Vicarious liability was a viable theory of liability against a TCPA defendant, the U.S. District Court for the Northern District of Ohio ruled, denying a motion for summary judgment.
In his complaint, Matthew Dickson claimed that Direct Energy delivered multiple ringless voicemails (RVMs) to his cellphone in 2017 advertising its services.
One RVM explicitly stated that the call was from “Nancy Brown with Direct Energy.” Direct Energy moved to dismiss the complaint for lack of standing, arguing that Dickson had suffered no concrete injury because he only received one message.
The district court granted the motion and dismissed the case, (https://www.manatt.com/insights/newsletters/tcpa-connect/single-rvm-insufficient-to-establish-standing-for), holding that the receipt of a single RVM did not constitute a concrete harm sufficient for Article III standing.
But the Sixth U.S. Circuit Court of Appeals reversed the district court’s dismissal (https://www.manatt.com/insights/newsletters/tcpa-connect/sixth-circuit-single-rvm-sufficient-for-standing).
On remand, Direct Energy moved for summary judgment, arguing that it could not be vicariously liable under the TCPA because the calls were actually made by Total Marketing Concepts (TMC), its contractor for marketing services, and its contract with TMC disclaimed any agency relationship.
TMC was not acting with actual or apparent authority when it violated the statute, Direct Energy told the court, nor did Direct Energy ratify the illegal acts of TMC.
In a report and recommendation from U.S. Magistrate Judge Carmen E. Henderson, the court reached a different conclusion.
A genuine issue of fact existed as to whether Direct Energy and TMC had a principal/agent relationship, the court said.
The wording of the operative contract between Direct Energy and TMC did not preclude a finding of agency, the court found, as the record evidence showed that Direct Energy expressly authorized TMC to (among other things) close sales on Direct Energy’s behalf, thereby binding Direct Energy in contracts with customers.
Energy maintained a high level of control over TMC and the telemarketing campaigns. For example, Direct Energy had the ability to audit TMC’s records to ensure its compliance with contractual obligations, had access to TMC facilities and staff, and had the ability to terminate the contract with or without cause.
“As such, Dickson has produced evidence from which a reasonable jury could find that Direct Energy exerted such a level of control over TMC such that there was a principal/agent relationship, despite [their contract’s] assertion otherwise,” the court wrote.
After considering the various theories of authority, the court determined that, while no material fact existed with regard to actual authority, Dickson produced sufficient evidence to create a question with regard to apparent authority.
“Dickson relies in part on TMC’s authorized use of Direct Energy’s trade name and Direct Energy’s approval of the RVM scripts as evidence that Direct Energy allowed third-party recipients of the RVMs to reasonably believe that RVMs were from Direct Energy,” the court said, indicating “more than ‘mere use’ of Direct Energy’s trade name.”
He also produced evidence that could reasonably be interpreted as showing Direct Energy knew, or reasonably should have known, that TMC was sourcing leads in violation of the TCPA and failed to take steps to stop it, including that Direct Energy was notified thousands of times of individuals complaining that they had been contacted without their consent, on some days receiving more than 600 complaints.
All of this was enough to create a question of material fact as to whether TMC acted with apparent authority when it contacted potential consumers who had not opted in to receiving such calls.
The court recommended that Direct Energy’s motion for summary judgment be denied.
To read the report and recommendation in Dickson v. Direct Energy, LP, click here.
Why it matters: Even though the operative contract expressly disclaimed the existence of an agency relationship, the court found that other evidence of apparent authority, including a high level of control over the marketing company that made the calls (from its ability to audit records to its access to facilities), the authorization it provided for the telemarketer to use its trade name and the high number of complaints it received about allegedly illegal calls, was sufficient to allow the case to proceed.