Special Master to Choose Recipient of Unclaimed Dish Network Class Action Funds

On Tuesday, District Judge Catherine C. Eagles issued an order explaining that she will appoint a special master to help decide how to disburse approximately $11 million in remaining funds from a Telephone Consumer Protection Act (TCPA) judgment entered against Dish Network, LLC. The TCPA trial resulted in a notable $61.3 million verdict against Dish for making 51,119 calls to 18,066 “Do-Not-Call” list residential telephone numbers. The court subsequently trebled the amount, finding that Dish’s agent’s violations were willful.

Judge Eagles briefly recited the case’s history, recounting that the judgment was affirmed on appeal by the Fourth Circuit, and certiorari denied by the Supreme Court. The court also described the outcome of the claims process, which had concluded.

According to the order, “[a]pproximately 11,000 class members were identified fully and without contradiction in the existing data. The remaining 7,000 were subject to a claims process, and 1,958 valid claims were submitted by class members.” Thus, the order reported that about 5,000 class members did not claim and will not receive funds from the judgment. In addition, some class members may not cash their checks, the court explained.

The question before the court was what to do with the undisbursed $11 million or so judgment funds. At the outset of her analysis, Judge Eagles noted that the “‘court’s choice among distribution options should be guided by the objectives of the underlying statute and the interests of the silent class members.’” The three choices were reversion of the funds to Dish, cy pres distribution, and escheat.

The court noted that “Dish unsurprisingly advocates for reversion,” and acknowledged the plaintiff’s position, that “most of the money should go to state unclaimed property funds—much of which would ultimately escheat to the state—and the remainder to an as-yet unidentified cy pres recipient.” Under the plaintiff’s suggestion, “funds for the class members who did not submit claims but who are identified by name and address should escheat to those members’ state unclaimed property funds,” while remaining invalid claims or uncashed check funds would be distributed to a cy pres recipient.

The court held that reversion to Dish was inappropriate because its violations were held willful and it engaged in “obstructive conduct after judgment in connection with establishing a claims process.” The court discarded Dish’s arguments against escheat and cy pres, finding that federal escheat would be an uncostly option, and that “cy pres, assuming an appropriate recipient exists, is still potentially the best option.”

In deciding between cy pres and escheat to the federal government, the court remarked that such a decision is one “that can [not] be made hypothetically.” The court explained that it “needs to know whether there are in fact appropriate cy pres recipients and to make a concrete comparison to federal escheat.” Pursuant to Federal Rule of Civil Procedure 53(a)(1)(B)(i) and Rule 53(a)(1)(C), the court gave notice of “its intent to appoint a special master to identify, evaluate, and recommend an appropriate cy pres recipient or recipients, in light of the purposes of the TCPA and the interests of and benefits to the class members who do not claim their share of the judgment.”

Thus, the court denied Dish’s motion and the plaintiff’s motion to the extent it advocated for escheat to state governments, an option it deemed too costly. The court also permitted the parties to submit suggestions regarding special master selection by Oct. 29.