Class action complaints alleging violations of the Telephone Consumer Protection Act (“TCPA”) are on the rise. This is particularly true with respect to short message service (“SMS”) or text message marketing. The TCPA is a “strict liability” statute. This means that a violation of the TCPA imposes liability on the offender regardless of intent. Many service providers have been dragged into court under the theory that unsolicited marketing telephone calls or SMS text messages have been sent “on behalf of” the service provider, and thus the service provider has also violated the TCPA. However, the operative “on behalf of” language appears in a distinct subsection of the TCPA and is only triggered if the consumer has received “more than one” unsolicited telephone call or text message. This provision does not apply if the consumer has only received one unsolicited telephone call or text message.
The TCPA
Pursuant to 47 U.S.C. § 227(c)(5), a consumer may bring a private or class action claim if he/she has “received more than one telephone call [or text message] within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed under this subsection.” Therefore, if a consumer has received multiple unsolicited telephone calls or text messages, a service provider may be found liable for the actions taken by its marketer “on behalf of” the service provider. However, in many instances, complaints only allege receipt of one unsolicited telephone call or text message by a consumer. In those instances, a court must look to 47 U.S.C. § 227(b)(3). Subsection (b) of the TCPA only imposes direct liability on the sender of the unsolicited telephone call or text message. It does not contain the vicarious liability language of subsection (c).
Strict “On Behalf Of” Liability
Recently, a federal court in the northern district of West Virginia recognized this distinction. The court determined that there is no strict “on behalf of” liability under subsection (b) of the TCPA (although the court nevertheless found that a service provider may still be found liable under common law theories of tort joint venture or agency liability principles). In that case, the plaintiff sued the service provider for an unsolicited telephone call made by one of its marketers. The parties agreed that the marketer, and not the service provider, made the call at issue. The service provider conceded that it purchased leads from the marketer. The court determined that the service provider could not be held liable under subsection (c) of the TCPA because there was only one allegedly offending telephone call. The court further determined that subsection (b) of the TCPA does not impose strict liability on a service provider for a telephone call made by its marketer. The court did entertain common law theories of vicarious liability, but the hurdle to be met by a consumer in that instance is higher and requires a strong showing of control over the marketer on the part of the service provider.
Defeating TCPA Claims
It is critical that service providers obtain experienced and knowledgeable counsel if they find themselves subject to a TCPA claim as a result of actions taken by a third-party marketer. The best way to succeed in any TCPA class action or regulatory action is to never appear on a potential plaintiff’s radar screen in the first place. Retaining counsel that knows the intricacies and nuances the TCPA, telephone and SMS marketing, will go a long way toward making sure a class action complaint, or regulatory complaint, never gets filed in the first place.
If you are interested in ensuring that you are compliant with current regulations or if you are facing a class action or direct consumer lawsuit, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
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