After a class obtained a judgment against Dish under the TCPA, some of the funds awarded in judgment went unclaimed. “Here, the Court found, “the judgment funds represent 51,119 discrete and proven violations of the statute. Even if the specific person who received Dish’s call was not successfully contacted, or someone who was identified did not timely file a claim, Dish still made the violative call to a member of the class and, thus, to a party: the class was defined in the first instance as the persons whose phone numbers received such calls, not by the names and addresses of the people involved….
“The TCPA is a deterrence statute, and reversion does not support the statutory goal. That is particularly true here, where the Court found Dish willfully violated the statute. Moreover, Dish’s obstructive conduct after judgment in connection with establishing a claims process resulted in substantial delays, which no doubt will increase the amount of unclaimed funds as people moved from addresses in the record and the possibility of contacting them about claiming their share of the judgment was reduced. Reversion to Dish is inappropriate.
“Both a cy pres distribution and escheat support and further the aims of the TCPA. Each supports the deterrence purpose of the statute by ensuring that Dish does not escape responsibility for the damages imposed as a result of its 51,000-plus violations, and each would support the punishment aspects of the treble damages provisions of the TCPA.
“But escheat to the states is too costly to be feasible. It is likely to involve both significant administrative costs in dividing up the unclaimed funds between the states and significant resources from the court, class counsel, and the administrator in ensuring that orders appropriate under the laws of the many states are clearly crafted and entered.
“Escheat to the federal government does not have these problems, as it would be relatively straightforward. It is appropriate, since violation of a federal statute was the basis for the judgment. And cy pres, assuming an appropriate recipient exists, is still potentially the best option.”
After rejecting Dish’s various arguments that cy pres is ‘prohibited’, the Court was faced with the question of whether to escheat the unclaimed fund to the Federal Government or to distribute them as cy pres. “As previously noted, both cy pres and escheat to the federal government are consistent with the deterrence purposes of the TCPA and are feasible, cost-efficient options, as would be some combination of the two. But in order to appropriately exercise its discretion, the Court needs to know whether there are in fact appropriate cy pres recipients and to make a concrete comparison to federal escheat. This is not a decision that can be made hypothetically.” The Court therefore appointed a Special Master to identify and evaluate potentially appropriate cy pres recipients.
Krakauer v. Dish Network, No.14-333, 2020 WL 6292991 (M.D.N.C. Oct. 27, 2020).