A Win and a Loss (but Mostly a Win!) Court Grants Motion to Dismiss on Vicarious Liability Theory

Earlier this week, a court in New Jersey handed green energy company, Suntuity, a win and a loss on its motion to dismiss. The case is about a putative nationwide TCPA class action alleging unsolicited calls made using an ATDS. See Landy v. Natural Power, Case No. 3:21-cv-00425, 2021 U.S. Dist. LEXIS 154637 (D. N.J.  August 16, 2021).

Let’s start with the win. The Court granted the motion to dismiss.

According to his complaint, the Plaintiff, Steve Landy, received a call from “an unknown caller” and was then “transferred to an operator [also] named Steve. . . who identified himself as working for US Home Solar.” The operator “also solicited [Mr.] Landy to purchase green energy products.” After speaking with Steve from US Home Solar, Mr. Landy was transferred via a “warm transfer” to a third operator named Evelyn, from Suntuity, who tried to convince Mr. Landy to buy “solar energy products.”

(BTW, a “warm transfer” is where one operator stays on the line with the called party during a transfer until the second operator answers.  Critically, as the Court noted, a “warm transfer” does not “imply that the called party consented to speak to either operator.”)

Regardless, Mr. Landy claimed he never consented to the initial call and so, according to Mr. Landy:

Suntuity is vicariously liable for that violation because it ‘knew about the calls, received the benefits of the calls, directed the calls to be placed, and ratified the calls.’

The court disagreed. It is settled law that an entity “cannot be held liable under the TCPA merely because they stand to benefit from the call. There must be a basis for liability in common law agency principles.” And Mr. Landy did not sufficiently allege facts to support agency liability.  He did not allege actual authority because he did not allege “any facts that establish the initial caller had actual authority to make telemarketing calls on Suntuity’s behalf.” Nor did he allege apparent authority because he did not “plead any facts that indicate Suntuity’s conduct led him to reasonably believe the initial caller had authority to act on Suntuity’s behalf.” Instead, he limited allegations to the fact that he was transferred to Suntuity.

As the Court explained, those allegations are simply not enough:

[His] complaint, however, does not assert facts that suggest the initial caller had any relationship with Suntuity, or that would lead a reasonable person to believe the initial caller had authority to act on Suntuity’s behalf.

So all good on vicarious liability, there isn’t any.

As for the loss. The court concluded Mr. Landy had adequately alleged use of an ATDS. Mr. “Landy’s allegation that he heard a pause before the operator of the initial call came on the line is sufficient to allege that an ATDS was used.” Notably, however, the case does not discuss Facebook and is–therefore–not worthy of mention on the Facebook Ruling Resource Page as it doesn’t really move the needle (but this would be another example of courts continuing to apply a low standard for ATDS allegations at the pleadings stage.)

Mr. Landy has until mid-September to amend his complaint, but he faces an uphill battle given the Court’s skepticism about his vicarious liability allegations.

 

 

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