Case analysis · Do Not Call
Seventh Circuit Affirms Do Not Call Liability in FTC v. Day Pacer but Vacates $28.6 Million Penalty
The bottom line: on January 3, 2025, the U.S. Court of Appeals for the Seventh Circuit affirmed that Day Pacer LLC, EduTrek L.L.C. and the individuals who ran them are liable under the Telemarketing Sales Rule (TSR) for millions of calls to numbers on the National Do Not Call Registry. The court reversed the substitution of a deceased defendant's estate and vacated the $28.6 million civil penalty award, remanding for reconsideration. The case is FTC v. Day Pacer LLC, Nos. 23-3310, 24-1273 and 24-1289.
On this page
The opinion is attached: Seventh Circuit opinion in FTC v. Day Pacer.
What happened
The Federal Trade Commission (FTC) brought a civil enforcement action against the companies and their operators. The district court entered summary judgment against them, issued a permanent injunction against telemarketing and imposed $28.6 million in civil penalties.
What the court held
- The companies were telemarketers. They argued they were mere intermediaries that never sold anything. The TSR defines telemarketing broadly as any plan, program or campaign to induce purchases by telephone.
- Consent to a vendor is not consent to the caller. The companies argued that they relied on consent given to the vendors they bought consumer information from. The court rejected that argument. Consumers must consent to each separate caller, and consent obtained after a call is too late.
- Individuals are liable. Each individual defendant is personally liable because each knew or should have known of the illegal acts and had authority to stop them.
- Penalties do not survive death. The FTC's suit was a penal action, which does not survive a party's death. Substituting David T. Cumming's estate was error.
- Penalty factors. The district court failed to consider all mandatory statutory factors in setting the penalty, which was an abuse of discretion.
The law
The TSR makes it unlawful to place a telemarketing call to a Registry number unless the telemarketer has a prior express written agreement with the consumer or an established business relationship. It also makes it unlawful to "substantially assist" a seller or telemarketer that violates the rule.
What this means for you
- Purchased consent is risky. Consent given to a data vendor is not consent to the caller.
- Get consent before you call. After-the-fact consent does not cure a violation.
- Executives are exposed. Authority to stop the conduct can create personal liability.
- Scrub against the Registry. It remains the simplest compliance step.
Not legal advice. TCPA.com provides general information, not legal advice, and is not a substitute for the advice of an attorney. Do not rely on it. Verify any action with your own licensed lawyer before you take it. See our Terms of Use.
Primary sources
About the Author: Harrison Gevirtz
Harrison Gevirtz serves as the Chief Strategy Officer (CSO) of Ringba, a call tracking and pay per call platform, and is based in Las Vegas, Nevada. Harrison Gevirtz is a serial operator in call tracking, call routing and telemarketing operations, and for the past several years he has focused on how federal regulations affect the daily operations of these industries. At TCPA.com, Harrison Gevirtz covers TCPA litigation, Telemarketing Sales Rule (TSR) enforcement, tech support fraud prosecutions and Federal Communications Commission (FCC) rulemaking in a way that's accessible to the non-lawyer executive or compliance manager.
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