide an explanation or basis

for this opinion.

Taylor also opined on the number of Internal List Calls that

Dish and its Telemarketing Vendors made to telephone numbers

with Plaintiff States area codes. Taylor opined that of the 903,246

Internal List calls on Dish’s and eCreek’s Internal Do-Not-Call Lists,

36,598 calls were made to telephone numbers with Ohio area

codes. T 633: 3282-83 (Taylor); PX 28, Taylor November 6, 2013

Report, at 11. The Court credits this opinion of Taylor.

The Court determined at summary judgment that Dish made

an additional 140,349 Internal List Calls made to persons who told

eCreek that they did not wish to be called by or on behalf of Dish.

Opinion 445, at 179-80. Dr. Yoeli determined that 5,190 of those

calls were directed to telephones with Ohio area codes. T 613: 214-

15 (Yoeli). The Court credits this opinion of Dr. Yoeli. A total of

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41,788 Internal List Calls were initiated to telephone numbers with

Ohio area codes (36,598 calls plus 5,190 calls).

Dr. Yoeli compared the 8,244,409 records of Dish’s Internal

List Calls with calls in the Calling Records from 2007 to 2010 that

Dish provided to Taylor and were not part of the 501,650 calls

previously identified by Taylor and on which the Court granted

summary judgment. T 613: 176, T 614: 255-56 (Yoeli); PX 38,

Taylor December 13, 2013, Declaration, at 12. Dr. Yoeli then found

the intersection of these two sets. Dr. Yoeli found that there were

2,386,386 calls to telephone numbers that were both on the

internal do-not-call lists and on the Registry and were not found to

be in the 501,650 calls. Dr. Yoeli found that of the 2,386,386 calls,

71,853 were on the Dish internal do-not-call list and 2,314,533

were on the combined Order Entry Retailer internal do-not-call

lists. T 613: 175-76, T 614: 256 (Yoeli); see Y-DEM03-001, Yoeli

Demonstrative Exhibit 3.

Dr. Yoeli also found that, of the 2,386,386 calls in this set, the

following were made to telephone numbers with area codes

associated with the Plaintiff States:

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 302,983 calls made to California area codes, of which

296,640 were more than 93 days after the numbers were

registered on the Registry;

 118,289 calls made to Illinois area codes;

 97,785 calls made to North Carolina area codes; and

 95,275 calls made to Ohio area codes.

T 613: 207, 210-11 (Yoeli); Yoeli December 13, 2013 Declaration, at

12.

Dr. Yoeli further broke down the calls to telephone numbers

with Plaintiff States’ area codes. Of the 71,853 calls made to

numbers on the Dish internal do-not-call list:

 9,783 calls were made to California numbers;

 5,311 calls were made to Illinois numbers;

 1,324 calls were made to North Carolina numbers; and

 1,538 were made to Ohio numbers.

T 613: 208 (Yoeli). Of the 2,314,533 call made to numbers on the

Order Entry Retailers’ internal do-not-call lists:

 293,200 calls were made to California numbers;

 112,978 calls were made to Illinois numbers;

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 96,461 calls were made to North Carolina numbers; and

 93,737 calls were made to Ohio numbers.

T 613: 207-08 (Yoeli).

The Court credits Dr. Yoeli’s opinions as demonstrating that

Dish made the 2,386,386 telemarketing calls to persons whose

numbers were on both Registry Calls and Internal List Calls to

numbers on the internal do-not-call lists of Dish, the Telemarketing

Vendors, or an Order Entry Retailer and that these calls were not

previously found to be part of the 501,650 calls on which the Court

granted summary judgment. The Court also credits Dr. Yoeli’s

opinions of the breakdown of the number of this set of calls made to

numbers with area codes associated with the Plaintiff States.

3. Dish Abandoned Calls

The Court entered summary judgment finding that Dish was

liable for making 98,054 prerecorded calls that were answered by a

person. Such calls were Abandoned Prerecorded Calls in violation

of the TSR. See Opinion 445, at 193-94, 233. The TSR

abandonment provisions are not subject to the Established

Business Relationship exception. The Plaintiffs presented no

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evidence at trial regarding additional Abandoned Prerecorded Calls

by Dish.

Dr. Yoeli identified the number of these 98,054 Abandoned

Prerecorded Calls that Dish made to telephone numbers with

Plaintiff States’ area codes:

 23,020 calls made to California area codes;

 5,830 calls made to Illinois area codes;

 2,283 calls made to North Carolina area codes; and

 1,759 calls made to Ohio area codes.

T 613: 204 (Yoeli); PX 38 Yoeli December 13, 2013 Declaration,

Appendix C, Yoeli December 14, 2012 Report, at 10, Table 6.

The translations of the texts of the prerecorded messages used

in the 98,054 calls show Dish’s foreign language marketing group

intended to direct the calls to existing Dish customers. Dish

Dr. Yoeli also identified the number of all Prerecorded Calls that Dish made through its

autodialer system to telephone numbers with Plaintiff States’ area codes:

301,002 calls made to California area codes;

93,530 calls made to Illinois area codes;

30,931 calls made to North Carolina area codes; and

22,919 calls made to Ohio area codes.

PX 38 Yoeli December 13, 2013 Declaration, Appendix C, Yoeli December 14, 2012 Report, at

10, Table 6. The FCC Rule prohibits initiating Prerecorded Calls regardless of whether the calls

are answered. 47 C.F.R.§ 64.1200(a)(3). Dr. Yoeli did not testify regarding the total number of

calls, but only the answered calls. The Plaintiff States also do not seek a finding regarding the

total number of calls. See Plaintiff States’ Proposed Findings of Fact (d/e 662), at 12-13 ¶¶

122-26. The Court, therefore, makes no findings regarding the total number of Prerecorded

Calls made to numbers with Plaintiff States’ area codes.

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presented no other evidence to show that the recipients of these

calls were current customers of Dish at the times of the calls, and

no evidence of the number of months that elapsed between the

dates that the recipients of these calls last paid Dish for Dish

Network programming and the dates of the calls.

C. Order Entry Retailer Call Records

The Court found at summary judgment that Dish was liable

for causing the following Order Entry Retailers to make the

following telemarketing calls offering Dish Network programming in

violation of the TSR:

 6,637,196 prerecorded calls by Dish TV Now that were

answered by individuals and abandoned;

 381,811 illegal Registry Calls by Satellite Systems;

 43,100,876 prerecorded telemarketing calls by Star

Satellite that were answered by individuals and

abandoned;

 2,349,031 Registry Calls by JSR made in 2006; and

 one prerecorded call by American Satellite that was

answered by a person and abandoned.

Opinion 445, at 176, 194-95, 233.

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Dr. Yoeli identified the number of the 43,100,876 Star Satellite

calls that were made to telephone numbers with area codes

associated with the Plaintiff States:

 5,727,417 calls made to California area codes;

 2,660,066 calls made to Illinois area codes;

 1,716,457 calls made to North Carolina area codes; and

 3,419,175 calls made to Ohio area codes.

T 613: 203 (Yoeli); PX 38 Yoeli December 13, 2013 Declaration,

Appendix C, Yoeli December 14, 2012 Report, at 12, Table 8b. The

Court credits these opinions.

Taylor identified the number of the 381,811 Satellite Systems

calls that were made to telephone numbers with area codes

associated with the Plaintiff States:

 37,688 calls made to California area codes;

 17,357 calls made to Illinois area codes;

 13,088 calls made to North Carolina area codes; and

 22,878 calls made to Ohio area codes.

T 633: 3328 (Taylor); PX 28, Taylor November 6, 2013 Report, at 13.

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Taylor identified the number of the 2,349,031 JSR Registry

calls that were made in 2006 to telephone numbers with Plaintiff

States area codes:

 473,102 calls made to California area codes;

 369,384 calls made to Illinois area codes;

 18,250 calls made to North Carolina area codes; and

 129,004 calls made to Ohio area codes.

T 633: 3329 (Taylor); PX 28, Taylor November 6, 2013 Report, at 13.

The Court credits these findings from Taylor’s analysis of these call

records.

Taylor also found that JSR made 3,315,242 Registry Calls

from January through March 2007. PX 28, Taylor November 6,

2013 Report, at 14. This finding in Taylor’s analysis is credible.

Taylor identified the number of the 3,315,242 JSR Registry

Calls that were made in 2007 to telephone numbers with Plaintiff

States area codes:

 50 calls made to California area codes;

 557,336 calls made to Illinois area codes;

 4,936 calls made to North Carolina area codes; and

 338,352 calls made to Ohio area codes.

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PX 28, Taylor November 6, 2013 Report, at 13.

Taylor found that in 2006, JSR made 416,221 telemarketing

Internal List Calls to numbers on Dish’s Internal Do-Not-Call List

and 2,007 telemarketing Internal List Calls to numbers on the

Internal Do-Not-Call Lists of Dish’s Telemarketing Vendors. Taylor

found that from January to March 2007, JSR made 765,934

Internal List Calls to numbers on Dish’s Internal Do-Not-Call list,

and 2,762 Internal List Calls to numbers on the Internal Do-Not-

Call lists of Dish’s Telemarketing Vendors. PX 28, Taylor November

6, 2013 Report, at 14.

Taylor found that in 2006, JSR made 267,439 Internal List

Calls to numbers on other Order Entry Retailers’ Internal Do-Not-

Call lists. Taylor found that from January to March 2007, JSR

made 526,956 Internal List Calls to numbers on other Order Entry

Retailers’ Internal Do-Not-Call lists. PX 28, Taylor November 6,

2013 Report, at 15. These findings in Taylor’s analysis of these

records are credible.

Taylor found that the JSR call records consisted of 12,853,478

dials of calls between July 2006 and March 2007 from JSR’s

autodialer facility in Texas. PX 28, Taylor November 6, 2013

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Report, at 14. Goodale testified that JSR used “press 1”

prerecorded calling exclusively in its telemarketing calls. T

622:1886-88 (Goodale). JSR made its telemarketing calls to market

Dish Network programming. See T 622: 1880-81, 1888-90

(Goodale); see also Opinion 445, at 170. This testimony is credible.

Goodale’s partners allowed third parties to make calls using JSR’s

622:1918 (Goodale). The third parties may or may not have used

prerecorded calls. The call records, however, are JSR’s call records

from its dialing facility in Texas. The 12,853,478 dials, therefore,

were made by JSR and not a third party. The Court finds that JSR

made “press 1” prerecorded telemarketing calls for Dish Network

programming in all of the dials reflected in these call records. The

Court further finds that JSR used its autodialers at its Texas facility

to make these calls.

The FCC Rule prohibited prerecorded telemarketing calls

unless the seller had an Established Business Relationship with the

intended recipient of the call. 47 C.F.R. § 64.1200(a)(2)(iv) (version

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in effect prior to October 16, 2012).

Dish presented no evidence to

show that Dish or JSR had an Established Business Relationship

with any of the intended recipients of the 12,853,478 prerecorded

calls dialed by JSR to sell Dish Network programming.

A prerecorded telemarketing call is an Abandoned Prerecorded

Call under the TSR if a person answers the call because no live

salesperson comes on the line. TSR 16 C.F.R. § 310.4(b)(1)(iv).

Goodale estimated that four out of ten telemarketing calls made by

JSR were answered by a person. T 622: 1982 (Goodale). Montano

estimated that thirty percent of Dish’s direct telemarketing calls

were answered by a person. T 629: 3084 (Montano). Dexter

estimated that sixteen to seventeen percent of Dish’s direct

telemarketing calls were answered by a person. T 627: 2528

(Dexter). Taylor estimated that one in ten telemarketing calls dialed

are answered by a person. T633 : 3342 (Taylor). The Court finds

that it is more likely than not that the most conservative estimate of

ten percent reflects the minimum number of the JSR dialed calls

that were answered by a person. The Court finds that at least

The FCC eliminated Established Business Relationship exceptions for prerecorded

telemarketing calls in 2012. Fed. Reg. 34233, at 13741 (June 11, 2012; 77 Fed. Reg. 66935

(November 8, 2012) (correcting the effective date to October 16, 2012); see Opinion 445, at 25.

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1,285,379 of the prerecorded calls dialed by JSR were answered by

a person.

V. Make-up of the Registry and Call Recipients

Dish has presented evidence about the operation of the

Registry and about the composition of the phone numbers on the

Registry. Plaintiffs responded with evidence concerning the makeup

of the numbers on Dish calling lists.

In March 2003, the FTC awarded a contract to AT&T to

maintain the Registry. DTX 352, Memorandum from Lydia Parnes,

Director, Bureau of Consumer Protection dated September 30, 2005

(Parnes Memorandum), at 2. The contract required AT&T to meet a

ninety-seven percent performance standard. The FTC did not

require AT&T to identify the type of phone numbers that individuals

registered on the Registry. AT&T also did not determine the validity

of the number that individuals registered on the Registry.

Deposition of Linda Miller Lavenda, at 47, 53, 111. The FTC does

not currently require its contractors to identify the type of phone

numbers that individuals register on the Registry. Deposition of

Ami Dziekan, at 100.

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AT&T hired a company called Targus as its subcontractor to

perform a monthly review of the Registry, which included purging

numbers that no longer belonged. Parnes Memorandum, at 2;

Miller Lavenda Deposition, at 34. The process of purging numbers

is sometimes call “list hygiene.” AT&T did not validate whether

Targus accurately captured all the telephone number changes.

AT&T personnel had “very high level,” knowledge of how Targus

undertook this process. Miller Lavenda Deposition, at 76-77, 148.

Lavenda used the term “very high level” to mean a superficial level

rather than a deep level of understanding. Id.

In December 2003, AT&T experienced what it labeled a

“missing day problem.” If a telemarketer downloaded an updated

list of newly registered numbers called a “change list,” the list did

not include numbers that were registered the day of the download.

If a telemarketer downloaded a full, updated Registry list rather

than a change list, then the telemarketer did not experience this

missing day problem. AT&T implemented fixes in January 2004 to

address the problem. DTX 348, Email thread dated December 30,

2003 to May 24, 2005, at 2, 4. The FTC also did not consider

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erroneous Registry Calls made because of this missing day problem

to be a violation. T 710: 59 (Torok).

On February 17, 2004, Targus notified the FTC for the first

time that “Land lines are considered disconnected and are deleted

and scrubbed from the registry only when the telephone number is

reassigned which can occur anywhere from four weeks to over one

year from the time the number is disconnected.” DTX 338, Letter

from FTC Contract Specialist Eric Vogt to Carol Brown dated April

16, 2004 (Vogt April 2004 Letter), at 1. Targus also notified the FTC

that “No cell phones are being scrubbed. There are approximately

9.7 million wireless phones on the registry.” Vogt April 2004 Letter,

at 2. AT&T did not require Targus to remove business or

government numbers from the National Registry. Miller Lavenda

Deposition, at 138, 141.

The FTC directed AT&T in the Vogt April 2004 Letter to start

scrubbing disconnected numbers from the Registry, including

disconnected wireless numbers. On May 21, 2004, the FTC

accepted the methodology of only removing numbers that were both

disconnected and reassigned. DTX 340, Letter from Vogt to Brown

The transcript of the trial dates on October 25, 2016 through November 2, 2016, are

paginated separately from the trial dates in January 19, 2016 through February 17, 2016.

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dated May 21, 2004 (Vogt May 2004 Letter). AT&T and Targus took

the position that no harm would result from allowing a

disconnected number that had not been reassigned to remain on

the Registry because telemarketers would not want to call

disconnected numbers anyway. Miller Lavenda Deposition, at 193.

Vogt also noted in the Vogt May 2004 Letter that Targus had a 10

percent error rate in its scrubbing methodology. Vogt stated that

this error rate was not acceptable. On June 1, 2004, AT&T

informed the FTC that it had no valid method to scrub for

disconnected wireless numbers. Miller Lavenda Deposition, at 196,

200-01.

In 2007, Congress enacted the Do-Not-Call Improvement Act.

15 U.S.C. § 6155. The Act mandates that each number on the

National Registry remain indefinitely, unless the individual to whom

the number is assigned requests removal, or unless the FTC

removed the number as follows:

The Federal Trade Commission shall periodically check

telephone numbers registered on the national ‘do-not-

call’ registry against national or other appropriate

databases and shall remove from such registry those

telephone numbers that have been disconnected and

reassigned. Nothing in this section prohibits the Federal

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Trade Commission from removing invalid telephone

numbers from the registry at any time.

Id. § 6155(b).

In conjunction with the 2007 legislation, the FTC submitted a

report to Congress in 2008 regarding the accuracy of the Registry.

As part of this report, the FTC analyzed a sample list of 20,000

numbers submitted by the Direct Marketing Association (“DMA”),

which the DMA claimed “had been disconnected and reassigned

since the time they had been registered.” The FTC concluded that

forty-two percent of these numbers should not have been

considered as active registrations on the Registry. DTX 459, Do-

Not-Call Improvements Act of 2007, Report to Congress: Regarding

the Accuracy of the Do Not Call Registry (October 2008) (FTC 2008

Report), at 3-4.

In 2007, Lockheed Martin replaced AT&T as the FTC’s

contractor responsible for maintaining the Registry. Deposition of

John Krebs, at 19; Dziekan Deposition, at 52. The FTC lowered the

permissible performance standard from 97 percent to 95 percent

performance rating in some categories. Deposition of Kathy French,

at 68; DTX 180. DTX 180, Lockheed Martin Do Not Call Registry

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Monthly Performance Report for November 2008 (Lockheed Martin

November 2008 Report), at 2-4.

In November 2008, Lockheed Martin was rated on 16

performance categories. Lockheed had a 95 percent performance

rating or better in 13 of the 16 categories. Lockheed had a 75.54

percent, 71.02 percent, and a 43.9 percent performance rating

respectively in the other three categories. DTX 180, Lockheed

Martin November 2008 Report, at 8; French Deposition, at 91. This

was a one-time event. Lockheed’s performance was generally over

or very close to the 95 percent performance rating. T 710: 68

(Torok). The FTC monitored Lockheed’s performance, but did not

terminate its contract with Lockheed for failure to meet the 95

percent performance rating. The FTC imposed a monetary penalty

on Lockheed when Lockheed did not meet the required 95 percent

performance rating pursuant to the terms of their contract. T. 710:

68 (Torok).

In December 2011, Lockheed Martin delayed adding new

registrations to the Registry. The delay occurred because the

registrations were “locked in the technical background” of Lockheed

Martin’s system. As a result, Lockheed Martin took additional steps

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and additional time to place new numbers on the Registry. In

February 2012, Lockheed Martin discovered that certain

telemarketers did not receive the full version of the Registry upon

downloading. This issue affected a few hundred telemarketers.

French Deposition at 70, 74, 76, 163-64. The FTC did not consider

erroneous Registry Calls made because of this delay in putting

numbers on the Registry to be violations. T 710: 60 (Torok).

Lockheed Martin used PossibleNOW as its subcontractor to

perform list hygiene on the Registry. French Deposition, at 53.

PossibleNOW estimated that approximately five percent of the

landline numbers registered prior to December 2007 were still listed

on the Registry as of October 2008, but were no longer valid

registrations. DTX 459, FTC 2008 Report, at 6. By July 31, 2008,

PossibleNOW had removed 7.9 million numbers from the Registry

as part of its process of removing inactive numbers. DTX 459, FTC

2008 Report, at 6 n.12; Krebs Deposition, at 92:9-20.

In 2009, PossibleNOW estimated that thirteen percent of the

National Registry is attributed to business landlines. DTX 486,

Analysis of The Phone Numbers on the National Do Not Call

Registry dated March 31, 2009 (PossibleNOW 2009 Report), at 7.

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PossibleNOW made some mistakes in maintaining the

Registry. In one instance, PossibleNOW mistakenly dropped

225,000 numbers from the Registry. PossibleNOW had accidentally

populated incorrect dates in the course of updating the

disconnect/reassign database. Richard Stauffer, CEO of

PossibleNOW testified that this occurred as a result of human error.

In correcting the issue, PossibleNOW missed 2,668 numbers that

should have been added to the Registry. T 618: 761-62 (Stauffer);

see French Deposition, at 157-58; DTX 463, Email dated December

19, 2009, re Issue With the November Process Run; DTX 466,

PossibleNOW Issue Report Form dated December 22, 2008. The

FTC penalized PossibleNOW for any errors by reducing payments

pursuant to the terms of the contract. T 710: 86 (Torok).

In 2008, PossibleNOW inadvertently left approximately 10,000

numbers on the Registry that should have been removed. In March

2009, PossibleNOW accidentally dropped 16,000 numbers from the

Registry. T 618: 762-63, 764-65 (Stauffer); DTX 583, Analysis of the

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Potential Input File Issue for the October 2008 National DNC

Registry Reassign Process.

PossibleNOW does not remove disconnected and reassigned

wireless numbers from the Registry. DTX 183, Biennial Report to

Congress Under the Do Not Call Registry Fee Extension Act of 2007,

FY 2010 and 2011 (FTC 2010-2011 Report), at 4-5. Pursuant to the

Do-Not-Call Improvements Act, PossibleNOW relies on the National

Directory Assistance database to perform maintenance of the

Registry, but the National Directory database does not contain

wireless numbers. DTX 486, PossibleNOW 2009 Report, at 3.

Wireless service providers are not required to share their directory

assistance data with the FCC. DTX 459, FTC 2008 Report, at 6.

PossibleNOW estimated that close to 50 percent of the Registry is

comprised of wireless numbers. DTX 486, PossibleNOW 2009

Report, at 7.

Voice over Internet Protocol (VoIP) telephone service providers

are also not required to share their directory assistance data with

the FCC. DTX 183, FTC 2010-2011 Report, at 5. PossibleNOW

estimated in 2009 that seventy-five percent of VoIP numbers were

Exhibit DTX 583 is not dated and the author is not does not identified. PossibleNOW

personnel appear to have conducted the analysis recorded in the Exhibit.

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contained within its national directory assistance data. DTX 486,

PossibleNOW 2009 Report, at 2; DTX 183, FTC 2010-2011 Report,

at 5.

Dish’s expert Dr. Robert Fenili, Ph.D., opined as to the

makeup of the types of telephone numbers on the Registry. DTX

189, Report of Dr. Robert N. Fenili, Ph.D., dated July 26, 2012

(Fenili Report). Dr. Fenili opined that in 2011, 28.2 percent of the

telephone numbers on the Registry were residential landlines, 7.1

percent were inactive residential landlines, 12.2 percent were

business landlines, and 52.5 percent were wireless telephones. Dr.

Fenili further opined that the residential landlines as a percentage

of all of the numbers on the Registry was decreasing over time, the

similar percentage of wireless numbers was increasing over time,

and the similar percentage of business numbers was remaining

relatively stable. DTX 189, Fenili Report, at 8-10; see Deposition of

Robert Fenili, at 73-76.

In response, Plaintiffs’ expert Dr. Yoeli took samples of calling

records to determine the make-up of the types of telephone

numbers that Dish and the Order Entry Retailers called. Dr. Yoeli

took samples of the 2003-2007 Calling Records; the 2007-2010

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Calling Records; Guardian’s records of calls for Star Satellite

(identified as Tenaya); Guardian’s records of calls for Dish TV Now

(identified as WOW TV); and JSR’s calling records. Dr. Yoeli sent

the sample to Stauffer of PossibleNOW. PossibleNOW maintains

historical records of major directories for residential, business, and

wireless telephone numbers. T 613: 192-96 (Yoeli).

Stauffer identified the type of telephone number for each

sample as follows:

2003-2007 Calling Records

 5,002 records in the sample

 2,708 numbers were listed as residential, of which 1 was

also listed as wireless and 5 were also listed as business;

 29 numbers were listed as business, of which 5 were also

listed as residential;

 174 numbers were listed as wireless, of which 1 was also

listed as residential; and

 2,097 numbers were of unknown type.

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2007-2010 Calling Records

 5,001 records in the sample

 3,434 numbers were listed as residential, of which 11

were also listed as business;

 43 numbers were listed as business numbers, of which11

were also listed as residential;

 425 numbers were listed as wireless numbers; and

 1,110 numbers were of unknown type.

Star Satellite (Tenaya) Calling Records

 5,001 records in the sample

 2,015 numbers were listed as residential, of which 4 were

also listed as business;

 58 numbers were listed as business, of which 4 were also

listed as residential;

 2 numbers were listed as wireless; and

 2,930 numbers were of unknown type.

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Dish TV Now (Wow TV) Calling Records

 5,001 records in the sample

 2,550 numbers were listed as residential, of which 7 were

also listed as business;

 20 numbers were listed as business number, of which 7

were also listed as residential;

 1 number was listed as a wireless; and

 2,437 numbers were of unknown type

JSR Calling Records

 5,000 records in the sample

 4,590 numbers were listed as residential, of which 26

were also listed as business;

 103 numbers were listed as business, of which 26 were

also listed as residential;

 3 numbers were listed as wireless; and

 330 numbers were of unknown type.

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T 616: 37-39 (Stauffer); PX 1319, Yoeli Rebuttal Report dated

October 16, 2012, attached Declaration of Rick Stauffer dated

October 16, 2012.

Dr. Yoeli reviewed Stauffer’s results and opined as follows:

 The numbers identified as residential in the 2003-

2007 Call records were 67 percent of all numbers and

85 percent of the numbers that could be identified as

residential, business or wireless;

 The numbers identified as residential in the 2007-

2010 Call records were 69 percent of all numbers and

94 percent of the numbers that could be identified as

residential, business, or wireless;

 The numbers identified as residential in the Star

Satellite records were 40 percent of all numbers and

97 percent of the numbers that could be identified as

residential, business, or wireless;

 The numbers identified as residential in the Dish TV

Now records were 51 percent of all numbers and 99

Stauffer’s testimony was transcribed separately during the trial. This transcript is paginated

separately from the rest of the trial transcript.

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percent of the numbers that could be identified as

residential, business, or wireless; and

 The numbers identified as residential in the JSR

records were 91 percent of all numbers and 98 percent

of the numbers that could be identified as residential,

business, or wireless.

T 613;195-202 (Yoeli); Y-Dem04, Yoeli Demonstrative Exhibit 4; PX

38, Appendix C, Yoeli December 14, 2012 Report, at 9 (PX 38-110).

The Court finds that Dr. Fenili’s opinion about the make-up of

the Registry is of little or no probative. Dr. Fenili’s opinions are only

relevant if Dish and the Order Entry Retailers called a normal

distribution of all types of numbers. Dish did not call a normal

distribution. Dish called residential telephone numbers. T 628:

2810 (Bangert); T 627: 2555, 2639, 2641 (Dexter); T 617: 633-34

(Davis). Dish knew the address associated with every number

called at the time of each call. See T 628: 2740-41 (Bangert); T 629:

3209-10 (Montano); T 627: 2639-40 (Dexter); T 617: 630 (Davis).

Dish also scrubbed its lists to remove wireless numbers.

Order Entry Retailers Dish TV Now, JSR and Star Satellite also

called residential telephone numbers. JSR called residential

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numbers from published white pages telephone directories. T 622:

1879-80, 1887 (Goodale). Star Satellite initially called numbers out

of the phone book. Myers Deposition, at 124. Star Satellite then

used Guardian’s services to make prerecorded calls. Dish TV Now

also used Guardian’s services. Guardian called published

telephone numbers “off of a CD-Rom you could buy down at Office

Max.” Deposition of Kevin Baker, at 50. In addition, Order Entry

Retailers were only authorized under the Retailer Agreement to

solicit potential customers to purchase residential service. The

Order Entry Tool could only be used to open residential accounts,

not commercial accounts. T 626: 2225 (Neylon).

Dr. Yoeli’s samples show that Dish, Dish TV Now, JSR, and

Star Satellite did not call a normal distribution of telephone

numbers on the Registry. Almost none of the calls from any of the

samples were made to identified business telephone or wireless

numbers. A very large majority of the identified calls in every set

were made to residential numbers.

The Court further finds that the preponderance of the evidence

established Dish and the Telemarketing Vendors made

telemarketing calls to residential telephone subscribers. Dish

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directed its telemarketing campaigns to sell Dish Network

programming to residential customers, whether current, former, or

prospective. Dish, further, knew the name and address of every

person that Dish and its Telemarketing Vendors called. Dish

scrubbed all calling campaigns to remove wireless numbers. The

disposition codes in the Calling Records for 2007-2010 showed that

approximately .2% of the calls were answered by businesses. See

T 3325-27 (Taylor); PX16, Taylor October 13, 2013 Report, at 7

(41,417 out of 17,168,194 calls were to businesses, or .24%); PX

38, Declaration of Dr. Erez Yoeli dated December 18, 2013,

Appendix C, Yoeli December 14, 2012 Report, at 7-8 (.2% of calls

were answered by businesses). All of this evidence demonstrates

that Dish and its Telemarketing Vendors called residential

telephone subscribers.

In addition, Taylor used the disposition codes to exclude the

Dish calls answered by businesses from the Registry Calls in the

Yoeli July 2012 Call Set and in the Registry Calls found by him in

his October 13, 2014 Report. Thus, the calling records identified by

Taylor on which the Court has found liability excluded calls to

businesses.

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The evidence also shows that Order Entry Retailers JSR and

Star Satellite called residential telephone numbers. The standard

Retailer Agreements only authorized Order Entry Retailers to sell

Dish Network programming to residential customers. The Order

Entry Tool could only be used to submit orders for residential

programming packages to Dish. Goodale, Myers, and Baker

testified that both JSR and Star Satellite, either directly or through

Guardian, called residential telephone numbers in published

telephone directories.

Dr. Yoeli’s 2012 sampling data corroborates these witnesses’

testimony. The 2012 samples show that the vast majority of the

identified calls were directed to residential customers:

 85 percent of identified numbers in the 2003-2007

Calling Records;

 94 percent of identified numbers in the 2007-2010

Calling Records;

 97 percent of identified numbers in the Star Satellite

Calling Records; and

 98 percent of identified numbers in the JSR Calling

Records.

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All of this evidence, taken as a whole, shows by a preponderance

that Dish, its Telemarketing Vendors, and Order Entry Retailers

JSR and Star Satellite placed the vast majority of their outbound

telemarketing calls to residential telephone subscribers. The

preponderance of the evidence shows that the telemarketing calls

made by Dish, the Telemarketing Vendors, JSR, and Star Satellite

at issue in this case were directed to residential telephone

subscribers.

The percentage of residential calls to all calls in the samples

was smaller.

 67 percent of all calls in the 2003-2007 Calling Records;

 69 percent of all calls in the 2007-2010 Calling Record;

 40 percent of all calls in the Star Satellite/Guardian

Calling Records; and

 91 percent of all calls in the JSR Calling Records.

These percentages would be accurate only if all of the unidentified

numbers were not residential telephone numbers. The unidentified

numbers, however, included unlisted landline residential numbers

and unlisted VoIP residential numbers. Furthermore, numerous

Dish witnesses, including Bangert, Dexter, and Davis, testified that

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Dish called residential numbers. Goodale, Myers, and Baker

testified that JSR and Star Satellite called published residential

numbers. Given this testimony, the actual percentage of residential

numbers in the call records is far closer to the percentage of

identified numbers.

Dish argues that Dr. Yoeli’s sampling analysis is not probative

because the samples are national samples rather than samples

from each of the Plaintiff States. Dr. Yoeli’s samples, standing

alone, would not establish the number of calls that these

telemarketers directed to residential telephone numbers because

they are national samples. Dr. Yoeli’s sampling, however,

corroborates the other evidence, including the testimony of Dish

witnesses Bangert, Dexter, and Davis, and others; the testimony of

Goodale, Myers, and Baker; the terms of the Retailer Agreements

which only authorized sales to residential customers; and the Order

Entry Tool could only be used to place residential orders. All of this

evidence, without the sampling, would be sufficient to establish that

Dish and its Telemarketing Vendors, JSR, and Star Satellite made

telemarketing calls to residential telephone numbers. Dr. Yoeli’s

national sampling corroborates this other evidence. The Court

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finds that it is more likely than not that the telemarketing calls

made by Dish, the Telemarketing Vendors, JSR, and Star Satellite

were directed to residential telephone subscribers.

The Plaintiff States have also established that it is more likely

than not that Satellite Systems called residential telephone

subscribers. The Retailer Agreement only authorized Satellite

Systems sales to residential customers for Dish Network

programming. The Order Entry Tool could only be used to place

residential orders. Satellite Systems, therefore, only made money

by calling residential telephone subscribers. Absent any

contradictory evidence, the reasonable inference is that Satellite

Systems called residential telephone subscribers. Dish has not

presented any evidence showing that Satellite Systems called

businesses or other non-residential numbers.

The Plaintiff States have further submitted post-trial the

verdict entered January 19, 2017, in the class action suit brought

by Plaintiffs’ witness Dr. Krakauer. Krakauer v. Dish Network,

L.L.C., M.D. N.C. Case No. 1:14-CV-333. The case concerned

51,166 Registry Calls made by Satellite Systems in 2010 and 2011.

Unlike this action, the class action was limited to residential

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telephone subscribers who were called twice within a 12-month

period after registering their numbers on the Registry. See 47

U.S.C. § 227(c)(5). The jury found that all of the 51,166 calls were

made to residential telephone subscribers. See Letter dated

January 30, 2017 (d/e 764), attached Verdict Sheets, at 1-2. The

Plaintiffs argue that the verdict determination is persuasive

evidence that the Satellite Systems directed its telemarketing calls

to residential telephone subscribers.

Id., at 4.

The Court may take judicial notice of the verdict, transcripts,

and filings in a public trial. See Village of DePue, Illinois v. Viacom

International, Inc., 632 F.Supp.2d 854, 857, n.1 (C.D. Ill. 2009);

Fed. Rule Evid. 201. Dish does not object to the Court’s

consideration of the verdict and other public record material from

the Krakauer case. See Letter dated February 10, 2017 (d/e 767).

Dish, however, disputes whether the verdict and the other public

record documents submitted by the Plaintiffs are relevant or

probative of whether the recipients were residential telephone

subscribers. Id., at 5.

The Plaintiffs also argue that the verdict in Krakauer establishes under the doctrine of issue

preclusion that Satellite Systems was an agent of Dish. The Court already determined that

Order Entry Retailers were marketing agents of Dish. The Court does not need to address the

question of issue preclusion.

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The verdict has some probative value. A jury heard evidence

on the issue and determined that the call recipients were residential

telephone subscribers. The probative value is limited, however,

because the verdict is subject to review by the trial court under

Federal Rule of Civil Procedure 59 and by the Court of Appeals. The

verdict, however, is consistent with the terms of the Retailer

Agreement and the design of the Order Entry Tool, which both

limited sales to residential customers.

With or without the verdict in the Krakauer class action, the

Court finds that the preponderance of the evidence shows that

Satellite Systems called residential telephone subscribers.

VI. Area Codes and State of Residency

The Plaintiff States alleged that Dish made illegal

telemarketing calls directed at residential telephone subscribers

residing in the Plaintiff States. Third Amended Complaint, Counts

V-XII.

Dr. Yoeli and John Taylor both used telephone area codes to

determine whether a call recipient resided in a Plaintiff State. See

e.g., Opinion 445, at 124-39. Dish, however, challenged at

summary judgment the accuracy of area codes to prove states of

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residency of telephone subscribers. Opinion 445, at 204. The

Court found that issues of fact existed regarding whether area

codes proved the telephone subscribers’ states of residence.

The Plaintiff States established at summary judgment that

Dish engaged in a pattern and practice of making illegal

telemarketing calls in violation of the TCPA to residents of the

Plaintiff States. The evidence regarding the accuracy of area codes

to prove telephone subscribers’ states of residence was relevant to

the appropriate amount of statutory damages or civil penalties

under the various counts. Opinion 445, at 205-07.

The North American Numbering Plan Administration (NANPA)

assigns telephone area codes to geographic areas within each state,

Puerto Rico, Canadian province and territory, and participating

Caribbean nation or territory. See PX 1405, NANPA 2014 Annual

Report; PX 1406, List of NANPA Area Codes Sorted by Location; T

613: 188-89 (Yoeli). The numbers are assigned to landline, VoIP,

and wireless telephone accounts.

Technological changes in telephones allow a telephone

customer to have a telephone number with area codes other than

the one assigned to their states of residence. Wireless telephone

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account holders can either keep the same number if they move to

other states, or may provide a wireless telephone for a relative or

friend that lives in another state. Since 2007, the FCC has allowed

telephone customers to port, or transfer, a number from one type of

telephone account to another, e.g., from a wireless account to a

VoIP line. See In re Telephone Number Requirements for IP-

Enabled Services, 22 F.C.C.R. 19531, at 19534-35 (2007); see also

T 616: 46 (Stauffer). VoIP telephone accounts may also elect to

have an area code that is not based on the geographic location of

the telephone where the telephone is actually located. See In re

Vonage Holdings Corp., 19 F.C.C.R. 22404, at 22408, 22439 (2004);

see also In re Numbering Policies for Modern Communications, 28

F.C.C.R. 5842, at 5920 (2013) (FCC Commissioner Jessica

Rosenworcel stated, “People now move and take their numbers with

them. Case in point: in my office here at the Commission, half of

those who work with me have phone numbers with area codes that

do not reflect where they live.”). Thus, it is theoretically possible

that residential customer’s telephone numbers could contain an

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area code other than the ones assigned to his or her state of

residency. See Opinion 445, at 145-46.

The mobility of wireless telephones is not relevant in this case

because Dish, its Telemarketing Vendors, and Order Entry Retailers

Star Satellite, JSR, and Satellite Systems directed their calls to

residential telephone subscribers, as discussed above. Dish also

scrubbed calling lists for itself and its Telemarketing Vendors to

remove wireless numbers, either directly or through PossibleNOW.

The evidence at the January and February 2016 trial

proceedings showed a high correlation between area code and state

of residence. Taylor agreed that prior to November of 2008, that the

match between area codes and states of residence for residential

landlines was 97 percent. T 633: 3332-33, 3338 (Taylor). Dr. Yoeli

analyzed a sample of consumer complaints compiled in the FTC’s

online Sentinel Database. The state of residency matched the state

assigned to the area code of the consumer in every case where the

Dish repeatedly states that the Court held at summary judgment that area codes cannot be

used to determine state of residency. See e.g., Dish Network L.L.C.’s Propose Conclusions of

Law for the Second Phase of Trial (d/e 737), at 38. This is incorrect. The Court only held that

area codes did not prove state of residency for purposes of summary judgment. See Opinion

445, at 205-08, 214-25.

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consumer provided address information. T 613: 188-89 (Yoeli); PX

38B, Spreadsheet of FTC Sentinel Database Analysis.

Dish’s employees disclosed for the first time at the January

and February 2016 trial proceedings that Dish had possession of

information that could verify the state of residency of the

individuals that it called. Montano testified that Dish had address

information on every intended recipient of the telemarketing calls

that made by Dish and its Telemarketing Vendors eCreek and

EPLDT (Dish Telemarketing Call Recipients). T 629: 3209-10

(Montano); see T 628: 2740-41 (Bangert); T 627: 2639-40 (Dexter);

T 617: 630 (Davis).

The Court determined that Dish should have produced this

address information in discovery. The Court ordered Dish to

produce this address information in supplemental discovery

(Supplemental Discovery). The Court further continued the trial to

October 25, 2016, to allow completion of the Supplemental

In March 2015, Dr. Yoeli provided Stauffer with a set of 30,354 Dish call records. Stauffer

compared those numbers with the PossibleNOW databases and determined that the area code

matched that state of residence in 30,314, or 99.87 percent of the time. The 40 that did not

match did not include information on state of residence. T 616: 42-49 (Stauffer). Dish

employees further testified that Dish just called residences in almost all of its telemarketing

campaigns. This evidence has limited probative value. The Plaintiff States did not present

sufficient evidence of the source of the 30,054 call records to establish that applicability of

these records to Dish’s call records generally. Without proof that the 30,054 call records were

a random sample or other representative sample, Stauffer’s observation has little probative

value.

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Discovery. Opinion entered February 24, 2016 (d/e 624) (Opinion

624), at 5-6. As noted above, the trial resumed on October 25,

2016, and was completed on November 2, 2016.

