Light at the End of the Tunnel for Some Defendants Under the Telephone Consumer Protection Act

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Explore:  Advertising TCPA

In recent months, three district courts have limited the scope of liability under certain subsections of the Telephone Consumer Protection Act (“TCPA”) for defendants who did not themselves send unsolicited calls, texts, or faxes to consumers. These courts concluded that the defendants were not liable for the alleged violations of the TCPA simply because the calls, texts, or faxes were made by another entity on the defendants’ behalf, or because defendants funded the allegedly unsolicited marketing communications. These recent cases show increased skepticism by courts of vicarious liability theories under the TCPA, and their reluctance to award the significant statutory damages that are sought in TCPA class actions under indirect liability theories.

On November 27, a district court granted summary judgment for a defendant in a TCPA case involving an allegedly unsolicited fax advertisement. In Zersen v. PT Insurance Group, et al., No. 11 C 7919, 2012 U.S. Dist. LEXIS 167783 (N.D. Ill. Nov. 27, 2012), an individual who had a 50% ownership interest in the defendant, Underwriters, hired an advertising company to send faxes advertising a different company, PT Insurance Group. Despite the fact that Underwriters paid for the faxes and its half-owner had hired the entity that sent the faxes, the court held that Underwriters was not liable under the TCPA because there was no evidence that the half-owner acted on Underwriters’ behalf when he arranged for the advertisements promoting a different company.

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