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United States v. Dish Network L.L.C.

United States District Court, C.D. Illinois, Springfield Division

June 5, 2017

UNITED STATES OF AMERICA and the STATES OF CALIFORNIA, ILLINOIS, NORTH CAROLINA, and OHIO, Plaintiffs,
v.
DISH NETWORK L.L.C., Defendant.

          ORDER FOR PERMANENT INJUNCTION

          SUE E. MYERSCOUGH UNITED STATES DISTRICT JUDGE

         Plaintiffs, the United States of America, acting upon notification and authorization to the Attorney General by the Federal Trade Commission (“FTC” or the “Commission”), and the States of California, Illinois, North Carolina, and Ohio (“Plaintiff States”) filed their Complaint, subsequently amended as the Third Amended Complaint and Demand for Jury Trial (the “Complaint”), for a permanent injunction, civil penalties, and other relief in this matter. The FTC's claims are pursuant to Sections 13(b), 19, 16(a)(1) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b), 57b, and 56(a)(1), and various provisions of the Telemarketing Sales Rule, 16 C.F.R. Part 310. The Plaintiff States' claims are pursuant to the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, California Business & Professions Code §§ 17592 and 17200, Illinois Automatic Telephone Dialers Act 815 ILCS 305/1 et seq., North Carolina General Statutes §§ 75-101, 75-102 and 75-104, and Ohio Consumer Sales Practices Act, Revised Code § 1345.01 et seq.

         The Court granted Plaintiffs' motion for summary judgment in part on December 11, 2014 (Opinion 445), finding inter alia, that Defendant Dish Network, L.L.C. (“Dish, ” or Dish Network”), was liable for committing violations of the Telephone Sales Rule and FTC Act as alleged by the United States, and reconsidered and vacated parts of Opinion 445 in Opinion 478; the rulings in Opinions 445 and 478 incorporated by reference herein. The Court tried the Plaintiffs' remaining claims, including claims for civil penalties and damages and injunctive relief during a bench trial that was conducted January 19 through February 17, 2016, October 25 through 27, 2016, and November 2, 2016, and has issued its Findings of Fact and Conclusions of Law on the same date as this Injunction Order. Pursuant to the Findings of Fact and Conclusions of Law, the Court hereby enters this Order for Permanent Injunction (“Injunction Order”). THEREFORE, it is ORDERED as follows:

         FINDINGS

         1. This Court has jurisdiction over this matter.

         2. The Complaint charges that Defendant Dish participated in acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, the Telemarketing Sales Rule, the TCPA, and various state laws by making telemarketing calls to persons with telephone numbers on the National Do Not Call Registry, making telemarketing calls to persons who previously stated that they did not wish to receive telemarketing calls on behalf of Defendant Dish, abandoning calls, using automated voice telemarketing (“prerecorded telemarketing calls”), and assisting others in these violations.

         3. Entry of this Injunction Order is in the public interest.

         DEFINITIONS

         For the purpose of this Injunction Order, the following definitions shall apply:

         1. “Activation” means a completed sale of Dish Network goods or services to a new customer.

         2. “Authorized Telemarketer” means a person who has received express, written authorization from Dish Network to use telemarketing to market Dish Network goods or services except for National Accounts. The term Authorized Telemarketer also includes any employee, agent, assign, independent contractor, or any other person hired, retained or used by an Authorized Telemarketer to engage in, or provide any assistance in, telemarketing.

         3. The term “Automatic Telephone Dialing System” means equipment which has the capacity-

(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and
(B) to dial such numbers.

         This definition is derived from TCPA, 47 U.S.C. § 227(a)(1), and shall be interpreted consistently with that statutory definition.

         4. “Customer” means any person who is or may be required to pay for goods or services.

         5. “Defendant, ” “Dish Network, ” or “Dish” means Dish Network L.L.C., its subsidiaries, successors, officers, agents, servants, employees, and attorneys.

         6. “Dish Network goods or services” means satellite television programming and all other goods or services marketed by Dish now or in the future while this Injunction Order remains in effect.

         7. “Effective Date” means the date of entry of this Injunction Order; provided however, that if this Injunction Order is subject to a stay pending appeal, the term “Effective Date” shall mean that date that such stay pending appeal is lifted.

         8. “Established business relationship” or “EBR” means a relationship between the seller and a person based on: (a) the person's purchase, rental, or lease of the seller's goods or services or a financial transaction between the person and seller, within the eighteen (18) months immediately preceding the date of the telemarketing call; or (b) the person's inquiry or application regarding a product or service offered by the seller, within the three months immediately preceding date of a telemarketing call.

         9. “Internal Do Not Call List” means a list or compilation pursuant to 16 C.F.R. § 310.4(b)(1)(iii)(A) containing telephone numbers of persons who have stated to Dish, an Authorized Telemarketer, or a Retailer that they do not wish to receive telemarketing calls for Dish Network goods or services.

         10. “National Accounts” means a person who markets Dish Network goods or services and who operates ten (10) or more retail stores in ten (10) or more different states, which stores also market goods or services other than Dish Network goods or services to customers in person in the stores.

         11. “National Do Not Call Registry” means the National Do Not Call Registry maintained by the FTC pursuant to 16 C.F.R. § 310.4(b)(1)(iii)(B).

         12. “Outbound telemarketing call” means a telephone call initiated by a telemarketer to induce the purchase of goods or services or to solicit a charitable contribution.

