Lawyer Scores $925-Million Dollar Settlement Against ViSalus For Alleged TCPA Violations

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Telemarketing is a thorn in almost everyone’s sides – it annoys many people and is a practice frowned upon by most.

There came relief for folks when the Telephone Consumer Protection Act (TCPA) was created 25 years ago. The aim was to put a stop to unsolicited telemarketing phone calls.

With this new law, the work of every TCPA lawyer was cut out for them – there were many complaints made. While not all complaints resulted in court cases, one did, and it is quite a big case.

ViSalus Inc., a marketing company in Michigan, was taken to court for allegedly breaking the law according to the TCPA.

Although the company fought back, a federal judge has upheld a damages award against it. As a result, ViSalus must pay $925-Million dollars.

The TCPA lawyer that had to work on this case had proven ViSalus didn’t act properly and the ViSalus case serves as an example to other companies.

How the ViSalus Lawsuit Played out

A woman who used to promote ViSalus, Lori Wakefield, brought on the lawsuit. She argued that the company used prerecorded calls that violated the TCPA.

During the ViSalus lawsuit, the jury heard that the company placed almost two million recorded robocalls. These calls were made to people all over the United States and offered deals on various products.

The products mentioned included energy drinks, dietary supplements and weight-loss products.

The jury determined in 2019 that more than 1.8 million unlawful automated calls were made by the company. Every violation called for a stiff $500 penalty.

According to District Judge Micheal H.Simon, who presided over the case, the amount determined by the court was mathematically correct.

However, Attorney Benjamin G. Shatz, who represented the company during the lawsuit, did not agree.

He claimed the damage award was absurd, adding it would be a ‘death sentence’ for the marketing company. 

The lawyer then asked that the amount be lowered. The judge did not agree and dismissed Shatz’ argument – ViSalus must pay $925-Million dollars.

Clarification on Liability for Fax Advertisers

While the ViSalus lawsuit may be a win for consumers, there is still a lot about the TCPA that isn’t clear to everyone.

The Federal Communications Commission tried to give better understanding related to the accountability of fax advertisers under the TCPA. 

There have been many concerns and complaints that advertisers unfairly take on accountability for fax broadcasters which go outside the stipulations of their marketing terms.

The FCC’s guidance gives some clarity – an advertiser is not a sender in the meaning of the rule where fazes are sent without the subject advertiser’s approval.

How Does the FCC’s TCPA Fax Ruling Give Clarity to the Range of Liability?

The TCPA forbids the use of a telephone facsimile machine or computer to send any unsolicited advertisement. This led to some confusion.

Courts had difficulty in consistently interpreting who is a ‘sender’ and who isn’t. The beginning of this divide goes back to a ruling in 2006 when the FCC defined the term as the person or entity on whose behalf advertisements are sent. In most cases, that would be whoever’s service or product is advertised.

However, saying ‘in most cases’ have often been taken to also mean ‘in all cases’. This meant that advertisers were held accountable for faxes that advertise their products/services. Even when the advertiser was falsely represented, liability was put on their shoulders.

Now, thanks to this new clarification, the liability lies with the fax broadcaster when deception takes place.

Advertisers cannot be held responsible when non-compliant faxes have been sent on their behalf.

Effectively Avoiding Fax Liability

With this new clarifying ruling, the FCC gave everyone some very welcome news. The regulation and governing of fax marketing is rather challenging but at least now there is better understanding.

TCPA fax rules can be rather technical and nuanced and this may have devastating results when non-compliance takes place.

The recent development shows that the laws that govern fax marketing are always changing, this time for the better.

Even Facebook Got into Hot Water 

Noah Duguid took the legal route, claiming that Facebook sent him numerous automatic text messages. These messages were sent to him without his consent – clearly breaking the TCPA rules.

Noah didn’t even use the social media platform but kept getting messages that someone was trying to access his non-existent account.

According to the case, Facebook violated a provision of the TCPA that prohibits calls placed through automated dialing systems (ATDS).

“The United Supreme Court is expected to provide much-needed clarity regarding what constitutes an Automatic Telephone Dialing System. The reality is that the landscape surrounding the TCPA is far from clear, and the Court’s anticipated insight in the Facebook, Inc. v. Noah Duguid case may address the ambiguity,” says Rick Nehora of California’s  Nehora Law Firm, APC. 

The confusion is leaving what many view as ‘loopholes’ to the consumer protection laws.  However, Facebook felt that the equipment used to send the messages is not such a system within the meaning of the law. As such, they moved to have the case dismissed.

In this case, it is clear that having precise definitions of every aspect is important. If there is ambiguity, companies can find legal loopholes and skirt around the law.

The court would hopefully help clear matters up, as every TCPA lawyer out there hopes.