FACING THE TEXAS HEAT: Court Holds Working With An Unregistered Telemarketer in Texas Can Be A Costly Mistake

1 Comment

Really interesting one for you today.

As most folks know, Texas has a registration requirement that requires telemarketers making calls in the state to register with the state in many instances.

In what appears to be a first-in-the-state result, the Court in Salaiz v. VSC Operations, 2024 WL 3405601 (W.D. Tex. July 10, 2024) a court just held a product provider can be held liable for a telemarketer’s failure to register and that’s just weird.

In Salaiz the defendant is an administrator of vehicle warranty products. The warranties were allegedly sold by a third-party telemarketer who was not named in the suit. Yet the defendant was sued for the marketers failure to register with the state.

The Defendant moved to dismiss arguing that it did not have to register so how could it be liable for the third-party’s failure to register?

The Court applied basic vicarious liability principles, however, to find Defendant had to face the heat for its “agent’s” failure to register:

“GSP’s telephone solicitations on VSC’s behalf may [] be imputed to VSC, making VSC a “seller” that must “hold[ ] a registration certificate for the business location from which the telephone solicitation is made” to avoid liability. Tex. Bus. & Com. Code § 302.101(a). Plaintiff alleges that although VSC “was registered at one point in time,” its registration “is now suspended.” Compl. ¶¶ 62, 64. Plaintiff has therefore plausibly alleged that VSC violated section 302.101 and VSC’s Motion is denied as to that claim.

Wow.

This is really bad news for folks working with call centers, BPOs and marketers who are not licensed in Texas. Very important to keep an eye on registration requirements folks.

Those of you who attended Law Conference of Champions heard the Duchess talk at length about these requirements–so you are well armed and ready to go. For everyone else– time to do some research so you don’t even up facing the Texas HEAT. 😉

Speaking of heat, check out these #lcoc photos!!!

ABSOLUTELY INCREDIBLE: LCOC24 Changed Everything… And Legal Conference Will Never Be The Same!!!!!

Chat soon.

Discover more from TCPAWorld

Subscribe to get the latest posts sent to your email.

Categories:

Published by Eric "Czar" Troutman

The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.

1 Comment

  1. Although I missed LCOC, I’m well aware of the many states that have Telephonic Seller Registration requirements.

    In fact California requires any/all telemarketers that are either in CA and call other states, or are anywhere else and call into CA. They need to post a $100K bond.

    https://oag.ca.gov/consumers/general/telreg

    While I’m currently awaiting the Public Records Request response I recently filed for, to reveal the current number of CA registrants. Shockingly, as of October 2022 there were only 59 specific firms (!!!!) representing 95 registrants (inc. dba’s). How this relates to the literal billions of calls we get here in CA is pretty telling…

    Courtesy of our friends(??) at the Blacklist Alliance there are only 18 states that do NOT have some form of registration requirements!

    https://www.blacklistalliance.com/blog/demystifying-telemarketer-state-registration-requirements

    So can one assume that even if REACH members are not violating TCPA laws, how many are actually following the state laws? Does REACH require proof of registration of its specific members that fall into said categories? Eric??

    Reply

Leave a Reply