         13. “Person” means any individual, group, unincorporated association, limited or general partnership, corporation, or other business entity.

         14. “Plaintiff States” means the States of California, Illinois, Ohio, and North Carolina.

         15. “Plaintiffs” means the FTC and the Plaintiff States.

         16. “Prerecorded telemarketing call” means an outbound telemarketing call that uses an artificial or prerecorded voice to deliver a message without the prior express written consent of the called party, except for a prerecorded message authorized by 16 C.F.R. § 310.4(b)(1)(v) or (b)(4)(iii) and 47 C.F.R. § 64.1200(b).

         17. “Primary Retailer” means every Authorized Telemarketer or Retailer that, during the calendar year 2016, or any subsequent calendar year while this Injunction Order is in effect:

a. used directly or indirectly, or through a third party, an Automatic Telephone Dialing System in connection with telemarketing Dish Network goods or service; or
b. secured 600 activations of Dish Network goods or service.

         “Primary Retailer” also includes any employee, agent, assign, vendor, service provider, independent contractor, or any other person or third-party affiliate contracted with, hired, retained, or used by a Primary Retailer to engage in, or provide any assistance in, marketing Dish Network goods or services.

         18. “Relevant State Statutes” means California Business & Professions Code §§ 17592 and 17200, North Carolina General Statutes §§ 75-101, 75-102 and 75-104, and Ohio Consumer Sales Practices Act, Ohio Revised Code §§ 1345.01-1345.03.

         19. “Retailer” means any person who markets Dish Network goods or services, solicits orders for Dish Network goods or services, or offers Dish Network goods or services except for National Accounts. “Retailer” also includes any employee, agent, assign, vendor, service provider, independent contractor, or any other person or third-party affiliate contracted with, hired, retained, or used by a Retailer to engage in, or provide any assistance in, marketing Dish Network.

         20. “Safe Harbor Provisions” means the Telephone Sales Rule safe harbor provision 16 C.F.R. §§ 310.4(b)(3) and (b)(4) and the TCPA safe harbor provision 47 C.F.R. §§ 64.1200(c)(2)(i).

         21. “Seller” means:

a. any person who, in connection with a telemarketing transaction, provides, offers to provide, or arranges for others to provide goods or services to the customer in exchange for consideration, whether or not such person is under the jurisdiction of the FTC, or
b. any person or entity on whose behalf a telephone call or message is initiated for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

         22. “Signature” shall include an electronic or digital form of signature, to the extent that such form of signature is recognized as a valid signature under applicable federal law or state contract law.

         23. “Telemarketer” means:

a. any person who, in connection with telemarketing, initiates or receives telephone calls to or from a customer or donor, or
b. any person or entity that initiates a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

         24. “Telemarketing” means a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call. The term does not include the solicitation of sales through the mailing of a catalog which: contains a written description or illustration of the goods or services offered for sale; includes the business address of the seller; includes multiple pages of written material or illustrations; and has been issued not less frequently than once a year, when the person making the solicitation does not solicit customers by telephone but only receives calls initiated by customers in response to the catalog and during those calls takes orders only without further solicitation. For purposes of the previous sentence, the term “further solicitation” does not include providing the customer with information about, or attempting to sell, any other item included in the same catalog which prompted the customer's call or in a substantially similar catalog.

         25. The “Telemarketing Sales Rule” or “Rule” means the FTC Rule entitled “Telemarketing Sales Rule, ” 16 C.F.R. Part 310, attached hereto as Appendix A, and as it may hereafter be amended.

         26. The “Telephone Consumer Protection Act” or “TCPA” means 47 U.S.C. § 227, and as 47 U.S.C. § 227 may hereafter be amended, and any rule enacted pursuant to it, including but not limited to 47 C.F.R. § 64.1200, and as 47 C.F.R. § 64.1200 may hereafter be amended. A copy of the TCPA and 47 C.F.R. § 64.1200 are attached as Appendix B.

         27. “Third-party monitoring service” means a qualified, independent third-party monitoring organization experienced in monitoring and producing reports on compliance with the Telemarketing Sales Rule.

         ORDER

         I. TELEMARKETING BY DISH AND PRIMARY RETAILERS IT IS HEREBY ORDERED that within 90 days of the Effective Date, Defendant Dish shall demonstrate to the Plaintiffs, to the Plaintiffs' satisfaction, that Dish and each Primary Retailer: (1) are fully complying with the Safe Harbor Provisions; and (2) have made no prerecorded telemarketing calls at any time during the five (5) years immediately preceding the Effective Date (collectively the Demonstration Requirements).

         If Dish fails to prove the Demonstration Requirements to the Plaintiffs' satisfaction within the 90 day period, the Plaintiffs shall file a notice to that effect (Plaintiffs' Notice) with the Court and serve a copy of the Notice on Dish. Unless Dish files a request for a hearing with this Court within two (2) business days of service of Plaintiffs' Notice, then for a period of two (2) years from the filing of the Plaintiff's Notice, Dish and the Primary Retailers shall be barred from conducting any outbound telemarketing of Dish Network goods or services and Dish shall be barred from accepting any orders from any Primary Retailer. If Dish files a timely request for a hearing, the Court will set the matter for a hearing within 30 days of Dish's request. No additional discovery will be allowed before the hearing. Dish shall have the burden to prove the Demonstration Requirements to the Court at the hearing. If Dish fails to prove that Dish's direct marketing operations meets the Demonstration ...


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