Here is a really interesting one.
An auto warranty company is trapped in a TCPA lawsuit after a court found allegations of direct liability sufficient to find calls made by an apparent seller were actually made by the warranty company itself directly. And the fact that the warranty company and the seller had the same lawyer had a lot to do with it.
In Doyle v. Matrix Warranty, 2023 WL 4188313 (D. N.J. June 26, 2023) the warranty defendant moved to dismiss arguing the complaint failed to allege facts demonstrating either vicarious or directly liability for the calls at issue.
The Court agrees with Matrix that the complaint lacked vicarious liability allegations. Nothing in the complaint showed control over the seller or ratification.
Despite this fact, however, the Court still found Matrix was directly liable for the calls–and you don’t see that every day.
In essence the Court found the two companies were one in the same, and the fact that they were using the same lawyer had a lot to do with it:
Element’s website instructs customers to contact “our” lawyers — at an email address of the Defendant, legal@matrixprotection. This allegation is especially probative given the care that lawyers are expected to take to separate out their work between one client and another.
So apparently the seller’s website directed consumers with legal inquiries to contact Matrix’ legal department–characterizing Matrix’ lawyers as its own.
Certainly Element’s statement that Matrix lawyers represented it is very damaging–but only if it is true. I think it is intereting that the Court accepted Element’s recitation–which may have just been a lie–as binding on Matrix, without any allegation that Matrix knew about the website or permitted the eail address to be supplied.
Moreover, even if Matrix did know about it that seems to be a fact supporting an allegation of apparent authority for vicarious liability purposes–not a fact demonstrating Matrix and Element are the same company.
So really an odd ruling.
In the end the Court found:
“a “plausible” inference, made in light of “experience and common sense,” is that the Defendant and Element are, for present purposes, functioning as one and the same entity, and that the Defendant, for purposes that include the call the Plaintiff received, is doing business under the name Element. This means the Defendant can be liable for Element’s alleged phone call to the Plaintiff — and that, on a direct liability theory, the Amended Complaint passes muster.
Never a dull moment in TCPAWorld.
So take aways here–if a company uses your legal department as its lawyers, you can assume a court will hold YOU liable for their misconduct. So be careful with that.
That being said I find it hard to believe Matrix authorized Element to use the Matrix legal department as “our” lawyer, so this case is really just a cautionary tale about keeping an eye on your vendors/sellers.
Always happy to chat.
And for more INCREDIBLE compliance tips from the Troutman Amin, LLP team–including two former in-house general counsel–you CANNOT miss the Troutman Amin, LLP Summer Marketing/Advertising/Privacy Law conference on July 13, 2023.
We will be providing great and ACTIONABLE compliance tips. Really valuable stuff.
In-person tickets are SOLD OUT but you can still attend our virtual option!