Ninth Circuit Issues Ruling Regarding TCPA Vicarious Liability

In Gomez v. Campbell-Ewald Company, decided on September 19, 2014, the Ninth Circuit Court of Appeals confirmed two emerging principles of Telephone Consumer Protection Act (TCPA) jurisprudence and slightly expanded the reach of the statute.

Jose Gomez received a text message asking him to enlist in the United States Navy.  Gomez's response to this call-to-arms was to enlist an attorney to file a class action lawsuit. He did not sue the Navy because it possessed sovereign immunity, but he sued Campbell-Ewald, the Navy’s marketing consultant who developed the text messaging campaign. Campbell-Ewald then made Gomez an offer of judgment for the full amount of his claim, but Gomez declined it. Campbell-Ewald filed a summary judgment motion, admitting it designed the campaign, but alleging that a non-party named Mindmatics was the sender of the text. In February 2013, the district court dismissed the lawsuit, finding that Campbell-Ewald was protected by the Navy’s sovereign immunity.

The Ninth Circuit has now reversed that dismissal, reiterating two principles this blog has discussed in recent years. First, that the offer of judgment, even though it was for the full amount of Gomez’s claim, did not moot the lawsuit. As readers of this blog know, that position, although not universally accepted by courts, is now the majority view. Second, the potential of vicarious liability under the TCPA was once again confirmed for defendants who do not actually send the text message, autodialed call or unsolicited facsimile in question.

What is new here is a slight expansion of vicarious liability. Campbell-Ewald argued that vicarious liability under the TCPA should apply only to the party whose goods or services were being marketed, which in this case was the Navy. The Ninth Circuit disagreed and ruled that the TCPA’s vicarious liability applies to “any person” and not just the “merchant” whose product or service is the subject of the message, call or fax. If the sender of the message (in this case Mindmatics) was acting as the agent of a defendant (in this case Campbell-Ewald), then TCPA liability applies, even to a middleman who was not the ultimate beneficiary of the message. Campbell-Ewald was effectively whip-sawed by this decision: on the one hand, it was the Navy’s contractor but was not protected by the Navy’s sovereign immunity; on the other hand, it was not the sender of text message, but now faces liability for the acts of subcontractor who sent the text message.

Takeaway: This ruling emphasizes the need for any party in the chain of a marketing campaign involving text messages, auto-dialed calls or unsolicited facsimiles to take precautions that ensure that the other parties to the campaign adhere to the TCPA.

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