United States of America et al v. Dish Network LLC

Filing 766

OPINION entered by Judge Sue E. Myerscough on 2/9/2017. Plaintiffs and Defendant to file supplemental memoranda simultaneously on 2/28/2017. (SEE WRITTEN OPINION) (MAS, ilcd)

E-FILED

Thursday, 09 February, 2017 03:57:29 PM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
UNITED STATES OF AMERICA,
and the STATES of CALIFORNIA,
ILLINOIS, NORTH CAROLINA,
and OHIO,
Plaintiffs,
v.
DISH NETWORK LLC,
Defendant.

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No. 09-3073

OPINION
SUE E. MYERSCOUGH, U.S. District Judge:
The Court has identified a legal issue which the parties have
not adequately addressed in their post-trial submissions. The
Plaintiffs seek civil penalties or statutory damages for acts of Order
Entry Retailers. At least some of these claims may require the
application of agency law. The parties have addressed principles of
agency law regarding a principal’s liability for the actions of an
agent.
The parties, however, have not addressed whether a principal’s
liability under agency law for punitive remedies for the actions of an
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agent should apply to any claim in this case, and if so, how. The
Seventh Circuit has held that under both federal and Illinois law a
principal is only liable for punitive damages for the acts of an agent
if the principal knew of or ratified the acts. See City of Chicago v.
Matchmaker Real Estate Sales Center, Inc., 982 F.2d 1086, 100 (7th
Cir. 1992) (principal liable for punitive damages if she knew of or
ratified the agent’s acts) (applying federal law); accord Jannotta v.
Subway Sandwich Shops, Inc., 125 F.3d 503, 514 (7th Cir. 1997)
(corporation liable for punitive damages for acts of a managerial
employee or if the corporation authorized or ratified that acts)
(applying Illinois law).
The Restatement supports requiring such proof to impose
punitive damages on a principal. Restatement (Third) of Agency, §
7.03 comment e (2006) (citing with approval Restatement (Second)
of Torts, § 909). Comment e to § 7.03 further states that imposing
statutory penalties on principals for the acts of a third party should
depend on the language and purpose of the statute:
A statute may authorize the award of punitive damages
or may provide for a penalty, such as treble damages,
that may be awarded to a plaintiff injured by a
defendant’s violation of the statute. When a defendant is
not itself the actor who committed the conduct that
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violates the statute, the court must then determine
whether the actor’s conduct should be attributed to the
defendant. Unless the language of the statute itself
resolves the question, the determination should reflect
the purpose of the statute.
Restatement (Third) of Agency, § 7.03 comment e.
The Court directs the parties to submit supplemental
memoranda of law to address whether the legal principles discussed
in Restatement (Third) of Agency § 7.03 comment e and the two
cited cases should apply to any claim in this case, and if so, how
those legal principles should apply. The Plaintiffs shall file a single,
joint supplemental memorandum of law. Each side’s supplemental
memorandum shall not exceed twenty pages. The Plaintiffs’ and
Defendant’s supplemental memoranda shall be due simultaneously
on February 28, 2017.
Enter: February 9, 2017

/s Sue E. Myerscough
UNITED STATES DISTRICT JUDGE

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