In Jones v. All Am. Auto Prot., Inc., No. 314CV00199LRHWGC, 2015 WL 7566685 (D. Nev. Nov. 24, 2015), Judge Hicks granted Defendant Royal Administrative Services' (“Royal”) Motion for Summary Judgment.

Royal is a provider and administrator of vehicle service contracts, and supplies its products to independent and franchise vehicle dealers and to direct-to-consumer marketing companies. Royal did business with Defendant All American Auto Protection (“AAAP”), a direct marketing vendor. Plaintiffs alleged that they received auto-dialed phone calls from AAAP in 2014.  Plaintiffs argued that even though Royal did not physically place the calls itself, Royal was still vicariously liable under the TCPA because AAAP placed the calls on Royal's behalf.

Judge Hicks disagreed finding no evidence that Royal was liable under any agency theory—formal agency, apparent authority, or ratification.

With respect to actual authority, Judge Hicks held that while Royal did provide materials, training, and scripts, Royal did not direct AAAP as to when, where, and how many people to call.  Judge Hicks also found it persuasive that Plaintiffs never alleged that any of the callers identified themselves as calling on behalf of Royal, and that AAAP sells products from multiple companies.

Judge Hicks held that there was no apparent authority because Royal did not make (or cause to make) any direct communications to end-users such that they might think a vendor or dealer was acting on Royal's behalf.  Indeed, Judge Hicks found that the undisputed facts demonstrated that Royal did not market to end-users, but only supplied its products to dealers and direct-to-consumer marketing companies, who, in-turn, sold the products to consumers. Thus, in Judge Hicks’ view, Plaintiffs failed to produce any evidence from which one could trace their belief as to AAAP's apparent authority to Royal's conduct or statements.

Finally, Judge Hicks held that Plaintiffs failed to allege a plausible basis to hold Royal liable under a ratification theory because they did not provide any specific allegations that Royal received any benefit from AAAP's calls.  Moreover, Royal had made efforts to enforce compliance, and investigated AAAP when it suspected wrongdoing.

This decision is important for all companies facing (or potentially facing) third party liability under the TCPA, and underscores the need to police and enforce compliance by sellers of their products.