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Innocent Until Proven Guilty: TCPA Complaint Using Unproven Claims in Earlier Suit as Crowbar for “Information and Belief” Allegations Deemed Insufficient

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Determining what allegations are sufficient to establish direct and vicarious liability in TCPA cases is almost as tricky as determining whether ATDS allegations are sufficient.

Just last week I reported that platform providers can be found directly liable for violations of the TCPA undertaken by users of those platforms merely because a “right to control” was alleged in the complaint.  Just yesterday, however, a court in Illinois found “information and belief” allegations a Defendant had the right to control a caller’s conduct insufficient to demonstrate even plausible vicarious liability.  That’s TCPAland for you.

More importantly, however, the Court rejected the premise that unproven allegations in prior suits can serve as a basis for such “information and belief” for new suits against the same Defendant.

In Fisher v. Alarm.com, Case No. 18-cv-2299, 2018 WL 5717579 (N.D Ill. Nov. 1, 2018) the court dismissed a putative TCPA class action against the Defendant on the basis that the complaint did not plausibly allege that the Defendant was vicariously liable for the calls placed by a third party telemarketer.

The Complaint alleged that the Plaintiff had received sixteen calls from a telemarketer he contends (on information and belief) was working for Alarm.com.  In support of his vicarious liability theory Plaintiff alleged that Alarm.com’s Form 10-K Annual Report references the use of the word “telemarketing” and also references pending litigation in California challenging that Alarm.com used such agents and contending Alarm.com allegedly produced training material related to third-party collectors it utilizes.

The Court quickly dispensed with the idea that being sued in other litigation proves Alarm.com used a telemarketing agent to contact Plaintiff:

Those allegations do not save the complaint here. As noted above, that case has not been adjudicated on the merits, and nothing in that case supports an inference that Alarm.com is vicariously liable for the calls made here.

Fisher at *23.

The Court goes on to find that Plaintiff’s “lumping” of defendants–so called “shotgun” pleading– fails to give Alarm.com reasonable notice of what claims it is actually responsible for. As the Court points out, the allegations make it perfectly plausible that one of the dismissed Defendants was wholly, and solely, responsible for the calls and “Fisher cannot put Alarm.com on notice of the allegations against it if the very pleading suggests that other parties could be wholly responsible.”  Id. 

The Court also points out that the allegations in the complaint make it clear that the callers were selling multiple products–not just those offered by Alarm.com:

In some of the allegations when Fisher asked for more information or a website to view he was directed to entities other than Alarm.com. See, e.g., Dkt. 1 at ¶¶191, 199. During one call, the caller explained that Alarm.com is “one of the applications, which is used by most companies for the basic interactive services, so yeah, depending upon your installer…”. Id. at ¶196. When asked for clarification, the caller affirmed that Alarm.com is the interactive part of the security system but 2GIG is the system itself.” Id. at ¶¶197-98. There is only one instance, where a caller directed him to the Alarm.com website. Id. at ¶222. None of these allegations however support a reasonable inference that Alarm.com is the principal and the third-party caller is an agent controlled by Alarm.com.

Fisher at * 3.

Fisher is thus a critical ruling for sellers that leverage lead providers that broker multiple products. Fisher finds that allegations that a lead seller offers a Defendant’s products in addition to other products are insufficient to allege that the Defendant had the right to control the conduct of the third-party telemarketer. This has obvious and wide-ranging import for folks that sell products using third-parties to generate leads or sales.

Also useful for Defendants–the Court joins the chorus of others to find that no private right of action exists for violations of Section 227(d) of the TCPA regarding delivery restrictions on pre-recorded messages. Specifically, the Court finds that the Plaintiff cannot sue Alarm.com for a purported failure to “clearly identi[f]y” the business leaving the message.  This is hardly a surprising result since, as the Fisher court points out, “[n]o court to have considered the issue has found that a plaintiff may bring a claim for technical violations of this provision.” Fisher at *2.

So three critical take aways from a neat and tidy 4 page decision:

  1. Unproven allegations asserted in separate actions against the same Defendant are insufficient to establish “information and belief”‘;
  2. Allegations that a telemarketer attempted to sell a defendant’s goods in addition to other products to a customer does not, in and of itself, mean the seller is vicariously liable for the calls; and
  3. No private right of action for violation of the TCPA’s delivery restrictions of Section 227(d).

Happy Friday TCPAland.

 

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