An Oklahoma federal court granted summary judgment in favor of a Telephone Consumer Protection Act (TCPA) plaintiff on vicarious liability issues, ruling that the defendant was liable for telemarketing calls made by a sales lead generator on its behalf.
Robert Braver sued NorthStar Alarm Services and Yodel Technologies for violations of the TCPA, accusing Yodel of making unlawful telemarketing calls on behalf of NorthStar, a company that provides residential security and home automation systems to consumers.
When Yodel’s automated predictive dialer initiated calls, it would detect whether it was answered by a potential customer. If so, the call was transferred to a soundboard agent who was trained to play prerecorded audio files to deliver messages to the called party by pressing buttons.
After receiving a call from Yodel, Braver filed a putative class action. The defendants conceded that Yodel initiated the calls to Braver as well as the class, and that Yodel did not obtain consent from the called parties prior to initiating the calls. But they argued that Yodel’s calls did not violate the TCPA because they did not “deliver a message” within the meaning of the statute.
Section 227(b)(1)(B) makes it unlawful “to initiate any [telemarketing] telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party.” This provision uses the singular (“a message”), the defendants told the court, and was not intended to regulate interactive exchanges of plural messages or a system that involves human interaction—like those in the Yodel calls.
U.S. District Court Judge Stephen P. Friot from the Western District of Oklahoma disagreed. “These arguments are unpersuasive given the plain language and meaning of § 227(b)(1)(B), together with the principle of statutory construction embodied in 1 U.S.C. § 1,” he said.
Having rejected the defendants’ arguments and in light of the matters expressly conceded by the defendants, the court found liability had been established and granted summary judgment in favor of Braver.
Turning to NorthStar’s vicarious liability, Judge Friot found several facts weighed in favor of an agency relationship between NorthStar and Yodel. For starters, NorthStar was involved in determining the script for the prerecorded messages used by Yodel in the calls it made and was aware that Yodel intended to use—and did use—soundboard technology to deliver prerecorded voices in audio clips. And at times, NorthStar caused Yodel to change its procedures.
In addition, NorthStar received complaints from consumers about the calls placed by Yodel and had some involvement in determining to which telephone numbers calls would be placed by Yodel. NorthStar allowed Yodel to upload consumer lead data directly into NorthStar’s telemarketing software and the two agreed that the calls would be made using a fictional alias (the “Security Help Center”).
“This undisputed evidence establishes that NorthStar’s involvement with Yodel’s material acts (acts in violation of the TCPA as alleged in count one) was both ongoing and significant,” the court wrote.
Although this holding made it unnecessary to consider Braver’s alternative theories of agency, the court found the relationship between NorthStar and Yodel also established apparent authority and ratification.
While “the court recognizes that issues concerning the existence and scope of an agency are typically for a jury, this record supports but one conclusion: an agency existed which encompassed Yodel’s acts taken in violation of § 227(b)(1)(B),” Judge Friot wrote.
To read the order in Braver v. NorthStar Alarm Services, LLC, click here.
Why it matters: Not only did the court find that the facts established an agency relationship between the defendants, it found enough evidence for apparent authority and ratification as well, leaving no doubt that the alarm company was on the hook for the calls made by the lead generator on its behalf. This case also stands in contrast to the vast majority of other federal courts that have dismissed TCPA class action complaints at the pleadings stage for failing to plead facts supporting vicarious liability, the touchstone of which is generally considered to be the alleged principal’s “control” over an alleged agent.