U.S. judge orders Dish to pay $280 million fines, damages in telemarketing lawsuit

WASHINGTON/NEW YORK (Reuters) - A federal judge in Illinois on Monday ordered Dish Network Corp to pay $280 million in penalties to the U.S. government and four states in an eight-year-old “robocall” telemarketing lawsuit.

The Dish Network logo is seen on the side of an installer truck in Denver, Colorado March 2, 2009. Picture taken March 2, 2009. REUTERS/Rick Wilking

In what may be the largest ever monetary judgment in a “robocall” case, U.S. District Judge Sue Myerscough required Dish to pay $168 million to the U.S. government and $112 million to North Carolina, California, Ohio and Illinois over what the judge said were “millions and millions” of calls.

Myerscough said the award represents about one-fifth of Dish’s 2016 after-tax profits. She said the award was “not onerous” and rejected what she termed Dish’s “pleas of poverty and lack of cash.”

In March 2009, the states and FTC sued Dish after the company settled with 46 states for allegedly violating “do not call” rules and rules governing “robocalls.”

Dish and its contractors allegedly made millions of illegal calls by calling numbers on the Do Not Call Registry and by placing telemarketing calls that deliver prerecorded or “robocall” messages to live consumers.

In a statement, the Englewood, Colorado-based company said it “respectfully disagrees with today’s decision by the Court, and said that it will appeal the ruling. Dish added that the penalties “radically and unjustly exceed, by orders of magnitude, those found in the settlements in similar actions.”

The company added “the court is holding Dish responsible for telemarketing activities conducted by independent third-parties, including in circumstances where such third-parties intentionally hid their telemarketing efforts from Dish.”

Dish shares were largely unchanged in trading Monday, closing up 0.2 percent at $66.19 per share.

Lois Greisman, associate director of the FTC’s Division of Marketing Practices called the decision “an enormous win for consumers.”

“I certainly hope that between the historic civil penalty and strong injunctive relief that Dish will change how it does business,” she said.

Myerscough said in her 475-page decision that the four states and federal government may make unannounced inspections of Dish and its telemarketing vendors but will require approval of the court before an inspection.

The judge also said Dish must employ a telemarketing compliance expert to formulate a long-term plan to ensure compliance with the do-not-call laws.

The judge said evidence suggests “pressure needs to be maintained to keep Dish’s marketing personnel from reverting to their practice of trying to get around the rules.”

Dish in a securities disclosure noted that the federal government at one point said it planned to seek up to $900 million in penalties and the states as much as $23.5 billion.

Reporting by David Shepardson. Additional reporting by Diane Bartz; Editing by Jonathan Oatis and Diane Craft