During the Supplemental Discovery, Dish produced eleven

different sets of data containing address and telephone number

information of Dish Telemarketing Call Recipients (Address Data

Sets). On May 26, 2016, Dish’s counsel sent an email to Plaintiff

California’s counsel regarding the production. One of the Address

Data Sets (data set 10) contained data from a credit reporting

agency TransUnion and another (data set 11) contained marketing

data company Speedeon. Dish’s counsel stated that Dish secured

cold call lists from a marketing database operated by credit

reporting agency Equifax. Counsel stated that Equifax sold the

relevant database to a company named Epsilon. Epsilon no longer

retained such information prior to 2011. Dish secured and

produced substitute data from TransUnion and Speedeon. PX

1446, Revised Supplemental Expert Report of Dr. Erez Yoeli for

Plaintiff States of California, Illinois, North Carolina & Ohio, dated

July 7, 2016 (Yoeli July 2016 Report), Appendix C, Email from

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Dish’s Counsel to Plaintiff California’s Counsel dated May 26, 2016

(May 26, 2016 Email).

Counsel for Plaintiff States sent an email to Dish’s counsel

asking for a description of Address Data Sets 1-9. Plaintiffs’

counsel stated that Plaintiffs stated that they understood that the

final two Address Data Sets, sets 10 and 11, were data from

TransUnion and Speedeon. PX 1446, Yoeli July 2016 Report,

Appendix B, Email from Plaintiff States’ Counsel to Dish Counsel

dated June 9, 2016 (June 9, 2016 Email), ¶ 1.

Dish’s counsel responded by email. PX 1446, Yoeli July 2016

Report, Appendix D, Email from Dish’s Counsel to Plaintiff State

California’s Counsel dated June 22, 2016 (June 22, 2016 Email).

Dish’s counsel provided a brief description of each of the 11

Address Data Sets:

Sets 1 and 1A contain Customer Account data. This

information was pulled from DISH’s Customer Account

database within DISH’s Teradata environment in DISH’s

Data Warehouse.

“Location begin date” reflects the date when DISH

received the location information. It is the first date

when the account was associated with the address.

“Location end date” reflects the last date that the account

was associated with the address. If the date is in the

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future, such as 2199-12-31, then the address was

currently associated with the account at the time that the

information was pulled.

Phone “begin” and “end” dates similarly represent the

first and last dates that the phone number was

associated with the account. If the phone “end” date is in

the future, then the phone number was currently

associated with the account at the time that the

information was pulled.

Set 2 contains lead data pulled from the Lead Tracking

System in use at DISH prior to May 22, 2013.

The “Lead creation” field represents the date the record

was generated.

Set 3 contains lead data pulled from the Lead Tracking

System in use at DISH as of May 22, 2013.

The “Lead creation” field represents the date the record

was generated.

Set 4 contains information from DISH’s “Do Not Contact”

database. This information was pulled from the “Do Not

Mail” portion of DISH’s “Do Not Contact” database. The

mailing addresses in this database may be associated

with customer account numbers. DISH cross-referenced

account numbers associated with phone numbers in the

call records to identify addresses associated with those

same account numbers within this database.

The “Effective date” field represents the date when the Do

Not Contact information became effective.

The “Expiration date” field represents the date when the

Do Not Contact information expired.

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Set 5 contains MKTG_RAID data. This information was

pulled from external hard drives associated with DISH’s

Marketing Department, which contain historical

marketing data.

Set 6 contains SALESCOMM data. This information was

pulled from a database containing customer accounts

generated by retailers and used to determine retailer

compensation. SalesComm is the database of record for

all payments that are made to retailers.

. . . .

The “Eff date” field represents the date when the sales

commission data became effective.

The “Exp date” field represents the date when the sales

commission data expired.

Set 7 contains data from DISH’s Siebel database. This

information was pulled from a database containing

information on customer accounts generated by order

entry retailers.

The “Created date” field represents the effective date of

the Siebel data.

The “Last updt date” field represents the latest date when

the Siebel data was updated.

Set 8 contains data pulled from DISH’s Production

Operational Data System (“PODS”) which was DISH’s

Operational Data store . . . . This specific information

came from . . . data tables created . . . for use by the

Marketing Department. Those tables contained an

association between phone numbers and account

numbers. For any phone numbers . . . identified by the

State Plaintiffs that appeared within these tables, DISH

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used the associated account numbers to pull address

information from its Customer Account data.

“Location begin date” reflects the date when DISH

received the location information. It is the first date

when the account was associated with the address.

“Location end date” reflects the last date that the account

was associated with the address. If the date is in the

future, such as 2199-12-31, then the address was

currently associated with the account at the time that the

information was pulled.

Set 9 contains data from DISH’s Production Operational

Data System (“PODS”) (explained above), and specifically

from subscriber and address information from DISH’s

Billing System-CSG that had been imported into this

Production Operational Data System.

Set 10 contains TransUnion data. TransUnion data was

only provided for phone numbers that did not have any

associated addresses within DISH’s records. . . .

Set 11 contains Speedeon data. Speedeon data was only

provided for phone numbers that did not have any

associated addresses within DISH’s records or within

TransUnion’s data. . .

According to Speedeon, the “I” date represents the date

that the address record was created at Speedeon and the

“D” date represents a date as of which Speedeon no

longer associated the telephone number with that

address.

June 22, 2016 Email, at 1-2 (emphasis in the original).

On July 7, 2016, Plaintiffs’ expert Dr. Yoeli issued his report.

Dr. Yoeli relied on the 11 Address Data Sets produced by Dish; the

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May 26, 2016 Email, the June 10, 2016 Email, and the June 22,

2016 Email, and the information regarding the list of geographical

assignment of telephone area codes by the NANPA. PX 1466, Yoeli

July 7, 2016 Report, at 1; see T 710:99-100 (Yoeli).

Dr. Yoeli made the following assumptions about the time

period when address information in any Address Data Set was valid

(Valid Address). If the Address Data Set included a type of

beginning date and ending date (e.g., the location_begin date and

location_end date in Address Data Set 1), then the association of

the telephone number with the address was valid between the two

dates. If the Address Data Set included a beginning date, but no

end date, then the address was valid from the beginning date until

the present. If the Address Data Set had no date information, then

the address was always valid. PX 1466, Yoeli July 7, 2016 Report,

at 3-4.

Dr. Yoeli did not consider the different descriptions of the

beginning and ending dates in the Address Data Sets, such as

location_begin and location_end in Sets 1 and 1A, the Eff date and

Exp date in Set 6, or the “I” and “D” dates in Set 11. Dr. Yoeli

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testified that those different descriptions were not material to his

analysis. See T 710: 145-48, 152-53, 164 (Yoeli).

Dr. Yoeli also used seven sets of call records admitted at the

initial phase of the trial in January and February 2016 (Call Record

Sets). The Call Record Sets contained records of telemarketing calls

that Dish made from September of 2007 through March of 2010.

The first two Call Record Sets made up the Yoeli July 2012 Call Set.

The remaining Call Record Sets were the calls records on which the

Court granted partial summary judgment as violations of the TSR.

The third, fourth, and fifth Call Record Sets were the No English,

Uncompleted, and Inquiry calls records. The sixth Call Record Set,

called Taylor, contained the 501,650 call records identified by

Taylor in his October 2013 Report. The seventh set, called AM

Calls, contained Dish’s 98,054 Abandoned Prerecorded Calls.

Dr. Yoeli identified the calls in the Call Records made to

telephone numbers with area codes assigned to the Plaintiff States

by the NANPA (Relevant State Call Records). PX 1466, Yoeli July 7,

2016 Report, at 4.

Dr. Yoeli compared the telephone numbers in the Relevant

State Call Records with the Valid Addresses associated with those

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telephone numbers at the times of the calls to determine the extent

to which the state of residence in the Address Data Sets agreed with

the state assigned to the telephone numbers’ area codes by NANPA.

Dr. Yoeli identified the times that all Valid Addresses in any of the

Address Data Sets matched the NANPA area code geographic

assignment (All States Match) and the times that at least one Valid

Address in any of the Address Data Sets matched the NANPA area

code geographic assignment (Any States Match). The All States

Match showed NANPA assigned-state for area codes and state of

residency matched 82% to 98% of the time. The Any States Match

showed a match 97% to 100% of the time. PX 1466, Yoeli July 7,

2016 Report, Appendix E, Tables 2A-2G.

Dr. Yoeli concluded, “My analysis shows that, for all Call Sets

and All Plaintiff States, the percentage of calls to addresses in the

Plaintiff State was at least 82%.” PX 1466, Yoeli July 7, 2016

Report, at 6; T 710: 100-02, 173-74 (Yoeli). Dr. Yoeli explained the

rationale behind his All State Match:

I looked at address data as is and allowed the address to

be used if DISH's own records indicate it should be. And

because of the fact there's a variety of different data sets

being used and they are verifying each other, then I have

a lot of confidence in the fact that it doesn't matter if you

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change a particular assumption, you're going to get very

similar results. And that these results are conservative.

T 710: 179 (Yoeli).

Dr. Yoeli erroneously failed to analyze the data in Address

Data Set 1A in his Report. Dr. Yoeli testified that Address Data Set

1A contained about a 10 percent increase in the new data not

already included in the other Address Data Sets. T 710:128-29

(Yoeli). Dr. Yoeli assumed that Dish combined Address Data Sets 1

and 1A before providing them to the Plaintiff States. Yoeli testified

that he subsequently reviewed the information in Address Data Set

1A and concluded that the data did not change his conclusions

materially. T 710:120-23 (Yoeli). Yoeli testified that the change in

the analysis was, “.2, .3 percent. Always less than .5.” T 710: 162

(Yoeli).

Dr. Yoeli also testified that the Address Data Sets contained

multiple addresses for the same telephone number, but the

addresses were generally all in one state, “[T]he bulk of the data are

for people who never move out-of-state.” T 710:149 (Yoeli). Dr.

Yoeli testified that the percentage of cases in which that data

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showed that people moved from one state to another state was 13

percent. T 710:120 (Yoeli).

The Court credits Dr. Yoeli’s All State Match analysis as

probative of the connection between area code and states of

residence. The analysis cross-checked states of residency against

all the Address Data Sets and only counted as matches those

calling records in which the state and area code matched in every

Valid Addresses that appeared in all Address Data Sets. The cross-

checking meant that the information in the various Address Data

States corroborated each other. The corroboration confirmed that

the match of state of residency and area code was more likely than

not accurate. The All States Match analysis supports Dr. Yoeli’s

opinion that Call Sets and All Plaintiff States, the percentage of calls

to addresses in the Plaintiff State was at least 82%.

The conclusion is further supported by Dr. Yoeli’s observation

that almost all of the consumers who had the telephone numbers in

the Call Sets simply did not change states of residence. Only 13

percent of them changed states of residence. Dr. Yoeli’s observation

is further supported by U.S. Census data that 5.6 percent of the

American population moved to a different state during the five-year

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period from 2005 to 2010, an average of 1.1 percent per year. PX

2093, U.S. Census, Geographic Mobility: 2005 to 2010, at 2

(December 2012). The vast majority of consumers did not port their

telephone numbers across state lines because they did not move

out of state. This fact further supports the inference that area

codes agreed with a call recipient’s state of residence at least 82

percent of the time.

Dish presented the expert opinions of Rebecca Kirk Fair. Kirk

Fair holds an MBA in finance and applied economics. She is an

expert with more than 20 years of experience in analyzing large

data sets. She opined that Dr. Yoeli should have considered the

purpose for which the address data was collected and maintained in

each of the 11 Address Data Sets, the purpose of the dates in the

Address Data Sets, and the purpose of the calls made to numbers

in the various Call Record Sets. She opined that Dr. Yoeli’s analysis

was unreasonable and unreliable because of these failings. See

T 711: 456-65, 494-97 (Kirk Fair); DTX 1096, Revised Responsive

Expert Report of Rebecca Kirk Fair (Kirk Fair Report), at 5-6, 44-45.

Kirk Fair did not quantify her opinion of the extent to which Dr.

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Yoeli’s errors affected the validity of his opinions. See T 711: 511,

528 (Kirk Fair).

Much of Kirk Fair’s opinions are speculative and not based on

her expertise in analyzing large data sets. She based much of her

opinions on the relative reliability of the address information in the

11 Address Data Sets. Kirk Fair opined on the reliability of each

Address Data Set based on the descriptions in the June 22, 2016

Email. See Kirk Fair Report, at 9-13. Kirk Fair is not an expert in

the relative reliability of customer account records, billing data,

marketing data from marketing companies such as Speedeon, or

any of the other types of information in the Address Data Sets. See

T 711: 530, 519-20, 527, 533-35 (Kirk Fair) (no knowledge of the

purpose of the various Address Data Sets, and no knowledge of

whether information in various Address Data Sets was maintained

or kept current). Her speculation of the relative reliability of these

different sets of data is not an expert opinion and has no probative

value.

Kirk Fair also criticized Dr. Yoeli’s use of dates in the Address

Data Sets to decide when the address information in a particular

call record was valid. Her criticisms have some validity. In

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particular, Kirk Fair is correct to question Dr. Yoeli’s assumption

that addresses are valid indefinitely if the Address Data set has no

end date of any kind. See T 711: 484-85 (Kirk Fair); Kirk Fair

Report, at 8-14. The Court, however, finds that the All State Match

accommodates for this weakness in Dr. Yoeli’s analysis by requiring

that the area code and state of residency must match in all Address

Data Sets in which it appears at the time of the call.

Kirk Fair also criticized Dr. Yoeli for failing to consider the

types of calls and their relationships to data sets. See T 711:465

(Kirk Fair). Kirk Fair relied on Dish witness Joey Montano’s trial

testimony regarding the types of calling campaigns, including the

purposes of the campaigns and the intended call recipients. Kirk

Fair opined that “the purpose and date of the call can be used

together to assess the relevance and reliability of the addresses”

found in particular data sets. For example, she opined that the

addresses in current account Address Data Sets 1A should be more

relevant and reliable for calls the Dish intended to direct to current

customers. Kirk Fair Report, at 17-19; T 711:465 (Kirk Fair). Kirk

Fair’s observation makes some sense, but depends on her

underlying assumption about the relative reliability of the address

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information in the Address Data Sets. If the Address Data Sets

were equally reliable, then the relationship between the type of call

and the type of Address Data Set would not matter significantly.

Kirk Fair is not qualified to opine on the relative reliability of the

Address Data Sets.

Kirk Fair offered her own alternative analysis of the data. She

used a method she called “triangulation.” Kirk Fair “triangulated”

or looked for logical consistencies and inconsistencies between the

data in light of her opinions of the purpose and reliability of the

data collection and the purpose of the calling campaigns. For

example, if a call to a prospective customer in the Inquiry Call

Record was followed shortly by the placement of the call recipient in

the active accounts (Address Data Set 1A), Kirk Fair inferred that

the call recipient decided to purchase Dish Network programming.

If the addresses in the Lead Tracking System Address Data Sets 2

and 3 and the active account Address Data Set 1A agreed, then Kirk

Fair opined that such a match was a good indication that the

address was the call recipient’s address at the time of the call. Kirk

Fair opined that such consistencies between the purpose of the

calls and the relevant types of data sets corroborated the address

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information in the Address Data Sets. See T 711: 490-96 (Kirk

Fair).

Kirk Fair prepared an alternative analysis of the address data

and call records using her triangulation method. Kirk Fair Report,

24-32 and Exhibit 11. Kirk Fair divided the calls into ten categories

with differing degrees of reliability based on her triangulation

method. She also broke the call record data into the seven different

Call Records that Dr. Yoeli used in his analysis. Kirk Fair’s

triangulation method, like her other opinions, is dependent on her

assumptions about the reliability of the Address Data Sets. That

opinion has no probative value, so the triangulation analysis is not

helpful. Kirk Fair also did not offer any quantitative analysis or any

conclusions on the question at issue, whether it is more likely than

not that an area code indicates that state of residency of the

telephone subscriber with that number.

One aspect of Kirk Fair’s triangulation analysis, however, was

helpful to the Court as the finder of fact. Kirk Fair’s triangulation

analysis showed only one state of residence associated with a

telephone anywhere from 69 to 99 percent of the time, depending

on the Call Record. See T 712: 638-52 (Kirk Fair); Kirk Fair Report,

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Revised Exhibit Table 11.

This analysis did not consider the call

records for which the only address data were from TransUnion and

Speedeon. Kirk Fair Report, 31-32, Revised Table 11 Group I.

Kirk Fair agreed that when a person initially received a

residential telephone number, the NANPA geographic assignment of

the area code in the number would agree with the subscriber’s

residency. T 712: 712 (Kirk Fair). Her triangulation analysis

showed that the owners of the telephone numbers in the Address

Data Sets rarely changed the state of residency. All the addresses

were in one state 69 to 99 percent of the time. This finding is

consistent with Dr. Yoeli’s finding that only 13 percent of the

telephone numbers in the Call Records had more than one state of

residency. These two findings are also consistent with the U.S.

Census data that showed that people changed states of residency at

a low rate of 1.1 percent per year. Together, this evidence proves

that it is more likely than not that an area code of residential

telephone subscribers indicates state of residency of the intended

In these instances, Kirk Fair stated that one or more of her Groups of Dish internal Address

Data Sets in her triangulation method showed an address associated with the phone number

“with no contradictory state information in other sources.” Kirk Fair Report, Revised Exhibit

Table 11, n. 4-7. Kirk Fair testified that her Groups A, B, and C in her triangulation method

had only one state of residence associated with the phone number. T 712: 638-41 (Kirk Fair).

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recipients of telemarketing calls by Dish and the Telemarketing

Vendors.

The preponderance of the evidence also proves that area codes

indicate the states of residency of the residential telephone

subscribers to whom Order Entry Retailers Star Satellite and JSR

initiated illegal calls at issue in this case. Dish’s expert Taylor

agreed that prior to November 2008 area codes accurately indicated

the states of residency 97 percent of the time. Star Satellite and

JSR made all of their illegal calls before 2008. Star Satellite made

its calls in 2005, and JSR made its calls in 2006 and 2007. Star

Satellite and JSR also did not call wireless numbers; rather, both of

these telemarketers called residential numbers in published white

pages directories. Published telephone directories contain highly

accurate address information about the numbers included in the

directories. See T 616: 20-21 (Stauffer). The preponderance of the

evidence shows that area codes establish the state of residence of

JSR and Star Satellite’s intended call recipients.

The Plaintiff States also argue area codes show the residency

of the intended recipients of Satellite Systems telemarketing calls at

issue in this case. The Plaintiff States rely on Taylor’s spreadsheet

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of the 381,811 illegal Registry Calls initiated by Order Entry

Retailer Satellite Systems. DTX 906, Taylor Satellite Systems

Spreadsheet. The Taylor Satellite Systems Spreadsheet contained

addresses including state of residency and area code data in

214,376 of the 381,811 call records. Of the 214,376 call records:

 24,243 call records had California area codes;

 10,145 had Illinois area codes;

 7,414 had North Carolina area codes; and

 12,900 had Ohio area codes.

Almost all of these records had corresponding addresses in the

respective Plaintiff States addresses:

 24,100 of the 24,243 call records with California area

codes also had California addresses, or 99.4%;

 10,048 of the 10,145 call records with Illinois area codes

had Illinois addresses, or 99%;

 7,290 of the 7,414 call records with North Carolina area

codes had North Carolina addresses, or 98.3%; and

 12,803 of the 12,900 call records with Ohio area codes

had Ohio addresses, or 99.2%.

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The Court finds that the Plaintiff States have failed to show

that this calculation can be applied to remaining calls in the

381,811 call records. The Plaintiff States presented no evidence

that the 214,376 call records that had addresses were either a

random sample or otherwise representative sample of the 381,811

call records. The Plaintiff States needed expert testimony or some

other competent evidence to show that the information about the

214,376 call records could be applied generally to all of the 381,811

call records.

The address information in the Taylor Satellite Systems

Spreadsheet is sufficient to establish by a preponderance of the

evidence the states of residency for holders of the telephone

numbers with specific records that included addresses. The

Plaintiffs have failed to present necessary to show that anything

more can be drawn from this information.

VII. Taylor Analyses Related to Civil Penalties

Dish presented testimony by Taylor regarding the 1,707,713

Dish telemarketing calls from 2007-2010 on which the Court

granted partial summary judgment. Dish presented this testimony

for the limited purpose of addressing the appropriate amount of

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civil penalties. Dish’s culpability is a relevant factor in awarding

civil penalties under at least the TSR. See FTC Act § 5(m) (1)(C), 15

U.S.C. § 45(m)(1)(C).

The Court makes the following findings

regarding Taylor’s trial testimony for the limited purpose of

addressing the appropriate amount of monetary remedies. The

Court also makes additional findings regarding Taylor October 14,

2013 Report because the Report contains significant additional

information relevant to Dish’s culpability. The Court addresses the

October 14, 2013 Report first because the findings about this

Report provides useful background for the findings related to

Taylor’s testimony.

A. Taylor October 14, 2013 Report

Taylor prepared the October 14, 2013 Report in response to

Dr. Yoeli’s December 14, 2012 Revised Report. PX 16, (Taylor

October 2013 Report). Taylor performed his own separate analysis

of Dish’s calling records and Telemarketing Vendor eCreek’s calling

records for the years 2007-2010. Dish provided Taylor with

371,161,704 Dish call records and 85,144,857 eCreek call records

The Court addresses the applicability of equitable factors in assessing the appropriate

amount of statutory damage under the TCPA and applicable state laws later in Conclusions of

Law.

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for the period from 2007 to 2010. Taylor removed duplicate records

and records with invalid telephone numbers, which resulted in a

net total of 406,831,605 call records. Taylor eliminated records

associated with non-telemarketing calling campaigns. Taylor then

compared the remaining calls against the Registry historic

database. Taylor found 52,190,030 Registry Calls to numbers that

were on the Registry for at least 31 days at the time of the calls.

Taylor eliminated 1,317,872 Dish prerecorded telemarketing calls

which were not answered by the call recipients. The result was

50,872,178 Registry Calls. Taylor October 2013 Report, at 6.

Taylor then eliminated calls that were made within 558 days of

the latter of the last payment date or the activation date. A total of

18,643,695 Registry calls remained. Taylor found that with respect

to these calls: (1) Dish had no record of any payments or activations

associated with the intended recipients of these calls; or (2) Dish’s

records showed that the last payments (or activations if Dish had

no subsequent payment records) were more than 558 days before

the dates of these calls. Taylor October 2013 Report, at 6.

Taylor then eliminated 943,240 calls that were on Lead

Tracking System calling campaigns. Taylor again relied on

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representations from Dish personnel that the Lead Tracking System

calling campaigns were calls to inquiry leads made within a day or

two of the inquiry. See T 633: 3258 (Taylor). The remaining

Registry calls totaled 17,700,455. Taylor October 2013 Report, at

6-7.

Taylor then eliminated 532,261 calls because the disposition

codes indicated that the telephones of the intended recipients did

not ring. The remaining Registry calls totaled 17,168,194. Taylor

October 2013 Report, at 7.

Taylor then eliminated 41,417 calls because the disposition

codes indicated that the calls were calls to businesses or were non-

telemarketing calls, such as related to payment reminders. The

remaining Registry Calls totaled 17,126,777. Taylor October 2013

Report, at 7.

Taylor then eliminated 76,740 calls because the disposition

codes stated wrong number or no English. The remaining Registry

Calls totaled 17,050,037. Taylor October 2013 Report, at 7.

Taylor then eliminated 13,792,511 calls because the

campaigns “were only dialed to current customers or former

customers within 558 days after their last transaction with DISH.”

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Taylor did not rely on records of transactions to make this

statement in the October 2013 Report. He had already eliminated

calls based on transaction data to reduce the number of possible

violations from 50,872,178 Registry Calls to 18,643,695 Registry

Calls. Taylor relied on a spreadsheet containing a list of calling

campaigns to identify by campaign name or code the campaigns

that Dish intended to direct to current and former customers with

disconnect dates within 18 months of the date of the calls. Taylor

October 14, 2013 Report, at 7; see T 633: 3298-99 (Taylor). After

eliminating 13,792,511 calls on this basis, the remaining Registry

Calls totaled 3,257,526.

Taylor then eliminated 2,755,876 calls because “Quality

Assurance testing” found that the calls were part of non-

telemarketing campaigns. The resulting Registry calls totaled

501,650. Taylor opined that he had no basis that these 501,650

Registry Calls were permitted under the Do-Not-Call Laws. The

Court granted partial summary judgment on the 501,650 Registry

Calls from Taylor’s analysis in this October 2013 Report. Opinion

445, at 158-67, 231-32.

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A number of Taylor’s opinions for excluding calls from the set

of calls that violated the Do-Not-Call Laws are legally incorrect or

are not supported by any evidence in the record. Taylor excluded

532,261 calls which did not ring the intended recipients’ phones,

and 76,740 calls that were wrong numbers or to individuals who

did not speak English. The Court rejected similar opinions by

Taylor at summary judgment. See Opinion 445, at 167-168. The

TSR and FCC Rule prohibit initiating Registry Calls regardless of

whether the calls go through. TSR 16 C.F.R. § 310.4(b)(1)(iii); 47

C.F.R. § 64.1200(c)(2). The 532,261 calls and the 76,740 calls were

initiated as telemarketing calls, Taylors’ opinions regarding these

calls have no probative value.

Taylor excluded 943,240 calls on Lead Tracking System calling

campaigns. This opinion is premised on Dish’s representations to

Taylor that Lead Tracking System calling campaigns are calls to

inquiry leads within a day or two of the inquiry. See T 633: 3258

(Taylor). As the Court discussed above, Dish has failed to present

competent evidence regarding the make-up of the Lead Tracking

System. Dish, therefore, failed to show that the Lead Tracking

System in fact consisted of contact information of individuals who

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inquired about Dish Network programming. Taylor’s opinion

regarding the Lead Tracking System calls is not supported by

competent evidence. The opinion has no probative value.

Taylor excluded 13,792,511calls because those calls were part

of Dish calling campaigns with codes that indicated that the

campaigns directed toward current customers or customers who

made a payment within 18 months (558 days) of the dates of the

calls. As the Court has already explained, calling campaign codes

and names are not a reliable method of determining whether Dish

had a Transaction-based Established Business Relationship with a

customer. Taylor’s October 2013 Report demonstrates the lack of

reliability of calling campaign names. Taylor identified 18,643,695

telemarketing calls directed to individuals for whom Dish had

either: (1) no records of activations or payments, or (2) Dish’s

records showed that the last payments or activations associated

with those records were more than 558 days (or 18 months) before

the dates of the calls. Taylor October 2013 Report, at 6. The

13,792,511 calls were a subset of those 18,643,695 calls. Thus,

Dish had no record that any of the intended recipients of the

13,792,511 calls either activated Dish Network programming or

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paid for Dish Network programming for at least 18 months before

the date of the calls. Taylor’s opinion that Dish had Transaction-

based Established Business Relationships with the intended calls

recipients based on calling campaign names has no probative value.

After eliminating Taylor’s opinions that have no probative

value, Taylor’s October 2013 Report supports the finding that from

2007 to 2010, Dish made at least 15,846,402 Registry Calls to

individuals with whom Dish had not shown that the calls were

made either within three months of inquiries about Dish Network

programming, or within 18 months of the intended recipients’ last

transactions with Dish.

Dish, therefore, did not show that it had

an Established Business Relationship with the intended recipients

of an additional 15,846,402 Registry Calls from 2007-2010. The

Court notes that this conclusion has some similarity to Dr. Yoeli’s

finding in his December 14, 2012 Report that 2007-2010 Calling

The Court does not address the 1,317,872 prerecorded calls that were not answered or the

2,755,876 calls that were excluded by an undefined “Quality Assurance” process. The

1,317,872 calls were still initiated to numbers on the Registry even if they were not answered

by a person. The answering requirement only relates to call abandonment. The Court does not

include them because Taylor eliminated them before he analyzed whether call recipients paid

Dish for programming and services within 18 months of the call. These calls, therefore, might

be subject to an Established Business Relationship exception. The Court did not include the

2,755,876 calls because the parties presented no evidence on the Quality Assurance process

cited by Taylor, and the purpose of these findings is limited to weighing the factors related to

the appropriate amount of monetary relief, rather than the number of calls for which Dish

should be held liable.

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Records contained 18,039,631 Registry Calls.

The Court will not

impose liability for these calls because the Plaintiffs do not seek

liability for these calls. The Court will only consider this finding

with respect to factors used to determine appropriate monetary

relief.

B. Taylor Trial Testimony

1. Taylor’s Revised Opinions

At trial, Taylor revised his opinions from the September 20,

2012 Report (PX 26). The Plaintiffs submitted Taylor’s opinions to

the Court at summary judgment, and the Court relied on those

opinions when it entered partial summary judgment against Dish

on 1,707,713 calls in the records of Dish’s telemarketing calls in the

years 2007- 2010. See Opinion 445, at 167, 75 F.Supp.3d at 1010.

Taylor opined in the September 20, 2012 Report that certain of

the 3,342,415 calls that Dr. Yoeli found to illegal Registry Calls

were not violations for various reasons. When Taylor opined that a

portion of the 3,342,415 calls were not illegal Registry Calls for a

particular reason, he removed or “eliminated” them from the total.

Taylor’s calculations would actually exceed Dr. Yoeli’s findings if the Court included the

1,317,872 prerecorded calls that were not answered or the 2,755,876 calls that were excluded

by an undefined “Quality Assurance” process.

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Taylor testified that he used a “waterfall” analysis in his

assessment. Taylor testified that the waterfall method meant that

when he eliminated a set of calls for one reason, he subtracted

those calls from the total calls before he considered other reasons

for eliminating calls. In this case, Taylor eliminated 309,931 calls

because the phones of the intended recipients of the calls did not

ring. He subtracted the 309,931 calls from the 3,342,415 calls in

the Yoeli July 2012 Call Set to produce a remainder of 3,032,484

calls. He followed this method with each reason on which he

opined that calls should be excluded. He subtracted from the

3,032,484 calls the 12,552 calls that were to wrong numbers or

because the call recipient did not speak English. This left a

remainder of 3,019,932 calls. He continued this waterfall method

of subtraction and evaluation of the remainder of calls until he

found 765,531 calls for which he could not find a basis to say that

the calls did not violate the TSR or the TCPA. T 633: 3253-59

(Taylor); see PX 26, September 20, 2012 Report, at 3-8.

Taylor did not consider whether a call could be eliminated for

more than one reason. The Court rejected Taylor’s opinions that

telemarketing calls were not illegal Registry Calls if the intended

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recipients’ telephones did not ring, if the recipient of the call did not

speak English, if the call was intrastate, or if call was part of a Lead

Tracking System campaign (collectively Rejected Reasons). See

Opinion 445, at 167-68, 75 F.Supp.3d at 1010. Taylor testified at

trial that some calls that were eliminated in early parts of the

waterfall analysis for these Rejected Reasons should have been

eliminated at later points in the analysis for other valid reasons.

See T 633: 3255, 3266-67 (Taylor).

Taylor testified that if he had considered multiple reasons for

excluding calls, many more calls would have been eliminated.

Taylor opined at trial that the following numbers of calls that he

eliminated for Rejected Reasons would also have been eliminated

for alternative reasons:

 65,451 calls were Lead Tracking System calls;

 26,077 calls were directed to individuals who opted to

receive information about home services on a website

called EP Homes (Dish witness Montano testified Dish

received lead from the EP Homes website. T 629:

3120-21 (Montano));

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 16,107 calls were non-telemarketing work orders

based on the calling campaign codes (These campaign

codes were codes that Montano initially identified as

telemarketing campaigns, but later changed his

opinion.);

 4,280 calls that were non-telemarketing calls based on

the calling campaign code (These campaign codes were

codes that Montano initially identified as telemarketing

campaigns, but later changed his opinion.);

 106,781 calls were calls to current customers based

on calling campaign codes;

 3,559 were calls to current customers to convince

them not to terminate service, based again on

campaign codes; and

 78,947 calls were calls to former customers within 18

months of disconnection based on campaign codes.

T 633: 3269-73 (Taylor).

Taylor’s opinions regarding the 16,107 calls for work orders

and the 4,280 calls for other non-telemarketing reasons may have

some merit. Montano’s trial testimony that he changed his mind

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may provide some basis to consider a lesser degree of culpability by

Dish for these calls. Dish did not present Montano’s revision of his

opinions regarding calling codes at summary judgment, however, so

any argument to avoid liability based on Montano’s trial testimony

is waived.

Taylor’s other revised opinions have no probative value. Dish

failed to present competent evidence regarding the formation and

scrubbing of the Lead Tracking System calling lists. Dish,

therefore, failed to present any evidence to show an Inquiry-based

Established Business Relationship with any of the recipients of

these calls.

The evidence regarding 26,077 calls to leads Dish received

from the EP Homes website does not establish the dates that

consumers made any inquiries or opt-ins on the EP Homes website.

The evidence, therefore, does not show that the telemarketing calls

were within three months of the inquiries.

Taylor opined that the recipients of the remaining sets of

106,708 calls, 3,559 calls, and 78,947 calls all had Transaction-

based Established Business Relationships with Dish because the

calls were part of certain calling campaigns. As discussed above,

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Dish calling campaign names were not a reliable indicator a

Transaction-based Established Business Relationship. Taylor’s

October 2013 Report showed that Dish made at least 13,792,511

calls to people who had not purchased Dish Network programming

for at least 18 months, but who were erroneously included in

calling campaigns with names that indicated that Dish had

Transaction-based Established Business Relationships with them.

Taylor’s opinions of Dish’s Established Business Relationships with

intended call recipients of these calls have no probative value.

Taylor also again offered at trial his opinion that 873,551 of

the calls from the 2007-2010 calls for which Dish was liable at

summary judgment were not illegal because the calls were made as

part of Lead Tracking System calling campaigns. T 633: 3268-69

(Taylor). Dish presented no competent evidence of the makeup of

the Lead Tracking System or the process to scrub calling lists

derived from that system. Dish, therefore, presented no competent

evidence that it had Inquiry-based Established Business

Relationships with the intended recipients of these calls. Taylor’s

The 13,792,511 figure does not include the 1,317,872 prerecorded calls that were not

answered or the 2,755,876 calls that were excluded by an undefined “Quality Assurance”

process.

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opinions regarding these calls still lack a factual basis and still have

no probative value.

Taylor’s opinions about the effect of his waterfall analysis

technique and his use of Rejected Reasons, at best, show that the

1,707,713 Registry calls for which Dish was found liable may have

included 16,107 work order calls and 4,280 non-telemarketing

calls. Taylor’s waterfall analysis did not affect the accuracy of his

conclusions with respect to the remaining 1,687,326 calls. The

Court will only consider this analysis for purposes of determining

the appropriate amount of monetary relief.

2. Taylor’s Additional Opinions that Relate to Culpability

Taylor also testified about a detailed analysis of the 501,650

illegal Registry Calls found at summary judgment based on his

October 2013 Report. Dish provided Taylor with the calls records of

all the campaigns in which the 501,650 calls were made. Taylor

broke down the 501,650 illegal Registry Calls into the number made

in each specific campaign. Taylor calculated the percentage of the

calls in each campaign that were found to be part of the 501,650

illegal calls. T 633: 3262-66 (Taylor); DTX 626A, 626B, 626C, and

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626D, Summary of Campaigns with Violations (Taylor’s Tables).

Taylor testified that this analysis showed:

 334,836 of the 501,650 calls were Registry Calls to

persons who had not done business with Dish for at

least 18 months before the dates of the calls;

 125,838 of the 501,650 calls were made in cold calling

campaigns and comprised less than 5% of all calls

made in those campaigns; and

 14,579 of the 501,650 calls were made in other

campaigns and comprised less than 5% of all calls

made in those campaigns.

T 633: 3276-78 (Taylor).

Taylor opined that if the percentage of

violations from a particular calling campaign list was less than 5%,

then that list was scrubbed to remove numbers on the Registry.

T 633:3277 (Taylor).

Taylor’s Tables have no probative value. Taylor’s Tables only

considered the 501,650 calls from his October 2013 Report found to

be violations at summary judgment. Taylor did not include in his

Taylor offered no opinions regarding 57,707 of the illegal Registry Calls found at summary

judgment.

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calculations the 15,846,402 Registry Calls in his October 2013

Report that he erroneously excluded. Taylor’s Tables, therefore, are

not probative of the percentage of Registry Calls in any particular

campaign.

VIII. Dish Financial Evidence

Dish’s financial condition is relevant to the determination of

appropriate monetary relief. The Court must consider Dish’s ability

to pay and its ability to continue operating when determining an

appropriate civil penalty under § 5 of the FTC Act in Counts I-IV.

15 U.S.C. § 45(m)(1) (C). The Court must further consider whether

an award would be excessive in violation of due process. See St.

Louis I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 66-67 (1919).

The Court, therefore, finds the following facts about Dish’s financial

situation.

Dish’s Annual Report for the period ending December 31,

2016, shows that Dish’s parent holding company, Dish Network

The Court will address the specific applicability of Dish’s financial information to each claim

in the Conclusions of Law below.

Counsel for the United States stated at one point in the trial, “I just want to point out that

we don’t agree that the ability to pay in the statute necessarily means current day ability to

pay. And that the Court could actually look at different time periods ability to pay to calculate

the civil penalties figure. But for the purposes of today I don’t think that matters.” T 621: 1458

(DeFranco) (Attorney Runkle speaking). The United States has not developed this argument or

identified a different relevant period of time. The argument, therefore, is waived. The United

States also relied on Dish’s most recent public filing regarding its financial situation.

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Corporation (Dish Corp.) had a net worth of approximately $28

billion ($28,091,847,000.00); and for 2016, Dish Corp. had total

gross revenues of approximately $15 billion ($15,094,562,000.00)

and net after-tax income of approximately $1.4 billion

($1,449,853,000.00), or $3.12 per share. DTX 1109, Form 10-K

Annual Report Filed February 22, 2017 for the Period Ending

December 31, 2016 (2016 10K), at F-3, F-4.

Dish Corp. also had cash and cash equivalents (cash) of

approximately $5.3 billion ($5,323,7255,000.00) as of December 31,

2016. 2016 10K, at F-3. On June 13, 2016, Dish Corp. secured $2

billion ($2,000,000,000.00) from a bond issue made by a wholly

owned subsidiary of Dish Corp. called Dish DBS Corp. The bonds

are unsecured, are due in June 2026, and carry an interest rate of

7.75 %. Id. at F-36, 38, Note 9, Long Term Debt.

On August 8, 2016, Dish Corp. completed a private

unregistered offering of $3 billion ($3,000,000,000.00) of convertible

notes due in 2026. The notes carry an interest rate of 3.375%.

DTX 1085, Form 8-K dated August 8, 2016. Dish Corp. received

net proceeds of approximately $2.7 billion ($2,723,000,000.00) from

this transaction. Dish Corp. stated in the notice of this private

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offering that the proceeds would be used for “strategic transactions,

which may include wireless and spectrum-related strategic

transactions, and for other general corporate purposes.” Id.

As of December 31, 2015, Dish Corp. had a net worth of

approximately $22.9 billion ($22,886,710,000.00), and had total

revenues for 2015 of approximately $15 billion

($15,068,901,000.00) and net after-tax income of approximately

$747 million ($747,092,000.00). PX 1440, Dish Corp. Annual

Report Form 10K filed February 18, 2016 for the Period ending

December 31, 2015 (2015 10K), at F-3, F-4. Dish Corp. had

approximately $1 billion ($1,053,158,000.00) in cash as of the end

of 2015. 2015 10K, at F-3.

The 2015 annual income reflected a payment of a penalty of

approximately $516 million ($515,555,000.00) to the FCC because

two affiliates of Dish Corp., Northstar Wireless and SNR Wireless,

failed to complete the purchase of a portion of wireless spectrum for

which the two affiliates were the successful bidders at an FCC

auction. Dish Corp. owned an 85% interest in Northstar Wireless

and SNR Wireless. 2015 10K, at F-4 (“FCC auction expense”), and

at F-50 through F-53 (Note 15, Commitments and Contingencies);

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see T 621: 1462-64 (DeFranco). Dish’s annual after-tax income

would have been approximately $1.2 billion ($1,262,647,000.00),

but for this one-time payment for the affiliates’ failure to perform on

their bids with the FCC.

