The Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), prohibits initiating a telephone call using a prerecorded voice to wireless or residential telephone numbers unless the called party consents to receiving the call. Edward Makaron and Bianca Carter filed suit against UTC Fire & Security Americas Corporation, Inc. (“UTCFSA”) and Security One Alarm Systems (“SOAS”), and alleged that SOAS, acting as an authorized agent of UTCFSA, called them with a prerecorded message without their consent, and sought to represent a class of similarly situated persons. On May 18, 2015, the district court granted UTCFSA’s motion for summary judgment. Makaron v. GE Security Mfg., Inc., et al., No. CV-14-1274 (C.D. Cal. May 18, 2015).
UTCFSA hires thousands of independent, third-party businesses, called “authorized dealers,” to sell its security equipment to consumers, one of which was SOAS. While SOAS initiated the call to the plaintiffs, the plaintiffs sought to hold UTCFSA liable for the calls, as the FCC has held that sellers, such as UTCFSA, may be held vicariously liable for the calls of its telemarketers, such as SOAS, under principles of agency, apparent authority, and/or ratification. UTCFSA moved for summary judgment on the grounds that the plaintiffs could not establish vicarious liability as a matter of law.
The contract between UTCFSA and SOAS provided that SOAS was an independent contractor and that it would market UTCFSA’s products in compliance with all applicable telemarketing laws. The contract also provided that, while SOAS could not represent itself as UTCFSA, it was allowed to represent itself as an “authorized dealer” of UTCFSA and was granted a limited license to use the trademark of the brands it sold for UTCFSA. The plaintiffs argued that this fact was sufficient to establish agency because the FCC previously opined that permitting a telemarketer to use a seller’s trademark could give rise to agency or apparent authority. The district court rejected this argument, holding that the mere use of a trademark cannot support of finding of agency or apparent authority.
The district court also noted that, in order to establish apparent authority, UTCFSA must have made a manifestation of authority to the plaintiffs. While the plaintiffs argued that UTCFSA did not need to make a direct manifestation of authority to class members, the district court likewise rejected this argument, noting that the circumstances in which indirect manifestations of authority gave rise to apparent authority were not remotely analogous to the situation in the case. Finally, even if appointing SOAS an “authorized dealer” could give rise to apparent authority (or even if an indirect representation were sufficient for that matter), the court noted that it was not alleged that SOAS informed the plaintiffs that it was an authorized dealer or took any other action that would cause the listener to believe that SOAS was acting as an agent of UTCFSA during the calls.
Finally, because SOAS was not an agent of UTCFSA, the court held that UTCFSA could not have ratified the calls as a matter of law, and there was also no evidence that UTCFSA had information or knowledge of the particular calls to the plaintiffs.
As such, the district court granted summary judgment to UTCFSA.