ARE YOU IN GOOD HANDS? Allstate Stands Victorious Against Vicarious Liability Claims

Hey TCPAWorld!

Check this out. The Seventh Circuit recently issued an opinion in Hossfeld v. Allstate Ins. Co., Nos. 25-1518 & 25-1672, 2026 WL 1815908 (7th Cir. June 24, 2026), holding that Defendant Allstate Insurance Company (“Allstate”) could not be held vicariously liable for alleged violations of the Telephone Consumer Protection Act (“TCPA”) committed by Atlantic Telemarketing Center (“Atlantic”). Reversing the District Court’s judgment, the Court concluded that Plaintiff failed to establish any viable agency theory that would permit Atlantic’s conduct to attach to Allstate.

Factual Background:

Under their contract with Allstate, insurance agents Fleming and Gilmond (the “Insurance Reps”) agreed to comply with the TCPA, and to ensure any vendors comply with the TCPA too. The Insurance Reps sometimes engage entities with which Allstate “has no direct contractual relationship”, called “Non Contracted Telemarketers,” but only if “the agent and Non-Contracted Telemarketers comply with [the] Agency Standards and incorporated Do Not Call Policy.” Hossfeld, 2026 WL 1815908, at *2.

The Insurance Reps retained Non-Contracted Telemarketers Transfer Kings (“TK”). TK agreed to place calls to customers and transfer anyone interested in purchasing Allstate insurance to the Insurance Reps. TK subcontracted the work to Atlantic without informing the Insurance Reps or Allstate that Atlantic would be me telemarketing its products. Before placing the calls, Atlantic had purchased a list of leads from another company called KP Leads (“KP”). KP represented that all the phone numbers on the leads list belonged to people who had consented to receiving phone calls. Atlantic placed twelve calls to Plaintiff advertising automobile insurance provided by Allstate.  Atlantic eventually connected Plaintiff to the Insurance Reps, who later emailed him quotes. Plaintiff never purchased any insurance from Allstate. Claiming Allstate had vicarious liability for Atlantic’s phone calls, Plaintiff filed a class action against Allstate for violating section 227(c) of the TCPA for not honoring its received do-not-call request.

Vicarious Liability

Plaintiff argues that Allstate was vicariously liable for the calls placed by Atlantic, because Atlantic acted as Allstate’s subagent or, alternatively, because Allstate authorized or ratified Atlantic’s conduct. Not so–according to the Court.

For those new here, agency law recognizes various theories for attributing liability from agent to principal, including actual and apparent authority. As the Court explains:

“An agent acts with actual authority if…at the time of an agent’s conduct, ‘the agent reasonably believes, in accordance with the principal’s manifestations to the agent, that the principal wishes the agent so to act…An agent acts with apparent authority when []a third party reasonably believes the actor has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations.[] Absent either type of authority, an agent’s act is still attributable to a principal if the principal ratifies the act.”

Hossfeld, 2026 WL 1815908, at *3 (internal citations omitted).

No Subagency

Plaintiff claims that Allstate was responsible for Atlantic’s calls because Atlantic acted as Allstate’s subagent. The Court explains, however, that:

“There must be appointing authority at each level to support an agency relationship between each subagent and the principal.”

Hossfeld, 2026 WL 1815908, at *4. The principal may authorize an agent to appoint another party to perform delegated tasks, but if the agent lacks authority to make that appointment, then the appointed party is not the principal’s responsibility.

The Court concluded that Plaintiff failed to create a genuine issue of fact that TK had actual authority (expressed or implied) to appoint Atlantic as Allstate’s subagent. At no point did Allstate authorize TK to hire subagents or otherwise communicated its consent to such an appointment. Even Plaintiff conceded that Allstate was unaware of TK’s existence prior to the lawsuit.

Further, the Court stated that Allstate’s agreement with the Insurance Reps, which required its agents to ensure that outside vendors complied with the TCPA, did not implicitly authorize multiple layers of subagency, as Plaintiff argues. Agreements made between a principal and its agent do not automatically extend to the subagent.

Plaintiff “identifies no evidence that would allow a jury to find Allstate directly spoke, wrote, or acted toward [TK] authorizing it to appoint anyone to make telemarketing calls on Allstate’s behalf. Accordingly, [TK] did not have express actual authority to do so.” Hossfeld, 2026 WL 1815908, at *5.

The Court also stated that Plaintiff did not present any evidence indicating implied actual authority. With no actual or implied authority, Plaintiff could not succeed in holding that Allstate was vicariously liable on a subagency theory.

Plaintiff’s Alternative Theories Miss the Mark

Plaintiff also argues that Allstate is liable for Atlantic’s calls either because Atlantic had apparent authority to make the calls or because Allstate ratified them. Again–not so!

Apparent Authority

“Apparent authority … is created by a person’s manifestation that another has authority to act with legal consequences for the person who makes the manifestation, when a third party reasonably believes the actor to be authorized and the belief is traceable to the manifestation.”

Restatement § 3.03. Apparent authority arises only from the principal’s own words or conduct that would reasonably lead a third party to believe an agent is authorized to act on the principal’s behalf. Plaintiff offered no evidence that Allstate communicated with him or otherwise acted in a way that would suggest Atlantic was authorized to place those calls on Allstate’s behalf. Plaintiff also fails to raise an issue of fact that he reasonably relied on Atlantic’s apparent authority, as he does not indicate that he took any actions after receiving the calls, and conceded to not purchasing any of Allstate’s products. Therefore, the Court concluded that his theory of apparent authority fails.

Ratification

Finally, Plaintiff argues Allstate ratified Atlantic’s calls to him by accepting the benefits arising from the placement of mass calls, resulting in insurance quotes and hundreds of issued policies for Allstate. The Court, however, disagrees. The TCPA’s private right of action is limited to calls made to the plaintiff, and Plaintiff here has failed to show that Allstate knowingly accepted a benefit from the specific calls placed to him, as he did not purchase any insurance.

Next, Plaintiff attempts to argue that Allstate ratified Atlantic’s actions by failing to act. However, ratification through inaction requires evidence that the principal knew the material facts underling the agent’s conduct. However, there was no evidence that Allstate knew Atlantic was placing these calls. Even assuming Allstate eventually learned that Atlantic was placing calls, the Court found that Allstate “promptly traced the problematic calls to [TK] and immediately began a thorough investigation into the calls and the source of the leads. And within a few months of the investigation and meeting with [TK’s] representative, Allstate prohibited its insurance agents from contracting with either [TK] or Atlantic.” Hossfeld, 2026 WL 1815908, at *7. Thus, the Court found there was no ratification.

The Seventh Circuit got this one right. Companies should not be held liable for the conduct of downstream vendors they neither authorized, controlled, nor knew existed. At the same time, the opinion is not a license for companies to relax their compliance protocols. Businesses should continue to maintain robust TCPA compliance programs, carefully vet their marketing vendors, and promptly investigate and address any potential breaches. Coincidentally–that’s something Troutman Amin can assist with.

Give us a call and see you on the next one!