Consumer Finance Litigation

The Northern District of West Virginia, applying the FCC's May 9, 2013 Declaratory Ruling in Dish Network, LLC, 28 F.C.C.Rcd. 6574, recently held that "on behalf of" liability found in §227(c) (5) of the TCPA does not require a formal agency relationship, but can instead rely on principals of apparent authority and ratification to establish vicarious liability under the TCPA. In Mey v. Monitronics Int'l., ---F.Supp.2d---, 2013 WL 4105430 (N.D.W.Va. 2013), the plaintiff sued three defendants for violation of the Telephone Consumer Protection Act's prohibition against calls to telephone numbers on the Do Not Call Registry, 47 U.S.C. §227(c)(5). The plaintiff alleged that two of the defendants, UTC and Monitronics, were vicariously liable, even though they did not physically place the calls themselves, because the third defendant placed the calls on their behalf. Section 227(c)(5) states that "[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 under this subsection may" bring an action for injunctive relief or damages. Defendants UTC and Monitronics each filed motions for summary judgment arguing that the phrase "on behalf of" in §227(c)(5) did not expose them to vicarious liability when they did not actually place the calls. Although the motions for summary judgment were filed before the FCC's May 9, 2013 Declaratory Ruling, the court stayed the action for a year awaiting the anticipated Declaratory Ruling, then upon issuance, gave the parties the opportunity to further brief the effect of the Declaratory Ruling. After extensive briefing, but without oral argument, the court held that the FCC's Declaratory Ruling was based on a permissible construction of the TCPA and that its conclusion that "on behalf of" liability embraces federal common law principals of agency (as opposed to stricter state law principals) was sensible. Id. at 5. Accordingly, the court denied the defendants' motions for summary judgment finding that a reasonable finder of fact could conclude that the defendants UTC and Monitronics cloaked the third defendant with the apparent authority to act on their behalf, exposing them to liability under §227(c)(5). Id. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.