Dish had net after-tax income of approximately $1.5 billion

($1,515,907,000.00) in 2011; $945 million ($944,693,000.00) in

2013; and $807 million ($807,492,000.00) in 2014. PX 1092, Dish

Corp. Annual Report Form 10K filed February 23, 2012 for the

Period ending December 31, 2011 (2011 10K), at F-5; 2015 10K, at

F-4. For the first six months of 2012, Dish had net after-tax

income of approximately $586 million ($586,042,000.00). PX 1088,

Dish Corp. Form 10Q Quarterly Report, filed August 8, 2012, for

the period ending June 30, 2012 (June 2012 10Q), at 2. The

evidence does not show Dish Corp.’s annual net after-tax income for

2012.

As of the time of trial, Dish had approximately $1 billion

($1,000,000,000.00) per month in operating expenses. T 621:

1539-40 (DeFranco); see 2016 10K, at F-4 (total costs and expenses

for 2016 were approximately $12.9 billion ($12,883,453,000.00),

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including approximately $950 million ($953,146,000.00) in

depreciation and amortization.).

Dish made several large one-time payments in the last five

years. In 2015, Dish paid $515,555,000.00 to the FCC discussed

above. In 2012, Dish paid $700 million ($700,000,000.00) to a

company called Voom HD Holding, LLC (Voom), to settle a contract

dispute. PX 1440, 2015 10K, at 93 ¶10.47 (referencing Confidential

Settlement Agreement and release dated October 21, 2012); T 621:

1455 (DeFranco). In 2011, Dish agreed to pay TiVo, Inc., a total of

$500 million ($500,000,000.00), to settle a patent dispute. Dish

agreed to make an initial payment of $300 million

($300,000,000.00) in 2011 and to pay the remaining $200 million

($200,000,000.00) in six equal annual installments in 2012

through 2017. PX 1440, 2015 10K, at F-78.

IX. Injunctive Relief

The Court bifurcated the trial in this proceeding. The Court

continued the trial on issues regarding injunctive relief to the

October and November 2016 trial dates. Both parties attempted to

present evidence regarding Dish’s current operations. Dish

attempted to submit evidence of its current practices to show that it

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is complying with the Do-Not-Call Laws. The Court excluded this

evidence because Dish did not properly disclose the evidence in

discovery. The Court gave Dish the option of using the new

evidence at trial if it agreed to reopen discovery at its expense. See

Opinion entered January 4, 2006 (d/e 575). Dish decided not to

reopen discovery. Notice of Defendant Dish Network L.L.C.

Declining Additional Discovery (d/e 650). The Court prohibited all

parties from submitting new evidence not produced in discovery

without leave of court. See Opinion entered October 12, 2016, (d/e

697), at 7-9.

The Plaintiffs sought to produce evidence of new consumer

complaints. The Court barred this evidence because the Plaintiffs

did not seek leave of Court and the prejudice to Dish from the late

disclosure.

The Plaintiffs presented the testimony of David Torok. At the

time of trial, Torok had recently retired from the FTC. Before his

retirement, Torok was an Associate Director of the FTC’s Bureau of

Consumer Protection. Torok participated in the launch of the

Registry and in the original TSR rulemaking proceeding. Torok

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later managed the division that ran the Registry and the Consumer

Sentinel database of consumer complaints. T 710: 21-23 (Torok).

Torok testified that prior to the launch of the Registry,

consumers were clamoring for help because of unwanted

telemarketing calls. Internal Do-Not-Call Lists did not work

because even if consumers told one telemarketer not to call,

another would. State registries were uneven in their effectiveness.

T 710: 35 (Torok).

The FTC staff was surprised by consumer response to the

launch of the Registry in 2003. Fifteen million consumers

registered telephone numbers in the first five days. Within two

months of the launch, 40 million consumers had registered their

telephone numbers. Currently, 226 million numbers are registered

on the Registry. The number of registered telephone numbers has

grown every month. About 100 consumers per month remove their

telephone numbers from the Registry. T 710: 35-37 (Torok).

The FTC continues to receive complaints about illegal

telemarketing calls. The FTC receives 200,000 to 300,000

complaints on the Registry complaint system every month. Torok

opined that these complaints are the just tip of the iceberg, that the

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total violations are much higher. Torok testified that consumers are

particularly upset about the proliferation of Prerecorded Calls,

which he called robocalls. T 710: 38-42 (Torok).

Torok opined that Registry enforcement, including injunctive

relief, was critical. Torok opined that enforcement actions stopped

the violator, sent a message to other violators to deter similar

practices, and sent a message to consumers that the government

was responsive to their complaints and problems. Torok opined

that failure to grant injunctive relief would defeat these law

enforcement goals and send a bad message to consumers. T 701:

44-47 (Torok).

Dish witnesses opined on the likely impact of the Plaintiffs’

proposed injunction on Dish and its Retailers. The Plaintiff United

States submitted a proposed injunction in its pretrial submissions.

DTX 1097, [Proposed] Judgment and Order for Permanent

Injunction filed October 3, 2016 (Proposed Injunction). The Dish

witnesses gave lay opinions on the effect of five provisions of the

Proposed Injunction: (1) a five-year ban on outbound telemarketing

by Dish or any Retailer (Proposed Injunction, § I); (2) a ban on

taking orders from any Retailer that was authorized to place order

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on the Order Entry Tool or a successor system at any time from

2003 to the present (Proposed Injunction § II); (3) a requirement

that Dish must terminate any Retailer who violated the Do-Not-Call

Laws (Proposed Injunction § V); (4) a requirement that Plaintiffs

could perform unannounced inspections of Dish and its Retailers at

any time without prior notice (Proposed Injunction § III); and (5) an

order directing Dish to hire a telemarketing a compliance expert

that had no prior role with Dish or involvement in this case to

perform the following tasks: (a) prepare a compliance plan to be

implemented once the 5-year ban was over, (b) monitor compliance,

and (c) provide regular status reports on compliance (Proposed

Injunction, § II A. and B). The last provision would mean that

PossibleNOW could not be the compliance expert because of its

prior role with Dish and its involvement in this case.

The Dish employees opined that these proposed injunctive

provisions would cause Dish to lose all of its Retailers and many

customers and would impair Dish’s ability to get new customers.

Under Proposed Injunction § II, Dish could not take any orders from

any Retailer because all TVRO and Order Entry Retailers have for

several years used the same computer system called Axiom to place

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orders. E.g., T 710: 195 (DeFranco); T 711: 353 (Mills); see Opinion

445, at 59 (“All retailers now use the Axiom system as the order

entry tool.”).

Also, several Dish witnesses testified the ban on telemarketing

in Proposed Injunction § I would harm all Retailers, not just Order

Entry Retailers. These witnesses testified that TVRO Retailers

commonly call customers on the phone. TVRO Retailers return

messages from existing and prospective customers inquiring about

Dish Network programming. Existing customers contact TVRO

Retailers about upgrades or changes in service. Prospective

customers leave messages about purchasing Dish Network

programming. The ban on all telemarketing would prohibit TVRO

Retailers from calling these people back. The Dish witnesses

testified that the ban on telemarketing would harm these TVRO

Retailers’ ability to maintain and develop customers. Several Dish

employees opined that the TVRO Retailers would stop selling Dish

Network programming and might go out of business, depending on

whether the companies could stay in business marketing other

products and services. See e.g., T 710: 203-04 (DeFranco); T 711:

289-93 (Van Emst).

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Dish employees testified that the Order Entry Retailers would

stop selling Dish Network programming if the telemarketing ban

went into effect. Dish employees opined that many of those Order

Entry Retailers would go out of business. E.g., T 711: 329-30, 334-

35 (Mills).

Joshua Slater, a senior vice president of an Order Entry

Retailer, Infinity Sales Group, testified that the proposed injunction

would put Infinity Sales Group out of business. He testified that

Dish sales were 85 percent of Infinity Sales Group’s business. He

testified that 400 people at Infinity Sales Group would lose their

jobs. T 712: 567 (Slater).

Slater said that Infinity Sales Group would be affected by a

ban on telemarketing even though Infinity Sales Group engaged

inbound telemarketing. Customers may call to inquire about Dish

Network, but want to think about the available programming before

making a decision. Customers may also call and leave a message

requesting a callback. Slater testified that inbound telemarketers,

such as Infinity Sales Group, need to be able to call the prospective

customer back. Such calls would be telemarketing calls. T 712:

570-71 (Slater).

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Dish employees also opined that Proposed Injunction § V

would unfairly force Dish to fire a Retailer if it made one mistake

that violated a Do-Not-Call Law. Dish employees opined that

Retailers would again not work with Dish under those conditions.

E.g., T 711: 302-03 (Van Emst); T 711: 344 (Mills).

Dish employees further opined that Retailers would not work

with Dish if they were subject to unannounced inspections by

federal government officials pursuant to Proposed Injunction § III.

Dish employees opined that such inspections would be intimidating

and would hurt the reputation of the business under inspection.

E.g., T 711: 302 (Van Emst); T 711: 343 (Mills);

Dish employees opined that large numbers of people would

lose their jobs if these provisions of the Proposed Injunction were

put in effect. Dish employees estimated that TVRO Retailers

accounted for 20 percent of Dish’s business, and Order Entry

Retailers accounted for 25 percent of Dish’s activations. T 710:

197-200 (DeFranco); T 711: 288 (Van Emst); T 711: 331 (Mills).

Dish employees opined that many Retailer employees would lose

their jobs. Dish employees opined that many Dish employees would

also lose their jobs, including those directly involved in

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telemarketing and those who would be terminated because Dish

lost business generally. See e.g., T 710: 188, 201 (DeFranco).

Consumers would be injured because Dish could not offer the same

level of services and products if it lost such a large percentage of its

business and retail outlets. T 710: 208-09 (DeFranco); T 711: 300

(Van Emst); T 711: 335-37 (Mills); T 711: 404-05 (Montano).

Finally, CompliancePoint Senior Vice President and General

Manager Kenneth Sponsler testified that PossibleNOW and its

wholly-owned subsidiary CompliancePoint could perform these

telemarketing compliance expert services called for in Proposed

Injunction § II A. and B. Sponsler testified that he felt that

provision sought to punish PossibleNOW for some reason. He

testified that another company would need to invest large amounts

of time gaining the necessary expertise to perform the services

called for in the Proposed Injunction. See T 715: 77-84 (Sponsler).

On questioning by the Plaintiff United States, Sponsler agreed that

under the terms of the Proposed Injunction, PossibleNOW could

perform the expert services as a subcontractor of some other

provider that acted as the telemarketing compliance expert. T 715;

803-04 (Sponsler).

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The testimony from the Dish witnesses regarding the possible

effects of the Proposed Injunction was speculative, and the

witnesses had some bias. Most of the witnesses are Dish employees

involved in marketing or Outbound Operations. Witness DeFranco

is the co-founder and currently Director and Executive Vice

President and, so, has a personal interest the protecting Dish from

any restrictive injunction.

Still, some of the Dish witnesses’ testimony has some merit. A

total telemarketing ban would prohibit anyone in Dish or a Retailer

from returning phone calls about purchasing or upgrading Dish

Network programming. The ban on taking orders from any Retailer

that used the Order Entry Tool’s successor Axiom would effectively

terminate all Dish Retailers. The requirement to fire any Retailer

that made on violation of any Do-Not-Call Laws could be harsh in

some circumstances.

Dish witnesses DeFranco and Montano also testified about

their attitudes toward illegal telemarketing and the effect on

consumers. DeFranco testified that Dish understood the

importance of complying with the Do-Not-Call Laws:

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Q. There's been a claim here, Mr. DeFranco, the

Government's put in papers to the Court, stating that

DISH doesn't get it, that DISH is indifferent to the

telemarketing laws. Much of your life has been devoted to

DISH. Can you address this for the Court, please?

A. DISH definitely gets it. This has been a very -- a

very serious thing both to the senior management of

DISH, and we've communicated that down through the

ranks to anybody that has anything to do with

telemarketing. We take it very seriously. You know,

many of these violations -- we have made mistakes. The

retailers made mistakes. Many of these violations

occurred ten years ago. They were hidden from us by

certain retailers. When we discovered it, we terminated

those retailers. And the people at DISH, the men and

women who work at DISH, are good people. We want to

do the right thing. We're trying to continually improve, we

have improved over the years, and we expect to improve

on a going forward basis.

T 710: 226-27 (DeFranco).

Dish’s Outbound Operations Manager Montano, however,

testified that illegal telemarketing calls in violation of the Do-Not-

Call Laws do not harm consumers:

Q. . . . . Now, you talked about how there – how

consumers or customers get a benefit from receiving win-

back and up-sales; correct?

A. Yes. There's a potential up side for the consumer.

Q. But there's also a group of people who are

harmed by these calls. Namely, those consumers who

don't want them and have asked the national government

as well as DISH Network not to call?

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A. I wouldn't say that they are harmed. Certainly, if

any consumer, regardless of whether it's a current DISH

customer or former DISH customer, communicates to

DISH that they don't want to receive calls from our

organization, we'll absolutely do everything in our power

to abide by that.

Q. But DISH has, in fact, made millions of calls to

these consumers, some who have repeatedly told DISH

Network not to call them. You would say those

consumers weren't harmed?

A. So we talked about that in great detail the last

time I was here.

Q. I know we did. My question is are they not

harmed?

. . . .

A. I don't know whether they were harmed or not.

All I can say, once again, is I apologize for any

inconvenience that may have been caused to the

consumer. Certainly, it is not our intention to call any

consumer that does not wish to receive a phone call from

DISH Network.

T 712: 432-34 (Montano). The Court finds that Dish management

in 2017 takes Do-Not-Call Law violations seriously as a result of the

multistate investigations leading to this action and the July 2009

Assurance of Voluntary Compliance with 46 states, as well as other

private lawsuits. The Court also finds that at least some Dish

managers involved in telemarketing, such as Outbound Operations

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Manager Montano, believe that millions and millions of illegal

telephone calls may have caused some inconvenience, but no real

harm to anyone.

X. Additional Expert Testimony

The parties presented the testimony of three additional

experts, Kenneth Sponsler, Debra Green, and Dr. Avery Abernethy,

Ph.D. The Court makes the following findings regarding these

opinions.

A. Debra Green

Green opined that Dish’s practices did not meet industry

standards with respect to Dish’s handling of consumer complaints

about Order Entry Retailers. T 625: 1978 (Green). The Court finds

that Green is qualified to render expert opinions on operating call

centers. T 625: 1940 (Green). She is not an expert in compliance

with Do-Not-Call Laws. The Court finds that her opinions regarding

Dish’s handling of Order Entry Retailers represented her opinion

based on her general experience. See e.g., T 625: `980-88 (Green).

Green did not rely on any empirical research or any recognized or

published set of industry standards. Green did not opine on

whether Dish complied with the Do-Not-Call Laws, but only

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whether Dish’s practices complied with industry standards. Her

opinions about whether Dish’s practices meet industry standards

have limited probative value. The issue is whether Dish violated the

Do-Not-Call Laws.

B. Kenneth Sponsler

In addition to testifying as a fact witness in the injunctive

phase of the trial, Kenneth Sponsler also testified as an expert

witness. Sponsler is an expert on the telemarketing industry

standards.

Sponsler opined that Dish acted reasonably in its

handling of Order Entry Retailers. T 633: 3400-06, 3419, 3223-25,

3429-32, 3452, 3481, 3502-04 (Sponsler). Like Green, Sponsler’s

opinions were based on his general experience and not on any

empirical research or recognized or published industry standards.

Like Green, Sponsler did not opine on whether Dish complied with

the Do-Not-Call Laws, but only whether Dish acted reasonably. Like

Green, his opinions about Dish’s practices with respect to Order

Entry Retailers have limited probative value. Again, the issue is not

whether Dish complied with industry standards. The issue is

whether Dish violated the law.

Sponsler is an employee of CompliancePoint, a wholly owned subsidiary of PossibleNOW.

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Sponsler also testified about an audit he conducted of Dish’s

direct marketing practices in May 2010. Dish did not disclose any

expert opinions of Sponsler regarding this audit in discovery. The

audit itself, however, was admitted into evidence at trial without

objection. PX 33, Email from Sponsler to Dish Corporate Counsel

Brett Kitei dated July 8, 2010, attached Compliance Certification

Audit dated July 8, 2010 (2010 Audit). Sponsler visited Dish for

two days on May 3-4, 2010 in order to prepare the audit. PX 33,

2010 Audit, at 1. Sponsler’s findings in the audit were limited to

Dish’s practices at the time of the audit in May 2010. T 633: 3452

(Sponsler). The audit says nothing about Dish’s practices before

May 2010. Dish’s telemarketing calls at issue were all made before

March 12, 2010.

Sponsler’s audit may say something about Dish’s practices

after May 2010. The audit, however, was superficial and was based

in large part on hearsay interviews with Dish employees. T 633:

3371, 3379 (Sponsler). Sponsler did not review or audit any call

records. As such, Sponsler’s conclusions have very little factual

support. His opinions in this audit have little probative value.

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Sponsler also mentioned in his testimony that some sellers

who currently engage telemarketing firms are limiting their

monitoring or supervising of telemarketers to avoid findings that the

telemarketers are the sellers’ agents. T 715:817 (Sponsler); see

T 715: 815-20 (Sponsler). This testimony is credible. Sponsler is

knowledgeable of developments in the telemarketing industry

generally.

C. Dr. Avery Abernethy, Ph.D.

Dr. Abernethy is an economist who has studied the

telemarketing industry and the impact of Do-Not-Call Laws on that

industry. Dr. Abernethy opined that the Registry is over-inclusive

because the FTC Improvements Act of 2007 required the FTC to

keep telephone numbers on the Registry until the numbers are both

disconnected and reassigned. T 628: 2844-48 (Abernethy). Dr.

Abernethy opined that this over-inclusiveness resulted in injury to

consumers who would have benefited from receiving telemarketing

calls, but who do not receive the calls. Telemarketers did not call

these consumers because these consumers’ numbers were

improperly required to remain on the Registry too long. T 628:

2859-60 (Abernethy).

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The Court finds that Dr. Abernethy’s opinion is of little or no

probative value. The portion of this case related to the Registry is

concerns calls made to persons whose numbers were on the

Registry. Dr. Abernethy did not offer any opinion at trial regarding

telemarketing calls made to persons whose numbers are on the

Registry; he only opined on the injury that may result from calls

that were not made.

CONCLUSIONS OF LAW

The Plaintiffs allege twelve Counts against Dish. The Court

first makes conclusions of law regarding liability for each Count.

The Court then makes conclusions of law regarding Dish’s liability

for monetary relief. The Court finally makes conclusions of law

regarding the Plaintiffs’ requests for a permanent injunction.

Dr. Abernethy’s opinion is also purely qualitative. He did not opine on the magnitude of any

injury to people who want to be called by telemarketers, but are not being called because of the

statutory requirement to keep numbers on the Registry until the numbers are both

disconnected and reconnected.

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I. Liability

A. Count I

The Plaintiff United States alleges in Count I:

In numerous instances, in connection with

telemarketing, Defendant DISH Network engaged in or

caused a telemarketer to engage in initiating an

outbound telephone call to a person’s telephone number

on the National Do Not Call Registry in violation of the

TSR, 16 C.F.R. § 310.4(b)(1)(iii)(B).

Third Amended Complaint, ¶ 66. Count I contains two parts: (1)

Dish initiated outbound telemarketing telephone calls to persons

whose numbers were on the Registry; and (2) Dish caused

telemarketers to initiate outbound telemarketing telephone calls to

persons whose telephone numbers were on the Registry.

1. First Amendment Challenge

Dish asserts that all claims based on the Registry are

unenforceable because “the Registry violates the First Amendment,

both facially, and as applied to Dish.” Dish Network, L.L.C.’s

Proposed Post-Trial Conclusions of Law (d/e 666) (Dish Conclusions

of Law), at 44 ¶ 144. Dish cannot make a facial challenge because

the Registry only affects commercial speech. Dish may only make

an as-applied challenge. Commodity Trend Services, Inc. v.

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Commodity Futures Trading Comm’n, 149 F.3d 679, 683 (7

Cir.

1998).

The Seventh Circuit has held that Do-Not-Call Registry laws

do not violate the First Amendment. National Coalition of Prayer,

Inc. v Carter, 455 F.3d 783, 792 (7

Cir. 2006). The Seventh

Circuit ruled on the validity of the Indiana Telephone Privacy Act

(Indiana Act). The Indiana Act established a state Do-Not-Call List

that is substantially similar to the Registry. The Indiana Act

prohibited making telemarketing calls to persons who registered

their telephone numbers with the state of Indiana. The Seventh

Circuit held that such registry laws did not violate the First

Amendment. The Court finds the holding in National Coalition of

Prayer is controlling in this case. Should this matter be appealed,

Dish may ask the Seven Circuit to reconsider, but this Court will

follow the Seventh Circuit’s instructions that Do-Not-Call registries

do not violate the First Amendment. See also, Patriotic Veterans,

Inc. v. Zoeller, 845 F.3d 303, 306 (7

Cir. 2017) (Registry has been

“sustained against constitutional challenge.”) (citing Mainstream

Marketing Services, Inc. v. FTC, 358 F.3d 1228 (10

Cir. 2004)).

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Dish argues that the Seventh Circuit did not consider the gist

of Dish’s First Amendment as-applied challenge. Dish argues that

its First Amendment rights were violated because “the Registry was

not effectively cleaned.” Dish Conclusions of Law, at 46 ¶ 189. The

FTC Improvements Act of 2007 directed the FTC to check national

databases and remove numbers from the Registry that have been

disconnected and reassigned:

The Federal Trade Commission shall periodically check

telephone numbers registered on the national “do-not-

call” registry against national or other appropriate

databases and shall remove from such registry those

telephone numbers that have been disconnected and

reassigned. Nothing in this section prohibits the Federal

Trade Commission from removing invalid telephone

numbers from the registry at any time.

15 U.S.C. § 6155. Dish argues that the FTC’s subcontractor

PossibleNOW is not removing from the Registry disconnected and

reassigned wireless numbers because the national databases do not

include directory information about wireless numbers.

Furthermore, Dish argues that the national databases do not

include directory information for 25 percent or more of the VoIP

telephone lines. As a result, PossibleNOW is not removing from the

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Registry many disconnected and reassigned VoIP telephone

numbers.

Dish argues that, “the Registry and its implementing

regulations are not narrowly tailored because the Registry was not

properly cleaned of numbers that DISH and other commercial

entities had a right to contact.” Dish Conclusions of Law, at 46 ¶

190. Dish concludes that “the Registry is overbroad.” Id. ¶ 191.

The Court still concludes that the Seventh Circuit’s decision in

National Coalition of Prayer and is controlling even in the face of

Dish’s new argument. The Seventh Circuit found that Do-Not-Call

registries are constitutional. The Seventh Circuit specifically noted

in Patriotic Veterans that the Tenth Circuit found that the Registry

was constitutional. The Court will follow the Seventh Circuit.

Moreover, even assuming that National Coalition of Prayer and

Patriotic Veterans were not controlling, Dish failed to demonstrate a

violation of the First Amendment as applied to Dish. Dish must

show that the Registry was unconstitutionally applied to Dish to

prevail in an as-applied challenge. See e.g., United States v.

Phillips, 645 F.3d 859, 863 (7

Cir. 2011). Dish did not present

any evidence that any call at issue was made to a telephone

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number that was improperly on the Registry at the time of the call.

As a result, Dish’s as-applied First Amendment argument fails for a

lack of evidence even if National Coalition of Prayer and Patriotic

Veterans were not controlling. The statutes and regulations

establishing and implementing the Registry do not violate the First

Amendment, and the FTC’s maintenance of the Registry did not

violate Dish’s First Amendment rights to commercial speech.

2. Registry Calls by Dish

To establish the first claim in Count I, the United States must

prove that Dish initiated outbound telemarketing Registry Calls. To

establish the second claim in Count I, the United States must prove

the additional element that Dish caused a telemarketer to initiate

outbound Registry Calls. Dish agrees that it is responsible for the

actions of its Telemarketing Vendors eCreek and EPLDT, but denies

that Dish caused the actions of any Retailer.

The Court determined at summary judgment that the

undisputed facts established that Dish and its Telemarketing

Vendors made 1,707,713 illegal Registry Calls reflected in the 2007-

2010 Calling Records. Opinion 445, at 231-32, 75 F.Supp.3d at

1032. At trial, the United States presented evidence to prove Dish’s

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liability for additional calls made by Dish and its Telemarketing

Vendors. The United States sought to prove liability for Registry

Calls recorded in the 2003-2007 Calling Records, and additional

calls recorded in the 2007-2010 Calling Records.

a. The 2003-2007 Calling Records

The Plaintiffs presented evidence at trial that Dish made

millions of calls to persons whose telephone numbers were on the

Registry from October 2003 to September 2007. The 2003-2007

Calling Records contain 501,513,302 telemarketing call records,

and 94,804,008 of the telemarketing calls reflected in those records

were made to persons whose numbers were on the Registry for at

least 31 days at the times of the calls. The statute of limitations for

the United States’ claims is five years. The case was filed on March

25, 2009, so the statute extends back to March 25, 2004. Opinion

445, at 153. Of the 94,804,008 call records, 90,033,575 of the

records show telemarketing calls were made to persons whose

numbers were on the Registry within the five-year statute.

Dish argues that the 2003-2007 Calling Records do not

accurately indicate the total number of calls because the 2003-2007

Calling Records contain duplicate records of the same calls. The

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Court agrees. The June 2005 InterImage Hits Files contained

duplicate records of the same call to the same number on the same

day at the same time. T 615: 542 (L. Steele); PX 772, June 2005

Hits File.

The June 2005 Hits File showed duplicates because that

particular Hits File showed the date and times of the calls. Most of

the InterImage Hits Files included the dates of the calls, but did not

include the times. The InterImage Hits Files contained many

instances of multiple calls to the same number on the same date.

See e.g., PX 792, February 2006 Hits File; PX 793, March-April

2006 Hits List; PX 794, May 2006 Hits List; PX 799, December

2006 Hits Files. The multiple call records on the same day in the

InterImage Hits Files could indicate several calls on the same day to

the same number or duplicate records of the same call. The 2003-

2007 Calling Records contained the dates and the times of the calls.

The United States did not direct Dr. Yoeli to compare the InterImage

Hits Files with the 2003-2007 Calling Records to identify hits that

were duplicate records of the same call. Instead, Dr. Yoeli treated

multiple hits to the same number on the same day as one violation,

or one call. The Court finds that Dr. Yoeli’s assumption meets the

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United States’ burden of proof. The assumption probably

undercounts the number of violations, but the calls counted under

this assumption are more likely than not Registry Calls.

Dr. Yoeli, however, did not opine on the number of calls in the

InterImage Hits Files when counted under the assumption that all

hits on one day to the same number were one violation. Dr. Yoeli

opined on the number of calls that were both hits in the InterImage

His files and hits on Dish’s internal do-not-call lists. Dr. Yoeli

opined that there were 3,022,355 such calls on both the Registry

and Dish’s Internal Do-Not-Call Lists. Dr. Yoeli opined that

2,919,321 of those calls occurred within the statute of limitations

after March 25, 2004. PX 38, Yoeli Declaration, Appendix D, Yoeli

October 14, 2013 Report, Appendix A, at PX 0038-125. Dr. Yoeli

was not offering any opinions at trial regarding the 2003-2007

Calling Records. T 614: 376-77 (Yoeli). The United States relied on

the InterImage analysis, and the Plaintiff States relied on Taylor’s

analysis, discussed below. See State Plaintiffs’ Additional Post-Trial

Proposed Findings of Fact, at 8-9 ¶¶ 73-80 (Plaintiff States relying

on Taylor); United States Amended Proposed Findings of Fact (d/e

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667), at 5-7 ¶ 16 (Plaintiff United States relying on Leslie Steele’s

InterImage analysis).

Taylor opined that from March 2004 to August 2007 Dish

made 3,632,468 calls were made to persons whose numbers were

on the Registry after disregarding his opinions that had no

probative value. Taylor worked from a slightly different call set than

the 2003-2007 Call Records produced in response to the FTC

Demand. Taylor also did not identify the number of calls after

March 25, 2004, to persons on the Registry.

Dish did not present any evidence to show that it had an

Established Business Relationship with any of the call recipients

from October 2003 to September 2007. The Established Business

Relationship exception is an affirmative defense, and Dish has the

burden of proof on this issue. Opinion 445, at 162-63.

The Court concludes that it is more likely than not that from

March 25, 2004 to August 31, 2007, Dish made millions illegal

Registry Calls in violation of the TSR, but the United States failed to

prove the number of calls with sufficient certainty to impose an civil

penalties for specific calls. Dish did not prove that it had an

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Established Business Relationship with the recipients of any of

these calls.

b. The 2007-2010 Calling Records

The 2007-2010 Calling Records show that, in addition to the

1,707,713 illegal calls determined at summary judgment, Dish

made an additional 1,433,207 illegal Registry Calls in violation of

the TSR. Dr. Yoeli opined that the Yoeli July 2012 Call Set of

3,342,415 calls in the 2007-2010 Calling Records were Registry

Calls to persons who did not have an Established Business

Relationship with Dish. The Court entered summary judgment on

1,707,713 calls made by Dish and its Telemarketing Vendors from

September 2007 to March 2010. The United States stipulated that

the maximum number of additional violations in Count I for this

time period was 1,634,702. The stipulated number of 1,634,702

calls was the remaining calls after subtracting the 1,707,713 calls

from the Yoeli July 2012 Call Set of 3,342,415 calls.

The United States conceded that 96,100 of the 1,634,702 calls

were made to persons who activated service with Dish within 18

months of the dates of the calls. As such, Dish had an Established

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Business Relationship with these call recipients. These calls were

not violations.

Dr. Yoeli opined that the remaining 1,538,602 calls were all

telemarketing calls made to persons whose numbers were on the

Registry. Dish presented evidence that 105,395 of the 1,538,602

calls were non-telemarketing calls. The calling campaign codes or

the disposition codes showed that these calls were calls to

businesses, collection calls, scheduling calls, or informational calls.

In light of this evidence, the United States failed to prove that the

105,395 calls were telemarketing calls.

Dr. Yoeli opined that the remaining 1,433,207 were all

telemarketing calls made to persons whose numbers were on the

Registry. Dish presented no evidence to contradict Dr. Yoeli’s

opinion with respect to these calls. Therefore, the 1,433,207 calls

were illegal Registry Calls in violation of the TSR.

Dish attempted to prove that 1,265,359 of these calls were

made to persons who had an Established Business Relationship

with Dish. Dish failed to meet its burden on this defense. Taylor

opined that Dish had a Transaction-based Established Business

Relationship with these calls recipients because the calls were on

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current customer calling campaigns or because Dish had no

disconnect date. These factors are not reliable evidence of a

Transaction-based Established Business Relationship for the

reasons stated in the Findings of Fact. Dish had the burden to

prove the Established Business Relationship exception. Opinion

445, at 162-63. Dish did not meet its burden of proof. The United

States proved that the 1,433,207 calls violated the TSR as calls to

persons whose numbers were on the Registry at the time of the

calls. Dish is liable for making these illegal Registry Calls.

The United States presented evidence that Dish made an

additional 2,386,386 illegal calls to numbers in the 2007-2010

Calling Records because the call recipients’ telephone numbers

were also on the Internal Do-Not-Call Lists of Dish, its

Telemarketing Vendors, or one of its Order Entry Retailers. A seller

or telemarketer may not call a person who has stated that he did

not wish to be called even if the seller or telemarketer has an

Established Business Relationship with the person. TSR 16 C.F.R.

§§ 310.4(iii)(A) and (B). The 2,386,386 calls are also included in

Count II because the calls violated both the probation against

Registry Calls and Internal List Calls. See Lary v. Trinity Physician

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Financial & Insurance Services, 780 F.3d 1101, 1105 (11

Cir.

2015) (A single action can constitute two separate violations if the

action violates more than one part of a regulation (in Lary, the

TCPA)).

Dish is liable for a total of 5,527,306 telemarketing calls

(1,707,713 plus 1,433,207 plus 2,386,386) to persons whose

numbers were on the Registry at the times of the calls in violation of

the TSR from September 1, 2007 to March 12, 2010. The

2,386,386 calls also are included in Count II totals below. The

court in its equitable discretion, will not impose a double recovery

of civil penalties for violation of the TSR in Counts I and II for the

2,386,386 calls.

3. Registry Calls by Order Entry Retailers

The United States must show that the Order Entry Retailers

made telemarketing Registry Calls and that Dish caused the Order

Entry Retailers to make those calls. To prove the latter element, the

United States must show that (1) Dish retained the Order Entry

Retailers, (2) Dish authorized the Order Entry Retailers to market

Dish products and services, and (3) the Order Entry Retailers

violated the TSR by initiating Dish telemarketing calls to numbers

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on the Registry. Opinion 445, at 176; see Opinion entered

November 4, 2009 (Opinion 20), at 15, United States v. Dish

Network, LLC, 667 F.Supp.2d 952, 959-60 (C.D. Ill. 2009) (Scott, J.,

retired).

The Court found at summary judgment that the undisputed

evidence showed that Dish was liable for causing JSR to make

2,349,031 Registry Calls, and for causing Satellite Systems to make

381,811 Registry Calls. Opinion 445, at 176, 232.

The Court finds that Dish caused JSR to make 3,315,242

additional Registry Calls in violation of the TSR. Taylor’s analysis of

the call records show that JSR made these calls from January 2007

through March 2007. The evidence shows that JSR made these

calls as an Order Entry Retailer until Dish terminated JSR on

February 14, 2007. Thereafter JSR made these calls as an affiliate

of another Order Entry Retailer. Goodale testified that JSR

continued to operate after February 14, 2007 by using the login of

another Order Entry Retailer. Goodale did not identify the other

Order Entry Retailer. T 622:1893-94 (Goodale). Regardless, Dish

caused the Order Entry Retailer through which JSR worked to

make telemarketing calls for Dish. The Order Entry Retailer

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authorized JSR to market Dish Network programming. The call

records show that JSR made the calls. Goodale testified that the

calls were made to market Dish Network programming. The Court

finds that Dish thereby caused JSR to make the calls after February

14, 2007 for purposes of the TSR. Dish is liable for causing JSR to

make a total of 5,664,273 (2,349,031 plus 3,315,242) Registry Calls

in violation of the TSR.

The United States claims that Dish is liable for causing Order

Entry Retailer Dish Nation to make the same 5,664,273 calls that

Dish caused JSR to make. However, the United States failed to

show that Dish Nation caused all of these calls. The evidence

shows that JSR worked through Dish Nation before August 10,

2006, when JSR became an Order Entry Retailer. PX 239,

September 2006 Spreadsheet. The fact that JSR worked through

Dish Nation before becoming an Order Entry Retailer in August

2006 does not prove that JSR worked through Dish Nation

thereafter. Dish terminated JSR on February 14, 2007. Goodale

did not identify the Order Entry Retailer through which JSR worked

after February 14, 2007, and no other evidence identifies the Order

Entry Retailer that JSR worked through at that time. Yet, the

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United States has established Dish caused Dish Nation to make

illegal Registry Calls through JSR in July through August 10, 2006.

The United States, nonetheless, did not present evidence of the

number of illegal Registry Calls that Dish Nation and JSR made

before August 10, 2006.

4. Summary

In summary, Dish is liable for the following violations of the

TSR in Count I:

2003-2007: Millions of calls, but

specific number was

September 1, 2007, to March 12, 2010

JSR calls caused by Dish

Satellite System Calls caused by Dish

Total

unproven

5,527,306 calls

5,664,273 calls

381,811 calls

11,573,390 calls

As noted above, the Court, in its discretion, will not impose a

double penalty under the TSR in Counts I and II for 2,386,386 of

the calls that are subject to liability in both Counts.

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B. Count II

The United States alleges in Count II:

In numerous instances, in connection with

telemarketing, DISH Network has engaged in or caused

other telemarketers to engage in initiating an outbound

telephone call to a person who has previously stated that

he or she does not wish to receive such a call made by or

on behalf of DISH Network, in violation of the TSR, 16

C.F.R § 310.4(b)(1)(iii)(A).

Third Amended Complaint, ¶ 67. Count II also contains two parts:

(1) Dish initiated outbound Internal List Calls to a person who

previously stated that he or she does not wish to receive calls made

by or on behalf of Dish; and (2) Dish caused Order Entry Retailers

to initiate outbound Internal List calls to persons who previously

stated that they did not wish to receive calls made by or on behalf of

Dish.

1. Dish Internal Calls

To establish the first claim in Count II, the United States must

prove that Dish initiated outbound telemarketing telephone calls to

persons who previously stated that they did not wish to be called by

or on behalf of Dish. To establish the second claim in Count II,

United States must prove that Dish caused an Order Entry Retailer

to initiate an outbound telemarketing telephone call to persons who

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previously stated that they did not wish to be called by or on behalf

of Dish. Dish again agrees that it is responsible for the actions of

its Telemarketing Vendors eCreek and EPLDT.

The undisputed evidence at summary judgment showed that

Dish made 903,246 Internal List Calls to persons who told Dish or

its Telemarketing Vendors that they did not wish to be called by or

on behalf of Dish. The Court further found that the undisputed

evidence showed that Dish was liable for 140,349 Internal List Calls

made to persons who told eCreek that they did not wish to be called

by or on behalf of Dish. Opinion 445, at 232.

The United States seeks to prove that Dish is liable for

7,321,163 additional Internal List Calls that Dish made to persons

who told one or more Order Entry Retailers that they did not wish

to be called by or on behalf of Dish. The Court found at summary

judgment that the United States needed to show that Dish had an

agency relationship with the Order Entry Retailers in order to

establish liability for these calls. The Court found that issues of

fact remained on this issue. Opinion 445, at 181-84.

The United States asks for reconsideration of the Court’s

determination that the United States must show an agency

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relationship with the Order Entry Retailers in this Count. The

Court denies that request. The TSR states that the seller is liable

for a call made to a person when, “[t]hat person previously has

stated that he or she does not wish to receive an outbound

telephone call made by or on behalf of the seller whose goods or

services are being offered . . . .” 16 C.F.R. § 310.4(b)(1)(iii)(A). The

TSR does not define to whom the statement must be made. The

FTC, however, stated that a do-not-call request was “company-

specific” and that the FTC intended § 310.4(b)(1)(iii)(A) to track the

approach of the FCC Rule. Opinion 445, at 182 (citing Notice of

Proposed Rule Making, Amendments to the Telemarketing Sales

Rule, 67 Fed. Reg. 4492, 4516 (January 30, 2002)). The FCC held

that the similar “on behalf of” language in the FCC Rule required

finding an agency relationship. FCC May 9, 2013 Order, 28 FCC

Rcd. at 6574. This Court found that this interpretation should

apply here given the FTC’s explanation in the 2002 Notice of

Proposed Rulemaking. Opinion 445, at 183.

The Court further noted at summary judgment that the United

States relied on an FCC interpretation of the “on behalf of” language

to support its interpretation of § 310.4(b)(1)(iii)(A). Opinion 445, at

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183-84; see Plaintiffs’ Motion for Summary Judgment (d/e 341), at

91-92(citing Rules and Regulations Implementing the Telephone

Consumer Protection Act (TCPA) of 1991, 68 Fed. Reg. 44,144,

44,156 (July 25, 2003) (2003 FCC Statement); Plaintiffs’ Opposition

to Defendant’s Motion for Summary Judgment (d/e 378), at 196-97

(citing 2003 FCC Statement); Plaintiffs’ Reply in Support of Their

Motion for Summary Judgment (d/e 389), at 61 (citing 2003 FCC

Statement).

The United States no longer relies on the 2003 FCC

Statement, but it now asserts a new interpretation of § 310.4(b)

(1)(iii)(A) based on complaints filed in four cases, including this one.

United States Proposed Conclusions of Law (d/e 668), at 14-16.

