The United States District Court for the Northern District of West Virginia recently reversed its position on vicarious liability under the Telephone Consumer Protection Act, granting summary judgment for defendants UTC Fire and Security Americas Corporation, Inc. and Honeywell International, Inc. in multi-district litigation. In doing so, the court joined the growing list of federal district courts that have limited a plaintiff's ability to recover under the theory of vicarious liability proposed by the FCC's ruling in In re Dish Network, LLC, 28 FCC Rcd. 6574 (May 9, 2013). The case is In re Monitronics International, Inc. Telephone Consumer Protection Act Litigation, 2016 U.S. Dist. LEXIS 177105 (N.D. W.Va., Dec. 22, 2016).
In the Monitronics MDL the plaintiffs did not contend that either UTC or Honeywell were directly liable under the TCPA. Rather, they argued that both were liable for the actions of their authorized third-party dealers under a theory of agency or vicarious liability. Specifically, the plaintiffs alleged that they were called by the defendants' authorized dealers and resellers in violation of their registration on the national do-not-call registry.
While acknowledging the FCC's position that "a seller may be liable for [TCPA] violations by its representatives under a broad range of agency principles," the court nonetheless found that such agency liability is narrowly construed, and that the plaintiffs in this case had failed to present sufficient evidence to withstand summary judgment, most notably any indication that either UTC or Honeywell controlled "the manner and means of the solicitation campaign" conducted by its third-party dealers. In re Monitronics, 2016 U.S. Dist. LEXIS 177105 at *19. The court rejected the plaintiffs' attempt to impose vicarious liability based on evidence that the third-party dealers were allowed to represent themselves as "authorized representatives" of UTC and Honeywell, and noted that a defendant's ratification of a vendor's actions would still fail to establish liability under the TCPA as long as the vendors retained sufficient discretion to preclude an agency relationship. This was true despite the plaintiffs' factual allegations that the defendants permitted third parties to represent that they were authorized representatives, that telemarketing scripts were provided by the defendants, and that the defendants did not move swiftly enough to stop the illegal calling when it came to their attention.
By joining the growing ranks of federal district courts that have clarified the FCC's Dish Network ruling on vicarious liability, and by overruling its own prior decision in Mey v. Monitronics International, Inc., 959 F. Supp. 2d 927 (N.D. W.Va. 2013), the Monitronics court has paved the way for easier and swifter resolution of similar allegation of vicarious liability under the TCPA. However, it bears noting that Monitronics does not completely shut the door on such claims, and care must be taken to avoid creating the very agency relationship needed to invoke the statute.
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