A recent ruling by the Ninth Circuit took an expansive view of vicarious liability under the Telephone Consumer Protection Act (TCPA).  Reversing the district court’s grant of summary judgment, the court in Gomez v. Campbell held that a marketing consultant could be held liable for text messages sent in violation of the TCPA, even though the marketing consultant itself had not sent the texts and even though the texts were sent on behalf of the marketing consultant’s client, not the consultant itself.

Among other things, the TCPA prohibits (with certain exceptions) the use of automatic telephone dialing systems in making calls to cellphones.  Both the Federal Communications Commission (FCC) and the courts have interpreted this provision to bar the use of automated systems to send unsolicited texts to cellphones.  In Gomez, the Campbell-Ewald Company had been hired by the Navy to conduct a multimedia recruiting campaign.  Campbell-Ewald had then outsourced the text-messaging component of the campaign to a third party, Mindmatics.  Mindmatics then allegedly sent text messages to the plaintiff and others who had not given consent.

On appeal, Campbell-Ewald raised two variations of the arguments that it should not be held liable for texts that it had not itself sent.  First, Campbell-Ewald argued that it did not “make” or “initiate” any calls under the TCPA because Mindmatics had sent the texts.  As the statue only provides for liability for those that “make” or “initiate” prohibited calls, Campbell-Ewald argued that it could not be held liable.  Second, addressing another potential avenue of liability, Campbell-Ewald noted that the FCC had interpreted the TCPA to allow for liability against those “on whose behalf” unsolicited calls are made.  But, Campbell-Ewald argued, it could not be held liable on this ground either because the texts had been sent on behalf of its client, the Navy, not Campbell-Ewald.

In the end, the Ninth Circuit sidestepped both these arguments and found Campbell-Ewald potentially liable on a third basis, “ordinary tort-related vicarious liability rules.”  The court noted that where a statute is silent on vicarious liability—as the court judged the TCPA to be—traditional common law standards of vicarious liability apply.  Thus, the court held, Campbell-Ewald could be liable under the TCPA based on the agency relationship between Campbell-Ewald and Mindmatics.  The court further noted that FCC had stated that the TCPA imposes liability “under federal common law principles of agency,” and held that the FCC’s interpretation was entitled to deference.

Finally, the court noted that it made little sense to subject both the actual sender and the ultimate client to liability, while absolving the middleman marketing consultant, noting, “a merchant presumably hires a consultant in party due to its experience in marketing norms.”

The decision reinforces the importance for companies to closely monitor anyone sending texts or placing calls on their behalf or at their direction.  Following Gomez, it is clear that any company that had a role in sending unsolicited calls or texts can potentially be held liable under the TCPA; and the company with the [...]

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