The U.S. District Court for the Southern District of Illinois issued a mixed decision on a motion to dismiss filed by several defendants in a TCPA action involving calls regarding vehicle service contracts (VSCs).
In the case, plaintiff Angelina Showers alleged she received multiple unsolicited phone calls marketing vehicle service contracts from Pelican Investment Holdings Group in 2022, despite her phone number appearing on the National Do Not Call Registry (DNC) since January 2006. Showers claimed the calls were part of a scheme involving Pelican, Dimension Service Corporation, SunPath LTD and Mepco, with Pelican acting as an agent for the parties by making the illegal phone calls to consumers nationwide in violation of the TCPA.
Showers alleged the defendants engaged in a scheme and acted as co-conspirators or in concert, and that all of the acts occurred within the scope of the relationship. Specifically, Showers claimed that Dimension and SunPath conspired to create a common scheme of selling VSCs and acted as administrators for the scheme, while Mepco collected payments from consumers. Thereafter, she alleged Pelican acted as an agent for Dimension and SunPath.
Defendants Dimension, SunPath and Mepco argued direct liability under the TCPA only applies to entities that initiate the call by “taking the steps necessary to physically place a telephone call.” Plaintiff conceded that no direct liability existed as to those Defendants.
The court focused on the vicarious liability of the defendants other than Pelican. The court emphasized that vicarious liability can be shown through “a broad range of agency principles,” including actual authority, apparent authority, and ratification. Here, although the defendants argued that the allegations were conclusory and boilerplate, the court ultimately found that they were sufficient to support vicarious liability.
“While these allegations are not the model of specificity, the court finds them sufficient to state a plausible claim for relief under the TCPA through the theory of vicarious liability,” the court wrote. “The allegations here create an inference that Dimension and SunPath, acting as principals, created a scheme to sell VSCs through automated telephone solicitation. Pelican, acting as an agent, made the unsolicited phone calls, including to people on the National Do Not Call Registry (DNC). Mepco then acted as a principal and/or agent by processing monthly payments from consumers who purchased a VSC. It is also plausible to infer from the allegations in the [complaint] that Mepco ratified its co-defendants’ conduct when it continued to collect monthly payments from consumers that purchased a VSC as a result of the alleged illegal scheme.”
Whether an agency relationship exists is ultimately a question of fact that need not be proved at the pleading stage, the court said, finding that Showers had alleged a plausible claim for relief based on actual authority and ratification.
The court also found that Showers’ failure to allege that she personally registered her phone number on the DNC Registry was not fatal to her claim.
“Defendants are inserting an adverb into regulatory text that is not actually there,” the court said. “The regulation merely requires that a subscriber have registered his or her phone number on the do-not-call registry. There is no requirement that an individual have personally registered the phone number.”
The court did side with the defendants on Showers’ claim under 47 C.F.R. § 64.1200(d), setting forth requirements for internal company do-not-call policies. While consumers do have a private right of action for violations of the provision, the court concluded that Showers’ allegations as to the alleged internal do-not-call violation were “nothing more than conclusory, formulaic recitations of the elements of the cause of action” and dismissed the claim. The court also found that it did not lack jurisdiction over the out-of-state defendants and that Showers’ complaint did not constitute an impermissible shotgun pleading.
To read the memorandum and order in Showers v. Pelican Investment Holdings Group, LLC, click here.
Why it matters: The court allowed the majority of the plaintiff’s claims to survive, including the claims that the defendants were “liable for each other’s acts” based on vicarious liability because the complaint “created an inference” that all defendants were involved in the scheme as co-conspirators. The court was also not persuaded that the plaintiff needed to personally register her number on the DNC Registry to state a claim for relief under the do-not-call rules. However, the court found that plaintiff’s allegations that defendants did not have an internal do-not-call list or policy was not sufficient to state a claim under the internal do-not-call rules and granted the motion to dismiss on that claim.