Allegations of Contract and Control Keep TCPA Suit Alive in Pennsylvania Federal Court

TCPA Connect

The purported existence of a telemarketing contract and facts suggesting control over the calling party was enough to avoid dismissal of a Telephone Consumer Protection Act (TCPA) claim for vicarious liability in Pennsylvania federal court.

Zachary Fridline registered his cellphone number on the National Do Not Call Registry on Sept. 12, 2005. In September 2021, he received a marketing call from Vanguard Vehicle Armor soliciting Integrity Vehicle Group’s automobile warranty services.

Fridline wrote a letter to Vanguard asking it to stop calling him, but he received several more calls. Vanguard also mailed a copy of Integrity’s automobile warranty contract to Fridline’s residence.

Each time he received a call, Fridline told Vanguard to stop, but when the calls continued, he filed suit against Vanguard and Integrity.

According to Fridline, Vanguard and Integrity entered into a contract requiring Vanguard to promote Integrity products on their telemarketing calls to generate new customers; Integrity then accepted business originating through Vanguard’s telemarketing calls.

Fridline also alleged that Integrity had “day-to-day control” over Vanguard’s actions, providing call volume and the number of leads it would purchase as well as instructions about the states that the companies were allowed to make calls into and restricting other states where they could not make calls.

Integrity responded with a motion to dismiss, arguing that Vanguard made the calls at issue and that it could not be vicariously liable for Vanguard’s actions.

U.S. District Court Judge Matthew W. Brann disagreed, finding Fridline’s allegations that Vanguard had actual authority to act on Integrity’s behalf sufficient to keep the suit alive.

While the court acknowledged that some of Fridline’s allegations were conclusory—such as the “day-to-day control” claim, which did not specify what control Integrity had and how it was exercised—his other allegations passed scrutiny.

“Fridline has plausibly alleged that a contractual relationship existed between Vanguard and Integrity, for which Integrity specified the volume of calling and leads and the states to which the calls were made,” the court wrote. “He has alleged that Vanguard called him to solicit Integrity’s auto insurance five times, and mailed him a contract on Integrity’s behalf twice. These facts make it reasonable to infer that a telemarketing contract existed between the parties. While Fridline ‘does not allege the specifics of any contractual relationship between [Vanguard] and [Integrity] … requiring h[im] to do so prior to discovery would be unreasonable.’ ”

A contract does not necessarily create an agency relationship as a matter of law, Judge Brann noted, but it can, depending on the degree of control expressed through the contract terms.

“The point is that additional allegations demonstrating an exercise of control, through interim instructions or otherwise, might be necessary in some cases to render an agency allegation plausible, but they are not a required element or ‘hallmark’ of agency whose absence in the pleadings mandates dismissal as a matter of law,” the court added. “It need only be plausible from the face of the complaint that the proposed agent could have issued such interim instructions because it had the ‘power’ to do so.”

It will often follow from the fact of contracting for telemarketing services that the contractor has the right to issue additional instructions—for example, to instruct the telemarketers that they are not to call persons registered on the “do not call” list, or to issue a script.

In contrast, where the complaint alleges a different kind of contractual relationship or the nature of the relationship is too unclear to determine why one company mentions another in its solicitations, additional allegations would be needed to plausibly allege that the defendant had the power to control the manner and means of those solicitations, the court explained.

“Under these circumstances, where plaintiff has alleged that a telemarketing contract existed requiring Vanguard to solicit on Integrity’s behalf, it is plausible that Integrity had the power to direct the manner by which Vanguard fulfilled these telemarketing services,” Judge Brann wrote.

While he recognized that the assumption of the contracting party’s powers was an inference, “such reasonable inferences must be construed in favor of the non-moving party at the dismissal stage.”

It is likely that all of the documents and information that establish or refute the details of the agency relationship are exclusively within the control of the defendant, the court noted, requiring discovery on the issue.

On a motion to dismiss, Fridline’s allegations were enough, the court concluded.

“If discovery reveals that Integrity had no such power under its contract with Vanguard, then judgment may be entered in favor of Integrity at that time,” the court said, denying the motion to dismiss.

To read the memorandum opinion in Fridline v. Integrity Vehicle Group, Inc., click here.

Why it matters

While the court acknowledged that the mere existence of a contract would not be enough to establish an agency relationship for purposes of vicarious liability under the TCPA, the plaintiff’s additional allegations about the volume of calls and leads, the instructions given by the alleged principal to the alleged agent placing the calls, and the specific details included in the calls and correspondence sent to the recipient were sufficient to overcome a motion to dismiss. This decision may make it easier for TCPA plaintiffs to meet the required pleading threshold to show vicarious liability and could make it more difficult for TCPA defendants to prevail on motions to dismiss where questions of vicarious liability are in play.



pursuant to New York DR 2-101(f)

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