Does the Telephone Consumer Protection Act Violate Due Process as Applied?

J. Gregory Sidak

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The Telephone Consumer Protection Act of 1991 (TCPA) subjects a telemarketer’s use of autodialed telephone calls, automated text messages, and faxes to statutory damages of $500 per violation or up to $1,500 per willful violation. Depending on the circumstances of the violating communication, the TCPA’s penalties can exceed by orders of magnitude any plausible economic estimate of the recipient’s actual harm, such that the TCPA, as applied, likely violates the Due Process Clause of the Fifth Amendment.

A violating communication causes actual harm of between 6.8 cents and 70.7 cents per violating communication, depending on the communication channel used. The remainder of the TCPA’s statutory damages is purely punitive. The punitive component of the TCPA’s statutory damages is between 706 and 22,058 times the total actual damages that a violating communication imposes. That multiplier can vary significantly according to the specific circumstances of the violating communication. Given the Supreme Court’s jurisprudence on punitive damages, lower courts must take seriously the possibility that the TCPA’s statutory damages violate the Due Process Clause of the Fifth Amendment as applied.

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J. Gregory Sidak, Does the Telephone Consumer Protection Act Violate Due Process as Applied?, 1 Criterion J. on Innovation 649 (2016).

J. Gregory Sidak is the chairman of Criterion Economics. He testifies as an expert economic witness in complex business disputes throughout the Americas, Europe, Asia, and the Pacific, and he has twice served as Judge Richard Posner’s court-appointed neutral economic expert on patent damages. Sidak held the Ronald Coase Professorship of Law and Economics at Tilburg University in The Netherlands and the F.K. Weyerhaeuser Fellowship in Law and Economics at the American Enterprise Institute for Public Policy Research. He has also been a senior lecturer at the Yale School of Management and a visiting professor at Georgetown University Law Center. Sidak received A.B. and A.M. degrees in economics and a J.D. from Stanford University. He was Judge Posner’s first law clerk, served on the senior staff of the Council of Economic Advisers in the Executive Office of the President, and was deputy general counsel of the Federal Communications Commission. Sidak has published six books and roughly 200 articles or book chapters. The Supreme Court of the United States, the Supreme Court of Canada, the European Commission, state supreme courts, the U.S. Courts of Appeals, and many other courts and regulatory bodies have cited his writings approvingly.