The United States argues that this interpretation is entitled to

deference under Auer v. Robbins, 519 U.S. 452 (1997). The United

States made this change in position for purposes of litigation. As

such, the interpretation is not entitled to deference. Christopher v.

SmithKline Beecham Corp., 567 U.S.142, 132 S.Ct. 2156, 2166-67

(2012). The January 30, 2002 FTC statement that do-not-call

requests are company-specific and that the interpretation of this

section should track the FCC approach is a far more accurate

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representation of the FTC interpretation of this section. The Court

will not reconsider its interpretation of §310.4(b)(iii)(A).

The United States has proven that Dish had an agency

relationship with the Order Entry Retailers to telemarket Dish

Network programming. The Court discussed agency principles in

the summary judgment opinion. See Opinion 445, at 185-91. As

this Court noted, “Federal law, Illinois law, and the Restatement all

agree on general agency legal principles. NECA-IBEW Rockford

Local Union 364 Health and Welfare Fund v. A & A Drug Co., 736

F.3d 1054, 1058 (7

Cir. 2013).” Opinion 445, at 185.

This Court set forth the applicable legal principles of express

agency:

The Restatement defines agency as follows:

Agency is the fiduciary relationship that arises

when one person (a “principal”) manifests assent to

another person (an “agent”) that the agent shall act

on the principal's behalf and subject to the

principal's control, and the agent manifests assent

or otherwise consents so to act.

Restatement (Third) of Agency, § 1.01 (2006). The

Restatement definition contains two key aspects: (1) the

principal and agent agree that the agent acts for the

principal; and (2) the agent is subject to the control of the

principal. See also In re Aquilar, 511 B.R. 507, 513

(Bankr. N.D. Ill. 2014). The principal need only have the

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right to control the agent; the agency exists even if the

principal does not exercise that right. See Schutz v.

Arrow Fin. Servs., LLC, 465 F.Supp.2d 872, 877 (N.D. Ill.

2006). The determination of whether an agency exists is a

factual issue. See Spitz v. Proven Winners of North

America LLC, 759 F.3d 724 (7

Cir. 2014); Chemtool,

Inc. v. Lubrication Technologies, Inc., 148 F.3d 742, 746

Cir. 1998).

Opinion 445, at 185-86. Both written agreements and the actual

practices of the parties are relevant to determine whether an agency

exists. See M&J Partners Restaurant Ltd. Partnership v. Zadikoff,

10 F.Supp.2d 922, 932 (N.D. Ill. 1998).

In this case, Dish and the Order Entry Retailers agreed that

the Order Entry Retailers would act for Dish to market Dish

Network programming nationwide. The standard Retailer

Agreement authorized Order Entry Retailers to market Dish

Network programming and present offers to purchase to Dish for

Dish’s approval. PX 152, Retailer Agreement §§ 3.1, 3.2, 7.2. The

Order Entry Retailers marketed Dish Network programming and

submitted customer offers to purchase on the Order Entry Tool,

and Dish reviewed and decided whether to approve the sale. The

Order Entry Retailers used Dish’s logo with the added phrase

“authorized dealer.” Dish and Order Entry Retailers agreed that the

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Order Entry Retailers acted for Dish to market Dish Network

programming.

Dish also retained extensive authority to control the marketing

of its programming and services by Order Entry Retailers. Section

7.3 of the Retailer Agreement gave Dish the authority to control all

aspects of marketing of Dish Network programming.

Dish began exerting that control in 2008 and 2009. Dish

required Order Entry Retailers to provide their Internal Do-Not-Call

Lists to PossibleNOW to be included in a combined Order Entry

Retailer Internal Do-Not-Call List. Dish also required certain Order

Entry Retailers to use PossibleNOW’s scrubbing services. In later

part of 2008 and the first part of 2009, Dish fired 40 Retailers for

fraud and making misrepresentations to customers. In 2009, Dish

fired over half of the Order Entry Retailers for fraud and high churn

and required the rest to comply with the more extensive Quality

Assurance program or be terminated. Dish’s Compliance Manager

Musso stated that the Quality Assurance program was authorized

by § 7.3 of the Retailer Agreement. PX 553, Email thread between

Musso and Sales Manager Mason dated October 25, 2011.

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Thereafter, Dish increased the monitoring and control of Order

Entry telemarketing. Field Representatives and Account Managers

visited Order Entry Retailers on a weekly basis and monitored

telemarketing calls. Dish scored Order Entry Retailer telemarketing

calls on 45 criteria. The criteria included “right sizing” questions to

determine the Dish Network programming that they were to offer

the customer. Dish Field Representatives, Account Managers, and

Sales Managers required Order Entry Retailers to change their

telemarketing practices to increase the Order Entry Retailers’ scores

for the Quality Assurance program.

Sales Managers on occasion: (1) coached Order Entry Retailers

on how to increase scores, (2) changed Order Entry Retailer sales

procedures, (3) revised sales scripts, and (3) prescribed the work

flow of an Order Entry Retailers that did not use a formal

telemarketing script. Sales Managers could discipline Order Entry

Retailers that did not comply. Sales Managers could withhold Dish

programming offers and could restrict access to the Order Entry

Tool.

Finally, Dish Sales Managers had the authority to use the

“absolute power” clause. That is, Dish Sales Managers had the

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authority to tell Order Entry Retailers what to do simply, “because I

said so.” PX 553, Email thread between Musso and Sales Manager

Mason dated October 25, 2011; T. 620: 1289 (Musso). The Court

concludes under all the evidence that Dish had the authority to

exert control over the marketing of Dish Network programming

conducted by Order Entry Retailers. The Court concludes that Dish

had an agency relationship with the Order Entry Retailers with

respect to marketing Dish Network programming.

Dish argues that Dish did not control marketing methods by

Order Entry Retailers because Order Entry Retailers wrote their

own scripts and secured their own leads. The evidence shows,

however, that Dish representatives revised scripts and required

Order Entry Retailers to follow the revisions. Dish also on rare

occasions provided scripts and also provided lead lists to Order

Entry Retailers. This evidence shows that Dish had the authority to

provide leads and to provide scripts. The fact that Dish may rarely

have exercised these indicia of authority to control does not matter.

The issue for purposes of agency analysis is the existence of the

authority, not the actual use of the authority. Schultz v. Arrow

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Financial Services, LLC, 465 F.Supp.2d 465, 477 (N.D. Ill. 2006)

(citing Restatement (Third) of Agency § 1.01 comment c).

Dish argues that § 7.3 of the Retailer Agreement did not give

Dish the authority to control the Order Entry Retailers’ marketing of

Dish Network programming. The Court disagrees. Section 7.3

states that Order Entry Retailers “shall take all actions and refrain

from taking any action, as requested by EchoStar in connection

with the marketing, advertisement, promotion and/or solicitation of

orders for Programming and the sale of DISH DBS Systems.”

Musso cited § 7.3 as authority for the Quality Assurance program.

Dish exerted extensive control over Order Entry Retailers through

the Quality Assurance program. The plain language of § 7.3 and

the Dish’s actions beginning in September 2006 and especially after

2008 show that Dish had extensive authority to control the Order

Entry Retailers’ marketing of Dish Network programming. The

after-the-fact, self-serving testimony by several Dish witnesses to

the contrary is not credible and does not disprove the actual control

exerted by Dish.

Dish also argues that Order Entry Retailers were completely

separate companies and as such were independent contractors.

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Dish cites § 11 of the Retailer Agreement that stated that Order

Entry Retailers were independent contractors. Dish also relies on

numerous statements by Dish employee witnesses and principles of

Order Entry Retailers such as Goodale and Myers to show that

Order Entry Retailers ran their own businesses independently from

Dish.

The Court agrees that the Order Entry Retailers were separate,

independent companies. An independent company, however, can

be an agent with respect to work performed for a principal. See

Bridgeview Health Care Center, Ltd. v. Clark, 816 F.3d 935, 938-39

Cir. 2016); Lawlor v. North American Corp. of Illinois, 2012 IL.

112530, ¶43, 983 N.E.2d 414, 427 (Ill. 2012). Telemarketing

Vendor eCreek was a separate independent business, yet Dish

concedes that eCreek was its agent for telemarketing. Dish’s

authorization to Order Entry Retailers to sell Dish Network

programming and Dish’s authority to control the marketing of Dish

Network programming by Order Entry Retailers are the relevant

questions. Dish authorized Order Entry Retailers to market Dish

Network programming nationwide. Dish had the authority to

control the Order Entry Retailers’ marketing of Dish Network

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programming. The Order Entry Retailers were marketing agents of

Dish. Dish, therefore, was obligated to honor the Do-Not-Call

requests made to Order Entry Retailers, just as it was obligated to

honor such requests made to Dish’s telemarketing agent eCreek.

Dish argues that even if the Order Entry Retailers were

marketing agents, their illegal telemarketing practices were not

within the scope of their authority. The Court again disagrees. The

concept of scope of authority is broad. An agent has authority to

act to further the principal’s objectives, “as the agent reasonably

understands the principal’s manifestations and objectives.”

Restatement (Third) of Agency, § 2.02(1). The principal is liable for

the acts of the agent to further the principal’s purposes unless the

agent acts entirely for the agent’s benefit only. Hartmann v.

Prudential Insurance Co. of America, 9 F.3d 1207, 1210 (7

Cir.

1993). The Order Entry Retailers marketed Dish Network

programming. They acted at least partially for Dish’s benefit. They

did not act entirely for their own benefit.

Dish cites Bridgeview Care Center for the proposition that

Dish is not liable for unauthorized marketing activities. In

Bridgeview Care Center, a hearing aid company authorized a

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telemarketer to send 100 faxed advertisements within a 20 mile

radius of Terre Haute, Indiana. The telemarketer sent almost 5,000

faxed advertisements across Indiana, Illinois, and Ohio. The

Seventh Circuit determined that the hearing aid company was liable

under the TCPA for the 100 faxes it authorized, but not the others.

Bridgeview Care Center, 816 F.3d at 937, 939. In this case, Dish

authorized the Order Entry Retailers to market Dish Network

programming nationally through outbound telemarketing. The

telemarketing was done to benefit Dish. The acts were within the

scope of authority.

Dish argues that it could not have honored the Order Entry

Retailers’ Internal Do-Not-Call Lists because it did not have the lists

until 2008 when it began requiring certain Order Entry Retailers to

give their Internal Do-Not-Call Lists to PossibleNOW. This

argument proves too much. If Dish had the authority to require

Order Entry Retailers to give Dish access to their Internal Do-Not-

Call Lists in 2008, then Dish had the authority to secure access to

the Lists in 2003 and 2004 when the Order Entry program began.

Dish should have done so. Dish’s failure to secure the Internal Do-

Not-Call Lists before 2008 does not absolve Dish from

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responsibility. The Court finds that Dish is liable for 7,321,163

illegal Internal List Calls made to persons who told Order Entry

Retailers that they did not wish to receive telemarketing calls on

behalf of Dish.

Dish’s expert Taylor testified that the set of 7,321,163 Internal

List calls overlapped with the 903,246 Internal List calls for which

the Court found Dish liable at summary judgment. Taylor provided

no explanation of the evidentiary basis of this comment regarding a

claimed overlap. Further, Dish does not point to any portion of any

of Taylor’s reports that mentioned or discussed this claimed

overlap. As such, Taylor’s comment on the stand about an overlap

is unexplained and unsupported by the evidence. The statement

has no probative value. Dish is liable for both the 7,321,163

Internal List Calls and the 903,246 Internal List Calls found at

summary judgment.

2. Order Entry Retailer Internal List Calls

a. Internal List Calls By JSR to Persons Who Stated to

Dish or a Telemarketing Vendor that They Did Not

Wish to be Called by or on Behalf of Dish

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From August 2006 through December 2006, JSR made

418,228 Internal List Calls to persons who stated to Dish or the

Telemarketing Vendors that they did not wish to receive

telemarketing calls by or on behalf of Dish. From January through

March 2007, JSR made 768,696 Internal List Calls to persons who

stated to Dish or the Telemarketing Vendors that they did not wish

to receive telemarketing calls by or on behalf of Dish. The United

States proved that Dish caused these calls to be made. JSR made

the calls before August 10, 2006, through Order Entry Retailer Dish

Nation. JSR made the calls as an Order Entry Retailer from August

10, 2006, until Dish terminated JSR on February 14, 2007.

Thereafter, JSR made the calls through another Order Entry

Retailer authorized by Dish to market Dish Network programming.

JSR made some of these calls as an agent of Dish. JSR was

an agent of Dish as an Order Entry Retailer from August 10, 2006,

until Dish terminated JSR on February 14, 2007. Prior to August

10, 2006, JSR made the calls through Dish Nation. JSR acted as a

subagent of a Dish Order Entry Retailer when it made the calls

prior to August 10, 2006. Dish can be held liable for the acts of a

subagent. See Lawlor, 983 N.E.2d at 427-28.

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However, Dish disputes that JSR was a subagent of Dish. The

Retailer Agreement, § 7.2, did not allow Order Entry Retailers to use

third party affiliates or subagents without Dish’s prior approval.

Dish personnel, however, knew that JSR worked through Dish

Nation before becoming an Order Entry Retailer. Dish was also

aware that Dish Nation used third-party affiliates. Dish personnel

referred to “Dish Nation’s affiliate program” and to JSR working

under “Dish Nation’s umbrella.” PX 239, September 2006

Spreadsheet. Under these facts, Dish Nation reasonably believed

that it had Dish’s permission to use third party affiliates as

subagents despite the language in § 7.2 of the Retailer Agreement.

“An agent has actual authority to create a relationship of subagency

when the agent reasonably believes, based on a manifestation from

the principal, that the principal consents to the appointment of the

subagent.” Restatement (Third) of Agency, § 3.15(2). The Court

finds that Dish Nation had actual authority to retain JSR as a

subagent prior to August 10, 2006. Dish is therefore liable for

418,228 Internal List Calls that JSR made from August through

December 2006 to persons who stated to Dish or a Telemarketing

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Vendor that they did not wish to receive telemarketing calls by or on

behalf of Dish.

The evidence does not establish that Dish allowed JSR to work

as subagent from February 14, 2007 through March 2007. Dish

terminated JSR on February 14, 2007. JSR thereafter worked for an

unidentified Order Entry Retailer into March 2007. By February

2007, Dish began taking steps to discourage Order Entry Retailers’

use of third-party affiliates. In October 2006, Dish surveyed the 11

biggest Order Entry Retailers to see how many used affiliates. In

November and December 2006, Dish told JSR to stop using

affiliates in the Philippines. At some point, Musso started requiring

Order Entry Retailer to secure prior approval before hiring affiliates.

In light of this evidence, it is not clear that, in 2007, Dish generally

allowed Order Entry Retailers to use affiliates without prior

authorization. As such, it is not clear that Dish authorized the

unidentified Order Entry Retailer to use JSR as a subagent after

February 14, 2007. The United States has failed to prove that JSR

worked as a subagent of Dish after February 14, 2007. The United

States has also failed to prove how many of the 768,696 Internal

List Calls in 2007 were made before Dish terminated JSR on

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February 14, 2007. While Dish is liable for causing JSR to make

hundreds of thousands of Internal List Calls in 2007, the number of

such calls has not been proven.

b. Internal List Calls By JSR to People Who Stated to

other Order Entry Retailers that They Did Not Wish to

be Called by or on Behalf of Dish

Dish is liable for calls made by Dish or its agents to persons

who previously told Dish or its agents that they did not wish to

receive such calls. Opinion 445, at 183. From August 2006

through December 2006, JSR made 267,439 Internal List Calls to

persons who previously told another Dish Order Entry Retailer that

they did not wish to receive such calls. JSR was an agent or

subagent of Dish during this time period, and the other Order Entry

Retailers were also agents of Dish. Dish is liable for these illegal

Internal List Calls. From January through March 2007, JSR made

526,956 Internal List Calls to persons who previously told another

Dish Order Entry Retailer that they did not wish to receive such

calls. The United States did not prove the number of these calls

that were made from January through February 14, 2007, when the

United States proved that JSR acted as Dish’s agent or subagent.

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As such, the United States proved that Dish caused JSR to make

hundreds of thousands of Internal List Calls in 2007 to persons

who previously told another Dish Order Entry Retailer that they did

not wish to receive such calls, but the United States did not prove

the specific number of violations.

c. Calls by Satellite Systems

In 2010 and 2011, Satellite Systems made 22,946 Internal List

Calls to persons who previously told Dish that they did not wish to

receive such calls. Satellite Systems was Dish’s agent for purposes

of marketing Dish Network programming at the time. Dish is liable

for causing Satellite Systems to make these calls in violation of the

TSR.

In 2010 and 2011, Satellite Systems made 42,990 Internal List

Calls to persons who previously told an Order Entry Retailer that

they did not wish to receive such calls. Satellite Systems and the

other Order Entry Retailers were Dish’s agents for purposes of

marketing Dish Network programming at the time. Dish is liable for

causing Satellite Systems to make these calls in violation of the

TSR.

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3. Summary

In summary, Dish is liable for Dish is liable for the following

violations of the TSR in Count II:

Dish Calls on Dish Internal List 903,246 calls

Dish Calls on eCreek DNC List 140,349 calls

Dish Calls on Order Entry Lists 7,321,163 calls

JSR 2006 Calls on Dish Internal List 418,228 calls

JSR 2006 Calls on Order Entry Lists 267,439 calls

Satellite Systems Calls on Dish Internal List 22,946 calls

Satellite Systems Calls on Order Entry Lists 42,990 calls

Total 9,116,361 calls

Dish is also liable for a portion of the 1,295,652 (768,696 plus

526,956) Internal List calls that JSR made in 2007, but the

Plaintiffs did not prove the number of those calls made before

February 14, 2007, while JSR was an agent of Dish. In addition,

the Court, in its discretion, will not impose a double penalty under

the TSR in Counts I and II for the 2,386,386 calls that are subject

to liability in both Counts. The total violations are so large and the

amount of the potential civil penalty is so high that the Court finds

that one penalty for each call is sufficient in this case.

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C. Count III

Count III alleges:

In numerous instances, in connection with

telemarketing, Defendant DISH Network has abandoned

or caused telemarketers to abandon an outbound

telephone call by failing to connect the call to a sales

representative within two (2) seconds of the completed

greeting of the person answering the call, in violation of

the TSR, 16 C.F.R. § 310.4(b)(1)(iv).

Third Amended Complaint, ¶ 68. Count III contains two claims: (1)

Dish abandoned outbound telemarketing telephone calls; and (2)

Dish caused Order Entry Retailers to abandon outbound

telemarketing telephone calls. In both cases, the abandonment

occurred because Dish or the telemarketer made Abandoned

Prerecorded Calls. The calls became abandoned because Dish or

the telemarketer failed to connect the Prerecorded Call to a sales

representative within two seconds of the completed greeting by the

recipient of the call.

1. Calls Abandoned by Dish

The Court found at summary judgment that Dish was liable

for making 98,054 Abandoned Prerecorded Calls in violation of the

TSR. Opinion 445, at 193-94. The United States did not seek to

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prove that Dish made any additional abandoned telemarketing calls

at trial.

2. Calls Abandoned by Order Entry Retailers

The Court found at summary judgment that Dish was liable

for causing: (1) Star Satellite to make 43,100,876 Abandoned

Prerecorded Calls in violation of the TSR; (2) Dish TV Now to make

6,637,196 Abandoned Prerecorded Calls in violation of the TSR; and

(3) American Satellite for making one Abandoned Prerecorded Call

in violation of the TSR. Opinion 445, at 193-95.

The United States has also proven that JSR initiated

12,853,478 Prerecorded Calls. These calls only became abandoned

calls in violation of the TSR if a person answered and was not

connected to a live representative within two seconds of answering.

16 C.F.R. § 310.4(b)(1)(iv). Goodale estimated that 4 out of 10 calls

were answered. Dexter estimated that a person answered 16 to 17

percent of Dish’s telemarketing calls. Montano estimated that a

person answered 30 percent of Dish’s telemarketing calls. Taylor

opined that 1 in 10 telemarketing calls are answered by individuals.

Given all this evidence, the Court finds that it is more likely than

not that at least 10 percent of JSR’s prerecorded telemarketing calls

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were answered by individuals and became Abandoned Prerecorded

Calls.

Dish caused JSR to make these Abandoned Prerecorded Calls

for the same reasons Dish caused JSR to make the Registry Calls

proven in Count I. The United States is not required to prove an

agency relationship to establish liability for abandoned calls. The

United States must only prove that Dish caused JSR to make the

abandoned calls. TSR 16 C.F.R. § 310.4(b)(iv). Dish authorized

Dish Nation to make calls and to use JSR to make calls before

August 10, 2006. Dish authorized JSR to make calls from August

10, 2006 until February 14, 2007. Dish authorized the unidentified

Order Entry Retailer to make calls and thereby to use JSR to make

these abandoned calls from February 14, 2007, until JSR stopped

operating in March 2007. The Court finds that Dish is liable for

causing JSR to make 1,285,379 abandoned calls in violation of the

TSR.

The United States argues that Goodale’s estimate supports

liability for 5,141,391 Abandoned Prerecorded Calls. However, the

testimony from Montano, Dexter and Taylor, however, indicates that

Goodale’s estimate may overstate the number of completed calls.

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Given the disagreement, the Court finds that the most conservative

estimate meets the preponderance standard on this issue. All four

witnesses agreed that at least 10 percent of the calls would have

been answered. The Court, therefore, finds that Dish is liable for

the conservative number of 1,285,379 Abandoned Prerecorded

Calls.

The United States also seeks to prove that Dish caused Order

Entry Retailer Dish Nation to make the same 1,285,379 abandoned

calls that JSR made. The United States has proven that Order

Entry Retailer Dish Nation acted with JSR to make the abandoned

calls before August 10, 2006. JSR made calls through Dish Nation

before JSR became an Order Entry Retailer. The United States

failed to prove that JSR continued to work through Dish Nation

after it became an Order Entry Retailer or after February 14, 2007,

when Dish terminated JSR’s Retailer Agreement. The United States

has established that Dish caused Dish Nation to make many

abandoned calls through JSR. The United States, however, has not

proven the number of abandoned calls Dish caused Dish Nation to

make through JSR before August 10, 2006.

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The United States proved at summary judgment that Dish

caused American Satellite to make one Abandoned Prerecorded

Call. Opinion 445, at 194-95, 233. The United States also proved

that Dish caused American Satellite to make many Abandoned

Prerecorded Calls in violation of the TSR. The testimony of Manuel

Castillo established this fact. He operated American Satellites’

automatic dialer that made the Prerecorded Calls. Castillo also

informed Dish personnel of American Satellite’s practices. Dish’s

investigator was interested in American Satellite’s practices that

defrauded Dish, but he had little interest in Do-Not-Call Law

violations. Dish is liable for causing American Satellite to make

many prerecorded calls that were abandoned in violation of the

TSR.

3. Summary

In summary, Dish is liable for the following abandoned calls in

violation of the TSR:

Dish AM calls 98,054 calls

Star Satellite calls 43,100,876 calls

Dish TV Now calls 6,637,196 calls

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American Satellite call 1 call

JSR calls 1,285,379 calls

Total 51,121,506 calls

In addition, Dish caused American Satellite to make more

abandoned calls, but the number of such calls has not been proven.

The 43,100,876 Star Satellite calls also are subject to liability under

the TSR in Count IV. The Court, in its discretion, will not impose a

double penalty under the TSR in Counts III and IV for these calls.

The total violations are so large and the amount of the potential civil

penalty is so high that the Court finds that one penalty for each call

is sufficient in this case.

D. Count IV

Count IV alleges:

Defendant DISH Network has provided substantial

assistance or support to Star Satellite and/or Dish TV

Now even though Defendant DISH Network knew or

consciously avoided knowing Defendant Star Satellite

and/or Dish TV Now abandoned outbound telephone

calls in violation of § 310.4(b)(1)(iv) of the TSR. Defendant

DISH Network, therefore, has violated 16 C.F.R. §

310.3(b).

Third Amended Complaint, ¶ 69. Section 310.3(b) of the TSR

prohibits providing substantial assistance or support to

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telemarketers when that person knows or consciously avoids

knowing that the seller or telemarketer is engaged in any act or

practice that violates the TSR.

To establish the claims in Count IV, the United States must

prove “(1) that the [Order Entry Retailers] were violating the TSR;

and (2) Dish knew or consciously avoided knowing that the [Order

Entry Retailers] were violating the TSR, but still kept paying the

Dealers to continue the violations.” Opinion entered February 4,

2010 (d/e 32) (Opinion 32), at 9 n.1, 2010 WL 376774, at *3 (citing

Opinion 20, at 20, 667 F.Supp.2d, at 961) (Scott, J. retired).

The Court entered partial summary judgment in favor of Dish

on the United States’ claim that Dish provided substantial

assistance to Dish TV Now. Opinion 445, at 195-99. The claim

against Dish for providing substantial assistance to Star Satellite

remained for trial.

The United States has established that Star Satellite violated

the TSR by making prerecorded calls that were answered and

abandoned in violation of the TSR, 16 C.F.R. § 310.4(b)(1)(iv). The

evidence also proves that it is more likely than not that Dish knew

about Star Satellite’s use of prerecorded calls, or consciously

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avoided knowing about such use, and kept paying Star Satellite to

continue the violations.

Dish was repeatedly put on notice that Star Satellite was

making prerecorded telemarketing calls. The most telling evidence

is that Dish’s Outbound Operations’ Manager Bangert knew about

Star Satellite’s prerecorded calls. Bangert relayed the message

through Dish employee Mark Duffy to the Retail Services

Escalations Department. Jeff Medina of the Retail Services

Escalations Department commented to Margot Williams of Retail

Services Escalations, “Are these your boys again?” Retail Services

Escalations did nothing. The activations kept coming, and Dish

Sales Department employees kept meeting their quotas and getting

their bonuses, and Dish kept paying Star Satellite to keep making

prerecorded calls that were abandoned when answered. The Court

finds that the United States has proven that Dish violated TSR §

310.3(b) by providing substantial assistance to Star Satellite even

though Dish knew or consciously avoided knowing that Star

Satellite was making abandoned telemarketing calls in violation of

TSR § 310.4(b)(1)(iv).

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Dish argues that Star Satellite hid its use of prerecorded calls

from Dish. The evidence shows that Star Satellite’s principal Myers

tried to hide Star Satellite’s use of prerecorded calls. Myer, however,

believed that Dish knew about the use of prerecorded calls. The

evidence also shows that Dish knew of the practice anyway and did

nothing about it.

Dish argues that the United States improperly seeks to impose

liability on Dish in Count IV for the same 43,100,876 calls for

which the Court found Dish liable in Count III at summary

judgment. The Court disagrees. Dish’s actions violated both

sections of the TSR, and the United States is entitled to bring

claims under both sections. See Lary, 780 F.3d at 1105 (11

Cir.

2015). The Court, in the exercise of its equitable authority, will

limit the United States to one possible civil penalty award for each

of these 43,100,876 abandoned calls under the circumstances of

this case. Dish’s double recovery argument, however, is not a

defense to liability.

E. Dish’s Liability for Civil Penalties to the United States

The United States asks the Court to impose civil penalties for

Dish’s violations of the TSR. Dish’s violations of the TSR are treated

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as violations of a rule promulgated under the FTC Act regarding

unfair or deceptive acts or practices. 15 U.S.C. § 6102(c)(1). A

violation of such a rule promulgated under the FTC Act is

considered an unfair or deceptive act or practice in violation of § 5

of the FTC Act. 15 U.S.C. §§ 45(a) and 57a(1)(B). The United States

is entitled to seek civil penalties for violation of such a rule

committed “with actual knowledge or knowledge fairly implied on

the basis of objective circumstances that such act is unfair or

deceptive and is prohibited by such rule.” FTC Act § 5(m)(1)(A), 15

U.S.C. § 45(m)(1)(A).

This Court previously stated, “A person also commits a

knowing violation if, under the circumstances, a reasonable,

prudent person would have known of the existence of the rule and

that his or her acts or omissions violated the rule.” Opinion 445, at

226 (citing United States v. National Financial Services, Inc., 98

F.3d 131, 139 (4

Cir. 1996) (“A defendant is responsible where a

reasonable person under the circumstances would have known of

the existence of the provision and that the action charged violated

that provision.”); and S. Conf. Rep. 93-1408, 93d Cong., 2

Sess.,

7772 (1974)). The United States must show “‘knowledge fairly

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implied on the basis of objective circumstances’ that the conduct

was prohibited.” Jerman v. Carlisle, McNellie, Rini, Kramer &

Ulrich, LPA, 559 U.S. 573, 584 (2010).

To establish actual knowledge or knowledge fairly implied, the

United States must show that, “the defendant or its agent have

some knowledge, actual or constructive, of the requirements of the

[rule] such that it can be concluded that the defendant or its agent

knew or should have known that his conduct was unlawful.”

United States v. ACB Sales & Service, Inc., 590 F. Supp. 561, 575

n.11 (D. Ariz. 1984); see FTC v. Bonnie & Co. Fashions, Inc., No.

90-4454, 1992 WL 314007, at *7 (D.N.J. 1992).

The maximum civil penalty is $11,000 for each violation before

February 9, 2009, and $16,000 for each violation after that date.

Federal Civil Penalties Inflation Adjustment Act, 28 U.S.C. § 2461

note, 74 Fed. Reg. 857-01 (January 9, 2009). The evidence that

Dish acted with knowledge or knowledge fairly implied is specific to

the particular calls at issue.

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1. Count I

a. Registry Calls by Dish

i. Dish Direct Telemarketing

Dish personnel knew that the Registry and the TSR prohibited

Registry Calls unless Dish had Established Business Relationships

with the intended call recipients. Dish went to great lengths to

prepare for the launch of the Registry. Dish developed a scrubbing

process for Account Number Campaigns to limit Registry Calls.

Dish personnel also knew from as early as 2004 that Dish

direct telemarketing was making illegal Registry Calls. Beginning in

2004, Dish received numerous consumer complaints about illegal

Registry Calls. Dish conducted audits in 2007 and 2009 and found

in three-month periods in 2005 and 2008, Dish made thousands of

illegal Registry Calls. Dish personnel further knew that eCreek’s

scrubbing process did not work correctly sometimes. Dish,

therefore, knew that Registry Calls were generally prohibited by the

TSR and knew that its outbound telemarketing procedures resulted

in Registry Calls in violation of the TSR.

In addition, Dish used ineffective methods to determine

whether it had a Transaction-based Established Business

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Relationship with current and former customers. Dish knew that

the TSR provided that a Transaction-based Established Business

Relationship existed if the call recipient purchased goods or services

from Dish within the 18 months immediately preceding the date of

the call. 16 C.F.R. § 310.2(o). Dish personnel did not follow the

clear language of the TSR. Dish personnel did not check the dates

that intended call recipients paid Dish for Dish Network

programming to determine if Dish had Transaction-based

Established Business Relationships. Dish personnel looked to lists

of current customers and disconnect dates. According to Taylor’s

analysis of Dish’s calling records from 2007-2010, Dish thereby

made over 15 million illegal Registry Calls to persons who had not

paid Dish for more than 18 months. Dish did not have

Transaction-based Established Business Relationships with these

individuals.

Dish is a sophisticated multi-billion dollar business operation.

Dish personnel knew the TSR definition of an Established Business

Relationship. The definition set the 18-month period from the date

of the last purchase or financial transaction. Such an enterprise

would have known to determine whether a call recipient purchased

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goods or services from it within the last 18 months by checking the

last date a call recipient paid for goods or services. Dish, however,

did not. An enterprise in Dish’s position would have known that it

was improperly calculating whether it had Transaction-based

Established Business Relationships with current and former

customers. Such an enterprise under the circumstances would

have known that improperly determining the existence of

Established Business Relationships would result in making illegal

telemarketing calls to persons whose numbers were on the Registry.

Dish, therefore, acted with knowledge fairly implied when it made

these illegal calls.

Dish personnel also knew that Dish could not call persons on

the Lead Tracking System if the telephone number was on the

Registry. Dish had the burden to show that it had an Inquiry-based

Established Business Relationship to avoid liability. Dish failed to

meet its burden of proof. Dish failed to present competent evidence

of how it formulated the Lead Tracking System calling campaigns.

Moreover, the scant evidence about the Lead Tracking System

indicates that the Lead Tracking System included contact

information for any persons who provided such information to Dish

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for almost any reason. PX117, Email thread regarding Dish Taking

a DTV Sale dated August 11, 2004, at PX117-001, 005-006. The

Lead Tracking System apparently included contact information for

people who started to buy online but did not, and people who

already received a telemarketing call but decided not to buy. Id.

The TSR stated that an Inquiry-based Established Business

Relationship is with individuals who inquired or applied for a

product or service offered by the seller within three months of the

date of the telemarketing call. 16 C.F.R. § 310.2(o). People who

decided not to buy Dish Network programming did not inquire

about Dish Network programming. Dish failed to meet its burden of

proof for the Established Business Relationship exception for the

Lead Tracking System calls. Dish is liable for civil penalties for

making the Lead Tracking System Registry Calls.

Dish, therefore, made the millions of illegal Registry Calls from

March 25, 2004 to September 2007, and 3,140,920 illegal Registry

Calls recorded from September 2007 to March 2010 with knowledge

or knowledge fairly implied that it was making calls in violation of

the TSR. Dish made an additional 2,386,386 Registry Calls that

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were also illegal Internal List Calls. The Court will discuss liability

for these calls in connection with Count II.

Dish presented numerous witnesses who testified that Dish

acted in good faith and never intentionally made an illegal call.

Dish’s expert Kenneth Sponsler further opined that Dish met

industry standards. Neither good faith nor compliance with

industry standard is a defense. The issue is whether Dish knew the

requirements of the TSR and knew or should have known that its

outbound telemarketing practices resulted in illegal Registry Calls.

The evidence shows that Dish knew the terms of the TSR and knew

or should have known that their outbound calling procedures

resulted in Registry Calls to persons who did not have Established

Business Relationships with Dish. The fact that Dish employees

acted in good faith when they knowingly made such calls or that

industry standards would allow such illegal calls is not a defense.

The only applicable defense is the TSR safe harbor defense.

Dish’s expert Sponsler acknowledged as much in his testimony.

See T 633:3451, 3507-08 (Sponsler). Dish did not comply with the

TSR safe harbor provisions. Dish did not have written procedures

to prevent calling persons whose numbers were on the Registry in

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Account Number Campaigns. Dish did not maintain records to

document the use of such a process. Dish further did not present

competent material evidence concerning any procedures, written or

unwritten, that Database Marketing may have used to ensure that

the Lead Tracking System and Cold Call calling campaigns

complied with the TSR. 16 C.F.R. § 310.4(b)(1)(iii); Opinion 445, at

163-65 75. Dish knew that some of its calls were illegally made to

numbers on the Registry, and Dish did not comply with the safe

harbor provisions to avoid liability for such calls. Dish made

millions of Registry Calls in the 2003-2007 Calling Records from

March 25, 2004 to August 2007, and 3,140,920 Registry Calls from

September 2007 to March 2010 with knowledge or knowledge fairly

implied that it was making calls in violation of the TSR. Dish is

liable for civil penalties for these calls.

ii. Calls by Order Entry Retailers to Persons Whose

Numbers Were on the Registry

Dish knew the TSR prohibited causing telemarketers to make

Registry Calls, Internal List Calls, and abandoned calls. 16 C.F.R.

§310.4(b)(1). Dish also had knowledge fairly implied under objective

circumstances it could be held liable under the TSR for causing the

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actions of telemarketers that it authorized to sell its programming

and services through telemarketing. Dish was a sophisticated

enterprise with knowledgeable counsel. Dish put together the

Working Group a year ahead of time to prepare for the TSR. Under

these objective circumstances, Dish would have known that it

would be liable for telemarketers’ actions. In 2004, the FTC

published a Guide for complying with the TSR which alerted Dish to

its responsibility for its Order Entry Retailers:

The FTC published a guide to help sellers comply

with the TSR. Plaintiffs’ Response, (Guide). The Guide

discussed the seller’s liability for the telemarketer’s

actions:

What happens if a consumer is called after he or

she has asked not to be called? If a seller or

telemarketer calls a consumer who has:

• placed his number on the National Registry

[the List]

• not given written and signed permission to call

• either no established business relationship

with the seller, or has asked to get no more calls from or

on behalf of that seller . . .

the seller and telemarketer may be liable for a Rule

violation. If an investigation reveals that neither the seller

nor the telemarketer had written Do Not Call procedures

in place, both will be liable for the Rule violation. If the

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seller had written Do Not Call procedures, but the

telemarketer ignored them, the telemarketer will be liable

for the Rule violation; the seller also might be liable,

unless it could demonstrate that it monitored and

enforced Do Not Call compliance and otherwise

implemented its written procedures. Ultimately, a seller

is responsible for keeping a current entity-specific Do Not

Call list, either through a telemarketing service it hires or

its own efforts.

Under the FTC interpretation of the TSR, a seller

“causes” the telemarketing activity of a telemarketer by

retaining the telemarketer and authorizing the

telemarketer to market the seller’s products and services.

According to the Guide, the seller is liable for the

telemarketer’s violations of the TSR unless the safe

harbor provisions apply.

Opinion 20, at 13-15, (quoting excerpts from FTC Guide, Complying

with the Telemarketing Sales Rule (January 2004) (FTC Guide)

(emphasis in the original)).

A sophisticated enterprise in Dish’s position with Dish’s legal

staff would have known that the FTC Guide stated that the seller

was ultimately responsible for the actions of its telemarketers,

“unless it could demonstrate that it monitored and enforced Do Not

Call compliance and otherwise implemented its written procedures.”

FTC Guide. Dish knew that it did not enforce Do-Not-Call

compliance on its Order Entry Retailers and did not require Order

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Entry Retailers to implement any written procedures. Dish’s only

written procedures, the Quality Assurance Program, did not

concern or monitor Do-Not-Call Law compliance. Under these

circumstances, a person in Dish’s position would have known that

it was responsible for causing the Order Entry Retailers’ violations.

Dish argues that it should not be held vicariously liable for

actions of Order Entry Retailers because they were independent

contractors. However, Dish’s liability for causing the acts of its

Order Entry Retailers is not vicarious liability. Rather, sellers cause

telemarketers to make Registry Calls, Internal List Calls, and

abandoned calls by retaining and authorizing Retailers to market

the sellers’ products. Opinion 20, at 13-15. Sellers that employ

telemarketers direct liability for causing the telemarketers’ illegal

Registry Calls, Internal List Calls, and abandoned calls.

Vicarious liability, however, may be an alternate basis for

imposing liability on sellers such as Dish for the acts of agents. See

ACB Sales & Service, Inc., 590 F. Supp. at 575 n.11 (principal may

be liable if agent had knowledge of the law and knowledge that the

acts violated the law). Dish, for example, has conceded that it is

responsible under the TSR for the acts its agents, Telemarketing

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Vendors eCreek and EPLDT. Dish is similarly responsible for the

actions of the Order Entry Retailers that were also its agents. As

discussed above, the Order Entry Retailers were acting within the

scope of their agency when they made the illegal Registry Calls,

Internal List Calls, and Abandoned Prerecorded Calls.

The TSR civil penalty provisions require not only proof of the

illegal acts, but proof of knowledge or knowledge fairly implied

under objective circumstances that the acts violated the TSR. The

knowledge of the agent about a matter material to an agent’s duties

is imputed to the principal unless the agent is acting adversely to

the principal. National Product Workers Union Insurance Trust v.

Cigna Corporation, 665 F.3d 897, 903 (7

Cir. 2011); Pekin Life

Insurance Co. v. Schmid Family Irrevocable Trust, 359 Ill. App. 3d

674, 681, 834 N.E.2d 531, 536-37 (Ill. App. 1

Dist. 2005);

Restatement (Third) of Agency, § 5.03. An agent acts adversely to

the principal when the agent intends to act solely for the agent’s

own purposes or those of another person. Restatement (Third) of

Agency, § 5.04; see Hartman v. Prudential Ins. Co. of America, 9

F.3d 1207, 1210 (7

Cir. 1993). In this case, the Order Entry

Retailers were Dish’s agents authorized to market Dish Network

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programming. The manner in which they conducted telemarketing

was material to their duties as marketing agents. The Order Entry

Retailers’ knowledge of telemarketing activities is therefore imputed

to Dish.

