United States v. DISH Network L.L.C., 954 F.3d 970

Background

DISH sold satellite TV via its own staff and third parties, including ~50 nationwide phone-based "order-entry retailers" that entered orders into DISH’s system and earned commissions; DISH handled installation and billing.
The government and several states sued after a five-week bench trial; the district court found >65 million telemarketing violations (Telemarketing Sales Rule, TCPA, and state laws) and assessed a $280 million penalty. DISH did not challenge the district court’s factual findings on appeal.
Central violations involved calls to (a) persons on the National Do Not Call Registry, (b) persons on vendors’ internal do-not-call lists, and (c) "abandoned" calls (no live person reached within two seconds).
The district court held DISH liable both because a Rule prohibits a seller from "causing" telemarketers to violate the Rule and, alternatively, because the order-entry retailers were DISH’s agents under state agency law. The court also found DISH provided "substantial assistance" to one retailer for abandoned calls and treated most violations as per-call for penalty purposes.
On appeal the Seventh Circuit affirmed the judgment in large part, agreeing that the order-entry retailers were DISH’s agents and that many violations were DISH’s vicarious liability; it vacated the "substantial assistance" finding (as applied to a seller and its own agents) and remanded on the measure of damages.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Meaning of "cause" in 16 C.F.R. §310.4(b) (seller liability for causing telemarketer violations)	Broad: any act that plays a role in chain to violation makes seller liable	Narrow/proximate-cause view: exclude remote effects; not every contractor hire is a violation-causing act	Court declined to resolve; agency finding made "cause" analysis unnecessary
Whether order-entry retailers were DISH’s agents	Retailers acted as DISH agents (entered orders into DISH system under DISH control)	Retailers were independent; contract disclaimers negate agency	Held: retailers were agents — DISH controlled performance via Business Rules and retailers acted within scope
Whether seller must coordinate internal do-not-call lists with agents	Yes — agents and principal collectively constitute the "seller whose goods or services are being offered" and must act collectively to avoid repeated calls	No — principal not responsible for every vendor’s separate list; coordination not required	Held: Yes — as agents, retailers and DISH were one seller and had to coordinate to prevent calls to persons who opted out
Whether §310.3(b) "substantial assistance" applies to seller for assisting its own agents	Gov./states: DISH provided substantial assistance to Star Satellite for abandoned calls	DISH: cannot "assist" itself; a principal cannot be a separate assisting "person" for its own agents	Held: Vacated as erroneous — §310.3(b) does not reasonably create liability for a seller "assisting" its own agents
Whether continuing-violation penalty provision (§45(m)(1)(C)) limits liability to per-day rather than per-call	Plaintiffs: violations are the individual calls; each call is a violation	DISH: continuing failure to coordinate is a daily continuing violation, capping penalties per day	Held: Per-call approach — Rule identifies the call as the violation; §45(m)(1)(C) refers to each violating call (not a single daily unit)
Knowledge / mistake defenses under 15 U.S.C. §45(m)(1)(A) (actual or implied knowledge required)	DISH: lacked actual knowledge of individual calls and misunderstood law (contract disclaimer, and interpretation of "established business relationship")	Plaintiffs: agents’ knowledge imputed to DISH; DISH should have known agency law and the regulatory definition of EBR	Held: Agent knowledge imputed; district court’s factual findings (unchallenged) support implied knowledge; Rule’s EBR text controls (18 months runs from last payment), so DISH’s legal mistake did not excuse liability

Key Cases Cited

Hemi Group, LLC v. New York City, 559 U.S. 1 (2010) (proximate-cause discussion in civil RICO context)
Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008) (limits on causation for securities liability)
Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005) (causation requires showing loss caused by fraud)
Pullman-Standard v. Swint, 456 U.S. 273 (1982) (deferential review appropriate when facts predominate)
U.S. Bank, N.A. v. Village at Lakeridge, LLC, 138 S. Ct. 960 (2018) (deference to factual findings on mixed questions)
SpiH v. Proven Winners N. Am., LLC, 759 F.3d 724 (7th Cir. 2014) (agency-existence reviewed for clear error)
Bridgeview Health Care Ctr., Ltd. v. Clark, 816 F.3d 935 (7th Cir. 2016) (principal liable only for agent acts within authority; unauthorized acts may not bind principal)
Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984) (treating single entity and employees as unitary for certain liabilities)
United States v. ITT Continental Baking Co., 420 U.S. 223 (1975) (daily-penalty interpretation in a different statutory context)
National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002) (discrete acts vs. continuing violations distinction)
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich L.P.A., 559 U.S. 573 (2010) (limits on mistake-of-law defense under statutes requiring knowledge or implied knowledge)
State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003) (constraints on excessive punitive multipliers)