Federal court gives roadmap to holding sellers accountable for the actions of their telemarketers - agency law
- Peter Schneider
- Nov 20, 2024
- 5 min read
Updated: Jul 22
Most telemarketing calls are initiated by someone other than the seller which is why Congress allowed recipients of unwanted phone calls to hold the telemarketer and the seller accountable together: TCPA 47 U.S. Code § 227(c)(5): "A person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed . . .". It makes sense because telemarketers aren't dialing the phones selling wares without financial incentives and the TCPA aimed to incentivize sellers to police their telemarketers.
The federal courts perverted Congress's intent by inventing rules that sellers could only be held accountable via principles of agency. In a nutshell TCPA plaintiffs now had to prove an agency relationship between the telemarketer and seller through actual authority, apparent authority, inherent authority, or ratification.
This can be a difficult hurdle to overcome because the Telemarketers and the people they are calling for use the system to avoid being held accountable.
Most junk telemarketing calls selling stuff for American businesses are initiated in places like India and Pakistan. You can't sue them and the American seller will sit there with a shit eating grin "we had no idea this overseas telemarketer would break the law! We told them not to!"
We can whine about it but that's how it is, so every time a federal court offers up how to beat sellers at their own game, we should all listen. The judge in federal telemarketing case just gave an interesting opinion in Harrison v. Humana, 2024 WL 4828737 (W.D. Ky. Nov. 19, 2024). In this lawsuit plaintiff Carlton Harrison received at least seven prerecorded calls from various phone numbers and he believed the calls were from a third party selling for Humana. In one call he spoke with someone at BAShealth.com, and then was transferred to an employee of Humana. Harrison filed a class action telemarketing lawsuit against Humana, and Humana moved to dismiss.
In its motion, Humana seeks dismissal of the TCPA claim because any alleged injury suffered by Harrison is not traceable to Humana. Thus, Humana contends that Harrison lacks standing to assert the TCPA claim against it. The court denied the motion.
In its motion, Humana disagrees with the allegations and instead argues that the callers were not its agents. That argument, however, goes to the merits of Harrison’s claims against Humana. Because Harrison has stated colorable claims arising under the TPCA, this Court has standing to hear the matter and Humana may later challenge the sufficiency of the evidence supporting the TCPA claims.
Humana also moved to dismiss under FRCP 12(b)(6) "because the pleading fails to state a claim under the TCPA."
It contends that Harrison failed to allege that Humana is vicariously liable or directly liable for any calls made in violation of the TCPA. Harrison asserts, however, that Humana may be liable based on agency law and points to this Court’s recent decision in Jewell v. Magnolia Bank, Inc., No. 3:23-CV-78-RGJ, 2024 WL 203972 (W.D. Ky. Jan. 17, 2024). In addition, Harrison contends that he has alleged that at least one of the calls was made by Humana.
The court went on to deny the motion.
For purposes of the motion to dismiss, the Court must consider whether Harrison has alleged “factual content that allows the court to draw the reasonable inference that [Humana] is liable for the misconduct alleged.” Explicit pleading of an agency relationship is not required. As reflected in the Complaint, all four of the TCPA claims are couched in terms of “[t]he foregoing acts and omissions of Defendants and/or its agents . . . .” While Humana is critical of Harrison’s allegations, it would otherwise be impossible for her to know of the alleged caller’s relationship with Humana—if any—without discovery.
And the court touched on several theories of liability.
For purposes of the motion to dismiss, the Court must consider whether Harrison has alleged “factual content that allows the court to draw the reasonable inference that [Humana] is liable for the misconduct alleged.” Explicit pleading of an agency relationship is not required. While Humana is critical of Harrison’s allegations, it would otherwise be impossible for her to know of the alleged caller’s relationship with Humana—if any—without discovery.
Apparent Authority
As this Court explained, “[a]pparent authority exists when (1) the principal manifests that another is the principal’s agent, and (2) it is reasonable for a third person dealing with the agent to believe the agent is authorized to act for the principal.” . . . Construing the Complaint as a whole, these allegations reflect that the callers were holding themselves out as agents of Humana and, under the circumstances, it was reasonable for Harrison to believe that the callers were agents of Humana. Thus, the allegations are sufficient to state claim against Humana based on the theory of apparent authority,
Ratification
“[R]atification occurs when an agent acts for the principal’s benefit and the principal does not repudiate the agent’s actions.” “A principal can ratify an act by ‘manifesting assent that the act shall affect the person’s legal relations,’ or by ‘conduct that justifies a reasonable assumption that the person so consents.’” “A person may ratify an act if the actor acted or purported to act as an agent on the person’s behalf.”
Conclusion
In determining whether there has been a violation of the TCPA, “the relevant question is a Defendant’s purpose in initiating the calls, not what occurred on each call.” . . . “Where ‘the context of a call indicates that it was initiated and transmitted to a person for the purpose of promoting property, goods, or services,’ the TCPA has been violated, even if the call was not answered.” In the Complaint, Harrison alleges that the call on May 9, 2023, which was purportedly made from the number 225-208-4162, began with a prerecorded voice and was then transferred to a person who identified him- or herself as being with Humana. Taking these allegations as true, Harrison has stated a TCPA claim for at least one call directly initiated by Humana. The motion to dismiss is denied for this reason.
Harrison didn't win his case, just just survived a motion to dismiss. He will have to build his case during discovery to prevail under one or more of these theories, and that isn't as easy as it looks.
Other useful court opinions on the subject
Ortega v. Ditommaso 2025 WL 440278 (W.D. Tx. Feb 6, 2025) is a by the skin of his teeth opinion. It would appear that Mr. Ortega received a single phone call, investigated, confirmed the Seller's identity through subsequent text messages, and turned it into a lawsuit that survived a motion to dismiss!
Would you like a free case review? Do you have a question or a telemarketing, debt collection, or bankruptcy case that would make a great blog article? We might even review your pro-se complaint or motion in a blog post. Email peter@nwdebtresolution.com and/or nathen@nwdebtresolution.com and we may answer it for everyone!
Are telemarketers harassing you in Washington, Oregon, or Montana? My Washington State TCPA plaintiff law practice can help, just give us a call at 206-800-6000 or email peter@nwdebtresolution.com.
The thoughts, opinions and musings of this blog are those of Peter Schneider, a consumer advocate and Washington State plaintiff's TCPA attorney at Northwest Debt Resolution, LLC. They are just that, his thoughts, opinions and musings and should be treated as such. They are not legal advice. If you are looking to file a lawsuit for TCPA violations and unwanted calls please contact me for a consultation.
Comments