Aaron Franklin is an independent State Farm agent State Farm Chattanooga, Tennessee.
His website boasts of his proximity to Volkswagen & Amazon and touts he has been proudly serving the Chattanooga area for over 18 years.
But on May 24, 2023 an employee of his office would send a very costly text message to one Gabriel Bou Nater.
According to State Farm, Franklin’s agency had engaged in a very common practice–it had purchased a lead from an online website operator connecting consumers with small businesses–like Franklin’s agency–that can provide cost effective services. The lead provider was allegedly Ads Logistix and the website where the Plaintiff purportedly provided his information was 1insurancerates.com.
One problem though– Plaintiff denied visiting the website or providing consent.
Nonetheless, State Farm argued it could not be liable for the calls because its Do Not Solicit policy advises agents that it does not authorize them to make prerecorded calls and that fact, coupled with the apparent consent, means the calls at issue were not “fairly traceable” to State Farm.
State Farm attempted to rely on the Baroness‘ huge win in Bacarri v. Carguard to support its cause but the Court found this case was different.
In Bacarri Troutman Amin, LLP had introduced direct evidence on behalf of Carguard that the calls at issue were definitively prohibited by the Defendant, State Farm had not gone far enough in the Court’s view.
The problem for all involved was a robocall pitching insurance that was sent the day before the Franklin text message. That robocall advertised insurance services. And that was the call Franklin was being called to account for.
State Farm correctly argued there was no connection between the robocall and the text message–the number the call was made from did not belong to Franklin, the content of the message did not mention State Farm, and no other evidence existed the call came from Franklin–but the mere coincidence was too much for the court to ignore.
The Court went on to deny State Farm’s motion to dismiss on vicarious liability as well. The Court determined the allegations of the complaint were sufficient to keep it in the case. Specifically Plaintiff alleged State Farm’s insurance agents are authorized to hire third parties, including the unknown entity that contacted him, for marketing purposes. While that allegation seems to fly in the face of the DNS policy State Farm submitted, that policy was not properly considered on a motion to dismiss and the Court refused to credit it.
This case is very similar to the recent Hossfield loss for Allstate.
And it has shades of the recent ruling in Deshay involving Keller Williams.
In all three cases the big name brand is being held liable for the actions of captive independent contactors within their umbrella. It is REALLY not looking good for companies hoping to leverage ICAs to defeat liability in TCPAWorld (at least not early in cases.)
Really important to note that the Franklin Agency did NOT make the robocall at issue and did NOT accept a warm transfer from the robocaller. All it did was a send a text message to a lead. But because SOMEBODY ELSE made a robocall the day before selling insurance State Farm is trapped in a TCPA class action.
Its yet another risk to buying third party leads. If that lead is sold multiple times–and they almost always are unless you are buying exclusive leads– you may be on the hook for calls someone else made.
Really pretty tough.
Not to worry though we have a TON of great compliance tips and tricks we will be sharing at the Law Conference of Champions on July 15, 2024! In person tickets are SOLD OUT (except for clients and R.E.A.C.H. members) but virtual passes are available.
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Kudos to you, Czar, for bringing these issues to the attention of all. Even with “exclusive” leads, many of those unscrupulous lead vendors resell that same “exclusive” lead to multiple unwitting sellers. All the more reason why R.E.A.C.H.’s mission is badly needed to (hopefully) reduce the “unscrupulous” population. I have given thought to the idea of publishing a “shame” list of “dirty” lead vendors, but realize that would likely not work because the lead vendors often utilize multiple names to avoid detection and have their name affixed on their door with Velcro.