Wakefield v. ViSalus: The $925 Million TCPA Verdict and the Due Process Limit on Aggregate Damages

The bottom line: a waived consent defense stays waived, but aggregate statutory damages can, in rare and extreme cases, violate due process.

Background

ViSalus is a multi-level marketing company that sells weight-loss products. From 2012 to 2015 it ran a "WinBack" campaign to bring back former customers and promoters, eventually using an automated system that placed tens of thousands of calls, many with prerecorded messages. Lori Wakefield, a former promoter, received five prerecorded messages on her home phone in April 2015.

During this period, a Federal Communications Commission (FCC) rule effective October 16, 2013 required prior express written consent, with a specific disclosure, for prerecorded telemarketing calls. ViSalus's enrollment forms did not contain the necessary disclosure.

ViSalus did not plead consent as a defense. It petitioned the FCC for a retroactive waiver of the written consent rule, as nine other companies had successfully done, but withdrew a motion to amend its answer and went to trial without putting on evidence. About two months after the verdict, the FCC granted the waiver. The district court refused to consider it and declined to reduce the award.

The decision

Judge Tallman wrote for a panel with Judges Berzon and Christen.

1. Standing. Receiving unsolicited telemarketing calls is a concrete injury. The court held that TransUnion LLC v. Ramirez did not overrule its precedent in Van Patten v. Vertical Fitness Group, and actually strengthened it, because unwanted calls resemble traditional privacy, intrusion and nuisance claims.
2. Waiver of consent. Consent is an affirmative defense, and failing to plead it waives it. The exception for an intervening change in law did not apply. Given the nine earlier waivers, ViSalus knew the defense was "fairly available," yet it did not assert consent, build a record or seek a stay. In the district court's words, quoted on appeal, "ViSalus got exactly what it asked for."
3. Due process. ViSalus did not challenge the $500 per-call amount. It argued the aggregate was excessive. The court held, for the first time in the circuit, that under St. Louis, I. M. & S. Ry. Co. v. Williams, aggregate statutory damages can violate due process in extreme circumstances, when they are "wholly disproportioned" and "obviously unreasonable" relative to the statute's goals and the conduct.

The court directed the district court to weigh factors from Six Mexican Workers v. Arizona Citrus Growers, including the award per plaintiff, the total award, the nature and persistence of the violations, the defendant's culpability, awards in similar cases, and whether the violations were substantive or technical. It stressed that only "very rarely" will such a reduction be appropriate. The court vacated and remanded on that issue alone.

Why it matters

Wakefield is an important precedent on both sides. Plaintiffs keep a strong standing rule in the Ninth Circuit. Defendants gain a recognized, if narrow, path to challenge enormous class awards. And the waiver holding is a lesson in litigation strategy: a pending agency petition is no substitute for pleading a defense.

Practical takeaways

1. Plead every available affirmative defense, including consent, in your answer.
2. If an agency ruling could change the case, ask the court for a stay.
3. Keep consent records that meet current FCC rules.
4. The exposure on a TCPA class action lawsuit can be in the hundreds of millions. Due process review is a last resort, not a plan.

Read the Ninth Circuit's opinion in Wakefield v. ViSalus.