Reversing dismissal, the U.S. Court of Appeals, Seventh Circuit found that a plaintiff had sufficiently pled allegations of vicarious liability to keep his Telephone Consumer Protection Act (TCPA) suit alive.
Christopher Bilek received two unauthorized robocalls. A prerecorded message allegedly solicited health insurance and instructed Bilek to press 1 to be connected to a representative. When he pressed 1, Bilek was allegedly connected to a live agent who provided a quote for health insurance underwritten by Federal Insurance Company (FIC) and facilitated by Health Insurance Innovations (HII).
Bilek sued FIC and HII for running afoul of the TCPA and Illinois’s state analog on a vicarious liability theory, claiming that the defendants’ agents generated the calls.
To support his allegations, Bilek alleged a web of business relationships: FIC contracted with HII to sell its insurance, HII hired lead generators to effectuate telemarketing, and the lead generators made the unauthorized robocalls that formed the basis of Bilek’s claims.
A district court dismissed Bilek’s complaint, holding that he failed to plausibly allege agency on any of the three grounds asserted—actual authority, apparent authority or ratification.
But the federal appellate panel reversed, finding that Bilek’s allegations were sufficient to move the lawsuit forward.
The panel first noted that it was not required to consider all three agency theories, as its inquiry was limited to finding only a single plausible claim for relief. Thus it began and ended its review with Bilek’s actual authority theory of agency liability.
To allege that the lead generators had actual authority, Bilek was required to plead sufficient facts suggesting that (1) a principal/agent relationship existed, (2) the principal controlled or had the right to control the alleged agent’s conduct and (3) the alleged conduct fell within the scope of the agency.
“We need not—and do not—decide here whether Bilek’s allegations are sufficient, if true, to prove his vicarious liability claims,” the panel wrote. “But we find that his allegations include enough detail to render his actual authority theory of agency liability plausible” enough to survive dismissal.
The panel noted that Bilek’s theory of liability was supported by factual allegations that the lead generators initiated automated calls soliciting FIC’s health insurance, and that FIC authorized the lead generators to use its approved scripts, trade name and proprietary information in making the calls.
“Indeed, Bilek spoke with a lead generator directly who quoted him [FIC’s] health insurance,” the court noted.
Bilek also alleged that the lead generators were paired with these quotes in real time by HII—the company FIC contracted with to sell its insurance. HII then emailed quotes to call recipients and permitted the lead generators to enter information into its system.
“These alleged facts, viewed in the light most favorable to Bilek, support the inference that [FIC] authorized the lead generators to act on its behalf and subject to its control,” the court said.
Somewhat in contrast to what other appellate courts have found, the Seventh Circuit was not persuaded that Bilek’s failure to include allegations that FIC controlled the timing, quantity and geographic location of the lead generators’ robocalls put an end to his claim, holding that “allegations of minute details of the parties’ business relationship are not required to allege a plausible agency claim.” Turning to HII, the panel found specific personal jurisdiction over the company through the lead generators’ alleged initiation of calls to Bilek in Illinois.
“[A]ttributing an agent’s actions to a principal which are intertwined with the very controversy at issue is consistent with the purposeful availment requirement underlying the Supreme Court’s specific personal jurisdiction precedent,” the panel said. “Here, the lead generators’ alleged conduct forms the basis of Bilek’s TCPA and [state law] claims. Bilek plainly alleges that the lead generators made the illegal phone calls to Bilek in Illinois. And just as with [FIC], Bilek’s supporting agency allegations adequately allege that the lead generators acted with [HII’s] actual authority.”
The court reversed dismissal of Bilek’s TCPA lawsuit.
To read the opinion in Bilek v. Federal Insurance Company, click here.
Why it matters: The Seventh Circuit’s decision sends two important messages to TCPA defendants. First, the panel noted that it only needed to find one plausible agency theory in order to keep all the vicarious liability allegations alive—and found the facts alleged sufficient to do so. The court then determined it had specific personal jurisdiction over a defendant based on the alleged conduct of unnamed lead generators that called the plaintiff in Illinois, tying the defendant to the state. Notably, other federal appellate courts, including the Ninth Circuit, have found that there must be sufficient factual allegations suggesting that the defendant had “control” over the timing, recipients, instrumentalities and persons involved in making the at-issue calls for vicarious TCPA liability to attach. Here, such call-specific facts were not necessarily required according to the Seventh Circuit, and the panel found that there were other facts alleged indicative of “control” over the agent sufficient for vicarious TCPA liability.