Ninth Circuit Court of Appeals TCPA Ruling: Thomas v. Taco Bell Corporation

In Thomas v. Taco Bell Corp., No. 12-56458 (9th Cir. June 6, 2014), the Ninth Circuit Court of Appeals affirmed summary judgment in favor of Defendant Taco Bell Corporation, holding that Taco Bell could not be held liable as a matter of law for text messages sent to consumers in alleged violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”).

The TCPA prohibits a person from initiating telephone calls, including text messages, to cellular phones without a consumer’s prior express consent. In Thomas, the text messages at issue were not sent by Taco Bell, but were sent as part of an advertising campaign conducted by the Chicago Area Taco Bell Local Owners Advertising Association (the “Association”). In 2005, the Association hired ESW Partners, LLC (“ESW”) an advertising agency, to promote a local sweepstakes for a taco bell product. EDW hired ipsh!net, Inc. (“Ipsh”), which sent the text messages at issue. The plaintiff sought to hold Taco Bell liable for the text messages.

The District Court granted summary judgment in favor of Taco Bell, holding that Taco Bell could not be held liable as it did not send the text messages and did not control the manner and means by which the Association, ESW, and Ipsh sent the text messages. On appeal, the Ninth Circuit affirmed the District Court’s decision. The Ninth Circuit, however, noted that the FCC had recently held that sellers could also be vicariously liable under theories of apparent authority and ratification under In re DISH Network, LLC, 28 F.C.C. Rcd. 6574 (2013). While the District Court did not address these theories of vicarious liability, the Ninth Circuit held that Taco Bell could not be liable under these alternative theories. 

The Court held that the plaintiff did not show that she reasonable relied, much less to her detriment, on any representation of Taco Bell that it had authorized the text messages. Further, the Ninth Circuit held that in order to be liable under a theory of ratification, the plaintiff must prove as a fundamental prerequisite that the entity that initiated the text messages was acting as an agent of the principal that allegedly ratified the conduct. The Court concluded that because the Association, ESW, and Ipsh were not agents of Taco Bell (because Taco Bell did not control the manner or means of the promotion), Taco Bell could not have ratified these entities’ conduct as a matter of law.

 

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