Dish argues that the Order Entry Retailers were acting

adversely to Dish because they were using illegal methods and

because they had high churn rates. See Dish Network, L.L.C.’s

Proposed Post-Trial Conclusions of Law (d/e 666), at 31 (citing

United States v. One Parcel of Land Located at 7326 Highway 45

North, Three Lakes, Onieda County, Wis., 965 F.2d 311, 317 (7

Cir. 1992)). The Court disagrees. In the case cited by Dish, One

Parcel of Land, the agent acted adversely because he sold illegal

drugs on the principal’s property solely for his own benefit. Id. The

Order Entry Retailers were acting at least in part for the benefit of

Dish because they were selling Dish Network programming. The

Order Entry Retailers may have used illegal means and may or may

not have been effective, but they were not acting solely for their own

benefit. The knowledge of the Order Entry Retailers about the

conduct of telemarketing is imputed to Dish.

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Dish also cites a case involving an employer-employee

relationship to argue that the United States must prove that Order

Entry Retailers received the knowledge of their illegal acts while

acting within the scope of authority and that they had a duty to

speak to Dish. Dish Conclusions of Law (d/e 666), at 31(citing

Juarez v. Ameritech Mobile Communications, Inc., 957 F.2d 317,

321 (7

Cir. 1992). The Juarez opinion described principles of

imputed knowledge in employer-employee relationships. This case

does not involve employment relationships. The general principles

of agency apply. Under general agency principles, the knowledge of

Order Entry Retailers about the subject of the agency, the

marketing of Dish Network programming, is imputed to Dish.

General agency principles do not apply to impose vicarious

liability for punitive damages on the principal for the acts of its

agents done within the scope of the agency. Under the agency law

of the United States and the Plaintiff States, a principal is

vicariously liable for punitive damages awarded for the actions of its

agents if the principal or a manager of a corporate principal knew of

the actions or later ratified the actions. See City of Chicago v.

Matchmaker Real Estate Sales Center, Inc., 982 F.2d 1086, 100 (7

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Cir. 1992) (applying federal law); accord Jannotta v. Subway

Sandwich Shops, Inc., 125 F.3d 503, 514 (7

Cir. 1997) (applying

Illinois law); Cal. Civ. Code § 3294(b); N.C. Gen. Stat. § 1D-15(c))

Ohio Rev. Code Ann. § 2315.21(C)(1); Restatement (Third) of

Agency, § 7.03 comment e (2006) (citing with approval Restatement

(Second) of Torts, § 909).

Restatement (Third) of Agency § 7.03 comment e states that

with respect to a statute that authorizes a penalty, “unless the

language of the statute itself resolves the question, the

determination should reflect the purpose of the statute.” The Court

directed the parties to submit supplemental briefing to address

whether agency law regarding a principal’s liability for punitive

damages for the actions applied to the claims for monetary relief in

this action. Opinion entered February 9, 2017 (d/e 766) (Opinion

766).

Upon careful consideration of the parties’ supplemental

submissions on this issue and the Court’s research, the Court

concludes that, in light of the purpose of the FTC Act, the special

agency rules for punitive damages do not apply to liability for civil

penalties under § 5(m) of the FTC Act. The FTC Act serves a

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markedly different purpose than punitive damages. Punitive

damages punish egregious or outrageous conduct done with evil

motive or reckless disregard for the rights or interest of others. See

Restatement (Second) of Torts, § 908 (1979). Congress authorized

FTC Act civil penalties as part of an array of remedial tools to

effectuate the purposes of the FTC Act, not to punish outrageous or

egregious conduct.

Congress enacted the FTC Act to establish an expert

administrative body to stop unfair and deceptive practices in the

marketplace. Section 5 of the FTC Act originally prohibited unfair

methods of competition and authorized the FTC to issue orders to

cease and desist such practices. See FTC Act, § 5, 38 Stat. 717,

719, codified at 15 U.S.C. § 5; H.R. CONF. REP. NO. 1142, 63d

Cong., 2d Sess. 19 (1914). In 1938, Congress amended Section 5

the FTC Act to also prohibit unfair and deceptive acts and practices.

See Act of March 21, 1938, ch. 49 § 3, 52 Stat. at 111-12 (Wheeler-

Lea Amendments) (amending FTC Act, § 5(a)). Congress also

authorized civil penalties for violations of cease and desist orders.

Wheeler-Lea Amendments § 5(l), 52 Stat. 111, 114, codified as 15

U.S.C. § 45(l). Congress subsequently authorized civil penalties for

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violations of FTC rules done “with actual knowledge or knowledge

fairly implied on the basis of objective circumstances” that the acts

violated the rule. Magnuson-Moss Warranty—Federal Trade

Commission Improvement Act of 1975, Pub. L. No. 93-637, tit. II §

205, 88 Stat. 2183, 2193, codified at 15 U.S.C. § 45(m).

Congress added civil penalties to ensure compliance with FTC

cease and desist orders and FTC regulations, not to punish

egregious or outrageous conduct. Section 5(m) does not require

proof of outrageous or egregious violations. That section only

requires knowledge or knowledge fairly implied under objective

circumstances that the acts in question violated the applicable rule.

Congress made culpability a factor in determining the amount of

penalties, but not to determining liability for penalties.

Applying agency punitive damages principles to FTC Act § 5(m)

civil penalties would interfere with the Congressional goals of

effective enforcement. Sellers would have incentives to avoid

monitoring telemarketers so that they could assert a defense of no

actual knowledge to TSR and FTC Act claims for civil penalties. The

TCPA requirement to show an agency relationship between seller

and telemarketer has already discouraged some sellers from

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monitoring telemarketers. These sellers have avoided implementing

Do-Not-Call monitoring or enforcement procedures over

telemarketers in order to assert a defense of no agency to TCPA

claims. T 715: 817 (Sponsler). Applying punitive damages

principles to TSR civil penalties would create additional incentives

to avoid implementing Do-Not-Call Law compliance policies and

procedures for telemarketers. This result is directly contrary to

Congressional purposes of FTC Act § 5(m) civil penalties. The civil

penalties exist to enforce compliance with the TSR, not discourage

compliance.

The Supreme Court has determined in the context of Title VII

of the Civil Rights Act of 1964 that agency law principles do not

apply to statutory claims when the agency law would frustrate

Congressional purposes. The Supreme Court stated that applying

common law agency principles in Title VII punitive damages “would

reduce incentives for employers to implement antidiscrimination

programs. . . . Dissuading employers from implementing programs

or policies to prevent discrimination in the workplace is directly

contrary to the purposes underlying Title VII.”). Kolstad v.

American Dental Association, 527 U.S. 526, 544-46 (1999).

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Similarly here, applying agency rules for punitive damages to FTC

Act § 5(m) civil penalties would frustrate the purpose of the FTC

Act. See Id.; Restatement (Third) of Agency § 7.03 comment e, (The

applicability of the punitive damages rules to statutory penalties

“should reflect the purposes of the statute.”). The agency principles

for vicarious liability for punitive damages, therefore, do not apply

to FTC Act § 5(m) civil penalties.

Dish may be liable for civil penalties directly for causing Order

Entry Retailers to make Registry Calls, Internal List Calls, and

Abandoned Prerecorded Calls; and, alternatively, may be liable

vicariously for civil penalties for the actions of their agents done

within the scope of the agency, including the Order Entry Retailers

who violated the TSR by making Registry Calls, Internal List Calls,

and Abandoned Prerecorded Calls, when done with the requisite

knowledge or knowledge fairly implied under objective

circumstances.

Pursuant to these legal principles, Dish acted with knowledge

fairly implied when it caused JSR to make 2,349,031 illegal Registry

Calls in 2006. Dish retained JSR as an Order Entry Retailer to

market Dish Network programming. Dish authorized JSR to

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conduct telemarketing. Under the objective circumstances of this

case, Dish knew or should have known that it was liable under the

TSR for causing JSR’s illegal Registry Calls. Dish did not provide

JSR with written Do-Not-Call compliance procedures. Dish is liable

for civil penalties for causing JSR to make these illegal Registry

Calls.

Alternatively, Dish is liable because JSR was Dish’s agent or

subagent for telemarketing Dish Network programming in 2006.

Dish was liable for JSR’s actions within the scope of the agency.

JSR’s Registry Calls were within the scope of the agency. Dish and

JSR knew that making telemarketing calls to persons whose

numbers were on the Registry violated the TSR. One of JSR’s

partners, Goodale, knew JSR was making illegal Registry Calls.

Goodale knew that his partners did not scrub calling lists to remove

numbers on the Registry. This knowledge is imputed to Dish.

Furthermore, Dish received consumer complaints that JSR was

making Registry Calls. Dish acted with knowledge fairly implied

under objective circumstances when its agent JSR made 2,349,031

illegal Registry Calls in 2006.

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Dish acted with knowledge fairly implied when it caused JSR

to make 3,315,242 illegal Registry Calls in 2007. Dish retained JSR

as an Order Entry Retailer to market Dish Network programming.

Dish authorized JSR to conduct telemarketing through February

14, 2007. Dish retained the other Order Entry Retailer through

which JSR conducted telemarketing after February 15 and March

2007. Under the objective circumstances of this, case Dish knew or

should have known that it was liable under the TSR for causing

JSR’s illegal Registry Calls either directly as an Order Entry Retailer

or through the other Order Entry Retailer. Dish did not provide any

Order Entry Retailer with written Do-Not-Call compliance

procedures. Dish is liable for civil penalties for causing JSR to

make these illegal Registry Calls.

Dish is vicariously liable for the millions of calls that JSR

made as Dish’s agent until Dish terminated JSR as an Order Entry

Retailer on February 14, 2007. JSR knew it was making Registry

Calls and that such calls were illegal. This knowledge is imputed to

Dish. Thereafter, JSR made the calls through March 2007 through

an Order Entry Retailer. The United States has not shown that

Dish had knowledge of these calls or authorized JSR to act as a sub

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agent when it made these calls. The United States has proven that

Dish vicariously liable under agency principles when it acted with

knowledge fairly implied through its agent JSR to make millions of

Registry calls in 2007, but the United States has not proven the

number of calls.

Dish acted with actual knowledge or knowledge fairly implied

when it caused Satellite Systems to make 381,811 Registry Calls

between May 2010 and August 2011. Dish retained Satellite

Systems as an Order Entry Retailer to market Dish Network

programming. Dish authorized Satellite Systems to conduct

telemarketing. Under the objective circumstances of this, case Dish

knew or should have known that it was liable under the Satellite

Systems for causing Satellite Systems’ illegal Registry Calls. Dish

did not provide Satellite Systems with written Do-Not-Call

compliance procedures. Moreover, Dish personnel knew that

Satellite Systems was making Registry Calls. Dish was receiving so

many complaints about these calls that Dish’s legal department had

developed a standard “go after Satellite Systems” letter to send to

complaining individuals. The evidence shows that Dish knew about

these calls and decided to keep Satellite Systems as an Order Entry

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Retailer. Dish knew that it was causing Satellite Systems to make

these 381,811 Registry Calls. Dish is liable for civil penalties for

these calls.

Alternatively, Dish is vicariously liable for its agent Satellite

Systems’ 381,811 illegal Registry Calls. Dish knew Registry Calls

violated the TSR. Dish further knew that Satellite Systems was

making these illegal calls. Dish consciously decided to do nothing

about it. Dish told injured consumers to go after Satellite Systems.

Dish therefore is liable for civil penalties for these calls.

2. Count II

a. Internal List Calls to Persons Who Stated to Dish

and the Telemarketing Vendors That They did not

Wish to Receive Calls by or on Behalf of Dish

Dish acted with knowledge or knowledge fairly implied under

objective circumstances when Dish and its Telemarketing Vendors

made 903,246 Internal List Calls between September 2007 and

March 2010 to persons who previously stated to Dish or one of the

Telemarketing Vendors that they did not wish to receive

telemarketing calls by or on behalf of Dish. Dish personnel clearly

knew that it was not supposed to call individuals who told Dish or

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its Telemarketing Vendor that they did not wish to receive

telemarketing calls by or on behalf of Dish. Dish has maintained

an Internal Do-Not-Call List since 1998. Dish further required its

Telemarketing Vendor eCreek provide Dish with its Do-Not-Call

requests. Telemarketing Vendor EPLDT used Dish’s dialers and

put its Do-Not-Call requests onto Dish’s Internal Do-Not-Call List

directly. Dish personnel also knew from its investigations of

consumer complaints and its internal audits that it made calls to

persons on Internal Do-Not-Call Lists. The Court finds that a

person in Dish’s position would have known that it was making

these illegal calls.

Dish acted with knowledge or knowledge fairly implied under

objective circumstances when Dish made 140,349 Internal List

Calls between September 2007 and March 2010 to persons who

previously stated to Dish’s Telemarketing Vendor eCreek that they

did not wish to receive telemarketing calls by or on behalf of Dish.

Again, Dish personnel knew that Dish was not supposed to call

individuals who told its Telemarketing Vendor that he or she did

not wish to receive telemarketing calls by or on behalf of Dish. Dish

further had eCreek provide Dish with Do-Not-Call requests made to

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eCreek. Dish personnel also knew from its investigations of

consumer complaints that it made calls to persons on Internal Do-

Not-Call Lists. The Court finds that a person in Dish’s position

would have known that it was making these calls.

Dish acted with knowledge or knowledge fairly implied under

objective circumstances when Dish and the Telemarketing Vendors

made 7,321,163 Internal List Calls between September 2007 and

March 2010 to persons who previously stated to Dish Order Entry

Retailers that they did not wish to receive telemarketing calls by or

on behalf of Dish. Dish knew that it was required to honor do-not-

call requests made to its marketing agents. Dish, in fact, honored

the do-not-call requests made to eCreek and EPLDT. The Order

Entry Retailers were Dish’s marketing agents. Under these

objective circumstances, a person in Dish’s position would have

known to honor do-not-call requests made to Order Entry Retailers.

Dish made no attempt to honor do-not-call requests to Order Entry

Retailers prior to April 2008. Dish did not collect Order Entry

Retailers’ Internal Do-Not-Call Lists until April 2008. Thereafter,

Dish made the illegal calls even with access to some of the Order

Entry Retailers’ Internal Do-Not-Call Lists. Dish’s investigation of

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consumer complaints showed that it was making calls to people on

Internal Do-Not-Call Lists. The Court finds that under the objective

circumstances in this case, a person in Dish’s position would have

known the requirements of the TSR and known that these calls

violated those requirements.

Dish argues that it should not be subject to civil penalties for

these calls because Dish could not have known that this Court

would find that it was obligated to honor do-not-call requests made

to Order Entry Retailers. Dish argues that the question of whether

it had to honor do-not-call requests to Order Entry Retailers was

undecided until the Court made these findings of fact and

conclusions of law. Dish argues that the fact that Plaintiffs had to

prove an agency relationship with Order Entry Retailers was

unknown until the Court entered partial summary judgment. Dish

argues that a person in its position in 2004 to 2010 would not have

known that it had to honor do-not-call requests to Order Entry

Retailers.

The Court disagrees. Dish knew that it had to honor do-not-

call requests made to its telemarketing agents. Dish set up

procedures to honor Do-Not-Call requests made to its agents eCreek

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and EPLDT. The Court’s conclusion that Order Entry Retailers

were Dish’s marketing agents was based on well-established

principles of agency law. Under the objective circumstances of this

case, a reasonable person in Dish’s position would have known that

Order Entry Retailers were marketing agents. Such a person would

have known not to call people who told Order Entry Retailers not to

make telemarketing calls by or on behalf of Dish. Dish is liable for

civil penalties on these 7,321,163 calls.

b. Internal List Calls by Order Entry Retailers

Dish acted with knowledge or knowledge fairly implied when

Dish caused JSR to make 418,228 Internal List Calls in 2006 to

persons who stated to Dish or the Telemarketing Vendors that they

did not wish to receive telemarketing calls by or on behalf of Dish.

JSR was Dish’s agent or subagent for telemarketing Dish Network

programming in 2006. Dish knew that making telemarketing calls

to persons who stated that they did not wish to be called by or on

behalf of Dish violated the TSR. Dish further knew that its agents

had to honor Do-Not-Call requests made to Dish.

Dish acted with knowledge or knowledge fairly implied when

Dish caused JSR to make hundreds of thousands of Internal List

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Calls from January through February 14, 2007, to persons who

stated to Dish or the Telemarketing Vendors that they did not wish

to receive telemarketing calls by or on behalf of Dish. JSR was

Dish’s agent or subagent for telemarketing Dish Network

programming. Dish knew that making telemarketing calls to

persons who stated that they did not wish to be called by or on

behalf of Dish violated the TSR. Dish further knew that its agents

had to honor Do-Not-Call requests made to Dish. The United States

proved that JSR made 768,696 such calls from January through

March 2007, but did not prove the number made while JSR was an

agent of Dish prior to February 14, 2007.

Dish acted with knowledge or knowledge fairly implied when

Dish caused JSR to make 267,439 Internal List Calls in 2006 to

persons who stated to Order Entry Retailers that they did not wish

to receive telemarketing calls by or on behalf of Dish. JSR was

Dish’s agent or subagent for telemarketing Dish Network

programming from July 2006 to February 14, 2007. The other

Order Entry Retailers were also Dish’s marketing agents. Dish

knew that making telemarketing calls to persons who stated that

they did not wish to be called by or on behalf of Dish violated the

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TSR. Dish further knew that its agents had to honor Do-Not-Call

requests made to Dish or its other agents.

Dish acted with knowledge or knowledge fairly implied when

Dish caused JSR to make hundreds of thousands of Internal List

Calls from January through February 14, 2007, to persons who

stated to Order Entry Retailers that they did not wish to receive

telemarketing calls by or on behalf of Dish. JSR was Dish’s agent

or subagent for telemarketing Dish Network programming from July

2006 to February 14, 2007. Dish knew that making telemarketing

calls to persons who stated that they did not wish to be called by or

on behalf of Dish violated the TSR. Dish further knew that its

agents had to honor do-not-call requests made to Dish or its other

agents. The United States proved that JSR made 526,956 such

calls from January through March 2007, but the United States did

not prove the number made while JSR was an agent of Dish prior to

February 14, 2007.

Dish acted with knowledge or knowledge fairly implied when

Dish caused Satellite Systems to make 22,946 telemarketing calls

to persons who stated to Dish that they did not wish to receive

telemarketing calls by or on behalf of Dish. Satellite Systems was

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Dish’s agent for telemarketing Dish Network programming. Dish

knew that making telemarketing calls to persons who stated that

they did not wish to be called by or on behalf of Dish violated the

TSR. Dish further knew that its agents had to honor do-not-call

requests made to Dish or its other agents.

Dish acted with knowledge or knowledge fairly implied when

Dish caused Satellite Systems to make 42,990 telemarketing calls

to persons who stated to Dish that they did not wish to receive

telemarketing calls by or on behalf of Dish. Satellite Systems was

Dish’s agent for telemarketing Dish Network programming. Dish

knew that making telemarketing calls to persons who stated that

they did not wish to be called by or on behalf of Dish violated the

TSR. Dish further knew that its agents had to honor do-not-call

requests made to Dish or its other agents.

3. Count III

a. Prerecorded Abandoned Calls Made by Dish

Dish acted with knowledge or knowledge fairly implied when it

made 98,054 Abandoned Prerecorded Calls that were answered by a

person and abandoned those calls in violation of TSR 16 C.F.R. §

310.4(b)(4)(iv) Dish personnel knew that Prerecorded Calls were

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illegal. The FTC stated in 2003 and 2004 that Prerecorded Calls

that were answered by a person were abandoned calls in violation of

the TSR. 2003 TSR Statement of Basis and Purpose, 68 Fed. Reg.

4580, 4644 (January 29, 2003); 2004 Notice, 69 Fed. Reg. 67287

(November 17, 2004); see Opinion 445, at 21-23. The courts that

have addressed this issue all agreed that Prerecorded Calls were

abandoned calls. The Broadcast Team, Inc. v. F.T.C., 429

F.Supp.2d 1292, 1300-01 (M.D. Fla. 2006); F.T.C. v. Asia Pacific

Telecom, Inc., 802 F.Supp.2d 925, 929 (N.D. Ill. 2011).

Dish argues that courts disagree on this issue. Dish cites

National Federation of the Blind v. F.T.C., 420 F.3d 331, 341 (4

Cir. 2005). The National Federation of the Blind case addressed the

effect of the abandonment provision on First Amendment rights.

The case did not mention Prerecorded Calls. The cases that

address Prerecorded Calls are not in conflict. Prerecorded Calls

that are answered are abandoned calls that violate the TSR.

Dish also notes that the FTC stated in 2006 that some

individuals criticized the abandonment provision as ambiguous.

Telemarketing Sales Rule, Denial of Petition for Proposed

Rulemaking, 71 Fed. Reg. 58716, 58726 (October 4, 2006). The

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FTC stated, however, that the provision was not ambiguous and

clearly covered Prerecorded Calls. “The Commission continues to

think that the plain language of the call abandonment provision

itself prohibits calls delivering prerecorded messages when

answered by a consumer, a position it has repeatedly stated, and

that has been accepted by at least one court.”(Footnotes omitted).

Id. The FTC has consistently interpreted § 310.4(b)(4)(iv) to cover

Prerecorded Calls that are answered.

A sophisticated business enterprise in Dish’s situation with

both in-house and outside counsel would have known that

Prerecorded Calls that were answered were Abandoned Prerecorded

Calls that violated the TSR. The evidence also proves that Dish

personnel in fact knew that Prerecorded Calls were illegal. Dish’s

arguments to the contrary are not persuasive.

With this knowledge, Dish made the Prerecorded Calls, and

98,054 of the calls were answered. A person in Dish’s position

would have known that these calls violated the TSR. Dish

Outbound Operations personnel knew such calls were prohibited.

Dish is liable for civil penalties for these calls. Dish acted with

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knowledge and knowledge fairly implied under objective

circumstances.

b. Abandoned Prerecorded Calls Made by Order Entry

Retailers

Dish acted with knowledge or knowledge fairly implied based

on objective circumstances when it caused Dish TV Now to make

6,637,196 Abandoned Prerecorded Calls that were answered by a

person and abandoned in violation of the TSR. Dish TV Now was

an Order Entry Retailer. Dish caused Dish TV Now to engage in

telemarketing because Dish retained Dish TV Now as an Order

Entry Retailers and authorized Dish TV Now to engage in

telemarketing Dish Network programming. Dish took no step to

enforce or monitor Do-Not-Call compliance. Under the objective

circumstances in this case, a person in Dish’s position knew or

should have known that Prerecorded Calls that were answered by a

person were abandoned calls in violation of the TSR. Dish is liable

for civil penalties for these calls. Dish is, therefore, liable for civil

penalties for causing Dish TV Now to make these illegal Abandoned

Prerecorded Calls.

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Alternatively, Dish is liable for civil penalties for the actions of

its agent Dish TV Now. Dish’s agent Dish TV Now made these

Abandoned Prerecorded Calls through Guardian. Dish TV Now’s

knowledge of these Abandoned Prerecorded Calls is imputed to

Dish. Under these circumstances Dish is alternatively liable for its

agents’ illegal calls.

Dish acted with actual knowledge when it caused Star Satellite

to make 43,100,876 Abandoned Prerecorded Calls that were

answered by a person and abandoned in violation of the TSR. Dish

caused Star Satellite to engage in telemarketing because Dish

retained Star Satellite as an Order Entry Retailers and authorized

Star Satellite to engage in telemarketing Dish Network

programming. Dish had actual knowledge that Star Satellite was

making Prerecorded Calls. Dish received repeated consumer

complaints beginning in late 2004 or early 2005 that Star Satellite

was making Prerecorded Calls. Dish Outbound Operations

Manager Bangert further knew that Star Satellite was making

prerecorded calls. Bangert sent notice of Star Satellite’s practices to

Dish’s Retail Escalations Department. Dish personnel did nothing

about Star Satellite’s Prerecorded Calls. Under the objective

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circumstances, a person in Dish’s position would have known that

Star Satellite was making Prerecorded Calls to sell Dish Network

programming and, that when individuals answered such calls, the

calls would become Abandoned Prerecorded Calls in violation of the

TSR.

Alternatively Dish is liable for civil penalties for the actions of

its agent Star Satellite. Star Satellite was an agent of Dish when it

had Guardian make these Prerecorded Calls. As Dish’s agent, Star

Satellite knew that Guardian was making Prerecorded Calls on its

behalf. Dish also knew that Star Satellite made these Prerecorded

Calls. Dish knew or reasonably should have known that

Prerecorded Calls that were answered by a person were abandoned

calls in violation of the TSR. Dish is, alternatively, liable for civil

penalties for these actions of its agent Star Satellite.

Dish acted with actual knowledge or knowledge fairly implied

when it caused JSR to make 1,285,379 Prerecorded Calls that were

answered by a person and Abandoned Prerecorded Calls in violation

of the TSR. Dish caused JSR and the other Order Entry Retailers

through which JSR worked to engage in telemarketing because

Dish retained them as Order Entry Retailers and authorized them

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to engage in telemarketing Dish Network programming. Dish had

actual knowledge that Star Satellite was making Prerecorded Calls.

Vice President Mills, Regional Sales Manager Oberbillig, and Dish

Representative Tchang knew from the beginning that JSR was

making “press 1” prerecorded telemarketing calls. Dish, therefore,

knew that JSR was making Prerecorded Calls to sell Dish Network

programming. A person in Dish’s position would have known that

when individuals answered those calls, the calls would become

Abandoned Prerecorded Calls in violation of the TSR. Dish is liable

for civil penalties for these calls.

Alternatively, Dish is liable for the Abandoned Prerecorded

Calls that JSR made as Dish’s agent. JSR was an agent or

subagent of Dish when it made many of these Prerecorded Calls

prior to February 14, 2007. Dish personnel knew its agent JSR was

making Prerecorded Calls. Dish knew or reasonably should have

known that Prerecorded Calls that were answered by a person were

Abandoned Prerecorded Calls in violation of the TSR. The United

States, however, did not prove the number of calls that were made

before February 14, 2007. Under the agency analysis, Dish is liable

for penalties for these Abandoned Prerecorded Calls, but the

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number of calls that JSR made while Dish’s agent has not been

proven.

Dish acted with knowledge or knowledge fairly implied when it

caused American Satellite to make the one Abandoned Prerecorded

Call proven at summary judgment, and also, many more

Abandoned Prerecorded Calls that were answered and abandoned

in violation of the TSR. American Satellite was an Order Entry

Retailer. Dish caused American Satellite to engage in telemarketing

because Dish retained American Satellite as an Order Entry Retailer

and authorized American Satellite to engage in telemarketing Dish

Network programming. Under the objective circumstances in this

case, a person in Dish’s position knew or should have known that

Prerecorded Calls that were answered by a person were abandoned

calls in violation of the TSR. Dish is liable for civil penalties for the

one call.

Dish also acted with actual knowledge when it caused

American Satellite to make many more Abandoned Prerecorded

Calls. Castillo told Musso and Eichhorn that American Satellite

was making Prerecorded Calls. Dish knew or reasonably should

have known that Prerecorded Calls that were answered by a person

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were Abandoned Prerecorded Calls in violation of the TSR. The

United States has not proven the number of such Abandoned

Prerecorded Calls that it caused American Satellite to make.

Alternatively, Dish is liable for civil penalties for the actions of

its agent American Satellite. American Satellite was an Order Entry

Retailer and, so, an agent of Dish. As Dish’s agent, American

Satellite knew that it was making Prerecorded Calls, including the

one call proven at summary judgment. This knowledge is imputed

to Dish. Under the objective circumstances, a person in Dish’s

position knew or should have known that the call was an

Abandoned Prerecorded Call in violation of the TSR. Dish is liable

for civil penalties for this action of its agent American Satellite.

Dish is also liable for civil penalties for the many more abandoned

calls that American Satellite made, but the number of such calls

has not been proven.

4. Count IV

Dish acted with knowledge when it provided substantial

assistance to Star Satellite after it knew that Star Satellite was

using Prerecorded Abandoned Calls to sell Dish Network

programming and continued to pay them and do business with

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them as an Order Entry Retailer. Dish is liable for civil penalties for

providing substantial assistance to Star Satellite to make the

43,100,876 Abandoned Prerecorded Calls in violation of the TSR 16

C.F.R. § 310.3(b). The Court, however, determines that it will

impose only one civil penalty for these calls even though the United

States proved liability in both Count III and Count IV. The total

violations are so large and the amount of the potential civil penalty

is so high that the Court finds that one penalty for each call is

sufficient in this case.

5. Continual Violations

Dish argues, alternatively, that the violations should be

counted as one continual refusal to comply with the TSR rather

than separate violations for each call. In cases of a continual

refusal to comply with an FTC rule, the FTC Act authorizes a

penalty of up to $11,000.00 per day before February 9, 2009, and

$16,000.00 per day thereafter. 15 U.S.C. § 45(m)(1)(C). The

continual violation provision may apply when a party continues to

violate the FTC Rule but the number of violations is unclear. See

F.T.C. v. Hughes, 710 F.Supp. at 1529. The FTC Act, however, also

authorizes a penalty of up to $11,000.00 before February 9, 2009,

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and $16,000.00 thereafter for each violation of an FTC rule. 15

U.S.C. § 45(m)(1)(A). The TSR, states that causing an illegal call is a

violation. TSR 16 C.F.R. § 310.4(b). The United States has proven

millions of calls. Each call proven is a separate violation and, so,

Dish may be liable for a separate penalty for each such call. A per

violation approach is appropriate in this case for the number of

proven illegal calls that Dish caused with knowledge or knowledge

fairly implied.

The daily penalty may be appropriate for the millions of illegal

calls that Dish made or caused with knowledge or knowledge fairly

implied under objective circumstances of this case, but the number

of which the United States did not prove with sufficient certainty.

The United States, however, did not ask for such an additional

penalty so the Court will not award such a sum. The maximum

possible penalty for the proven calls is so large that an additional

daily penalty is not necessary to serve the interests of justice.

The FTC Act directs the Court to consider several factors when

determining the appropriate penalty, including the ability to pay

and to continue to do business. 15 U.S.C. § 45(m)(1)(C). Dish’s

ability to pay and to continue to do business will depend, in part,

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on the amount of penalties and statutory damages that are

appropriate under the other Counts in this case. The Court

determines the appropriate amount of the penalties or statutory

damages for all Counts below after determining liability generally

and liability for penalties or statutory damages in the remaining

Counts.

F. Counts V and VI Plaintiff States TCPA Claims

1. Count V

Count V is the first of two claims brought by the Plaintiff

States for violations of TCPA. Count V alleges in pertinent part:

DISH Network, either directly or indirectly as a result of a

third party acting on its behalf, has violated 47 C.F.R. §

64.1200(c)(2) and 47 U.S.C. § 227(c), by engaging in a

pattern or practice of initiating telephone solicitations to

residential telephone subscribers, including subscribers

in California, Illinois, North Carolina, and Ohio whose

telephone numbers were listed on the National Do Not

Call Registry.

Third Amended Complaint, ¶ 72. The Plaintiff States further allege

that Dish’s violations were willful and knowing. Third Amended

Complaint, ¶ 73.

Count V contains two parts: (1) Dish allegedly engaged in a

pattern or practice of making telemarketing calls to residents of the

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Plaintiff States who registered their residential telephone numbers

on the Registry; and (2) Retailers acting on Dish’s behalf allegedly

engaged in a pattern or practice of making telemarketing calls to

residents of the Plaintiff States who registered their residential

telephone numbers on the Registry. The statute of limitations is

four years under the TCPA, and so, the period of liability extends

back to March 25, 2005. 28 U.S.C. § 1658; Sawyer v. Atlas Heating

& Sheet Metal Works, Inc., 642 F.3d 560, 561 (7

Cir. 2011).

Dish again agrees that the Telemarketing Vendors were acting

on its behalf. Dish disputes that the Order Entry Retailers were

acting on its behalf.

a. The 2003-2007 Calling Records

In 2006 and 2007, Dish made the following Registry Calls to

telephone numbers with area codes associated with the Plaintiff

States:

 266,514 calls to California area codes;

 112,769 calls to Illinois area codes;

 85,093 calls to North Carolina area codes; and

 98,207 calls to Ohio area codes.

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The Plaintiff States rely on Taylor’s analysis for these numbers.

The numbers are less than the numbers of Registry Calls Dr. Yoeli

found were made to numbers with Plaintiff States’ area codes after

March 25, 2005. See PX 38, Yoeli Declaration, Appendix D, Yoeli

October 14, 2013 Report, Appendix A, at PX 0038-125. Based on

all this evidence, it is more likely than not that Dish made at least

the number of Registry Calls to Plaintiff States area codes set forth

above within the statute of limitations.

The preponderance of the evidence established that the

intended call recipients Registry Calls were residential telephone

subscribers and residents of the respective Plaintiff States

associated with the respective area codes. Dish is liable for these

Registry Calls in Count V for violation of the FCC Rule and the

TCPA.

b. The 2007-2010 Calling Records

i. 1,707,713 Summary Judgment Calls

The Court found at summary judgment that Dish was liable

for making 1,707,713 Registry Calls for which Dish did not prove an

Established Business Relationship exception. The portion of the

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1,707,713 calls made to telephone numbers associated with the

Plaintiff States were:

 216,867 calls to California area codes;

 83,895 calls to Illinois area codes;

 52,961 calls to North Carolina area codes; and

 77,991 calls to Ohio area codes.

The preponderance of the evidence established that the

intended call recipients Registry Calls were residential telephone

subscribers and residents of the respective Plaintiff States

associated with the respective area codes. Dish is liable for these

Registry Calls in Count V for violation of the FCC Rule and the

TCPA.

ii. 2,386,382 Registry Calls and Internal List

Calls

The Court found in Count I above that Dish made an

additional 2,386,386 Registry Calls that were also Internal List

Calls. As explained above, the Order Entry Retailers were agents of

Dish for telemarketing purposes. Dish, therefore, is liable for failing

to honor the Internal Lists of the Order Entry Retailers as well as its

own Internal List and eCreek’s Internal List. As a result, Dish could

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not have an Established Business Relationship exception for any of

these Registry Calls. The portion of the 2,386,386 calls made to

Plaintiff States area codes were:

 302,983 calls to California area codes;

 118,289 calls to Illinois area codes;

 97,785 calls to North Carolina area codes; and

 95,275 calls to Ohio area codes.

The preponderance of the evidence established that the

intended call recipients Registry Calls were residential telephone

subscribers and residents of the respective Plaintiff States

associated with the respective area codes. These Registry Calls

violated the FCC Rule and the TCPA and Dish is liable for them as

alleged in Count V.

The Plaintiff States, unlike the United States, do not seek to

impose liability for these calls separately as Internal List Calls. The

Court therefore will award statutory damages for these violations in

this Count because the award would not result in a double recovery

by the Plaintiff States for these calls under the FCC Rule and the

TCPA.

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iii. 2,475,432 Calls found by Dr. Yoeli

The Plaintiff States failed to prove the source of the set of

4,075,766 calls records which they provided Dr. Yoeli to perform his

analysis on this point. The Plaintiff States failed to prove that Dish

was liable for those calls in the 2,475,432 call records made to

Plaintiff States’ area codes. This set of calls was subject to the

parties’ stipulation to proportionately reduce the number of calls for

which Dish would be liable from the Yoeli July 2012 Call Set.

Because no calls were proven, the proportional reduction issue is

moot.

c. Order Entry Retailer Registry Calls

i. JSR

This Court entered partial summary judgment that Dish

caused JSR made 2,349,031 Registry Calls in 2006 in violation of

the TSR. Opinion 445, at 176. The portions of the 2,349,031 calls

made to telephone numbers with Plaintiff States’ area codes were:

 473,102 calls to California area codes;

 369,384 calls to Illinois area codes;

 18,250 calls to North Carolina area codes; and

 129,004 calls to Ohio area codes.

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PX 28, Taylor November 6, 2013 Report, at 13. For the reasons

stated above, JSR was Dish’s agent or subagent when it made these

calls. The preponderance of the evidence also establishes that the

intended call recipients were residential telephone subscribers and

residents of the Plaintiff States associated with each call recipient’s

area code. These Registry Calls violated the FCC Rule and the

TCPA, and Dish is liable for them as alleged in Count V.

JSR also made 3,315,242 Registry Calls from January through

March 2007. For the reasons stated above, the Plaintiffs failed to

show that JSR was an agent or subagent of Dish after Dish

terminated JSR on February 14, 2007, and failed to prove the

number of Registry calls made before February 14, 2007. The

Plaintiff States, therefore, proved that JSR made illegal Registry

Calls as an agent of Dish in 2007, and made some of those calls to

residential telephone subscribers in the Plaintiff States, but they

failed to prove the number of violations for which Dish would be

liable.

ii. Satellite Systems

This Court entered partial summary judgment that Dish

caused Satellite Systems made 381,811 Registry Calls in 2010 and

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2011 in violation of the TSR. Opinion 445, at 176. The portions of

these 381,811 calls proven to be made to residents of the Plaintiff

States were:

 24,100 calls made to California area codes;

 10,048 calls made to Illinois area codes;

 7,290 calls made to North Carolina area codes; and

 12,803 calls made to Ohio area codes.

The preponderance of the evidence showed that of these calls the

number of calls made to residential telephone subscribers of the

respective Plaintiff States.

d. Summary

In summary, Dish is liable to the Plaintiff States for Registry

Calls in violations of the FCC Rule and TCPA in Count V as follows:

California

2003-2007 Calling Records 266,514 calls

1,707,713 TSR Summary Judgment Calls 216,867 calls

2,386,386 Registry and Internal List Calls 302,983 calls

JSR Calls 473,102 calls

Satellite Systems Calls 24,100 calls

Total 1,283,566 calls

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Illinois

2003-2007 Calling Records

1,707,713 TSR Summary Judgment Calls

2,386,386 Registry and Internal List Calls

JSR Calls

Satellite Systems Calls

Total 693,732 calls

North Carolina

2003-2007 Calling Records 85,093 calls

1,707,713 TSR Summary Judgment Calls 52,961 calls

2,386,386 Registry and Internal List Calls 97,785 calls

JSR Calls 18,250 calls

Satellite Systems Calls 7,290 calls

Total 261,379 calls

Ohio

2003-2007 Calling Records 98,207 calls

1,707,713 TSR Summary Judgment Calls 77,991 calls

2,386,386 Registry and Internal List Calls 95,275 calls

JSR Calls 129,004 calls

Satellite Systems Calls 12,803 calls

112,116 calls

83,895 calls

118,289 calls

369,384 calls

10,048 calls

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Total 413,280 calls

Grand Total for all Registry Call Violations in Count V

California 1,283,566 calls

Illinois 693,732 calls

North Carolina 261,379 calls

Ohio 413,280 calls

Grand Total for Count V 2,651,957 calls

2. Count VI

Count VI alleges, in pertinent part:

DISH Network, either directly or indirectly as a result of a

third party acting on its behalf, has violated 47 C.F.R. §

64.1200(a)(2) and 47 U.S.C. § 227(b)(1)(B), by engaging in

a pattern or practice of initiating telephone solicitations

to residential telephone lines, including lines in

California, Illinois, North Carolina, and Ohio, using

artificial or prerecorded voices to deliver a message

without the prior express consent of the called party and

where the call was not initiated for emergency purposes

or exempted by rule or order of the Federal

Communications Commission under 47 U.S.C. §

227(b)(2)(B).

