Advertising Law Blog

Two recent decisions clear up the issue of when an advertiser can be held legally responsible under the Telephone Consumer Protection Act (TCPA) for the illegal acts of its representatives. Strict liability for "robocalls" is inapplicable when a third party places the "robocall" or sends a text message for an advertiser client. Instead, these two decisions hold that the traditional standard of vicarious liability applies, and under such a standard, the advertiser must demonstrate the entities sending the call or text in question were acting as an agent of the advertiser (not an independent contractor), that the advertiser controlled the precise manner and means by which the sender conducted the advertising campaign. (Showing that the advertiser and sender are alter egos could be another way to prove liability, but alter ego liability is not the focus of this article).

In a September ruling from the Northern District of West Virginia, Mey v. Pinnacle Security, LLC, the advertiser's summary judgment motion was granted, which means that the plaintiff could not hold the advertiser liable for calls touting the advertiser's services, but which were made by a "lead generator." Diane Mey received a "robocall" to her cell phone advertising a Pinnacle home security system. Since Ms. Mey did not previously consent to the call, it was illegal under the TCPA. However, the call was made by one of four lead generators hired by Pinnacle. The court agreed with Pinnacle that the particular TCPA provision Ms. Mey sued under could not be used against Pinnacle just because the call was placed "on behalf of" Pinnacle. The TCPA does not hold advertisers strictly liable for illegal calls placed by independent contractors. Pinnacle could be held vicariously responsible for the calls of its lead generators, but only if certain conditions existed. The Court wrote, "in order to prove vicarious liability... more of a connection to the caller must be shown. In order to prevail under this theory, Mey must show that the actual caller 'acted as an agent' of Pinnacle, 'that [Pinnacle] controlled or had the right to control them and, more specifically, the manner and means of the [solicitation] campaign they conducted.'"

Under the facts Mey presented, the Court ruled in Pinnacle's favor: "Mey has failed to create an issue of material fact with regard to Pinnacle's ability to control the manner and means of the calls made on its behalf. Pinnacle has presented evidence, by way of an affidavit, that calls that it makes directly are only placed by live agents. However, it admits that it purchases leads from outside vendors, and that at the time of the Call, it utilized four 'outside companies' to provide sales leads. ... Evidence provided by Pinnacle also makes clear that Pinnacle has little to no control over the means or manner by which these companies generate sales leads for Pinnacle."

The West Virginia ruling closely echoed a June decision from the Central District of California, Thomas v. Taco Bell Corp. In that case, the plaintiff filed a class action after receiving a text message advertising Taco Bell which she said was unsolicited. (The TCPA treats text messages the same as "robocalls"). However, the text message was sent not by Taco Bell, but by a non-profit corporation with the unwieldy name of Chicago Taco Bell Restaurant Owners Advertising Association. Based on their names, there is obviously some relationship between Taco Bell and the texter, but the court said a relationship alone is not enough to hold Taco Bell responsible for the TCPA violations. "Simply stated, Ms. Thomas has not shown that Taco Bell controlled the manner and means by which the text message was created and distributed." The court granted summary judgment in Taco Bell's favor.

CONCLUSION: Soliciting customers through auto-dialed "robocalls" or text messages continues to be a risky practice, but the recent California and West Virginia decisions bring TCPA liability in line with traditional legal standards that a defendant is only responsible for actions that it could have or should have controlled and cannot be blamed for the acts of others if the others were acting independently.