While some courts are busy addressing the issue of whether mere provision of a cell phone number is sufficient consent under the TCPA to receive calls, other courts are struggling with the issue of vicarious liability under the statute. The D.C. Circuit recently refused to take up a challenge to the FCC’s ruling from May 2012 that established that there could be vicarious liability for violations of the TCPA, and that federal common law of agency would apply to a vicarious liability analysis. Now, trial court rulings are beginning to show how vicarious liability analyses are being conducted.
A federal court judge in Florida determined that summary judgment for the defendant in a TCPA suit was appropriate where the putative class action plaintiff failed to plead vicarious liability and to present evidence that the actual sender was an agent of the dental practice named in the faxed ad. (The decision is being appealed to the 11th Circuit.) In a case out of Illinois state court, an appellate panel reversed class certification where the actual sender of the faxed ad transmitted it beyond the group of recipients for which it had approval, exceeding its authority. (The decision is being appealed to the U.S. Supreme Court.)
Both cases involved a marketing company called Business to Business Solutions (B2B) that offered to send fax advertisements for other companies. In Florida, the marketing person for a dental practice agreed to pay $420 to have B2B send 10,000 ads via fax, with the caveat that the messages be sent only in specific zip codes near the dental practice.
Although the court recognized that vicarious liability could provide a basis for the claims at issue, the golf store plaintiff did not name B2B in the complaint and did not plead a theory of vicarious liability against the dental practice – a fatal defect to the case. U.S. District Court Judge Kathleen M. Williams then went one step further, engaging in sua sponte scrutiny of the plaintiff’s Article III standing and finding lack of standing to be yet another reason to grant summary judgment to the defendant. “Presumably, a plaintiff must see a fax to discern whether it is an advertisement or not,” Judge Williams wrote. “Furthermore, it is well-settled that, in enacting the TCPA, the aim of Congress was to protect consumers’ privacy rights. If a plaintiff does not see, know about, or otherwise become aware of an unsolicited fax advertisement, it is difficult to conceive how the plaintiff’s right to privacy could be invaded by the fax advertisement such that the plaintiff is injured in fact.”
Therefore, the court held that the golf store, whose owner did not recall receiving the facsimile in question, had not suffered a “distinct and palpable injury” as required by Article III.
In another case addressing vicarious liability under the TCPA, an Illinois appellate court held that a defendant could not be liable for faxes sent by B2B outside the requested recipient list. Poolman of Wisconsin, a company that services, sells, and repairs swimming pools and hot tubs, paid $312 to B2B for sending 6,000 fax ads. Poolman’s owner specifically requested that “I would only like to market to ‘Small Electric Motor Repair + Service Companys [sic].’”
Although a trial court certified the case as a class action, the appellate court reversed. Just because the faxes were sent with the defendant’s name did not satisfy the TCPA’s requirement that the sender transmitted them “on behalf of” another party, the court said. “There is nothing in the plain language of the Act nor its legislative history suggesting Congress intended to impose liability on a party that did not send an unsolicited fax or authorize a third party to send an unsolicited fax on its behalf,” the court wrote.
To read the Florida district court’s opinion in Palm Beach Golf Center v. Sarris, click here.
To read the Illinois appellate court’s decision in Uesco Industries v. Poolman of Wisconsin, click here.
Why it matters: Although the FCC clarified last year that defendants can be held liable pursuant to the TCPA under a theory of vicarious liability where a plaintiff can establish an agency relationship between the defendant and the sender of the fax, as evidenced by the Uesco and Sarris cases, courts continue to struggle with the issue and could use some guidance from the high court. With trial courts trying to make sense of vicarious liability and the TCPA, and these orders being taken up on appeal by plaintiffs eager to tag businesses with vicarious liability under the TCPA (and the accompanying $500 per violation statutory damages), how will appellate courts respond?