Third Amended Complaint, ¶ 76. The Plaintiff States further alleged

that Dish’s violations were willful and knowing. Third Amended

Complaint, ¶ 77. Count VI contains two parts: (1) Dish allegedly

engaged in a pattern or practice of making Prerecorded Calls to

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residents of the Plaintiff States; and (2) Order Entry Retailers acting

on Dish’s behalf allegedly engaged in a pattern or practice of

making Prerecorded Calls to residents of the Plaintiff States. The

statute of limitations is four years under the TCPA, and, so, the

period of liability extends back to March 25, 2005. All of the

prerecorded calls at issue were placed after March 25, 2005.

a. Dish and the Telemarketing Vendors

The Court entered partial summary judgment that Dish and

its Telemarketing Vendors made 98,054 Abandoned Prerecorded

Calls in that were answered by persons, and so, were abandoned

calls in violation of the TSR. See Opinion 445, at 193-94, 233. The

portion of the 98,054 calls made to telephone numbers with Plaintiff

States area codes were:

 23,020 calls made to California area codes;

 5,830 calls made to Illinois area codes;

 2,283 calls made to North Carolina area codes; and

 1,759 calls made to Ohio area codes.

These were Prerecorded Calls and the preponderance of the

evidence shows that the intended recipients were residential

telephone subscribers of the respective Plaintiff States. The Plaintiff

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States have established a prima facie case for liability for these calls

for violation of the FCC Rule and TCPA as alleged in Count VI.

Dish asserts that the Prerecorded Calls did not violate the FCC

Rule or TCPA because Dish had a Transaction-based Established

Business Relationship with the intended recipients. Dish has the

burden to prove this exception to liability. Dish’s only evidence is

the translations of the transcripts of the recorded messages. The

prerecorded messages were all in different foreign languages. The

translations show that the prerecorded messages were directed to

Dish customers. Dish, however, must show that the intended

recipient purchased goods or services from Dish within 18 months

of the call to establish a Transaction-based Established Business

Relationship. FCC Rule 47 C.F.R. § 64.1200(f)(5). The translations

of the messages do not provide any evidence of last dates of

purchase of Dish Network programming. The translations,

therefore, do not prove the Transaction-based Established Business

Relationship exception. Dish is liable for these calls for violation of

the FCC Rule and TCPA as alleged in Count VI.

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b. Order Entry Retailers Star Satellite and JSR

The Court entered partial summary judgment that Dish was

liable for causing Order Entry Retailers Dish TV Now, Star Satellite,

JSR, and American Satellite to make Abandoned Prerecorded Calls

that were answered and became abandoned calls in violation of the

TSR. See Opinion 445, at 176, 194-95, 233. The Plaintiff States

presented evidence of the number of Prerecorded Calls Star Satellite

made to Plaintiff States area codes, but not Dish TV Now or

American Satellite. The Plaintiff States proved that Dish TV Now

and JSR made millions of prerecorded calls nationwide, some of

which were directed to residential telephone subscribers in the

Plaintiff States; however, the Plaintiff States have not presented

evidence of the number of calls made to residents of the Plaintiff

States either by number of calls to Plaintiff States area codes or

otherwise. The Plaintiff States also proved that American Satellite

made numerous prerecorded telephone calls, but the Plaintiff States

did not present evidence of the number of calls made. The Plaintiffs

proved American Satellite made one prerecorded call during a Dish

sting operation, but the call recipient did not reside in a Plaintiff

State.

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The Court found at summary judgment that Dish caused Star

Satellite to make 43,100,876 Abandoned Prerecorded Calls between

July and November 2005. The portion of the 43,100,876 calls that

Star Satellite made to telephone numbers with Plaintiff States area

codes were:

 5,727,417 calls made to California area codes;

 2,660,066 calls made to Illinois area codes;

 1,716,457 calls made to North Carolina area codes; and

 3,419,175 calls made to Ohio area codes.

For the reasons stated above, the preponderance of the evidence

shows that Star Satellite was Dish’s agent for telemarketing when it

made these calls, the intended recipients of the calls were

residential telephone subscribers, and the intended recipients

resided in the Plaintiff States associated with the recipients’

respective area codes. Dish is liable for these calls made in

violation of the FCC Rule and the TCPA, as alleged in Count VI.

c. Summary

Dish is liable for Prerecorded Calls made in violation of the

FCC Rule and TCPA in Count VI as follows:

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California

Dish and Telemarketing Vendor Calls 23,020 calls

Star Satellite Calls 5,727,417 calls

Total 5,750,437 calls

Illinois

Dish and Telemarketing Vendor Calls 5,830 calls

Star Satellite Calls 2,660,066 calls

Total 2,665,896 calls

North Carolina

Dish and Telemarketing Vendor Calls 2,283 calls

Star Satellite Calls 1,716,457 calls

Total 1,718,740 calls

Ohio

Dish and Telemarketing Vendor Calls 1,759 calls

Star Satellite Calls 3,419,175 calls

Total 3,420,934 calls

Grand Total for violations in Count VI

California 5,750,437 calls

Illinois 2,665,896 calls

North Carolina 1,718,740 calls

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Ohio 3,420,934 calls

Grand Total 13,556,007 calls

3. Liability for Statutory Damages for TCPA Violations

The TCPA authorizes the Plaintiff States to recover $500 per

violation. 227 U.S.C. § 227(g). Each illegal call is a separate

violation, and if a call violates two or more subsections of the TCPA,

the call constitutes two or more violations, one for each subsection

violated. Charvat v. NMP, LLC, 656 F.3d 440, 448-49 (6

Cir.

2011). The $500 amount is a compensatory award fixed by

Congress and does not require proof of intent or motive. See Alea

London Ltd. v. American Home Services, Inc., 638 F.3d 768, 776

(11

Cir. 2011); Penzer v. Transportation Insurance Co., 545 F.3d

1303, 1311 (5

Cir. 2008); Universal Underwriters Ins. Co. Lou

Fusz Auto. Network, Inc., 401 F.3d 876, 881 (8

Cir. 2005); see also

Ira Holtzman, C.P.A. v. Turza, 728 F.3d 682, 684 (7

Cir. 2013).

Dish argues that the award is punitive. The Court disagrees. The

$500 is much more in the nature of a liquidated damage amount in

circumstances where the actual harm would be hard to calculate.

See Universal Underwriters, 401 F.3d at 881. As a result, the

special agency rules regarding punitive damages awards for the acts

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of agents is not relevant to the $500 per violation awards under the

TCPA.

Dish argues that the Court should interpret the TCPA to allow

an award “up to” $500 per violation the Plaintiff States. At least

one district court has accepted this argument. Texas v. American

Blastfax, Inc., 164 F.Supp.2d 892, 900-01 (W.D. Tex. 2001). This

Court respectfully disagrees. The statute authorizes actions to

recover of “actual monetary loss or $500 in damages for each

violation, or both such actions.” 47 U.S.C. § 227(g)(1). Congress

authorized private parties to sue under the TCPA for actual

monetary loss or damages “up to $500,” whichever is greater. 47

U.S.C. §§ 227(c)(5)(B). Congress also did not include the “up to”

language in the statutory damages that states could recover.

Congress distinguished between awards for various violations and

between awards to private individuals and awards to the states.

The Court must honor this language.

The Plaintiff States have proven the following TCPA violations

by Dish and its agents Star Satellite and JSR for each Plaintiff

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State:

California: 1,283,566 illegal calls in Count V

5,750,437 illegal calls in Count VI

Illinois: 693,732 illegal calls in Count V

2,665,896 illegal calls in Count VI

North Carolina: 261,379 illegal calls in Count V

1,718,740 illegal calls in Count VI

Ohio: 413,280 illegal calls in Count V

3,420,934 illegal calls in Count VI

Total: 16,207,964 illegal calls in Count VI

At $500 per call, the award would be approximately $8.1 billion

($8,103,982,000.00).

An award of $8.1 billion would be excessive and in violation of

due process. A statutory award violates due process “only where

the penalty prescribed is so severe and oppressive at to be wholly

disproportioned to the offense and obviously unreasonable.” St.

Louis I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 66-67, (1919); see

Maryland v. Universal Elections, Inc., 826 F.Supp.2d 457, 465-66

(D. Md. 2012); Pasco v. Protus IP Solutions, Inc., 865 F.Supp.2d

825, 834 (D. Md. 2011). An $8.1 billion award would represent

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more than 25 percent of Dish’s capital value and more than five

years’ net after tax profits. That amount is wholly disproportionate

to the offense and obviously unreasonable and might put Dish out

of business. That award also does not consider the effect of any

monetary awards to the United States in Counts I-IV or to the

Plaintiff States in the Counts VII-XII. The Court will exercise its

discretion and reduce the award to an amount that is proportionate

and reasonable under the circumstances. See Universal Elections,

862 F.Supp.2d at 466. The proportionate and reasonable amount

depends on the awards in the other Counts. The Court will address

the appropriate amount in light of all the Counts after discussing

liability for civil penalties in the remaining Counts.

The Plaintiff States argue that the Court should order a

remittitur prior to entertaining a due process challenge. The Court

disagrees. A remittitur is a procedure used in jury trials. The

remittitur offers the plaintiff the choice of accepting a lower damage

amount that the one awarded by a jury or a new trial on damages.

See Sony BMG Music Entertainment v. Tenenbaum, 660 F.3d 487,

511 (1

Cir. 2011). This is a bench trial, not a jury trial. Moreover,

the damages are a straightforward calculation of $500 per violation.

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A new trial on damages would not change that number. A

remittitur is not appropriate in this case.

The Plaintiff States argue in the alternative that the Court

should first entertain the Plaintiff States’ voluntary offer to remit

the damages award before entertaining the constitutional issues.

The case cited by the Plaintiff States involved a situation in which

the district court erred by ordering no civil penalties in the

circumstances in which the statutory amount was excessive.

United States ex rel. Bunk v. Gosselin World Wide Moving, N.V.,

741 F.3d 390, 406 (4

Cir. 2013). The Fourth Circuit stated that

the district court should have entertained the plaintiff’s offer to

remit the penalty. The primary error, though, was awarding no

penalty at all.

Furthermore, the Fourth Circuit did not address a situation in

which the plaintiff did not offer to remit the statutory amount. The

Plaintiff States have not offered to remit the statutory damage

award in Counts V and VI. Plaintiffs North Carolina offered to remit

the amounts in Counts IX and X. State Plaintiffs’ Post-Trial

Proposed Conclusions of Law (664), at 39-40. No such offer is

included in the Plaintiff States’ proposed conclusions of Law for

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Counts V and VI. The Plaintiff States mentioned the figure of $1

billion in their closing statement, but did not offer to remit any

damage award to a specific amount. See State Plaintiffs’ Closing

Statement (d/e 639), at 20 (“In light of Dish’s ability to pay . . . , the

millions of violations, and the extended period over which the

violations continued to occur, any damages award less than one

billion dollars would not raise constitutional concerns.”). The

question of a voluntary remittance of the damage award is,

therefore, moot.

In this case, the statutory damages calculation in Counts V

and VI exceeds $8.1billion. That is “wholly disproportionate to the

offense and obviously unreasonable.” Williams, 251 U.S. at 66-67.

No offer to remit that amount has been made. The Court will

exercise its discretion to award an amount that is proportionate and

reasonable under the facts and circumstances of this case. See

Universal Elections, 862 F.Supp.2d at 466

The TCPA provides that the Court may increase the damage

award up to $1,500 per violation for a knowing violation. 47 U.S.C.

§ 227(g)(1). Because the award in excess of $8.1 billion violates due

process, the Court will not exercise its discretionary authority to

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increase the award. The Court, therefore, will not address the split

of authority on the requirements to prove knowing violations (see

e.g., Lary v. Trinity Physician Financial & Insurance Services, 780

F.3d 1101, 1106-07 (11

Cir. 2015) (must prove actual knowledge

that the act violated the TCPA); contra e.g., Sengenberger v. Credit

Control Services, Inc., 2010 WL 1791270, at *6 (N.D. Ill. May, 2010)

(must only prove the act was intentional, not accidental)) or whether

the enhanced award would constitute punitive damages (see Alea

London Ltd. v. American Home Services, Inc., 638 F.3d 768, 778

(11

Cir. 2011) (enhanced awards up to $1,500 under the TCPA

were more compensatory than punitive).

G. Counts VII and VII California Claims

1. Count VII

Count VII alleges a claim under the California Do Not Call

Law. Cal. Bus. & Prof. Code § 17592(c). Section 17592(c) provides,

in relevant part, “no telephone solicitor shall call any telephone

number” on the California do-not-call list. The California Do-Not-

Call List consists of the California numbers on the Registry. A copy

of the California Do-Not-Call List is current if it was obtained from

the FTC no more than three months prior to the date of the call.

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Cal. Bus. & Prof. Code §17592(a)(2). California’s Established

Business Relationship exception tracks the TSR and FCC Rule’s

requirement that such relationships exist for 18 months after the

last purchase. Cal. Bus. & Prof. Code § 17592(e)(4). Count VII

alleges in pertinent part:

DISH Network, either directly or indirectly as a result of a

third party acting on its behalf, is a telephone solicitor

pursuant to California Business & Professions Code

section 17592(a)(1), and has violated Section 17592(c)(1)

by making or causing to be made telephone calls to

California telephone numbers listed on the National Do

Not Call Registry and seeking to rent, sell, promote, or

lease goods or services during those calls.

Third Amended Complaint, ¶ 80. The statute of limitations for

Count VII is three years. Cal. Civ. Code § 338(h); see Opinion 445,

at 216-17. The claims in Count VII extend back to calls made on or

after March 25, 2006, three years before the case was filed.

Dish argues that this claim, and any claim brought by the

Plaintiff States that relies on calls made to numbers on the Registry,

fails because the Registry violates the First Amendment for the

reasons Dish raised in connection with the United States’ claims in

Count I. The Court rejects this argument for the reasons given

above in connection with Count I.

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Dish and its Telemarketing Vendors made the following illegal

Registry Calls to telephone numbers with California area codes

more than 93 days (i.e. more than three months) after registration

on the Registry:

2007-2010 Calls:

Yoeli set of 2,386,386 calls; 296,640 calls

Taylor’s set of 501,650 calls; 42,019 calls

Taylor’s set of not completed calls; 33,970 calls

Taylor’s set of wrong number, no English calls; 1,955 calls

Total 374,584 calls

The “not completed calls” and “wrong number, no English calls” are

the calls with California area codes that Taylor erroneously

eliminated from the Yoeli July 2012 Call Set.

The preponderance of the evidence shows that the intended

recipients of these calls were California residents. Dish is liable for

making 374,584 Registry Calls in violation of Cal. Bus. & Prof. Code

§ 17592(c) as alleged in Count VII.

The Plaintiff States did not present evidence on the number of

Registry Calls made by Order Entry Retailers JSR and Satellite

Systems that were more than three months after the telephone

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numbers with California area codes were registered on the Registry.

The Plaintiffs, therefore, did not prove the number of calls made by

JSR and Satellite Systems for which Dish would be liable under

Count VII.

California law provides a safe harbor affirmative defense:

It shall be an affirmative defense to any action brought

under this article that the violation was accidental and in

violation of the telephone solicitor's policies and

procedures and telemarketer instruction and training.

Cal. Bus. & Prof. Code § 17593(d). Dish failed to prove this

affirmative defense. Dish failed to present sufficient competent

evidence of the procedures used to formulate or scrub Lead

Tracking System calling lists and, so, failed to show any illegal

Registry calls were accidental or violated procedures. Furthermore,

Dish failed to use the last dates of purchase to calculate

Transaction-based Established Business Relationships for the

Account Number Campaigns. As a result, Dish did not use proper

procedures to formulate these calling lists and called millions of

numbers on the Registry illegally. Those illegal calls were not

accidental. Finally, Dish failed to identify any particular calls that

were accidentally made. Some Dish witnesses testified in

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generalities that accidents happen, and some witnesses indicated

that some problems arose when Dish transferred all Account

Number Campaign scrubbing to its headquarters in Colorado, but

no witness testified that certain calls were accidentally made. Dish

failed to prove this affirmative defense. Dish is liable for at least

374,584 calls that violated § 17952 of the California Business &

Professions Code.

2. Count VIII

Count VIII alleges a claim for unfair competition under

California Business and Professions Code § 17200,

Section 17200 defines unfair competition as practices

that are “unlawful, or unfair, or fraudulent.” Acts that

violate some other law are “unlawful” and so violate §

17200. See Davis v. HSBS Bank Nevada, N.A., 691 F.3d

1152, 1168 (9

Cir. 2012). The other statutes violated

are referred to as “borrowed” statutes. Id.”

Opinion 445, at 217. The California Attorney General can bring an

action for civil penalties for violations of § 17200. Cal. Bus. & Prof.

Code § 17206. The penalties available under § 17206, “are

cumulative to each other and to the remedies or penalties available

under all other laws of this state.” Cal. Bus. & Prof. Code § 17205.

Thus, if an act that violates two borrowed statutes, that act

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constitutes two violations of § 17200 and is subject to two civil

penalties.

In this case, Plaintiff California borrowed from the TCPA

violations in Counts V and VI, the violations of § 17592(c) in Count

VIII, and also violations of California Civil Code § 1770(a)(22)(A).

Section 1770(a)(22)(A) prohibits making Prerecorded Calls “without

an unrecorded, natural voice first informing the person answering

the telephone of the name of the caller or the organization being

represented, and either the address or telephone number of the

caller, and without obtaining the consent of that person to listen to

the prerecorded message.”

Count VII alleges, in pertinent part:

Beginning at an exact date unknown to plaintiff and

continuing to the present, Defendant DISH Network has

engaged in and continues to engage in unfair competition

as defined in California Business & Professions Code

section 17200. Defendant’s acts of unfair competition

include, but are not limited to, the following:

(a) DISH Network, either directly or indirectly as a result

of a third party acting on its behalf, has violated the

TCPA at 47 U.S.C. § 227(c) and its regulations at 47

C.F.R. § 64.1200(c)(2), by engaging in a pattern or

practice of initiating telephone solicitations to residential

telephone subscribers, including subscribers in

California, whose telephone numbers were listed on the

National Do Not Call Registry.

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(b) DISH Network, either directly or indirectly as a result

of a third party acting on its behalf, has violated 47

C.F.R. § 64.1200(a)(2) and 47 U.S.C. § 227(b)(1)(B), by

engaging in a pattern or practice of initiating telephone

solicitations to residential telephone lines, including lines

in California, using artificial or prerecorded voices to

deliver a message without the prior express consent of

the called party and where the call was not initiated for

emergency purposes or exempted by rule or order of the

Federal Communications Commission under 47 U.S.C. §

227(b)(2)(B).

of a third party acting on its behalf, has violated

California Business & Professions Code section

17592(c)(1) by making or causing to be made telephone

calls to California telephone numbers listed on the

National Do Not Call Registry and seeking to rent, sell,

promote, or lease goods or services during those calls.

(d) DISH Network, either directly or indirectly as a result

of a third party acting on its behalf, has violated

California Civil Code section 1770(a)(22)(A), which makes

it an unfair method of competition and unfair or

deceptive act or practice to disseminate an unsolicited

prerecorded message by telephone without an

unrecorded, natural voice first informing the person

answering the telephone of the name of the caller or the

organization being represented, and either the address or

telephone number of the caller, and without obtaining

the consent of that person to listen to the prerecorded

message.

Third Amended Complaint, ¶ 82. The statute of limitations is four

years. Cal. Bus. & Prof. Code § 17208; see Opinion 445, at 218.

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The claim in Count VIII extends back to March 25, 2005, four years

before the filing of the Complaint.

Dish is liable for making, either directly or through its agents

the Telemarketing Vendors and JSR, 1,283,566 Registry Calls in

violation of the TCPA, as proven in Count V. Dish is liable for

making, either directly or through its agents the Telemarketing

Vendors and Star Satellite, 5,750,437 prerecorded telemarketing

calls in violation of the TCPA, as proven in Count VI. Dish is liable

for making, either directly or through its agents Telemarketing

Vendors, 374,584 Registry Calls as proven in Count VII.

Dish is also liable under § 17200 for the violations of §

1770(a)(22)(A). California proved that Dish or its agents

Telemarketing Vendors eCreek and EPLDT and Order Entry

Retailers Star Satellite and JSR made these Prerecorded Calls in

violation of § 1770(a)(22)(A). The penalties for violation § 17200 are

cumulative to each other. Thus, Dish may be liable twice under §

17200 for Prerecorded Calls if the calls violated both §

1770(a)(22)(A) and the TCPA and FCC Rule.

Dish argues that § 1770(a)(22)(A) does not impose liability for

the acts of Order Entry Retailers. Dish argues that § 1770(a)(23)

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specifically authorizes liability for third parties, but § 1770(a)(22)(A)

does not. Dish argues that § 1770(a)(22)(A), therefore, is limited to

Dish’s actions. The Court disagrees. Section 1770(a)(23)(B)

establishes an affirmative defense for a third party unless the

person who violated § 1770(a)(23)(A) was an agent of the third party

or the third party knew of the illegal act. Section 1770(a)(22)

contains no similar defense to third party liability. Businesses are

liable for the unlawful acts of their agents. See Ford Dealers

Association v. Department of Motor Vehicles, 650 P.2d 328, 336

(Cal. 1982); People v. Toomey, 203 Cal.Rptr. 642, 650-51 (Cal. App.

1984).

Dish argues that it is entitled to an Established Business

Relationship defense under § 1770(a)(22) for the 23,020 calls that it

made directly or through the Telemarketing Vendors. Section

1770(a)(22)(B) provides for such a defense:

(B) This subdivision does not apply to a message

disseminated to a business associate, customer, or other

person having an established relationship with the

person or organization making the call . . . .

Cal. Civ. Code § 1770(a)(22)(B). This defense requires proof that the

intended call recipient was a customer or had an established

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relationship with Dish. This portion of the California Civil Code

does not define either “customer” or “established relationship.” See

Cal. Civ. Code § 1761, Definitions. The statute does not require

proof of a purchase within 18 months of the call like the TSR and

the FCC Rule.

Dish argues that the translations of the sales scripts show

that the intended recipients were customers. The translations show

that the calls offered new foreign language programming packages

to existing customers. This evidence tends to show that the calls

were made to individuals who were at some time customers of Dish.

That evidence was not sufficient proof under Count VI because the

FCC Rule requires a call to be within 18 months of the last

purchase, and the script text did not prove the last purchase date.

California section 1761 does not require that the call to be within

any certain time period since the last transaction, only that the

person be a customer. Given the language of § 1761, the Court

finds that Dish has a valid defense under § 1770(a)(22)(B) for these

23,020 calls.

Dish, however, is liable under § 17200 for the

Dish also argues that it is entitled to an unintentional bona fide error defense for the 23,020

calls under California Civil Code § 1784. Dish’s foreign language marketing division intended

to place these Prerecorded Calls. This division of Dish did not unintentionally record sales

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5,727,417 calls that Dish’s agent Star Satellite made in violation of

§ 1770(a)(22)(A).

In summary, Dish is liable for unfair competition by

committing the following illegal calls in violation of California

Business & Professions Code section 17200:

Violation of TCPA proven in Count V 1,283,566 calls

Violation of TCPA proven in Count VI 5,750,437 calls

Violation of Cal. Bus. & Prof. Code § 17592(c)

proven in Count VII 374,584 calls

Violation of Cal. Civ. Code § § 1770(a)(22)(A) 5,727,417 calls

Total 13,136,004 calls

Dish is liable for making directly or through its agents 13,136,004

calls in violation of § 17200 in Count VIII.

3. Civil Penalties under California State Claims in Counts VII

and VIII

Pursuant to California Business & Professions Code §

17593(a)(2), California may recover for each violation proven under

Count VII a civil penalty up to the penalties available under § 5(m)

of the FTC Act, up to a maximum of $11,000 per violation for each

pitches or prepare calling lists for these campaigns. The defense does not apply. Dish,

however, proved the other affirmative defense under § 1770(a)(22)(B).

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violation before February 9, 2009, and $16,000 for each violation

thereafter. In addition, California may recover a separate penalty of

up to $2,500.00 for each violation. Cal. Bus. & Prof. Code §§ 17200,

17536(b). California may recover for each violation proven under

Count VIII a civil penalty of up to $2,500.00. Cal. Bus. & Prof. Code

§ 17206(b). The penalties are cumulative. Cal. Bus. & Prof. Code

§§ 17205 and 1734.5. A defendant is subject to multiple penalties

if he or she violates multiple statutes that authorize such penalties.

See People v. Toomey, 203 Cal.Rptr. 642, 656 (Cal. Ct. App. 1984).

Dish erroneously refers to some or all of the civil penalties

authorized under these statutes as damages. See e.g., Dish

Network L.L.C.’s Proposed Post-Trial Conclusions of Law (d/e 666),

at 94-95. Dish is incorrect. These statutes authorize civil

penalties.

These statutes also impose strict liability without any proof of

intent. Community Assisting Recovery, Inc. v. Aegis Security Ins.

Co., 112 Cal.Rptr.2d 304, 308 (Cal. Ct. App. 2001). Issues related

to culpability are relevant to the amount of the penalty, but not to

liability for a penalty. See Cal. Bus. & Prof. Code §§ 17206 and

17536 (willfulness a factor in the amount of the penalty), and §

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17593(a) (civil penalties subject to the same considerations as those

set forth in FCT Act § 5(m)).

California courts have determined that these civil penalties are

not akin to punitive damages. People v. Fremont Life Ins. Co., 128

Cal. Rptr.2d 463, 473-74 (Ct. App. 2002). Moreover, the Supreme

Court of California has held in other contexts that civil penalties are

not akin to punitive damages under California law. Kizer v. County

of San Mateo, 806 P.2d 1353, 1356-60 (Cal. 1991). The California

Supreme Court explained that civil penalties are “designed to

ensure compliance with a detailed regulatory scheme” and are not

akin to punitive damages “even though they may have a punitive

effect.” Id. at 1357. In addition, civil penalties do not require a

showing of actual harm and are “imposed without regard to motive

and require no showing of malfeasance or intent to injure.” Like the

FTC Act § 5(m) penalties, the primary purpose of California civil

penalties are to enforce regulations. Id. at 1358.

In light of the Fremont decision and the California Supreme

Court’s discussion of civil penalties in Kizer, the Court finds under

California law that the civil penalties at issue in this case are not

akin to punitive damages. The special rules of agency law limiting a

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principal’s liability for punitive damages for the acts of its agent

simply do not apply.

California has proven 374,584 violations of Count VII and

13,136,004 violations of Count VIII. The maximum possible

penalties for Count VII would be $11,000 per violation prior to

February 9, 2009, and $16,000 thereafter; plus $2,500 per

violation. The maximum possible penalties for Count VIII would be

$2,500 per violation. The total maximum possible civil penalty

exceeds $37.8 billion ($37,896,894,000.00).

California suggests

a civil penalty of $100 million ($100,000,000.00). State Plaintiffs’

Post-Trial Proposed Conclusions of Law (d/e 664), at 33. The Court

will address the appropriate amount to impose below in conjunction

with the amounts to be awarded for all of the claims for monetary

relief.

(374,584 x $11,000) + (374,584 x $2,500) + (13,136,004 x $2,500) = $37,896,894,000.00.

This calculation assumes $11,000 as the maximum possible penalty for the violations proven

under §17593.

Dish states that California sought restitution in its proposed conclusions of law in the Final

Pretrial Order. Dish Network L.L.C.’s Proposed Post-Trial Conclusions of Law (d/e 666), at 99-

100. The Court could not find such a claim for restitution. See Final Pretrial Order (d/e 564),

at 6, and Attachment F, Plaintiffs Proposed Conclusions of Law, ¶¶ 359-71. Regardless,

California did not pursue restitution at trial. Restitution is not an issue.

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H. Counts IX and X North Carolina Claims

1. Count IX

Plaintiff North Carolina alleges violations of the North Carolina

Do-Not-Call Law that prohibits Registry Calls to North Carolina

residents whose telephone numbers were on the Registry. Count IX

alleges in part:

85. DISH Network, and/or third parties acting on DISH

Network’s behalf, has violated N.C. Gen. Stat. § 75-102(a)

by making telephone solicitations to the telephone

numbers of North Carolina telephone subscribers when

those numbers were in the pertinent edition of the

National Do Not Call Registry.

86. DISH Network also violated N.C. Gen. Stat. § 75-

102(d) by failing to monitor and enforce compliance by its

employees, agents, and independent contractors in that,

as set forth above, those persons made numerous

telephone solicitations to the telephone numbers of North

Carolina telephone subscribers when those numbers

were in the pertinent edition of the National Do Not Call

Registry.

87. DISH Network willfully engaged in the actions and

practices described above.

Third Amended Complaint, ¶¶ 85-87.

The Court previously explained the structure of the North

Carolina statute,

North Carolina's Do–Not–Call Law . . . prohibits a

telephone solicitor from making a telemarketing call to a

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telephone subscriber's telephone number that appears

on the Registry. N.C. Gen.Stat. § 75–102(a). The term

“telephone solicitor” means an individual or entity that

makes telemarketing calls “directly or through

salespersons or agents.” N.C. Gen.Stat. § 75–101(10).

The term “telephone subscriber” means an individual

who subscribes for residential telephone service from a

carrier, including a wireless carrier. N.C. Gen.Stat. § 75–

101(11). Section 75–102 also requires telephone

solicitors to implement systems and written procedures

to prevent making telemarketing calls to numbers on

the Registry. N.C. Gen.Stat. § 75–102(d). Count IX

alleges a violation of this provision also.

Opinion 445, at 218-19. Thus, North Carolina must show that

Dish or its agents made Registry Calls to North Carolina residents

who were residential telephone subscribers. The statute of

limitations on claims under § 75-102 is four years, and extends

back to calls made after March 25, 2005. N.C. Gen. Stat. § 75-

16.2. The four-year statute is that same as the limitations period

under the TCPA.

For the reasons stated in the Court’s discussion of Count V,

North Carolina proved that Dish and its agents JSR and Satellite

Systems made 261,379 Registry Calls to numbers with North

Carolina area codes after March 25, 2005. The preponderance of

the evidence further establishes that intended recipients were

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residential telephone subscribers and residents North Carolina.

The 261,379 calls violated § 75-102.

Section 75-102(d) also requires telemarketers to “implement

systems and written procedures to prevent further telephone

solicitations to any telephone subscriber . . . whose telephone

number appears in the “Do Not Call” Registry.” Dish did not have

written procedures for scrubbing Account Number Campaigns to

remove from its calling lists telephone numbers on the Registry.

Dish, therefore, also violated § 75-102(d).

Dish argues that it is entitled to Transaction-based and

Inquiry-based Established Business Relationship defenses to these

calls. The North Carolina uses the same definitions of Transaction-

based and Inquiry-based Established Business Relationships as the

TCPA and TSR, with the same 18-month and three month time

periods respectively. N.C. Gen. Stat. § 75-101(5). The analysis in

the Count V TCPA Registry call claims, therefore, applies here, and

Dish is not entitled to either Established Business Relationship

defense for any of these 261,379 Registry Calls.

The parties presented no competent evidence of Dish’s procedures, written or otherwise,

used to process its Lead Tracking System calling lists or Cold Call calling lists.

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2. Count X

North Carolina alleges a claim in Count X for violation of it Do-

Not-Call Law that prohibits use of an automatic dialer to place

unsolicited prerecorded calls. N.C. Gen. Stat. § 75-104. Count X

alleges in part:

89. DISH Network, and/or third parties acting on DISH

Network’s behalf, has violated N.C. Gen. Stat. § 75-104

by using automatic dialing and recorded message players

to make unsolicited telephone calls to North Carolina

telephone subscribers without first having live operators

inform the telephone subscribers of the nature and

length of the recorded message and asking for and

obtaining permission to play the message from the

person receiving the call, and otherwise not complying

with any of the exceptions set forth in N.C. Gen. Stat. §

75-104.

90. DISH Network willfully engaged in the practices

described above.

Third Amended Complaint, ¶¶ 89-90. Liability under § 75-104

extends to calls made by agents. Opinion 445, at 220-22. The

intended recipients must be residential telephone subscribers

because the North Carolina statute defines the term “telephone

subscriber” to mean residential telephone subscriber. Opinion 445,

at 220; N.C. Gen. Stat. § 75-101(11). The statute of limitation is

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four years, extending back to calls made after March 25, 2005. N.C.

Gen. Stat. § 75-16.2.

For the reasons stated in the Court’s discussion of Count VI,

North Carolina proved that Dish and its agent Star Satellite made

1,718,740 Prerecorded Calls to numbers with North Carolina area

codes. The preponderance of the evidence further establishes that

the intended recipients were residential telephone subscribers and

residents North Carolina. The 1,718,740 calls violated § 75-104.

3. Civil Penalties for North Carolina under Counts IX and X

North Carolina authorizes civil penalties for the violations in

Counts IX and X as follows: “Five hundred dollars ($500) for the

first violation, one thousand dollars ($1,000) for the second

violation, and five thousand dollars ($5,000) for the third and any

other violation that occurs within two years of the first violation.”

N.C. Gen. Stat. § 75-105(a)(2). North Carolina established that

Dish is liable for 261,379 Registry Calls in violation of N.C. Gen.

Stats § 75-102 in Count IX, and 1,718,740 Prerecorded Calls in

violation of N.C. Gen. Stat. § 75-104 in Count X. Under § 75-

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105(a)(2), the statutory penalty applies to violations that occurred

within two years of the first violation.

In Count IX, the Registry Calls in the 2003-2007 Calling

Records would be subject to civil penalties if the calls were made

within the first two years within the statute of limitations, from

March 25, 2005 to no later than March 24, 2007. North Carolina

used Taylor’s analysis to show that Dish made 85,093 calls between

January 2006 and August 2007. These calls are within the two-

year window for civil penalties authorized by the § 75-105. This

number does not include the Dish direct marketing Registry Calls

made during the remainder of 2007, but this is the only number

proven with reasonable certainty. North Carolina is also entitled to

recover civil penalties on the 18,250 Registry Calls that Dish’s agent

JSR made to North Carolina residents in 2006 and 2007. These

calls were also within the two-year window for civil penalties. North

Carolina is entitled to recover civil penalties on 103,343 Registry

Calls in Count IX.

All of the Star Satellite 1,716,457 Prerecorded Calls to North

Carolina residents were made from July to November 2005. All of

these calls were within the statute of limitations and within two

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years of each other. North Carolina is entitled to recover civil

penalties on all these calls. Dish presented evidence at summary

judgment that Dish’s Prerecorded Calls to North Carolina area

codes occurred between September 2007 and March 2008. See

Opinion 445, at 127-28; see Defendant Dish Network L.L.C.’s

Memorandum of Law in Support of its Motion for Summary

Judgment (d/e 349), at 168-69; Defendant Dish Network L.L.C.’s

Opposition to Plaintiffs’ Motion for Summary Judgment (d/e 374),

at 50-51. North Carolina has failed to establish that it is entitled to

recover civil penalties on the 2,283 Dish Prerecorded Calls to North

Carolina residents.

Section 75-105 states that the penalty would be reduced to

$100.00 for each violation within two years of the first violation if

Dish “can show that that the violations are the result of a mistake

and . . . [Dish] complied with” § 75-102(d). Section 75-102(d)

requires telephone solicitors to implement “systems and written

procedures” to prevent Registry Calls and Internal List Calls, to

train its own sales staff, to monitor and enforce compliance by its

own sales staff and by independent contractors, to record

consumers’ do-not-call requests, and to maintain Internal Do-Not-

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Call Lists. N.C. Gen. Stat. 75-102(d). Dish did not have written

procedures to scrub Account Number Campaign calling lists to

prevent Registry Calls or Internal List Calls. Dish presented no

competent evidence on the procedures Dish’s Database Marketing

used to scrub Lead Tracking System and Cold Call calling lists.

Dish, therefore, is not entitled to this reduction in the penalty under

§ 75-102(d).

Section 75-105 imposes the penalty on telephone solicitors.

The definition of telephone solicitor means:

Any individual, business establishment, business, or

other legal entity doing business in this State that,

directly or through salespersons or agents, makes or

attempts to make telephone solicitations or causes

telephone solicitations to be made. “Telephone solicitor”

also includes any party defined as a “telemarketer” under

the Telemarketing Sales Rule.

N.C. Gen. Stat. Ann. § 75-101(10). Dish’s liability as a telephone

solicitor extends by this definition to telemarketing performed by its

agents. Because the statute extends liability to the actions of

agents, special rules limiting a principal’s liability for punitive

damages do not apply. See Restatement (Third) of Agency § 7.03

comment e (liability for statutory penalty first depends on the

language of the statute).

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The calculated amount of civil penalties under § 75-105(a)(1)

is $516.7 million ($516,706,500.00) for Count IX and $8.6 billion

($8,582,276,500.00) for Count X, for a total of $9.1 billion

($9,098,938,500.00).

Civil penalties of $9.1 billion are “wholly

disproportionate to the offense and obviously unreasonable” for the

same reasons discussed in regarding that calculated $8.1 billion

statutory damages in Counts V and VI above. See Williams, 251

U.S. at 66-67. Recognizing this fact, North Carolina has offered to

remit its claim for civil penalties to $100 per call. State Plaintiffs’

Post-trial Proposed Conclusions of Law (d/e 664), at 39, 42; see

Gosselin World Wide Moving, N.V., 741 F.3d at 406. The offer to

remit would reduce the civil penalties to approximately $182 million

($181,980,000.00).

North Carolina’s offer to remit still fails to

meet the due process requirements of Williams. A $182 million

penalty for the North Carolina state law violations is

disproportionate and unreasonable in light of the violations in

North Carolina and Dish’s total liability in all of the Counts. The

The calculated civil penalties for Count IX are $500 + $1,000 + (103,341 X $5,000) =

$516,706,500.00. The calculated civil penalties for Count X are $500 + $1,000 + (1,716,455 X

$5,000) = $8,582,276,500.00. The total calculated civil penalties for these two Counts are

$516,706,500.00 + $8,582,276,500.00 = $9,098,938,500.00.

(103,343 + 1,716,457) X $100 = $181,980,000.00.

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Court will determine a reasonable and appropriate penalty for

Counts IX and X below in conjunction with the amounts to be

awarded for all of the claims for monetary relief.

I. Count XI Illinois Claim

Plaintiff Illinois alleges a claim for violation of the Illinois

Automatic Telephone Dialers Act (IATDA), 815 ILCS 505/2Z. Count

XI alleges in part:

93. The Defendant, and/or third parties acting on

its behalf, has violated 815 ILCS 305/30(b) and 815 ILCS

505/2Z by knowingly playing or causing to be played

prerecorded messages placed by an autodialer without

the consent of the called party.

Third Amended Complaint, ¶ 93.

Section 505/2Z prohibits playing or causing to be played a

prerecorded message by an autodailer without prior consent.

Illinois only seeks liability for the 5,830 Prerecorded Calls that Dish

or its Telemarketing Vendors placed to telephone numbers with

Illinois area codes. Dish concedes that it is responsible for calls

made by Telemarketing Vendors. The Court, therefore, does not

need to decide the meaning of “cause” under the IATDA.

For the reasons stated in Count VI above, Illinois proved a

prima facie case that 5,830 prerecorded telemarketing calls to

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numbers with Illinois area codes. The preponderance of the

evidence further establishes that intended recipients were

residential telephone subscribers and residents Illinois.

The IATDA contains an Established Business Relationship

exception. The prohibition against autodialer Prerecorded Calls

“shall not apply” to “calls made to any person with whom the

telephone solicitor has a prior or existing business relationship.”

815 ILCS 305/20(a)(2). The IATDA does not define the term

“existing business relationship.” See 815 ILCS 305/5 Definitions.

The Court gives the exception its ordinary meaning. The exception

contains no time limit, such as the 18-month limit in the TSR and

the TCPA and FCC Rule. The IATDA exception would apply to any

current Dish customer or any prior Dish customer no matter when

the person was a customer.

Dish argues that the translations of the sales scripts show

that the intended recipients were Dish customers. The translations

show that the calls offered new foreign language programming

packages to existing customers. This evidence tends to show that

the calls were made to individuals who were at some time

customers of Dish. The evidence was not sufficient proof under

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Count VI because the FCC Rule requires a call to be within 18

months of the last purchase and the script text did not prove the

last purchase date. The IATDA defense in § 305/20(a)(2) does not

require that the call to be within any certain time period since the

last transaction, only that the person be a customer or have a

relationship. Given the language of § 305/20(a)(2), the Court finds

that Dish has a valid defense for these 5,830 calls under 815 ILCS

305/20(a)(2) of the IATDA. Dish is entitled to judgment on Illinois’s

claims in Count XI.

