Meaningful Telemarketing Involvement: Court Holds Provider of Virtual Callback Numbers Is Potentially Liable for TCPA Violations

A telemarketer contracted with the operator of dialing equipment to send unwanted telemarketing calls to the plaintiff. That’s a common fact pattern, and it isn’t that unusual for a plaintiff to sue both the telemarketer and the operator of the dialing system. But Spiegel v. EngageTel brings a new twist to TCPAWorld – liability for the company that supplied callback numbers used in a telemarketing campaign. 2019 U.S. Dist. LEXIS 53141 (N.D. Ill. March 29, 2019).

EngageTel provided virtual phone numbers to the telemarketer. The virtual numbers displayed on callerIDs and could be used as callback numbers for do-not-call requests. The plaintiff alleged that the virtual numbers EngageTel provided were “spoofed” – i.e., not the actual numbers from the calls originated. The plaintiff also presented at least some evidence that showed EngageTel worked with the telemarketer to help the telemarketer stay “under the radar” and not visible to consumers. The evidence also showed that EngageTel provided the telemarketer and other clients with compliance-related information, such as states to avoid and area codes viewed as problematic because of negative blogging and call-blocking apps. These facts, according to the plaintiff, were sufficient to show that EngageTel was the “initiator” of the calls.

The court first had to determine whether the FCC’s 2015 Order on the “maker” of a call is binding, or whether it could rely instead on the plain language of the TCPA. Without waiting for the Supreme Court’s decision in PDR Network, the court concluded that it was bound by the FCC interpretation. That’s certainly in line with existing precedent, but there is a chance the Supreme Court could reverse course.

Applying the 2015 FCC Order, the court ultimately held that a jury could find that EngageTel was so heavily involved with the making of the call that it could be deemed the “initiator” under the TCPA. The court proposed three pathways for such a finding. First, the jury could conclude that EngageTel’s virtual numbers were necessary for any calls to take place. Second, the jury could find EngageTel exercised significant enough control over the calls such that it could be considered to have “effectively programmed” the cloud-based dialer. The evidence on this point seemed particularly thin – principally that EngageTel matched virtual number area codes to the area codes of called parties. Finally, a jury could find that that EngageTel controlled the virtual numbers in a manner that affected the telemarketer’s calling behavior and the likelihood that calls would be answered.

EngageTel is significant in that it expands potential TCPA liability beyond the typical seller-telemarketer and creditor-debt collector issues that typically arise. It also relied on direct liability, not a vicarious liability theory, to deny summary judgment. And it is yet another reminder that companies involved in outbound dialing face a difficult balance between exercising enough control to avoid TCPA violations but avoiding exercising such a degree of control that they are held directly liable for calls made by others.