If you own a business that provides autodialing platform services, can you be held liable under the TCPA when your clients use your platform’s services to place unlawful calls?  Recently, a lower court within the Seventh Circuit said yes.

In Cunningham v. Montes, Case No. 16-cv-761-jdp, 2019 U.S. Dist. LEXIS 74721 (W.D. WI May 2, 2019), the court denied Defendants motion for summary judgment based on Defendants’ arguments that: (1) an automated calling platform provider and the platform’s owner could not be held liable for TCPA violations caused by businesses using the platform’s services, because the platform provider was not the one making or initiating the calls; and (2) the Defendants are shielded from liability by §230 of the Communications Decency Act. 

Factual Background

To provide some background, Defendant Michael Montes owned and operated several businesses that provided robocalling, predictive dialing, and virtual telemarketing services to customers seeking to engage in high-volume telemarketing operations. Montes provided these services through TollFreeZone.com, Inc.

Once customers had access to the platform, they were able to upload a recorded message and phone number lists into the system and launch auto-dialing campaigns themselves. They were also able to "scrub" their phone number lists so that numbers on the federal Do-Not-Call registry would be removed.

Because TollFreeZone.com had no other employees, Montes performed all of the activities himself. Often times, customers called Montes with questions about using the auto-dialing platform. His involvement in the telemarketing campaigns run through TollFreeZone.com varied. At times, Montes would do “all the legwork” by loading the client’s data and recordings into the system and hitting “send or start.” He would also help write the prerecorded messages. However, Montes never personally made phone calls, lent his voice for prerecorded messages, or monitored his customers to ensure they were complying with the TCPA.

Plaintiff Cunningham received numerous unsolicited, telemarketing calls from Montes’ customers between 2015 and 2018. On these grounds, Plaintiff filed suit against Montes and TollFreeZone.com, Inc. alleging violations of the TCPA. Defendants moved for summary judgment. 

Whether Defendants “Made” the Prohibited Calls

First, Defendants argued on summary judgment that they were not liable under the TCPA because the TCPA only applies to those who “make” calls, and neither Montes nor TollFreeZone.com made the prohibited calls. They simply provided an auto-dialing service that the clients could use, but the clients were the ones who actually made the calls. The court rejected Defendants’ argument and held that Plaintiff had provided enough evidence from which a reasonable jury could conclude that Montes had significant control over, and knowledge of, his client’s robocalls.

In reaching its decision, the court relied on the FCC’s 2015 Omnibus Ruling. Pursuant to the 2015 Ruling, one can violate the TCPA either by "taking the steps necessary to physically place a telephone call," or by "being so involved in the placing of a specific telephone call as to be deemed to have initiated it." In making this determination, a court must consider several factors, including: “(1) the extent to which the defendant controls the call's message; (2) the extent to which the defendant controls the timing or initiation of the call; (3) The extent to which the defendant controls who receives the call; (4) whether the service is ‘reactive in nature,’ meaning that it places calls in a manner that is arranged by the customer rather than the defendant; (5) the extent to which the defendant ‘willfully enables fraudulent spoofing of telephone numbers’ by offering that functionality to clients; (6) the extent to which the defendant ‘assists telemarketers in blocking Caller ID’ by offering that functionality to clients; and (7) whether a defendant ‘who offers a calling platform service for the use of others has knowingly allowed its client(s) to use that platform for unlawful purposes.’”

Here, the court found that Montes had extensive control over the calls made. Plaintiff adduced evidence that Montes actually set up and ran some of his clients' campaigns from start to finish. In some cases, he even wrote the scripts for the prerecorded calls. Further, the court found that Montes knowingly allowed his clients to use his website to make prohibited calls. In his deposition, Montes testified that he believed that the language in the terms of use advising customers to abide by all federal and state laws absolved him of any legal liability for his customers' actions. He also testified that he started blocking calls to four states after he learned about adverse regulatory activity. He even testified that he took no action to ensure TCPA compliance by his customers. The court found that these circumstances supported an inference that Montes knew that his clients' campaigns violated that TCPA, and that he helped them avoid the consequences.

Ultimately, the court emphasized that the 2015 FCC ruling makes it clear that “a provider of auto-dialing services cannot blithely sit back and blame his customers for any TCPA violations that result from their use of his service.”  And that is what Defendants did in this case.

Communications Decency Act

Finally, Defendants argued that even if they made calls in violation of the TCPA, they were shielded from liability by §230 of the Communications Decency Act.  The court rejected this argument and held that Plaintiff had produced enough evidence to show that Defendants were not entitled to immunity under the Act.

The Communications Decency Act bars any suit against an "interactive computer service" if that suit seeks to treat the service as "the publisher or speaker of any information provided by another information content provider." 47 U.S.C. § 230(c)(1). However, the court held that §230(c)(1) does not apply to TCPA liability because the harm addressed by the TCPA is not related to the content of the robocalls. In other words, “the TCPA holds purveyors of illegal robocalls liable not as publishers of objectionable content, but as tortfeasors who intrude on the privacy of others.” The court went on to note that even if §230(c)(1) applied, the evidence showed that Montes exerted control over the clients’ use of the platform. As such, that the platform was not a “neutral conduit” for his clients' messages, such that he would be entitled to immunity as an internet service provider.

As Cunningham shows, the TCPA’s expansive reach leaves many businesses and business owners susceptible to TCPA liability. Notably, this case serves as an important reminder to providers of automated calling platforms. If you wield excessive control over the calls your clients make while using your platform, you too can be held liable under the TCPA.

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