J. Count XII

1. Liability for Violations

Plaintiff Ohio alleges a claim in Count XII under the Ohio

Consumer Sales Practice Act (OCSPA), Ohio Rev. Code § 1345.01 et

seq. Count XII alleges in part:

95. Defendant, either directly or as a result of a third

party acting on its behalf, violated Ohio Revised Code

Sections 1345.02(A) and 1345.03(A) by engaging in a

pattern or practice of initiating telephone solicitations to

residential telephone subscribers in the State of Ohio,

whose telephone numbers were listed on the National Do

Not Call Registry in violation of the TCPA, 47 U.S.C. §

227(c), and 47 C.F.R. 64.1200(c)(2) and/or in violation of

the Telemarketing Sales Rule, 16 C.F.R. §

310.4(b)(1)(iii)(B).

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96. Defendant, either directly or indirectly as a result of a

third party acting on its behalf, violated Ohio Revised

Code Sections 1345.02(A) and 1345.03(A) by engaging in

a pattern or practice of initiating telephone calls to

residential telephone lines using artificial or prerecorded

voices to deliver a message without the prior express

consent of the called party and without falling within

specified exemptions delineated within the TCPA in

violation of the TCPA, 47 U.S.C. 227(B)(1)(b) and 47

C.F.R. 64.1200(a)(2).

Third Amended Complaint, ¶¶ 95-96.

In addition, the Final Pretrial Order provides that Ohio also

alleges:

437. Failing to record a do-not-call request on an internal

do-not-call list, and failing to honor a prior do-not-call

request, are unfair and deceptive practices in violation of

the OCSPA. Opinion 445 at 224–225.

. . . .

471. Dish is liable for 120,809 violations of the Ohio

Consumer Sales Practices Act for which a civil penalty

may be imposed because it called consumers on the

Registry as well as consumers who asked not to be

called. These are Dish calls and are not contingent on an

agency analysis.

Final Pretrial Order (d/e 564), Attachment F, Plaintiffs’ Conclusions

of Law, ¶¶ 437, 471. Ohio referenced Opinion 445 in which the

Court stated:

Ohio Courts have held that failing to record a do-not-call

request on an internal do-not-call list and failing to honor

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a prior do-not-call request were unfair and deceptive

practices in violation of the Ohio Act. Charvat v. NMP,

LLC., 656 F.3d 440, 451 (6th Cir. 2011) and cases cited

therein.

Opinion 445, at 224-25.

Dish did not challenge in the Final Pretrial Order Ohio’s

additional claim based on Internal List Calls on the grounds that

the theory was beyond the matters alleged in the Third Amended

Complaint. Rather, Dish addressed the substance of the additional

basis for the claim:

285. This Court has held that “failing to record a do-not-

call request on an internal do-not-call list and failing to

honor a prior do-not call request” may constitute a

violation of the OCSPA. Opinion 445 at 224-25.

286. Thus, pursuant to the Court’s interpretation of Ohio

law, Plaintiff Ohio will have to establish for each

telephone call for which it seeks to hold DISH liable that

the call recipient previously made a do-not-call request to

DISH which DISH failed to honor.

287. In that regard, DISH is not obligated to honor

internal do-not-call requests made to the Retailers unless

those Retailers are agents of DISH, and vice versa. See

Opinion 445 at 227. Plaintiff Ohio cannot meet its

burden to prove that an agency relationship existed as

between DISH and the Retailers at issue.

Final Pretrial Order, Attachment G, Dish’s Conclusions of Law, ¶¶

285-87. The Final Pretrial Order controls the claims at issue at

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trial. Fed. R. Civ. P. 16(d); Gorlikowski v. Tolbert, 52 F.3d 1439,

1443-44 (7

Cir. 1995). Both parties addressed the substance of

Ohio’s claims based on Internal List Calls even though Ohio did not

allege Internal List Calls as a basis for its claim in Count XII in the

Third Amended Complaint. Ohio may proceed on the Internal List

Calls in Count XII, as well as the Registry Calls and the prerecorded

calls.

The OCSPA prohibits unfair and deceptive practices in

consumer transactions:

No supplier shall commit an unfair or deceptive act or

practice in connection with a consumer transaction.

Such an unfair or deceptive act or practice by a supplier

violates this section whether it occurs before, during, or

after the transaction.

Ohio Rev. Code § 1345.02(A). The OCSPA also prohibits

unconscionable acts or practices in consumer transactions:

No supplier shall commit an unconscionable act or

practice in connection with a consumer transaction.

Such an unconscionable act or practice by a supplier

violates this section whether it occurs before, during, or

after the transaction.

Ohio Rev. Code § 1345.03(A). The statute of limitations is two

years, and so, extends back to calls made after March 25, 2007.

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The OCSPA uses the terms “supplier” and “consumer

transaction.” A “consumer transaction” includes both the

solicitation and the sale of goods or services “to an individual for

purposes that are primarily personal, family, or household . . . .”

Ohio Rev. Code § 1345.01(A). The Retailers Agreements only

authorized Order Entry Retailers to sell Dish Network programming

to residential customers, and the Order Entry Tool only could be

used to place orders for residential service. Further, Dish and its

Telemarketing Vendors almost always used outbound telemarketing

to sell Dish programming to residential customers. Therefore, the

solicitation and sale of Dish Network programming by Dish, its

Telemarketing Vendors, and the Order Entry Retailers were

consumer transactions to Ohio residents were consumer

transactions under the OCSPA.

A “supplier” includes a person “in the business of effecting or

soliciting consumer transactions.” Ohio Rev. Code § 1345.01(C).

Dish, the Telemarketing Vendors, and the Order Entry Retailers

were suppliers under the OCSPA when they made outbound

telemarketing calls to sell Dish Network programming to Ohio

residents.

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Courts have held that failing to record a Do-Not-Call request

on an internal do-not-call list and failing to honor a prior Do-Not

Call request constitutes an unfair or deceptive practice in violation

of the OCSPA. Charvat v. NMP, 656 F.3d 440, 451 (6

Cir. 2011)

(citing Charvat v. Continental Mortg. Services, Inc., No. 99CVH12-

10225, 2002 WL 1270183, at *5 (Ohio Ct. C.P. June 1, 2000) (Ohio

Attorney General Public Information File (PIF) no. 1882)). The

Court finds that these decisions are an accurate statement of Ohio

law. Pursuant to these holdings, Internal List Calls made by Dish

to persons who told Dish and its Telemarketing Vendors that they

did not want to receive such calls violated the OCSPA. Dish made

41,788 such calls to telephone numbers with Ohio area codes

reflected in the 2007-2010 Calling Records. T 633: 3282-83

(Taylor); PX 28, Taylor November 6, 2013 Report, at 11; T 613: 214-

15 (Yoeli).

The 2007-2010 Calling records contain calls beginning

in September 2007. The 41,788 calls were made after March 25,

2007, and so, within the statute of limitations.

The 41,788 calls consist of the 36,598 Internal List Calls to Ohio area codes from the

903,246 calls found by Taylor, plus 5,190 Internal List Calls to Ohio area codes from the

140,349 Internal List Calls made to numbers marked DNC by eCreek, as determined by Dr.

Yoeli. T 633: 3282-83 (Taylor); PX 28, Taylor November 6, 2013 Report, at 11; T 613: 214-15

(Yoeli). The sum of 36,598 plus 5,190 equals 41,788.

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For the reasons stated in Counts V and VI, the preponderance

of the evidence shows that the intended recipients of 41,788

Internal List Calls were Ohio residents and were residential

telephone subscribers. Dish is liable for these illegal calls under

Count XII in violation of the OCSPA.

Ohio also asks the Court to find that the 77,991 Registry Calls

and 1,759 Prerecorded Calls made by Dish and its Telemarketing

Vendors to telephones with Ohio area codes also were unfair,

deceptive, or unconscionable acts and practices in violation of the

OCSPA. Ohio only asks for a judgment on the Registry Calls to

Ohio residents that were included in the 1,707,713 calls that the

Court found violated the TSR at summary judgment. Ohio does not

seek relief for any other calls made by Dish or any calls made by

Order Entry Retailers in Count XII. No issues related to Dish’s

liability for the acts of Order Entry Retailers exist in Count XII.

A violation of the TCPA is not by itself proof of a violation of

the OCSPA. See NMP, 656 F.3d at 450; Culbreath v. Golding

Enterprises, L.L.C., 114 Ohio St.3d 357, 872 N.E.2d 284, 291 (Ohio

2007). Ohio must establish that the Registry Calls and Prerecorded

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Calls made Dish or its agents were unfair, deceptive, or

unconscionable.

The OCSPA does not define “unfair,” “deceptive,” or

“unconscionable.” The OCSPA includes a list of acts that are

deceptive but the list is not exhaustive or exclusive. Ohio Rev. Code

§ 1345.02(B). The acts on the non-exhaustive list involve situations

in which the consumer believes material facts about the transaction

are true, when in fact, they are not. E.g., Ohio Rev. Code §

1345.02(B)(1) (“the subject of a consumer transaction has

sponsorship, approval, performance characteristics, accessories,

uses, or benefits that it does not have.”).

The scope of deceptive acts covered by the OCSPA is broader

than the non-exhaustive list. “The boundaries of illegality under

OCSPA must remain flexible because it is impossible to list all

methods by which a consumer can be misled or deceived.”

Fletcher v. Don Foss of Cleveland, Inc., 90 Ohio App. 3d 82, 86, 628

N.E.2d 60, 62 (1993).

The OCSPA does not contain a list of acts that are unfair. The

OSCPA, however, directs the Court to look to the FTC Act for

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guidance in interpreting § 1345.02(A) prohibition against unfair and

deceptive acts:

shall give due consideration and great weight to federal

trade commission orders, trade regulation rules and

guides, and the federal courts' interpretations of

subsection 45 (a)(1) of the “Federal Trade Commission

Act,” 38 Stat. 717 (1914), 15 U.S.C.A. 41, as amended.

Ohio Rev. Code Ann. § 1345.02(C).

The FTC Act provides that an act is not unfair unless “[the act]

is likely to cause substantial injury to consumers which is not

reasonably avoidable by consumers themselves and not outweighed

by countervailing benefits to consumers or to competition.” 15

U.S.C.A. § 45(n); see FTC v. Wyndham Worldwide, Inc., 799 F.3d

236, 243 (3

Cir. 2015). The central focus of unfairness analysis is

consumer injury. Substantial consumer injury can be established

by “showing a small amount of harm to a large number of people.”

In the Matter of LabMD, Inc., 2016-2 Trade Cases P 79708 (F.T.C.),

2016 WL 4128215 (July 28, 2016), at *8; see Wyndham Worldwide,

Inc., at 243. Unfair and deceptive acts do not require proof of

intent. Fletcher v. Don Foss of Cleveland, Inc., 90 Ohio App. 3d 82,

86, 628 N.E.2d 60, 62 (1993).

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The OCSPA includes a list of unconscionable acts, but again,

the list is not exhaustive or exclusive. Ohio Rev. Code § 1345.03(B).

The listed acts cover situations in which the supplier has a marked

advantage over the consumer and takes advantage of that unequal

position to the consumer’s detriment. E.g., Ohio Rev. Code §

1345.03(B)(1) (“[T]he supplier has knowingly taken advantage of the

inability of the consumer reasonably to protect the consumer's

interests because of the consumer's physical or mental infirmities,

ignorance, illiteracy, or inability to understand the language of an

agreement.”).

The listed unconscionable acts all must be done knowingly.

The implication is that a supplier must act knowingly to commit an

unconscionable act under the OCSPA. To act knowingly, the

supplier must know the impact of his behavior on the consumer, or

know that his behavior was proscribed. Clayton v. McCary, 426

F.Supp. 248, 261 (N.D. Ohio 1976).

After careful review of the facts and applicable law, the Court

Concludes that Dish’s Registry Calls were unfair acts. Registry

Calls injure consumers because the supplier calls a consumer who

registered his or her telephone number specifically because he or

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she did not want such calls, and the seller is on notice from the

Registry that the consumer does not want the call, but calls

anyway. Every such unwanted call causes some injury, “Every call

uses some of the phone owner’s time and mental energy, both of

which are precious.” Patriotic Veterans, Inc., v. Zoeller, 845 F.3d

303, 305-06 (7

Cir. 2017). The consumer cannot reasonably avoid

the injury because the supplier controls whether to place the call.

There is no countervailing economic benefit because the consumer

did not want the call. Numerous Dish witnesses testified that it

made no business sense to call people who did not want to be

called.

The Court also concludes that the 1,759 Prerecorded Calls

made by Dish and the Telemarketing Vendors were unfair.

Prerecorded telemarketing calls injure consumers because there is

no live person on the other end of the line:

[M]any recipients find [prerecorded telemarketing calls]

obnoxious because there's no live person at the other end

of the line. The lack of a live person makes the call

frustrating for the recipient but cheap for the caller,

which multiplies the number of these aggravating calls in

the absence of legal controls.

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Patriotic Veterans, Inc. v. Zoeller, 845 F.3d at 306. Torok’s

testimony confirms the accuracy of the Seventh Circuit’s

observation in Patriotic Veterans. Prerecorded calls currently are

the primary cause of consumer frustration with telemarketing.

Prerecorded Calls generate large numbers of Do-Not-Call

complaints to the FTC. T 710: 39 (Torok). The FTC is actively

working to come up with a solution that would stop unwanted

Prerecorded Calls. T 710: 80-83 (Torok).

The consumers could not reasonably avoid the injury in this

case because Dish controlled whether to place the calls. The

evidence before the Court shows no countervailing economic

benefit. Dish witness Ahmed testified that these types of sales

tactics did not produce good customers and led to high churn rates

that cost Dish money. See T 626: 2323-28, 2333-34, 2418-19

(Ahmed). In this case, at least, Prerecorded Calls were unfair.

Dish is liable for the 41,788 Internal List Calls, 77,991

Registry Calls, and 1,759 Prerecorded Calls that Dish or its agents

made to Ohio residents in violation of the OCSPA.

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2. Civil Penalties for Ohio under Count XII

Ohio has established that Dish violated the OCSPA when it

made 41,788 Internal Calls from September 2007 to March 2010.

Each call was a separate violation.

Under the OCSPA, the Court may assess civil penalties as

follows:

[I]f the violation is an act or practice that was . . .

determined by a court of this state to violate section

1345.02 [or] 1345.03 of the Revised Code and committed

after the decision containing the court's determination

was made available for public inspection pursuant to

division (A)(3) of section 1345.05 of the Revised Code, the

attorney general may request and the court may impose

a civil penalty of not more than twenty-five thousand

dollars against the supplier.

Ohio Rev. Code § 1345.07(D). Section 1345.05(A)(3) provides:

(A) The attorney general shall:

(3) Make available for public inspection all rules and all

other written statements of policy or interpretations

adopted or used by the attorney general in the discharge

of the attorney general's functions, together with all

judgments, including supporting opinions, by courts of

this state that determine the rights of the parties and

concerning which appellate remedies have been

exhausted, or lost by the expiration of the time for

appeal, determining that specific acts or practices violate

section 1345.02, 1345.03, or 1345.031 of the Revised

Code;

Ohio Rev. Code § 1345.05.

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The Attorney General made judgments available as early as

2000 that stated that making calls to people who previously stated

that they did not want to receive such calls was unfair and

deceptive in violation of Ohio Revised Code § 1345.02. Charvat v.

Cont’l Mortg. Servs,, Inc., No. 99CVH12-10225, 2002 WL 1270183,

at *5 (Ohio Ct. C.P. June 1, 2000) (PIF no. 1882); see Burdge v.

Satellite Sys. Network, LLC., No. 2006 CV F 01279, at 3 (Fairfield,

Ohio Mun. Ct. March 2, 2007) (PIF No. 2535.); Ohio ex rel. Petro v.

Craftmatic Ord., Inc., No 05-CVH-06-06060, at 13 (Ohio Ct. C.P.

July 25, 2005) (PIF No. 2347); Burdge v. Satellite Sys. Network,

LLC., No. 2005 CV F 00243, at 2 (Fairfield, Ohio Mun. Ct. May 11,

2005) (PIF No. 2344.) Ohio ex rel. Fisher v. Wykle, No. 90-1395, at 4

(Ohio Ct. C.P. Apr 8, 1992) (PIF No. 1141). Ohio is entitled to

recover civil penalties for the 41,788 Internal List Calls that Dish

and its Telemarketing Vendors made from 2007 to September 2010.

The maximum civil penalty exceeds $1 billion (41,788 x $25,000.00

= $1,044,700,000.00). Ohio suggests that 1 percent of this figure,

or $10,447,000.00, would be an appropriate penalty.

Dish claims that it is entitled to an affirmative defense to civil

penalties under Ohio Rev. Code § 1345.11. Section 1345.11 states

Page 416 of 475

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that “no civil penalties shall be imposed” if “a supplier shows by a

preponderance of the evidence that a violation resulted from a bona

fide error notwithstanding the maintenance of procedures

reasonably adopted to avoid the error.” Ohio Rev. Code §

1345.11(A). Ohio objects to Dish raising this affirmative defense.

Plaintiffs’ Proposed Responsive Conclusions of Law (d/e 682), at 5.

Ohio objects because Dish did not raise the defense in its Answer or

in its proposed conclusions of law in the Final Pretrial Order.

Answer to Third Amended Complaint and Affirmative Defenses (d/e

484), at 19-22, Defenses; Final Pretrial Order (d/e 564), Attachment

G, Dish Network L.L.C.’s Proposed Conclusions of Law, at 78-82.

The pretrial conference and pretrial order “are vital parts of the

procedural scheme created by the Federal Rules of Civil Procedure.”

SNA Nut Company v. The Haagen-Dazs Company, Inc., 302 F.3d

725, 732 (7

Cir. 2002). As a result, “a defense not raised in the

pretrial order is deemed waived.” Id. Dish’s possible affirmative

defense under § 1345.11(A) is waived.

Dish also argues that Ohio is only entitled to a maximum

penalty of $25,000.00. Dish cites two opinions from the Ohio

Courts of Common Pleas in which the courts assessed penalties on

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companies that engaged in years of unfair and deceptive practices.

These courts assessed one penalty of $25,000.00 for each type of

unlawful practice. State ex rel. Fisher v. Gates, 1995 WL 901458,

at *2 (Ohio Ct. Common Pleas Mar. 21, 1995); State ex rel.

Celebrezze v. Erdil, 1992 WL 792930, at *1-2 (Ohio Ct. Common

Pleas Oct. 28, 1992). Section 1345.07(D) authorizes a penalty for

“an act or practice.”

The OSCPA “is a remedial law designed to provide various civil

remedies to aggrieved consumers and must be read liberally.” State

ex rel. Celebrezze v. Hughes, 569 N.E.2d 1059, 1062 (Ohio 1991);

see Motzer Dodge Jeep Eagle, Inc. v. Ohio Attorney General, 642

N.E.2d 20, 25 (Ohio App. 1994). Read liberally, § 1345.07(D)

authorizes a penalty for either an act or a practice. The Ohio

Attorney General in Erdil and Gates proved illegal practices, not a

specific number of illegal acts, and so, secured one penalty each

practice. In this case, Ohio proved a specific 41,788 unfair acts.

Ohio is entitled under § 1345.07(D) to secure a penalty for each act.

The maximum penalty proven under Count XI is not limited to

$25,000.00. The Court will address the appropriate amount to

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impose below in conjunction with the amounts to be awarded for all

of the claims for monetary relief.

K. Summary

In summary, Dish is liable for the calls set forth in the tables

below. The tables also list the number of calls for which Dish is

liable for monetary relief, either civil penalties or statutory damages.

Table I: Count I: TSR Registry Calls

Calls by Dish from March 25, 2004 through August

31, 2007

Millions of

calls, but

specific

number

unproven

Calls by Dish from September 1, 2007 through

March 12, 2010

3,140,920

Calls by Dish Order Entry Retailer and agent JSR in

2006

2,349,031

Additional Calls by Dish Order Entry Retailer and

agent JSR from January 1, 2007 to February 14,

2007

Millions of

calls, but

specific

number

unproven

Calls by Dish Order Entry Retailer and agent Satellite

Systems

381,811

Table II: Count II: TSR Internal List Calls

Calls by Dish to persons on Dish’s internal do-not-

call list

903,246

Calls by Dish to persons on eCreek’s internal do-not-

call list

140,349

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Calls by Dish to persons on Order Entry Retailers’

do-not-call lists

7,321,163

Calls by Dish Order Entry Retailer and agent JSR in

2006 to persons on Dish’s internal do-not-call list

418,228

Calls by Dish Order Entry Retailer and agent JSR

from January through February 14, 2007, to persons

on Dish’s internal do-not-call list

Millions of

calls, but

specific

number

unproven

Calls by Dish Order Entry Retailer and agent JSR in

2006 to persons on Order Entry Retailers’ internal

do-not-call lists

267,439

Calls by Dish Order Entry Retailer and agent JSR

from January through February 14, 2007 to persons

on Order Entry Retailers’ internal do-not-call lists

Thousands

of calls, but

specific

number

unproven

Calls by Dish Order Entry Retailer and agent Satellite

Systems to persons on Dish’s internal do-not-call list

22,946

Calls by Dish Order Entry Retailer and agent Satellite

Systems to persons on Order Entry Retailers’ internal

do-not-call lists

42,990

Calls by Dish Order Entry Retailer and agent Dish

Nation

Included in

JSR calls

Table III: Count III: TSR Abandoned Calls

Abandoned calls by Dish 98,054

Abandoned calls by Dish Order Entry Retailer and 6,637,196

agent Dish TV Now

Abandoned calls by Dish Order Entry Retailer and 43,100,876

agent Star Satellite (calls counted once for civil

penalties)

Abandoned calls by Dish Order Entry Retailer and 1,285,379

agent JSR

Abandoned call by Dish Order Entry Retailer and 1

agent American Satellite

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Additional abandoned calls by Dish Order Entry Many, but

Retailer and agent American Satellite specific

number

unproven

Abandoned calls by Dish Order Entry Retailer and Included in

agent Dish Nation JSR calls

Table IV: Count IV: TSR Substantial Assistance

Calls by Dish Order Entry Retailer

and agent Star Satellite (calls counted once for civil

penalties)

43,100,876

Total TSR Violations subject to monetary relief:

66,109,628 calls

At $11,000.00 per violation, the maximum amount of civil

penalties would be over $727 billion ($ 727,205,908,000.00). The

actual maximum penalty is higher than this figure because some of

the violations occurred after February 9, 2009, when the maximum

penalty per violation was $16,000.00.

The total includes the 43,100,876 calls that Dish caused Star Satellite to make only once,

and the 2,386,386 calls that Dish made from September 2007 to March 2010 only once.

Even if the Court disregarded the Order Entry Retailers’ activities (including Dish’s calls to

persons on the Order Entry Retailers’ Internal Do-Not-Call Lists), Dish and its Telemarketing

Vendors made a total of 4,282,569 illegal calls in violation of the TSR. At $11,000.00 per

violation, the maximum amount of civil penalties would still be over $47 billion

($47,108,259,000.00). This amount does not include the millions of illegal calls made from

March 25, 2004 through August 2007.

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Table V: Count V: TCPA Registry Calls

California

California calls in 2003-2007 Registry Calls 266,514

California calls in 1,707,713 TSR Summary

Judgment Registry Calls

216,867

California calls in 2,386,386 Registry and Internal

List Calls

302,983

California calls in JSR Registry Calls 473,102

California calls in Satellite Systems Registry Calls 24,100

California Total 1,283,566

Illinois

Illinois calls in 2003-2007 Registry Calls 112,116

Illinois calls in 1,707,713 TSR Summary Judgment

Registry Calls

83,895

Illinois calls in 2,386,386 Registry and Internal List

Calls

118,289

Illinois calls in JSR Registry Calls 369,384

Illinois calls in Satellite Systems Registry Calls 10,048

Illinois Total 693,732

North Carolina

North Carolina calls in 2003-2007 Registry Calls 85,093

North Carolina calls in 1,707,713 TSR Summary

Judgment Registry Calls

52,961

North Carolina Calls in 2,386,386 Registry and

Internal List Calls

97,785

North Carolina calls in JSR Registry Calls 18,250

North Carolina calls in Satellite Systems Registry

Calls

7,290

North Carolina Total 261,379

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Ohio

Ohio calls in 2003-2007 Registry Calls 98,207

Ohio calls in 1,707,714 TSR Summary Judgment

Registry Calls

77,991

Ohio calls in 2,386,386 Registry and Internal List

Calls

95,275

Ohio calls in JSR Registry Calls 129,004

Ohio calls in Satellite Systems Registry Calls 12,803

Ohio Total 413,280

Grand Total for Count V

California 1,283,566

Illinois 693,732

North Carolina 261,379

Ohio 413,280

Grand Total of Violations in Count V 2,651,957

Table VI: Count VI: TCPA Prerecorded Calls

California

California calls in Dish and Telemarketing Vendor

Prerecorded Calls

23,020

California calls in Star Satellite Prerecorded Calls 5,727,417

California Total 5,750,437

Illinois

Illinois calls in Dish and Telemarketing Vendor

Prerecorded Calls

5,830

Illinois calls in Star Satellite Calls 2,660,066

Illinois Total 2,665,896

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North Carolina

North Carolina calls in Dish and Telemarketing

Vendor Prerecorded Calls

2,283

North Carolina calls in Star Satellite Calls 1,716,457

North Carolina Total 1,718,740

Ohio

Ohio calls in Dish and Telemarketing Vendor

Prerecorded Calls

1,759

Ohio calls in Star Satellite Calls 3,419,175

Ohio Total 3,420,934

Grand Total for Count VI

California 5,750,437

Illinois 2,665,896

North Carolina 1,718,740

Ohio 3,420,934

Grand Total for Count VI Violations 13,556,007

Total TCPA Violations: 16,207,964

At $500.00 in statutory damages per violation for knowing

violations, the maximum statutory damages award would be

approximately $8.1 billion ($8,103,982,000.00).

Table VII: Violations of Cal. Bus. & Prof. Code § 17592(c)

2007-2010: Yoeli Set of 2,386,386 Registry Calls 296,640

2007-2010: Taylor’s Set of 501,650 Registry Calls 42,019

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2007-2010: Taylor’s Set of Not Completed Registry

Calls

33,970

2007-2010: Taylor’s Set of Wrong Number, No

English Registry Calls

1,955

Total 374,584

Table VIII: Violations of Cal. Bus. & Prof. Code § 17200

Violations of TCPA Proven in Count V 1,283,566

Violations of TCPA Proven in Count VI 5,750,437

Violations of Cal. Bus. & Prof. Code § 17592(c) 374,584

Violations of Cal. Civ. Code § 1770(a)(22)(A) 5,727,417

Total 13,136,004

The maximum possible penalties for Count VII would be

$11,000 per violation prior to February 9, 2009, and $16,000

thereafter; plus $2,500 per violation. The maximum possible

penalties for Count VIII would be $2,500 per violation. The total

maximum possible civil penalty for California’s claims in Counts VII

and VIII exceeds $37.8 billion ($37,896,894,000.00).

California

suggests a penalty of $100 million ($100,000,000.00).

(374,584 x $11,000) + (374,584 x $2,500) + (13,136,004 x $2,500) = $37,896,894,000.00.

This calculation assumes $11,000 as the maximum possible penalty for the violations proven

under §17593.

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Table IX: Violations of N.C. Gen. Stat. § 75-102

North Carolina Registry Calls within 2 years of the

first violation proven

103,343

Registry

Calls subject

to civil

penalties

Table X: Violations of N.C. Gen. Stat. §75-104

North Carolina Prerecorded Calls within 2 years of

the first violation proven

1,716,457

Prerecorded

Calls subject

to civil

penalties

The civil penalties for the violations in Counts IX and X are

$500 for the first violation, $1,000 for the second violation, and

$5,000 for the third and any other violation that occurs within two

years of the first violation. The calculated penalty would be

approximately $9.1 billion ($9,098,938,000.00). North Carolina has

offered to voluntarily remit the penalty to $100 per violation or

approximately $182 million ($182,980,000.00).

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Table XI: Violations of Illinois Automatic Telephone Dialers

Act (IATDA), 815 ILCS 505/2Z

No Violations Proven 0

Table XII: Violations of Ohio Consumer Sales Practice Act,

Ohio Rev. Stat. Ohio Rev. Code § 1345.02(A)

Ohio Internal List Calls by Dish and Telemarketing

Vendors

41,788

Violations

subject to

civil

penalties.

The maximum civil penalty is $25,000.00 per violation. The

total possible penalty in Count XII exceeds $1 billion (41,788 x

$25,000.00 = $1,044,700,000.00). Ohio suggests 1 percent of the

maximum, or $10.4 million ($10,447,000.00), as an appropriate

penalty.

Table XIII: Total Maximum Possible Monetary Liability

Counts I-IV TSR Maximum Civil Penalties $ 727,205,908,000.00

Counts V-VI TCPA Calculated Statutory

Damages

8,103,982,000.00

Counts VII-VIII Maximum Civil Penalties 37,896,894,000.00

Counts IX-X Calculated Civil Penalties 9,098,938,000.00

Count XI No Violations 0.00

Count XII Maximum Civil Penalties 1,044,700,000.00

Total Maximum Possible Penalties and

Statutory Damages

$ 783,350,422,000.00

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Table XIV: Plaintiffs’ Suggested Monetary Liability

United States’ Suggested Penalty for TSR

Counts I-IV

$ 900,000,000.00

Plaintiff States’ Suggested Statutory

Damages for TCPA Counts V-VI

1,000,000,000.00

California’s Suggested Penalty for Counts

VII-VIII

100,000,000.00

North Carolina’s Suggested Penalty for

Counts IX-X

182,980,000.00

Ohio’s Suggested Penalty for Count XII 10,447,000.00

Total Suggested Penalties and Statutory

Damages

$ 2,193,427,000.00

Table XV: Defendant’s Testimony Regarding Penalties

DeFranco’s testimony that a $20 million $ 20,000,000.00

penalty would “be a lot of money” and

“more than a slap on the wrist.”

T 621:1548 (DeFranco).

II. The Appropriate Amount of Monetary Relief

The appropriate amount of monetary relief in each Count

depends, in part, on the relief awarded in the other Counts. The

Court will address the factors for determining the amount of relief

in the Counts I-X and XII and then determine the appropriate

amount of monetary relief for these Count.

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A. Factors for TSR Violations in Counts I-IV

The FTC Act sets forth factors the Court must consider in

setting the appropriate amount of civil penalties within the

statutory maximum:

In determining the amount of such a civil penalty, the

court shall take into account the degree of culpability,

any history of prior such conduct, ability to pay, effect on

ability to continue to do business, and such other

matters as justice may require.

15 U.S.C. § 45(m)(1)(C). The Court considers these factors in order.

1. Culpability

Dish’s culpability is significant. Dish has some level of

culpability for its direct marketing and a significantly higher level of

culpability for the illegal calls made through its Order Entry

program.

a. Dish Direct Marketing

Dish made efforts to follow the Do-Not-Call Laws in its

Account Number Campaigns. Dish set up a system to scrub

Account Number Campaigns through the PDialer. In 2008, Dish

started using PossibleNOW’s services and software to provide an

additional scrub. These efforts weigh in favor of finding that Dish

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had limited culpability for the calls made in its Account Number

Campaigns.

Dish, however, failed to prove that it made similar efforts with

its Lead Tracking System and Cold Call campaigns. Dish claimed

that it had an Inquiry-based Established Business Relationship

with the persons whose numbers were on Lead Tracking System

campaigns because these individuals inquired about Dish Network

programming. Dish had the burden to prove Established Business

Relationship exceptions. Dish failed to demonstrate that the Lead

Tracking System was limited to people who inquired about Dish

Network programming. Dish presented almost no competent

evidence regarding how Lead Tracking System calling lists were

formulated. Dish failed to show that it had Established Business

Relationships with the persons on the Lead Tracking System.

Dish also failed to present competent evidence to show how

Lead Tracking System and Cold Call calling lists were scrubbed.

The lack of evidence leaves the Court with no basis to conclude that

Dish made any efforts to remove numbers that were on the Registry

or on Internal Do-Not-Call Lists from the Lead Tracking System and

Cold Call calling lists. The failure of Dish to present competent

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evidence to show effort to make its Lead Tracking System and Cold

Call campaigns comply with the TSR weigh in favor of finding

culpability for the illegal calls in these campaigns.

In addition, Dish made millions of illegal calls in Account

Number Campaigns because Dish used an unreliable method to

determine whether it had Transaction-based Established Business

Relationships with current and former customers. The TSR

definitions stated that a Transaction-based Established Business

Relationship existed for 18 months immediately after the customer’s

last payment or financial transaction. Dish’s expert Sponsler

testified that a Transaction-based Established Business

Relationship with a current or former customer had to be calculated

from the date of the last transaction. Dish did not start using

transaction dates until approximately July 2010, after all the calls

at issue were made.

Dish’s failure to read and properly apply the TSR definitions

for Established Business Relationships was a serious error that

should have been avoided. This error resulted in millions and

millions of illegal calls. Dish’s inability to read and follow the TSR

demonstrates a lack of care that weighs in favor of finding some

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level of culpability for the Account Number Campaign calls made by

Dish and its Telemarketing Vendors.

Dish presented Taylor’s testimony at trial in an attempt to

show that it had little culpability for the 1,707,713 calls that the

Court found were illegal calls to numbers on the Registry at

summary judgment. As explained in the Finding of Facts, the vast

majority of these calls were violations. Taylor showed that, at best,

20,387 canceled work order and other non-telemarketing calls may

not have been violations.

In addition, Dish made many more illegal calls than those on

which the United States has sought liability. Taylor concluded in

his October 14, 2013 Report, PX 16, that Dish made 501,650

Registry calls for which Taylor could not find a basis to exclude

from liability. The United States asked, and the Court found

liability for these calls. Taylor, however, erroneously eliminated at

least 15,846,402 calls from liability for reasons that were not

supported by the evidence. These 15,846,402 illegal calls show that

Dish’s errors caused many more illegal calls than those on which

the United States secured a finding of liability. The actual

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magnitude of the illegal conduct speaks to more a significant level

of culpability.

Dish further argues that violations as percentage of all of

Dish’s calls was very small. Dish relies on Taylor’s Tables, DTX

626A through 626D, to show that the vast majority of Dish’s calling

campaigns had very few illegal calls. Dish also relies on Taylor’s

opinion that an error rate of 5% or less indicated that the calling list

was properly scrubbed to remove numbers that should not be

called. Taylor’s Tables, however, are only based on the 501,650

calls from his October 14, 2013 Report on which the Court granted

summary judgment. Taylor’s Tables do not take into account the

15,846,402 additional calls in those calling campaigns that violated

the TSR. In light of all these additional violations, Taylor’s Tables

tell the Court little or nothing about the percentage of all of Dish’s

calls that violated the TSR.

Dish also relies extensively on Sponsler’s 2010 audit. The

audit says nothing about Dish’s culpability. The violations

occurred from March 2004 to March 2010. Sponsler only made

findings in the audit about Dish’s practices in May 2010. The audit

also says nothing about the process Database Marketing used to

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process Lead Tracking System and Cold Call calling lists to comply

with the Do-Not-Call Laws. The audit was also at a “high,” i.e.

superficial, level. Sponsler did not audit calling records to see the

rate of errors in Dish’s calling processes. The audit is not probative

of Dish’s culpability for the calls for which Dish is liable.

The Court concludes that Dish’s handling of its direct

telemarketing requires a finding of some culpability. Outbound

Operations Department took many steps to scrub Account Number

Campaign calling lists, but Dish failed to properly determine

whether Dish had Transaction-based Established Business

Relationships with current and former customers. Dish presented

no competent evidence of Dish’s efforts to ensure that the Lead

Tracking System and Cold Call calling campaigns complied with the

TSR or other Do-Not-Call Laws. On balance, the failure to read and

apply the TSR Established Business Relationship definition and the

lack of evidence on the formation and processing of Lead Tracking

Systems calling lists merits a finding of culpability for Dish’s direct

marketing.

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b. Order Entry Program

Dish bears significant culpability for the reckless manner in

which Dish operated the Order Entry Program before August of

2006, and to a lesser extent thereafter. Dish initially hired Order

Entry Retailers based on one factor, the ability to generate

activations. Dish cared about very little else. As a result, Dish

created a situation in which unscrupulous sales persons used

illegal practices to sell Dish Network programming any way they

could. By 2006, Dish admitted it was overwhelmed with consumer

complaints about these operators. Dish started to address the

mess in the second half of 2006, but by 2009, Dish’s own legal

department still viewed the Order Entry program as fraught with

illegal and shady practices. In late 2008 and early 2009, Dish fired

40 Retailers for defrauding Dish and lying to potential customers

over the phone. As part of this purge, in 2009, Dish cut the

number of Order Entry Retailers from 76 to 32. Dish sowed the

wind and reaped the whirlwind when it decided to hire anybody

that could get on the phone and bring in activations by whatever

means possible.

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Part of that whirlwind was the millions and millions of illegal

calls in violation of the TSR. The United States has proven that

Dish TV Now, Star Satellite, JSR, Satellite Systems, and American

Satellite made 54,505,896 illegal calls in violation of the Do-Not-

Call Law, including the TSR. The United States has also proven

that Order Entry Retailers JSR, American Satellite, Dish Nation,

United Satellite, Vision Satellite, LA Activations, and Atlas Assets

made many more illegal “press 1” prerecorded telemarketing calls to

sell Dish Network programming. Based on the volume of

Abandoned Prerecorded Calls made by Star Satellite, Dish TV Now,

and JSR, the Court finds it more likely than not that these other

operators made hundreds of millions more. Dish’s reckless decision

to use anyone with a call center without any vetting or meaningful

supervision demonstrates a disregard for the consuming public.

2. History of Prior Conduct

The evidence shows some history of Do-Not-Call Law violations

before March 25, 2004. Dish made calls to Oregon residents

without scrubbing against the Oregon state Do-Not-Call list. In

2003, Dish entered into an Assurance of Voluntary Compliance

with Indiana to comply with Indiana Do-Not-Call Laws, and Dish

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was sued by Missouri for Do-Not-Call Law violations. The history

shows that Dish had on-going problems complying with Do-Not-Call

Laws even before the Registry launched. The history also shows

that Dish understood the potential penalties for Do-Not-Call Law

violations could be substantial.

3. Ability to Pay

The evidence also shows that Dish has a significant ability to

pay a penalty. Dish is worth $28 billion. Dish’s net after tax

income, or profits, for 2016 was approximately $1.4 billion. Dish

also has consistently made net after tax income between $700

million and $1.5 billion since 2011. Dish has the ability to pay a

significant percentage of its annual profits as a penalty.

4. Ability to Continue Business

Dish would be able to pay a significant percentage of its net

after-tax income as a penalty and continue operating. Dish has

repeatedly demonstrated an ability to make large one-time

payments and still maintain operations. In 2015, Dish paid over

$515 million to the FCC because its affiliates bid on the wireless

spectrum, but they failed to complete the purchase of some

spectrum on which they bid. In 2011, Dish agreed to pay TiVo

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$500 million in settlement of a patent suit. Dish paid a lump sum

of $300 million to TiVo as an initial payment on this settlement. In

2012, Dish paid $700 million to Voom to settle a contract dispute.

Dish continued to operate and continued to increase its profits

while making these payments. In light of this evidence, Dish can

pay a penalty of a significant percentage of its profits and still

continue operating.

Dish claims that it is cash-poor because it has invested large

portions of its net after tax profits in wireless spectrum to keep the

company competitive. Dish’s plea of poverty borders on the

preposterous. Dish has made net after tax profits of $700 million to

1.5 billion annually for the past several years, and it has had no

problems paying the substantial penalties and settlements

discussed above. Dish cannot avoid liability because its current

business plan calls for buying illiquid assets in the form of

broadband spectrum. Dish has the assets and ability to pay the

appropriate penalty for its illegal conduct.

