A federal court in California has dismissed a class action
lawsuit against Taco Bell alleging violations of the Telephone
Consumer Protection Act (TCPA), ruling that an advertiser is not
vicariously liable under the statute for text message campaigns
carried out by agencies on its behalf unless the advertiser
controls the manner and means of the campaign. In Thomas v. Taco Bell Corp., plaintiff
alleged that Taco Bell was vicariously liable for unauthorized text
messages in connection with a text message marketing campaign
conducted by the Chicago Area Taco Bell Local Owners Advertising
Association (the Association), a non-profit association of local
Taco Bell restaurants owners. The U.S. District Court for the
Southern District of California granted Taco Bell's motion for
summary judgment, finding no vicarious liability.
According to the district court, while the plain language of the
TCPA assigns civil liability to the party who personally
"makes" a call in violation of the TCPA, the statute is
silent on vicarious liability. Under Supreme Court precedent,
however, absent a clear expression of intent on the part of
Congress to apply another standard, the court must presume that
Congress intended to use traditional standards of vicarious
liability, including agency and alter ego doctrines. The
court rejected plaintiff's argument that the TCPA's
provision applying to cellular phones, 47 U.S.C. §
227(b)(1)(A)(iii), employs a broader standard of liability that a
party can be held liable if text messages are sent on its
"behalf" - i.e., if a party receives benefit from the
text message.
In order to hold Taco Bell vicariously liable, the court held
that plaintiff was required to demonstrate that either the
advertising agency or its subcontractor who "pushed" the
messages acted as an agent of Taco Bell - "that Taco Bell
controlled or had the right to control them and, more specifically,
the manner and means of the text message campaign they
conducted." The court concluded that plaintiff had
failed to meet her burden because she did not present evidence that
Taco Bell directed or supervised the manner and means of the text
message campaign conducted by the Association and its two agents,
that the company created or developed the text message, or that it
played any role in the decision to distribute the message by way of
a blast text.
The court rejected plaintiff's "purse string"
argument - that Taco Bell's marketing policy requiring approval
from Taco Bell for the use of funds to cover the Association's
expenses for a local campaign established that Taco Bell had
"unfettered control over the Association" - finding that
the funds established insufficient evidence of control over the
manner and means of the text message. At best, the court
found that the evidence established that Taco Bell approved of and
authorized the expenditure of funds, but mere approval of funds
cannot be equated with control over the manner and means by which
the campaign was designed and executed. The court likewise
rejected the argument that Taco Bell's participation as a
member of the Association, and the participation of its field
marketing manager as a member of the Association's board,
created an agency relationship. The field marketing
manager's votes, both as a representative of Taco Bell in the
general Association vote, and as the company-appointed board
member in the board vote, constituted minority votes and plaintiff
presented no evidence that the Association could not have proceeded
with the campaign without those votes.
Viewed in the light most favorable to her, plaintiff's
evidence demonstrated Taco Bells' knowledge, approval, and
administration of funds related to the marketing, but this evidence
"do[es] not amount to controlling the manner and means of the
text message campaign." Plaintiff's evidence fell short of
establishing that Taco Bell directed or supervised the text message
campaign that was carried out by the Association and its two
agents. Consequently, Taco Bell could not be held vicariously
liable for their actions and summary judgment was granted in Taco
Bell's favor.
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