California Court Hangs Up On Vicarious Liability Claims

TCPA Connect

A California court tossed a Telephone Consumer Protection Act (TCPA) action seeking to hold the defendant liable for calls made by a lead generator.

Abante Rooter and Plumbing asserted four claims against Arashi Mahalo, two based on the use of an automatic telephone dialing system (ATDS) and two stemming from Abante’s membership on the National Do Not Call (DNC) Registry.

Arashi did not call Abante. The calls to Abante were placed by DTX Business Solutions, a third-party lead generation company retained by Arashi to contact and screen merchants who might be good candidates for Arashi’s financing services.

Abante did not contend that Arashi actually granted DTX the authority to use an ATDS or to call merchants on the DNC Registry; instead, Abante offered two theories of vicarious liability.

First, Abante argued that DTX had apparent authority. But the record reflected just one action taken by Arashi in support of this argument—when DTX called Abante’s owner to discuss the possibility of financing a project for his plumbing business, it transferred the call to one of Arashi’s employees.

“This conversation certainly could lead one to reasonably conclude (correctly) that DTX possessed the authority to procure leads for Arashi’s financing services,” U.S. District Judge Vince Chhabria wrote. “But Arashi did nothing to give Abante the (incorrect) impression that Arashi, by purchasing leads, had authorized DTX to use an ATDS or to call merchants on the DNC Registry.”

Judge Chhabria similarly rejected Abante’s theory of ratification, noting that Abante introduced no evidence that Arashi accepted the benefits of the agency relationship once it was apprised of DTX’s alleged violations of the TCPA.

“To the contrary, it is undisputed that Arashi canceled its arrangement with DTX after Abante contacted Arashi regarding the alleged TCPA violations,” the court said. “Nor does the record contain any evidence that Arashi, prior to Abante’s communication, remained willfully ignorant of any ‘red flag’ indicating DTX’s unlawful methods for this ‘otherwise commonplace marketing activity.’”

As a final note, the court said it would have dismissed the ATDS-based claims even had Abante demonstrated a viable theory of vicarious liability because the “sum total” of the evidence Abante presented was that its employee heard a “click noise” and a “long pause” before the DTX representative introduced himself.

“[T]his record contains no direct evidence that DTX possessed a predictive dialer or circumstantial evidence that the lead-generation industry typically (or even sometimes) uses predictive dialers,” Judge Chhabria wrote. “Nor is there, for instance, expert testimony with respect to the telltale signs of predictive dialers. … [A] reasonable jury could not return a verdict for Abante on so flimsy a basis.”

Therefore, the court granted summary judgment in favor of Arashi on all counts.

To read the order in Abante Rooter and Plumbing, Inc. v. Arashi Mahalo, LLC, click here.

Why it matters: In addition to making quick work of both of the plaintiff’s vicarious liability theories, the court found the allegations that an ATDS was used to make the calls lacked the necessary evidentiary support to survive summary judgment. 



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