5. Other Matters that Justice May Require

Dish has presented evidence that the United States, either

directly or through FTC, entered into numerous civil penalty

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settlements with various companies for violations of the TSR. The

United States entered into a stipulated judgment against Star

Satellite in the amount of $4,373,768 for the same 43,100,876 calls

at issue here. The United States entered into a stipulated judgment

with Guardian for $7,892,242 for the approximately 49,000,000

calls it made for Star Satellite and Dish TV Now at issue here. The

terms of the stipulated judgment against Star Satellite suspended

all but $75,000 of the penalties. The terms of the stipulated

judgment against Guardian suspended all but $150,000 of the

penalties.

The FTC entered into a stipulated judgment against Dish

TVRO Retailer New Edge Satellite for $570,000 in civil penalties,

but suspended all of the penalties. The FTC entered into a

stipulated judgment against Order Entry Retailer Planet Earth

Satellite in the amount of $7,094,354 but suspended all but

$20,000 of the penalties. The FTC entered into a stipulated

judgment against Caribbean Cruise Line, Inc., for $7,730,000 in

civil penalties for making 12 to 15 million illegal calls. The United

States entered into a stipulated judgment against Comcast

Corporation in the amount of $900,000 in civil penalties for TSR

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violations. The United States alleged that Comcast Corporation

made over 900,000 illegal calls. The United States entered into a

stipulated judgment against DirecTV for $2,310,000.00 in civil

penalties for TSR violations. The United States alleged that DirecTV

was responsible for 1,050,007 calls. Dish argues that fairness

requires a penalty commensurate with the penalties awarded in

these cases.

These settlements are worth little or no consideration in the

calculations of civil penalties in this case. Parties who settle

negotiate a settlement sum to avoid the time and costs of litigation.

The parties also negotiate a settlement to avoid the risk of a

judgment in a fully litigated matter. The plaintiff avoids the risk of

a judgment in favor of the defendant, and the defendant avoids the

risk of liability from a large judgment in favor of the plaintiff.

Settling parties “forego the possibility of fully vindicating their

positions.” United States v. Phelps Dodge Industries, Inc., 589

F.Supp. 1340, 1367 (S.D. N.Y. 1984). The settlements, therefore,

say little or nothing about the amount a court would have entered

in judgment if the matters had been fully litigated. As a result, the

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settlements have little probative value on the appropriate monetary

relief in this fully litigated case.

Assuming arguendo that settlements have some probative

value, the parties have not admitted any details about the activities

of any of the defendants in these settled matters except Star

Satellite and Guardian. The Court, therefore, has no basis to

compare those cases to this one.

The parties have presented evidence about Star Satellite and

Guardian. Dish argues that Star Satellite and Guardian were more

culpable that Dish. The Court disagrees. Dish created the

situation that allowed Star Satellite and Guardian to act. If Dish

had not started the Order Entry program, or if Dish had adequately

monitored and supervised the Order Entry program, Star Satellite

and Guardian would have never made millions and millions of

illegal calls to sell Dish Network programming. Dish’s creation of

the largely unsupervised Order Entry program and its indifference

to the consequences of its actions makes Dish more culpable than

either Star Satellite or Guardian.

Dish also presents no evidence about Star Satellite or

Guardian’s ability to pay a penalty. The ability to pay is a statutory

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factor that the Court must consider. Dish, thereby, failed to

present the necessary evidence to compare these cases.

Dish notes that the FTC issued statements in several of these

cases indicating that the settlement amount of civil penalties was

the proper penalty under the circumstances. However, the opinion

of a party in a case, even the FTC, is not controlling and does not

indicate the amount of penalties that a court would have entered if

the case had been fully litigated.

Dish argues that it will be punished for exercising its right to

trial if the penalties exceed an amount that is consistent with these

settlements. This is incorrect. Parties settle to avoid the possible

results of full litigation. The parties did not settle here. As a result,

the Court must give both parties the right to try the case to a fully

litigated judgment. Dish is not being punished for trying the case

rather than settling.

6. Res Judicata

Dish argues that an award of civil penalties for the 43,100,876

Prerecorded Calls by Star Satellite and the 6,637,196 Prerecorded

Calls by Dish TV Now is barred by the doctrine of res judicata. The

doctrine of res judicata holds that once a party has fully litigated a

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claim, the party cannot litigate the claim again against the same

party or their privies. Res judicata, however, does not bar separate

actions against joint wrongdoers. The claim against each

wrongdoer is a separate and distinct claim for purposes of res

judicata. See Minix v. Canarecci, 597 F.3d 824, 829-30 (7

Cir.

2010) (citing Restatement (Second) of Judgments § 49 (1982) (“A

judgment against one person liable for a loss does not terminate a

claim that the injured party may have against another person who

may be liable therefor.”)).

The claim of the United States against

Dish for these illegal calls is separate from its claims against Star

Satellite and Guardian for purposes of res judicata. The United

States’ claim against Dish is not barred by res judicata.

B. The TCPA Violations in Counts V and VI

The calculated amount of more than $8.1 billion in statutory

damages under the TCPA is “wholly disproportioned to the offense

and obviously unreasonable.” St. Louis I.M. & S. Ry. Co. v.

Williams, 251 U.S. at 66-67. The TCPA does not list factors for

reducing this amount. The parties have at times suggested

The Illinois Supreme Court has agreed with the Restatement (Second) of Judgments

approach to res judicata. See River Park, Inc. v. City of Highland Park, 184 Ill.2d 290, 311-12,

703 N.E.2d 883, 893 (Ill. 1998).

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applying the statutory factors in the FTC Act § 5(m) discussed

above. See Plaintiffs’ Motion for Summary Judgment (d/e 402), at

167; Dish Network, L.L.C.’s Proposed Post-Trial Conclusions of Law

(d/e 666), at 82. The Court agrees that these factors provide a

framework for assessing a proportionate and reasonable penalty

that would consistent with the requirements of due process.

Therefore, The Plaintiff States are entitled to significant amount of

statutory damages for the reasons discussed with respect to Counts

I-IV.

Dish renews its arguments that one call may not be subject to

multiple statutory damages and penalties even if the call violates

multiple statutes and rules. Dish is again incorrect. An act that

violates multiple statutes may be liable for multiple awards of

statutory damages and penalties. Lary, 780 F.3d at 1105-06.

The Plaintiff States again argue for a remittitur or a voluntary

reduction by them. As discussed above a remittitur is not

appropriate because this is not a jury trial, and the Plaintiff States

did not offer a voluntary reduction. The relevant factors used in the

FTC Act § 5(m) support the awarding of a significant penalty.

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C. California Civil Penalties in Counts VII and VIII

The amount of civil penalties for Count VII is governed by

California Business and Professions Code §§ 17536 and 17592(c).

The amount of civil penalties for Count VIII is governed by

California Business and Professions Code § 17206. Section

17592(c) states that the amount civil penalties under that provision

is governed by the same factors as the penalties under FTC Act §

5(m) discussed in Counts I-IV above. The California Business and

Professions Code §§ 17536 and 17206 set forth the same factors for

setting the appropriate penalties:

(b) The court shall impose a civil penalty for each

violation of this chapter. In assessing the amount of the

civil penalty, the court shall consider any one or more of

the relevant circumstances presented by any of the

parties to the case, including, but not limited to, the

following: the nature and seriousness of the misconduct,

the number of violations, the persistence of the

misconduct, the length of time over which the

misconduct occurred, the willfulness of the defendant's

misconduct, and the defendant's assets, liabilities, and

net worth.

Cal. Bus. & Prof. Code §§ 17206(b) and 17536(b) (statutory

language is identical in each).

The statutory factors in §§ 17206(b) and 17536(b) weigh in

favor of a significant penalty. Dish’s persistent misconduct was

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serious, and the number of violations in California was enormous.

From 2003 to 2010, Dish called hundreds of thousands of

California consumers who registered their phones on the Registry.

The message was clear: these consumers did not want to be

annoyed and bothered by incessant telemarketing calls, but Dish

made over hundreds of thousands of such calls anyway. The

cumulative injury of hundreds of thousands of calls over a seven-

year period was substantial.

Dish also hired Star Satellite as its telemarketing agent. Star

Satellite bombarded California households with over 5.7 million

Prerecorded Calls “that many recipients find obnoxious because

there's no live person at the other end of the line.” Patriotic

Veterans, Inc. v. Zoeller, 845 F.3d at 306.

The cumulative injury

caused by millions of illegal telemarketing calls also weighs in favor

of a significant penalty.

Dish’s disregard for Star Satellite’s telemarketing practices

also contributed to the millions of illegal calls. By spring 2005,

The actual number of Prerecorded Calls made to California residents was much larger.

Many of Dish’s agents made press 1 Prerecorded Calls, including Dish TV Now, Star Satellite,

JSR, Satellite Systems, American Satellite, United Satellite, Vision Satellite, LA Activations,

Atlas Assets, and Dish Nation. The combination of autodialers and recorded messaging

enabled each of these telemarketers to make hundreds of thousands of calls a day to

consumers nationally.

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Dish knew that Star Satellite was making Prerecorded Calls to

market Dish Network programming. Several consumers

complained about these calls. Dish’s dialing operations manager

Bangert knew. He reported the matter to Retail Services. Jeff

Medina in Dish’s Retail Escalations forwarded the email to Margot

Williams in Retail Escalations. Medina joked, “Are these your boys

again?” Retail Services was already well aware of Star Satellite’s

practices. Dish did nothing to stop the practice. In August 2005,

Dish was sued because of Star Satellite’s Prerecorded Calls. Dish

did nothing. Dish could have prevented millions of illegal calls, but

did nothing. This failure to act demonstrates a disregard consumers

and the law that merits a significant penalty.

Finally, Dish has significant net worth in excess of $28 billion,

and net after tax profits of more than $1.4 billion in 2016. Dish

has a track record of net after tax profits in this range. Dish’s pleas

of being cash poor are not persuasive. A significant penalty is

appropriate under the statutory factors in §§ 17206 and 17536.

Dish’s arguments to the contrary are not persuasive.

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D. North Carolina Civil Penalties in Counts IX and X

North Carolina also does not set forth statutory factors for

setting the level of civil penalties. The amount of civil penalties

under the statutory calculations is approximately $9.1 billion. As

explained above this amount is wholly “disproportioned and

obviously unreasonable” under the circumstances in violation of

due process. Williams, 251 U.S. at 66-67. North Carolina offers to

reduce the penalty to $100 per violation, or $175,967,600.00.

The Court will again apply the statutory factors for civil

penalties under the FTC Act § 5(m) as a meaningful framework for

assessing penalties in these Counts. For the reasons stated above

regarding these factors in Counts I-IV, a significant penalty is

appropriate. The amount of the penalty will be set below along with

the other claims.

E. Ohio Civil Penalties in Count XII

Ohio does not set forth statutory factors for determining the

amount of civil penalties. See Ohio Rev. Code § 1345.07(D). The

Court will apply the statutory factors for penalties under FTC Act §

5(m). Again, for the reasons stated above regarding these factors in

Counts I-IV, a significant penalty is appropriate.

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II. Amount of Statutory Damages and Penalties

After careful consideration of all the relevant factors, a total

award of civil penalties and statutory damages of $280,000,000.00,

representing approximately 20 percent of Dish’s 2016 after-tax

profits of $1.4 billion, is appropriate and constitutionally

proportionate, reasonable, and consistent with due process.

The amount represents a significant penalty for the millions

and millions of Do-Not-Call Law violations caused by Dish over

years and years of careless and reckless conduct. The amount

reflects Dish’s culpability for failing to read and follow the TSR and

TCPA in its direct telemarketing and for enabling unscrupulous

telemarketers in its Order Entry program to violate Do-Not-Call

Laws on a massive scale and injure enormous numbers of

consumers.

A total award of 20 percent of Dish’s annual 2016 profits, is a

small percentage of the $2.1 billion requested by the Plaintiffs and a

miniscule fraction of maximum possible penalties and damages.

The Court limited the monetary relief because Dish made some

efforts to avoid violations in its direct marketing and took some

actions after mid-2006, and particularly in 2009 when this suit was

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filed, to monitor its Order Entry Retailers,. The $280,000,000.00

award is consistent with all the relevant circumstances.

The total award is not onerous. Payment of the award will not

unreasonably affect Dish’s ability to operate. Dish pays operating

expenses approximately $1 billion a month, $12 billion annually.

The award of $280,000,000.00 will constitute a one-time 2.3

percent increase in those annual expenses. Dish also will retain 80

percent of its annual profits for payment of principal of any

indebtedness or for investment into its ongoing operations. As

noted above, Dish paid substantially higher penalties and

settlements in the recent past, including more than $515 million to

the FCC in 2015. Dish has been able to pay such sums and

maintain operations. Dish’s pleas of poverty and lack of cash are

unpersuasive in light of these facts.

The Plaintiffs ask for $2.1 billion in penalties and statutory

damages, or approximately 150 percent of Dish’s annual profits.

This amount could materially affect Dish’s ability to continue

operations. Such an award would not put Dish out of business, but

could adversely affect the many individuals who work for Dish and

other companies that do business with Dish.

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A total monetary award of $280,000,000.00 is also appropriate

in light of other matters that justice may require. Dish caused

millions and millions of violations of the Do-Not-Call Laws, and

Dish has minimized the significance of its own errors in direct

telemarketing and steadfastly denied any responsibility for the

actions of its Order Entry Retailers. The injury to consumers, the

disregard for the law, and the steadfast refusal to accept

responsibility require a significant and substantial monetary award.

The total award of $280,000,000.00 meets these requirements.

The Court hereby imposes penalties against Dish and in favor

of the Plaintiffs United States, California, and Ohio; and awards

statutory damages to Plaintiffs States and North Carolina and

against Dish, as follows: 60 percent of the total monetary award, or

$168,000,000.00, to the United States as civil penalties in Counts I-

IV; 30 percent, or $84,000,000.00, to the Plaintiff States as

proportionate and reasonable statutory damages in Counts V and

VI; 6 percent, or $16,800,000.00, to California as civil penalties in

Counts VII and VIII; 3 percent, or $8,400,000.00, to North Carolina

as proportionate and reasonable statutory damages in Counts IX

and X; and 1 percent, or $2,800,000.00, to Ohio as civil penalties in

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Count XII. The Court apportioned the majority of the award to the

United States because the United States’ claims address the

injuries to consumers nationally. The Court apportioned the

second largest award to the TCPA claims because of the large

number of illegal calls proven in those claims and to vindicate

federal law and to recognize the joint effort of all the Plaintiff States

to bring this action. The Court apportioned the remaining portions

to California, North Carolina, and Ohio to reflect the different

numbers of illegal calls for which each state sought monetary relief.

Dish is jointly and severally liable to the Plaintiff States for the

reasonable and proportionate statutory damages of $84,000,000.00

in Counts V and VI. The Plaintiff States shall divide the statutory

damages in Counts V and VI proportionately to the number of

violations in each state: 43.4 percent or $36,456,000.00 to

California; 20.7 percent or $17,388,000.00 to Illinois; 12.2 percent

or $10,248,000.00 to North Carolina; and 23.7 percent or

$19,908,000.00 to Ohio.

III. Injunctive Relief

The Plaintiffs asks for a permanent injunction pursuant to

FTC Act § 13(b), 15 U.S.C. § 53(b), TCPA 47 U.S.C. § 227(g)(2); Cal

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Bus. & Prof. Code §§ 17204 and 17593; N.C. Gen. Stat. § 75-105(a)

and 7-14; and OCSPA Ohio Rev. Code § 1345.07(A)(2). The parties

focus their arguments primarily on whether the United States is

entitled to a permanent injunction.

The United States seeks an injunction pursuant to the proviso

in the FTC Act § 13(b) which states: “Provided further, That in

proper cases the Commission may seek, and after proper proof, the

court may issue, a permanent injunction.” FTC Act § 13(b),15

U.S.C. § 53(b) (emphasis in the original) (Permanent Injunction

Proviso). Violations of the TSR are considered violations of a rule

promulgated under the FTC Act. Violations of such rules are unfair

and deceptive acts or practices in violation of FTC Act § 5(a). 15

U.S.C. §§ 45(a), 57a(1)(B) and 6102(c)(1). The United States may

pursue the remedies available under the FTC Act for these

violations, including injunctive relief under the Permanent

Injunction Proviso. See F.T.C. v. World Media Brokers, Inc., 415

F.3d 758, 764-66 (7

Cir. 2005).

The Permanent Injunction Proviso authorizes the Court to

issue a permanent injunction in a “proper case.” United States v. JS

& A Group, Inc., 716 F.2d 451, 455-57 (7

Cir. 1983). A proper

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case “is a straightforward violation of section 5 [of the FTC Act] that

required no application of the FTC's expertise to a novel regulatory

issue through administrative proceedings.” F.T.C. v. World Travel

Vacation Brokers, Inc., 861 F.2d 1020, 1028 (7

Cir. 1988). Dish’s

TSR violations are straightforward and do not present a novel

regulatory issue that required FTC expertise. This is a proper case

under the Permanent Injunction Proviso.

To establish a right to a permanent injunction, the United

States must meet the “public interest” test for injunctive relief. This

standard applies to actions by the federal government to enjoin

violations of federal statutes in the public interest. World Travel

Vacation Brokers, 861 F.2d at 1028-29. To meet the public interest

test for a permanent injunction, the FTC must prove a violation of

the TSR and a reasonable likelihood of future violations.

Commodity Futures Trading Commission v. Hunt, 591 F.2d 1211,

1220 (7

Cir. 1979). The Court must also consider a balance of the

equities; however, “public equities must receive far greater weight.”

World Vacation Brokers, 861 F.2d at 1029.

Factors that indicate a likelihood of future violations include

“the gravity of harm caused by the offense; the extent of the

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defendant's participation . . . ; the isolated or recurrent nature of

the infraction and the likelihood that the defendant's customary

business activities might again involve him in such transactions;

the defendant's recognition of his own culpability; and the sincerity

of his assurances against future violations.” S.E.C. v. Holschuh,

694 F.2d 130, 144 (7

Cir. 1982). Proof of past misconduct is

“highly suggestive of the likelihood of future violations.” Hunt, 591

F.2d at 1220 (quoting S.E.C. v. Management Dynamics, Inc., 515

F.2d 801, 807 (2

Cir. 1975). Evidence that the violator “continued

to maintain that his conduct was blameless” has been considered

indicative of a need for an injunction to prevent future violations.

Hunt, 591 F.2d at 1220.

Dish argues that the Plaintiffs also must prove scienter in

order to secure an injunction. The Holschuh opinion mentioned

scienter as a factor. Holschuh, 694 F.2d at 144. The Holschuh

case was a securities fraud case. Securities laws require proof of

scienter to secure an injunction. Aaron v. S.E.C., 446 U.S. 680,

701 (1980). Scienter is not an element for establishing liability in

the applicable Do-Not-Call Laws.

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Dish argues that the traditional four-part test for injunctive

relief in private actions of irreparable harm, no adequate remedy at

law, success on the merits, and a balance of the equities applies to

the United States’ claim for a permanent injunction. This is

incorrect. The Seventh Circuit specifically held in World Travel

Vacation Brokers that the public interest test applies to actions for

injunctive relief under the Permanent Injunction Proviso.

Dish appeals to other language in FTC Act § 13(b) which

authorizes temporary injunctive relief during pending

administrative proceedings. The temporary injunctive relief

provision in § 13(b) does not apply because the Permanent

Injunction Proviso is a separate and distinct authorization for

permanent injunctive that is independent of the temporary relief

provisions. JS & A Group, Inc., 716 F.2d at 456-57; see World

Travel Vacation Brokers, 861 F.2d at 1025-26.

Dish also cites Weinberger v. Romero-Barcelo, 456 U.S. 305,

313-14 (1982) for the proposition that the Court should apply the

traditional four-part test for private injunction actions. However,

the Weinberger v. Romero-Barcelo decision did not concern an

action brought by the federal government to enforce a federal

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statute. In this case, Congress determined that the FTC should be

able to secure injunctive relief for clear violations of the FTC Act

without should be subject to “the requirements imposed by the

traditional equity standard which common law applies to private

litigants.” H.R. Conf. Rept. No. 624, 93d Cong., 1

Sess., reprinted

in 1973 U.S. Code Cong. & Admin News, at 2533. See FTC v.

Warner Communications, Inc., 724 F.2d 1156, 1159 (9

Cir. 1984);

FTC v. Weyehauser Co., 665 F.2d 1072, 1082 (D.C. Cir. 1981). The

Weinberger v. Romero-Barcelo decision therefore does not apply. In

addition, the Seventh Circuit decided World Travel Vacation

Brokers in 1988, six years after the Romero-Barcelo decision. This

Seventh Circuit was aware of Romero-Barcelo when it made its

decision in World Travel Vacation Brokers. The Seventh Circuit

agreed with the other Circuit’s decision in Warner Communications

and Weyehauser Co. that the public interest test should apply.

World Travel Vacation Brokers, 861 F.2d at 1028-29. This Court

will follow the Seventh Circuit’s decision in World Travel Vacation

Brokers and apply the public interest test.

The Plaintiff States seek an injunction under the TCPA 47

U.S.C. § 227(g)(2). Section 227(g)(2) contains language very similar

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to the Permanent Injunction Proviso, “Upon a proper showing, a

permanent or temporary injunction . . . shall be granted without

bond.” 47 U.S.C. § 227(g)(2). Both statutes authorize the

government to secure an injunction to in the public interest. The

similar language and purpose supports the inference the TCPA

authorizes the Plaintiff States to secure an injunction under the

public interest test. See Minnesota ex rel. Hatch v. Sunbelt

Communications and Marketing, 282 F.Supp.2d 976, 979 (D. Minn.

2002); Bank v. Caribbean Cruise Line, Inc., 2014 WL 1883586, at

*1 and cases cited therein (E.D. N.Y. May 12, 2014), vacated on

other grounds, 606 Fed.Appx., 28, 29 (2

Cir. 2015).

The public interest test is also the appropriate standard for

injunctive relief under California Business & Professions Code §§

17204 and 17593; North Carolina General Statutes §§ 17-105(a)

and 17-14; and Ohio Revised Code § 1345.07(A)(2). See California

Service Station & Automobile Repair Association v. Union Oil Co.,

282 Cal. Rptr. 279, 285 (Cal. App. 1

Dist. 1991); State ex rel.

Morgan v. Dare To Be Great, Inc., 189 S.E.2d 802, 803 (N.C. App.

1972); Ohio Rev. Code § 1345.07(A)(2); Celebrezze v. Hughes, 479

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N.E.2d at 888-89; State ex rel. Fisher v. Warren Star Theater, 616

N.E.2d 1192, 1198 (Ohio App. 1992).

The Plaintiffs have established that Dish, its Telemarketing

Vendors, and its Order Entry Retailers violated the applicable Do-

Not-Call Laws millions and millions of times. The Plaintiffs have

also proven millions more violations, although have not proven the

specific amount for these additional violations. The additional

violations include Dish’s Registry Calls in the 2003-2007 Calling

Records. Dr. Yoeli found 2,919,321 calls that were both Registry

Calls and Internal List Calls after March 25, 2004. Dr. Yoeli

assumed all calls in one day on the calling records were one

violation. This was a very conservative assumption. Some of those

records reflected multiple illegal calls. The additional Do-Not-Call

Law violations also include the millions of calls that JSR made

between January 1, 2007 and the day Dish terminated it on

February 14, 2007. In addition, many Order Entry Retailers made

illegal press 1 Abandoned Prerecorded Calls, including Satellite

Systems, LA Activations, United Satellite, American Satellite, Vision

Satellite, Dish Nation, and Atlas Assets. This evidence shows that

The Court does not address the injunctive relief standard in Illinois because Illinois did not

establish liability for its Count XI claim.

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Dish and its agents made many millions more illegal calls that the

specific calls proven. The vast quantity of illegal calls provides

substantial proof that a reasonable likelihood of future illegal calls

without an injunction.

In many cases, Dish knew Order Entry Retailers were violating

the Do-Not-Call Laws and did nothing. Dish knew that Satellite

Systems made prerecorded abandoned calls as early as 2002. Dish

knew Satellite Systems was making Prerecorded Calls in 2004 and

made it an Order Entry Retailers anyway. Dish knew in 2005 that

Satellite Systems was continuing to make Prerecorded Calls. Dish

knew in August 2005 that United Satellite was making illegal

Abandoned Prerecorded Calls in August 2005 and allowed the

practice to continue for another year.

Dish’s Retail Sales managers showed little concern for

compliance with the Do-Not-Call Laws. Prior to 2009, their primary

concern was generating activations. Their compensation was tied to

activations. They knew that numerous Order Entry Retailers were

making illegal Abandoned Prerecorded Calls and did little or

nothing about it. Prior to August 2006, they did almost nothing to

address these problems. Paralegal Hargen in Dish’s Legal

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Department in fact noted that the Order Entry Retailers and the

Marketing Department tried to get around the rules.

In August 2006, Dish started the Compliance Department to

limit Dish’s exposure for liability from Retailer practices. The

Compliance Department systematically documented complaints and

secured responses. The Compliance Department apparently had

some success in reducing the use off-shore affiliates to telemarket

Dish Network. Dish’s actions to discipline Order Entry Retailers for

Do-Not-Call Law violations, however, remained ad hoc and

inconsistent. By 2009, Dish’s Legal Department still considered the

Order Entry program to be rife with shady, illegal activity.

Any real changes came in late 2008 and 2009. Dish fired

numerous Retailers, cut the number of Order Entry Retailers, and

instituted changes in the Quality Assurance program. These

changes corresponded with mounting pressure from investigations

by the FTC and state consumer protection officials. Ultimately,

these investigations led to this suit being filed in March 2009 and

Dish settling with the remaining 46 states in July 2009 by entering

into the Assurance of Voluntary Compliance with them. This

evidence shows that Dish reacted to pressure from law

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enforcement. The evidence supports the conclusion that the

pressure needs to be maintained to keep Dish’s marketing

personnel from reverting to their practice of trying to get around the

rules.

The Court is also seriously concerned with the most recent

evidence showed that Dish continued to show little or no regard for

consumer complaints about Order Entry Retailers’ practices. The

Satellite System calling records showed that Satellite Systems made

381,811 Registry Calls in 2010 and 2011. Dish received so many

complaints that the Legal Department prepared a standard go after

Satellite Systems letter. Dish’s response to these consumers was

essentially: go away, it’s not our problem, go after Satellite Systems.

Dish’s denial of responsibility and lack of regard for consumers are

deeply disturbing and support the inference that it is reasonably

likely that Dish will allow future illegal calls absent government

pressure.

In contrast, Dish’s direct marketing channel did not

demonstrate such a disregard for the Do-Not-Call Laws. The direct

channel established the Working Group to prepare for the launch of

the Registry. Outbound Operations scrubbed Account Number

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Campaigns to avoid Do-Not-Call violations. The scant competent

evidence, however, failed to show what Dish’s Database Marketing

did to ensure that Lead Tracking System and Cold Call calling

campaigns complied with the Do-Not-Call Laws. In 2008,

PossibleNOW began assisting Dish’s direct marketing with Do-Not-

Call Law compliance.

The evidence, however, shows that responsible Dish personnel

in direct telemarketing channel did not read the TSR or FCC Rule

carefully. There is no evidence that the Working Group attempted

to establish the necessary documentation to comply with the safe

harbor provisions of either the TSR or the FCC Rule. Dish

personnel knew that Dish made mistakes, but they did not try to

comply with the safe harbor provisions.

Dish personnel also did not read the Established Business

Relationship provisions carefully. Dish personnel did not follow the

language of the TSR and FCC Rule and calculate Transaction-based

Established Business Relationship exceptions from the last date of

purchase or other financial transaction. Dish hired PossibleNOW in

2008 and learned that its Transaction-based Established Business

Relationship procedures were flawed, but Dish did not correct the

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problem for another two years. This lack of care indicates that a

reasonable likelihood that future illegal calls will occur without an

injunction.

Finally, the Court is convinced that at least some in Dish

management do not believe that Dish really did anything wrong or

harmed anyone with these millions and millions of illegal calls.

Outbound Operations Manager Montano stated that he did not

think anyone was really harmed by the millions of illegal calls:

I wouldn't say that they are harmed. Certainly, if

any consumer, regardless of whether it's a current DISH

customer or former DISH customer, communicates to

DISH that they don't want to receive calls from our

organization, we'll absolutely do everything in our power

to abide by that.

. . . .

I don't know whether they were harmed or not. All I

can say, once again, is I apologize for any inconvenience

that may have been caused to the consumer. Certainly, it

is not our intention to call any consumer that does not

wish to receive a phone call from DISH Network.

T 712: 433-34 (Montano). Dish has even taken the position the

evidence did not show that the millions and millions of illegal calls

harmed anyone. Dish Network L.L.C’s Proposed Conclusions of

Law for the Second Phase of Trial (d/e 737), at 37-38. Illegal

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telemarketing calls clearly harm consumers. Every unwanted

illegal telemarketing call robs individuals of the “time and mental

energy, both of which are precious.” Patriotic Veterans, 845 F.3d at

303.

True, DeFranco testified that Dish “gets it” and now takes

telemarketing laws very seriously. See T 710: 225-26 (DeFranco).

The evidence shows that Dish’s indirect channel, at least, began

taking Do-Not-Call Laws seriously only in response to pressure from

consumer complaints and law enforcement investigation before. As

late as 2011, Dish still did not “get it” when Dish refused to

acknowledge any responsibility for Satellite Systems’ illegal

practices. Montano’s 2017 testimony further demonstrates that

some Dish managers do not seem to “get it.” Montano did not

believe that consumers were harmed by Dish’s millions of illegal

calls. T 712: 433-34 (Montano). This fundamental lack of

understanding is a cause for concern about Dish’s future conduct.

Absent an injunction, Dish will be reasonably likely to make or

cause others to make illegal calls in the future in violation of the

Do-Not-Call Laws.

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Dish presented extensive evidence and made extensive

arguments about the balance of the equities. The arguments,

however, address aspects of the Plaintiffs’ proposed injunction

rather than whether to issue an injunction. The Court must give

great weight to the public equities. Congress determined that

harassing unwanted telemarketing calls injure consumers. The

15,000,000 Americans who registered numbers on the Registry in

the first five days after the Registry opened, and the 40,000,000

who registered numbers in the first two months, agreed with

Congress. The 226 million who have registered their telephone

numbers also agree. See T 710: 35, 37 (Torok). These equities

clearly weigh in favor of some type of injunction to prevent future

harm.

The Court may include appropriate prophylactic provisions in

an injunction to ensure that future violations will not occur. See

Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946); FTC v.

Febre, 128 F.3d 530, 534 (7

Cir. 1997). The prophylactic

provisions may bar otherwise legal conduct. See FTC v. Colgate-

Palmolive Co., 380 U.S. 374, 394-95 (1965); United States v.

Lowe’s, Inc., 371 U.S. 38, 53 (1962), abrogated in part on other

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grounds, Illinois Tool Works, Inc. v. Independent Ink, Inc., 547

U.S. 28, 42-43 (2006).

The Court will set the parameters of the appropriate

injunction, not the Plaintiffs or Dish. The injunction must ensure

that the illegal Registry Calls, Internal List Calls, and Prerecorded

Calls will not happen in the future. The injunction will take into

account Dish’s concerns that certain of Plaintiffs’ proposed

injunctive provisions will drive Dish or its retailers out of business.

The primary goal of the injunction, however, is preventing future

illegal activity, not saving Dish from incidental or consequential

financial pain to achieve that goal.

The Court will not impose an immediate ban on Dish’s

telemarketing as proposed by the Plaintiffs. Rather, the Court will

require Dish, its Telemarketing Vendors, and major Retailers

(Primary Retailers) to comply with the safe harbor provisions of the

TSR and the FCC Rule. The Primary Retailers shall consist of every

Dish Retailer that, during the calendar year 2016, or any

subsequent calendar year, has either (1) produced 600 activations

or (2) has directly or indirectly used automatic dialing equipment.

The safe harbor provisions are designed to ensure compliance with

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the Do-Not-Call Laws and to allow for inadvertent errors. Requiring

compliance with the safe harbor provisions, therefore, will meet the

Plaintiffs’ justified need for a mechanism to ensure compliance and

avoid the potentially dire consequences of a complete telemarketing

ban. If Dish cannot demonstrate that Dish, its Telemarketing

Vendors, and the Primary Retailer are in compliance with the safe

harbor provisions of the TSR and FCC Rule, the Court will bar Dish

from accepting activations from the non-complying source.

Limiting the prophylactic aspects of the injunction to Primary

Retailers will address Dish’s concern that the Injunction Order

would affect every Retailer’s call to return a customer’s call. The

prophylactic aspects of the Injunction Order will only affect major

Retailers or Retailers who use automatic dialing equipment. The

Injunction Order will also prohibit any Retailer from violating the

relevant Do-Not-Call Laws.

The Court, further, will not include the Plaintiffs’ proposal to

require Dish to terminate a Primary Retailer for a single mistake as

long as the Primary Retailer is complying with the TSR and FCC

Rule safe harbor provisions. Compliance with the safe harbor

provisions will minimize errors and, so, meet the Plaintiffs’ desire

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for future compliance. The Plaintiff United States’ counsel indicated

that Dish would not need to terminate a Retailer who made a

mistake if the retailer was complying with the safe harbor

provisions. See T 711: 346-47 (Mills) (Attorney Runkle questioning).

Compliance with the safe harbor provisions will also meet the goal

of limiting violations while avoiding the uncertainty that could exist

if a Retailer knew it would be terminated for one mistake.

The Court further will not include the Plaintiffs’ proposed

provision that would bar Dish from accepting orders from Retailers

that previously used the Axiom system to place orders with Dish.

All Retailers have used the Axiom system for several years. The

Plaintiffs’ proposed ban on accepting orders from any Retailer that

used the Axiom system would effectively terminate all Retailers.

The Court sees no basis for barring 3,000 TVRO Retailers from

placing order with Dish when the Plaintiffs presented no material

evidence about their activities.

The Plaintiffs implied that Dish hid the fact that all Retailers

now used the Axiom system. See T 711:351-53 (Mills). This is

incorrect. Dish informed the Plaintiffs years ago that all Retailers

used the Axiom system. See Opinion 445, at 59 (citing DX 224,

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Declaration of Michael Mills, dated January 27, 2014.). The Court

will therefore not impose this bar.

The Court will adopt the Plaintiffs’ proposed requirement that

Dish employ a telemarketing compliance expert to formulate a long-

term plan to ensure compliance with the Do-Not-Call Laws and to

provide status reports. The reports will include an updated list of

Primary Retailers that made 600 activations in a calendar year or

used automatic dialing equipment in a calendar year. Such

Retailers will become Primary Retailers required to comply with the

safe harbor provisions of the TSR and FCC Rule.

The Court, however, will not follow the Plaintiffs’ suggestion to

bar PossibleNOW or CompliancePoint from serving as the

telemarketing compliance expert. PossibleNOW performed services

for both sides and PossibleNOW representatives testified for both

sides. The Court is not convinced that these services tainted

PossibleNOW to make it unable to serve as a telemarketing

compliance expert. Moreover, the Plaintiff United States’ counsel

indicated in his cross-examination of Sponsler on this issue that

the United States would have no objection if PossibleNOW

performed this role as a subcontractor. T 715: 803-04 (Sponsler)

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(Attorney Runkle questioning). If PossibleNOW can perform this

role as a subcontractor, there is no reason it cannot perform this

role directly. The Court will not include a provision that only

imposes form over substance.

Lastly, the Court will include a provision that any Plaintiff

make unannounced inspections of Dish, its Telemarketing Vendors,

or Primary Retailers, but will require a prior ex parte application to

this Court and Court approval for such inspection. An ex parte

application to inspect a Dish facility must demonstrate probable

cause necessary for administrative warrants to believe that Dish is

violating the Injunction Order, the plan developed by the

telemarketing compliance expert, the TSR, TCPA, FCC Rule, or any

of the State statutes at issue. An ex parte application to inspect a

Telemarketing Vendor or Primary Retailer must demonstrate

probable cause necessary for administrative warrants to believe

that the subject of the requested inspection is violating the TSR,

TCPA, FCC Rule, or any of the State statutes at issue. The ex parte

application must state with reasonable specificity for administrative

inspections the location to be inspected and the information sought

from the inspection. Requiring prior application alleviates any

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Fourth Amendment concerns, or other concerns, regarding the

reasonableness of any inspection. See Marshall v. Barlow’s, Inc.,

436 U.S. 307, 324-25 (1978); National-Standard Co. v. Adamkus,

881 F.2d 352, 361-63 (7

Cir. 1989). Requiring an ex parte

application and approval also alleviates Dish’s concerns about

random, abusive searches. The searches will only occur when a

Plaintiff can demonstrate probable cause to believe that a violation

of law or the Injunction Order.

Dish presented no evidence regarding any other provision in

the Plaintiffs’ proposed injunctions. The Court has reviewed the

provisions and has adopted those provisions that the Court found

to be reasonable and appropriate to ensure Dish’s ongoing

compliance with the Do-Not-Call Laws at issue.

CONCLUSION

THEREFORE this Court enters judgment in favor of the

Plaintiffs United States and the States of California, Illinois, North

Carolina, and Ohio and against Defendant Dish Network L.L.C. on

Counts I, II, III, V, VI, VII, VIII, IX, X, and XII of the Third Amended

Complaint and judgment in favor of Plaintiff United States and

against Defendant Dish Network L.L.C. on the claim that Defendant

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provided substantial assistance to Star Satellite as alleged in Count

IV of the Third Amended Complaint, and judgment in favor of

Defendant Dish Network L.L.C. and against the United States on

the claim that Dish Network, L.L.C. provided substantial assistance

to Dish TV Now as alleged in Count IV of the Third Amended

Complaint. The Court enters judgment in favor of Defendant Dish

Network L.L.C. and against Plaintiff State of Illinois on Count XI of

the Third Amended Complaint.

The Court awards the following monetary relief in favor of the

Plaintiffs United States and the States of California, Illinois, North

Carolina, and Ohio and against Defendant Dish Network L.L.C.:

1. Dish Network L.L.C. is hereby ordered to pay a civil penalty to

the United States in the sum of $168,000,000.00 for Dish’s

violation of the TSR done with knowledge or knowledge fairly

implied, as alleged in Counts I, II, III, and IV.

2. Dish Network L.L.C. is hereby ordered to pay statutory

damages in the sum of $84,000,000.00 to the Plaintiff States

of California, Illinois, North Carolina, and Ohio in the following

sums for violations of the TCPA and FCC Rule as alleged in

Counts V and VI, for which Dish shall be jointly and severally

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liable to the Plaintiff States of California, Illinois, North

Carolina, and Ohio. The statutory damages shall be divided as

follows:

a. California is awarded statutory damages in the sum of

$36,456,000.00;

b. Illinois is awarded statutory damages in the sum of

$17,388,000.00;

c. North Carolina is awarded statutory damages to in the

sum of $10,248,000.00; and

d. Ohio is awarded statutory damages in the sum of

$19,908,000,00.

3. Dish Network L.L.C. is hereby ordered to pay a civil penalty to

Plaintiff State of California in the sum of $16,800,000.00 for

violation of California Business and Professions Code §17200

and 175929(c) as alleged in Counts VII and VIII.

4. Dish Network L.L.C. is hereby ordered to pay a civil penalty to

Plaintiff State North Carolina in the sum of $8,400,000.00 for

violation of the North Carolina General Statutes §§ 75-102 and

75-104, as alleged in Counts IX and X.

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5. Dish Network L.L.C. is hereby ordered to pay a civil penalty to

Plaintiff State Ohio in the sum of $2,800,000.00 for violation

of Ohio Consumer Sales Protection Act, Ohio Revised Code §§

1345.02 and 1345.03, as alleged in Count XII.

As additional necessary and appropriate relief, the Court

further hereby enters a Permanent Injunction in favor of the

Plaintiffs and against Defendant Dish Network, L.L.C. in the

manner set forth in the separate Permanent Injunction Order

entered herewith.

All pending motions are denied as moot. This case is closed,

except to the extent that the Court retains jurisdiction to enforce

the Permanent Injunction.

Enter: June 5, 2017

/s Sue E. Myerscough

UNITED STATES DISTRICT JUDGE

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