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United States of America, et al v. Dish Network

February 4, 2011

UNITED STATES OF AMERICA, ET AL., PLAINTIFFS,
v.
DISH NETWORK, L.L.C., DEFENDANT.



The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge

E-FILED

Friday, 04 February, 2011 04:22:39 PM

Clerk, U.S. District Court, ILCD

OPINION

The Court now considers Defendant DISH Network, L.L.C.'s Motion to Stay This Action Pursuant to the Doctrine of Primary Jurisdiction, or in the Alternative to Stay All Counts IV-XI to the Extent They Claim "On Behalf Of" Liability and Refer That Issue to the Federal Communications Commission. See d/e 67 (the "Motion"). For the reasons stated below, DISH's Motion is ALLOWED IN PART.

FACTS

Plaintiffs The United States of America and the States of California, Illinois, North Carolina and Ohio allege that DISH, through its sales force and its dealers, violated the Telephone Consumer Protection Act, 47 C.F.R. § 64.1200(c), (f)(7) (the "TCPA"), the Telemarketing Sales Rule, 16 C.F.R. § 310.4(b)(1)(iii)(B) (the "TSR"), the Federal Communication Commission ("FCC") Rule that regulates telemarketing (47 C.F.R. § 64.1200(f)(7)) and various state laws prohibiting telephone solicitations. The Plaintiffs allege that DISH and its dealers: (1) called numbers on the "Do Not Call" List; (2) abandoned calls; and (3) used pre-recorded sales pitches.

The Plaintiffs allege that DISH authorized dealers to engage in telemarketing on DISH's behalf to sell DISH's products and services. The Plaintiffs also allege that DISH received complaints from consumers regarding the dealers' telemarketing practices. Thus, DISH knew or consciously avoided knowing that the dealers were violating the TSR and the FCC Rule.

Based on these and other allegations, Plaintiffs filed a Complaint seeking an injunction and civil penalties for violation of the Federal Trade Commission Act. See Complaint (d/e 1). Count I alleged that DISH called telephone numbers on the "Do Not Call" List and caused its dealers to do the same. Count II alleged that DISH abandoned outbound calls and caused dealers to do the same. Count III alleged that DISH provided substantial assistance and support to certain dealers when DISH knew or consciously avoided knowing that dealers were abandoning outbound calls in violation of the TSR. Id. at Counts I-III.

In Counts IV and V, Plaintiffs the Attorneys General of California, Illinois, North Carolina, and Ohio sought injunctions and damages for violations of the TCPA, 16 C.F.R. Pt. 310; 47 U.S.C. § 227(f)(1). See Complaint at Counts IV-V. Count IV alleged that DISH, either directly or through third parties acting on its behalf, called numbers on the "Do Not Call" List in violation of the TCPA. Count V alleged that DISH, either directly or through third parties acting on its behalf, used pre-recorded sales pitches in violation of the TCPA. See Complaint at Count V. In addition to these federal claims, each state Attorney General also seeks relief under each state's respective statute that prohibits these forms of telephone solicitations. See Complaint at Counts VI-XI.

DISH moves the Court to apply the primary jurisdiction doctrine and stay all TCPA-related proceedings so that the phrase "on behalf of" can be referred to the Federal Communications Commission for interpretation. See DISH's Memorandum of Law in Support of Motion to Stay This Action Pursuant to the Doctrine of Primary Jurisdiction, or in the Alternative to Stay All Counts IV-XI to the Extent They Claim "On Behalf Of" Liability and Refer That Issue to the Federal Communications Commission ("DISH's Memorandum") (d/e 68). The matter has been fully briefed and the Court has considered the parties' arguments.

STANDARD

The primary jurisdiction doctrine "is a prudential doctrine under which courts may, under appropriate circumstances, determine that the initial decisionmaking responsibility should be performed by the relevant agency rather than the courts." See Syntek Semiconductor Co. v. Microchip Tech., Inc., 307 F.3d 775, 780 (9th Cir. 2002). The doctrine should be invoked sparingly since it often results in added expense and delay to the litigants. See United State v. McDonnell Douglas Corp., 751 F.2d 220, 224 (8th Cir. 1984); Mississippi Power & Light Co. v. United Gas Pipeline Co., 532 F.2d 412, 418-19 (5th Cir. 1976).

The doctrine does not implicate a federal court's subject matter jurisdiction. See Syntek, 307 F.3d at 780. Even if the doctrine applies and an issue is referred to an administrative agency, the federal court retains jurisdiction. See Reiter v. Cooper, 507 U.S. 258, 268, 113 S.Ct. 1213, 122 L.Ed.2d 604 (1993). "Referral" is a term of art which, practically speaking, allows a court to either stay a proceeding or dismiss a case without prejudice in order to allow parties to pursue administrative action. See Syntek, 307 F.3d at 782 n.3. Because the Federal Communications Act does not provide a mechanism ...


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