Defendant-Business Not Vicariously Liable For Third-Party B2B’s Unsolicited Fax Advertisements In Putative TCPA Class Action

by Benesch
Contact

In Palm Beach Gold Center-Boca, Inc. v. Sarris, No. 12-80178, 2013 U.S. Dist. LEXIS 155912 (S.D. Fla. Oct. 22, 2013), the United States District Court for the Southern District of Florida recently granted summary judgment in favor of a defendant in a putative class action on the grounds that the defendant could not be held vicariously liable for purported violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”).  Notably, Sarris is one of several interrelated putative TCPA class actions nationwide seeking to hold businesses liable for the conduct of third-party marketer Business to Business Solutions (“B2B”).

In Sarris, the defendant, John G. Sarris, D.D.S., hired an independent contractor to market the defendant’s dental practice.  The third-party subsequently engaged B2B to send 10,000 fax advertisements to telephone numbers within a specific zip code.  The plaintiff, Palm Beach Golf Center-Boca, Inc., purportedly received a fax from the defendant sent by B2B.  The plaintiff’s owner, however, did not remember ever seeing the fax, did not have any actual knowledge that the plaintiff received the fax, and could not identify any employee of the plaintiff that could verify that the fax was received.  Instead, the plaintiff’s counsel had obtained the plaintiff’s telephone number from B2B’s fax transmission records from another lawsuit that arose out of B2B’s fax transmissions, and the plaintiff’s counsel (ironically) sent a fax to the plaintiff informing it that it may have a claim against the defendant for violations of the TCPA.

The plaintiff subsequently filed a putative class action against Sarris for the transmission of unsolicited faxes in violation of the TCPA.  The defendant moved for summary judgment on the grounds that the plaintiff was unable to prove that the defendant could be vicariously liable for B2B’s actions under the TCPA.

Relying on the FCC’s recent opinion in In re Joint Petition filed by Dish Network, 28 FCC Rcd. 6574 (2013) (which technically dealt with the application of vicarious liability to sellers for telemarketing calls initiated by third-parties), the District Court held that the FCC’s application of vicarious liability also applied to a “sender” of unsolicited facsimile advertisements under § 227(b)(1)(C). 

In granting the defendant’s motion for summary judgment, the District Court noted that the plaintiff failed to plead vicarious liability in its complaint and instead alleged that the defendant had directly sent the faxes himself.  The District Court held that the plaintiff’s failure to plead vicarious liability, when it was now undisputed that the defendant did not directly send any of the faxes, necessitated that the plaintiff’s claim fail per se.  (The District Court also noted that the plaintiff’s failure to join B2B may have constituted a failure to join a necessary party to the action.) Notwithstanding the procedural defect, the District Court further held that the defendant was still entitled to summary judgment on the vicarious liability theories of agency, apparent authority, and ratification. 

The District Court held that there was no evidence that the defendant had approved the fax at issue, such that there was no evidence that controlled B2B’s actions, and therefore B2B could not be an “agent” of the defendant.  The plaintiff argued that there was a genuine issue of fact as it was B2B’s “custom and practice” of obtaining approval before sending out faxes.  However, the Court held the plaintiff’s claim of “custom and practice” could not create a genuine issue of fact in light of the uncontradicted testimony that the defendant had not approved the fax that was sent to the plaintiff, and therefore a claim of formal agency necessarily failed.

In rejecting the plaintiff’s theory of apparent authority, the District Court noted that apparent authority cannot exist when a third-party believes that the alleged actor is in-fact a principal.  Accordingly, because the plaintiff’s own complaint alleged that the defendant (the now-alleged principal) sent the fax directly and not B2B (the now-alleged agent), the plaintiff could not establish apparent authority.  Moreover, the District Court held that because the the plaintiff’s owner admitted that he did not know whether he received a fax (and instead was relying solely on B2B’s transmission records), it is impossible for the plaintiff to show that it ever “relied” on a representation of B2B. 

The District Court further held that the plaintiff could not prove vicarious liability under a theory of ratification, as the plaintiff could not present any evidence that the defendant was fully informed of the material acts surrounding B2B’s conduct, and that the defendant’s act of contacting B2B’s attorney after learning of the at-issue conduct could only demonstrate repudiation and not ratification. 

Finally, the District Court sua sponte raised the issue of whether the plaintiff had standing under Article III of the Constitution to assert a claim.  The court noted that in order to establish a violation of the TCPA, a plaintiff need only prove that a defendant “sent” a fax advertisement, and does not need to prove that the plaintiff received it.  However, the also noted under the TCPA’s language, only the “recipient” of a fax has suffered an injury.  In this respect, the court further held that the TCPA does not circumvent Article III’s requirement that a plaintiff demonstrate a “distinct and palpable injury” in order to have standing to assert a claim.  Because the plaintiff did not see, know about, or otherwise become aware of the alleged unsolicited fax advertisement until being contact by the plaintiff’s counsel, the court concluded that the plaintiff had suffered no injury in fact under the TCPA. 

Accordingly, the District Court entered summary judgment in favor of the defendant.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Benesch | Attorney Advertising

Written by:

Benesch
Contact
more
less

Benesch on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!