Visalus turns to Supreme Court to settle robocall fraud
Back in May 2019 a federal jury awarded $925 million in statutory damages against Visalus.
The award pertained to alleged violations of the Telephone Consumer Protection Act (TPCA). Visalus was accused of illegally making almost 2 million robocalls to consumers.
The $925 million amount was calculated based on Visalus making 1,850,440 calls, and the minimum awardable damages per call under TCPA being $500.
Visalus has been fighting the company-ending award since it was granted – mostly unsuccessfully.
In October 2022 however, Visalus was thrown a life raft from the Ninth Circuit Court of Appeals.
The Ninth Circuit upheld the judgment against Visalus, but took issue with the $925 million statutory damages award.
We have jurisdiction … and we affirm the district court’s refusal to decertify the class, grant judgment as a matter of law, or grant a new trial, but we reverse and remand to the district court for further proceedings regarding the constitutionality of the nearly one-billion-dollar statutory damages award.
The decision reopened the case and punted it back to the Oregon District Court for further proceedings.
That process was quickly stayed however, following Visalus signalling its intention to file a writ of certiorari with the Supreme Court.
Visalus eventually filed its writ on March 17th. In their writ, Visalus claims there is an unresolved issue with respect to marketing calls received by someone who has “given some form consent”.
Essentially Visalus argues that Visalus customers and promoters give consent to receive marketing calls when they
become a promoter or purchasing customer, voluntarily provided their number, and opted in to receive marketing communications.
On March 29th, Visalus’ writ was “distributed for conference”. Said conference is to be held between the Supreme Court Justices on April 14th.
I expect a decision on whether Visalus’ writ will be heard will be made available either on April 14th or shortly after.
While I’m not intimately familiar with the TCPA, I think it’s generally accepted that nobody likes robocalls. This has prompted TCPA and relevant legislation as a deterrent.
That said, the minimum $500 per illegal robocall set under TCPA might not have taken into consideration a company making almost 2 million illegal calls.
On the flip side, while the $500 is a minimum that can be scaled up, reducing that amount runs the risk of trivializing TCPA judgments.
Be it Visalus or some other business, I’m perfectly fine with damages running that company out of business if they’re running millions of robocalls. That amount of calling (and the annoyance it generates) doesn’t just happen overnight.
In their writ, Visalus argues;
The harm from receiving a phone call after opting in to a marketing list is far from “concrete”.
Personally I think there is “concrete harm”. Receiving robocalls is frustrating and can be time consuming. And I think such to the extent Visalus puts forth their distributors, past and present, consent to receiving marketing, that doesn’t explicitly cover being harassed over the phone.
Which is ultimately what robocall fraud is – harassment.
Stay tuned for an update on Visalus’ Supreme Court writ sometime later this month. After which BehindMLM will continue tracking proceedings in Oregon.
Update 19th April 2023 – Visalus’ Supreme Court writ has been denied.
Dunno if this sheds light on your email but it was coincidental I had this on my calendar for today.
Maybe Visalus is anticipating a SC win? Or alternatively an all or nothing play before the end.
The Robocall laws can be unfair to mlm type companies. I had a friend who was an owner of an mlm and one of their distributors unknown to them was robocalling to build his business.
The company got sued instead of the distibutor. They were able to settle before it went to court but is still cost them about $30,000.
Even if you have wording in your Terms about robo calling they still come after the company and not the distributor.
I’d be surprised if an MLM company can be held accountable if it was a distributor doing it unbeknownst to the company, especially if they had a “do not robocall” clause in the distributor agreement.
If an MLM company doesn’t want to fight that in court, that’s on them.
Might not have much of a case if they were informed and did nothing though (which sounds like it might have been the case in your example).
Regarding Oz’s comment #1:
Last night, I commented on a Visalus article from years ago that I had received this mysterious bit of email spam, addressed to “Jessica Williams” at my business email address:
My last name isn’t Williams, and I don’t even know anyone named Jessica, other than Jessica Rabbit, and we broke things off a long time ago (great body and a sultry voice, but all she wanted to do was play patty-cake).
The name “Visalus” didn’t appear anywhere, but it’s definitely they (excruciatingly correct grammar achieved).
It was signed “Your friends at VI,” and its unsubscribe address was given as VI, 901 Sam Rayburn Hwy, Melissa, Texas 75454
It had the longest tracking link I’ve ever seen (wider than my 2560×1600 screen could show) for 10% off your first order. Yeah, no, thanks. I was born at night, but not last night.
The original VI-Shape shake mix tasted OK and wasn’t horrendously overpriced, but I would never buy anything from that company ever again, whether or not they’re still MLM. Put “Visalus” in the search window at the top of this page and see the horror stories for yourself.
Uh, Visalus goes by Vi (“body by Vi”) but that’s LaCore Enterprises’ address.
edit: I’ve been awake too long, forgot Visalus was sold off to LaCore Enterprises – https://behindmlm.com/companies/visalus/visalus-quietly-sold-off-to-pruvit/
I wonder if this means Visalus ultimately having to pay $925 million, or even a reduced amount, potentially means the end of LaCore Enterprises?
If you buy a company in active TCPA litigation are you left footing the bill?
I forgot about LaCore purchasing VI also.
Now it’s a bigger, louder “No, thanks!”
Vi has lied about equity. Lied about not selling on Amazon. Lied that they were bringing the Challenge to Pruvit. So why would anyone believe this is the ‘original shake’, now made by Terry LaCore.
Prior labels don’t show that- so why say it’s made in the ‘same’ place? Too bad spam emails can’t be part of the robocall lawsuit.
Supreme court denied to hear the ViSalus case. Looks like it goes back to the original judge for ruling and potentially lowering of penalty.
Thanks for that. I checked on Saturday for a Friday update and nothing was up yet. Figured it’d be a while before a decision but seems otherwise.
Anything less than $500 per call would require modification of the TPCA. That and Visalus approached the SC on the basis the ruling itself was wrong (consent), not the damages awarded.
It’s not impossible damages might be reduced but personally I’m not seeing it based on how things stand.
If I were the original judge, i’d cut the penalty in half to 250 per call, making it a cool 450 million payout.
Question – now that the Supremem court decided not to weigh in – does this go back to the Judge in Washington to finalize? Any idea when?
Is Vi out of chips to save payment?
The issue to be resolved is the amount of the penalty. That’ll be decided one way or another in the federal court.