TCPA Claim Against Taco Bell Fails For Lack of Agency

I mentioned before that a court said Taco Bell wasn’t liable for texts sent on its behalf because the plaintiff didn’t adequately allege the sender was Taco Bell’s agent (See “Franchisor Isn’t Liable Under the TCPA for Franchisees’ Text Message Campaign – Thomas v. Taco Bell“). That ruling was appealed to the Ninth Circuit, and the Ninth Circuit similarly rejected plaintiff’s claims that the main Taco Bell entity (the franchisor) should be held liable for a message sent out on behalf of one of its franchisee-associations:

Ms. Thomas did not present any evidence to the Court that Taco Bell directed or supervised the manner and means of the text message campaign conducted by the Association and its two agents, ESW and Ipsh. She presented no evidence to the Court that Taco Bell created or developed the text message. Nor did she present any evidence to the Court that Taco Bell played any role in the decision to distribute the message by way of a blast text. All of this control over the manner and means of the text message campaign was exercised by the Association, ESW, and Ipsh, and Ms. Thomas has not presented any evidence to the Court demonstrating that Taco Bell controlled the actions of these entities with respect to the campaign. Taco Bell, simply put, had nothing to do with it.

However, although the court affirmed the trial court’s rejection of the claims against the main Taco Bell entity, the Ninth Circuit held that the basis for holding Taco Bell should not be limited to traditional agency principles–it should also include apparent authority and ratification. On this issue, the court agreed with the FCC, which had earlier ruled that traditional agency is not the only route to holding a third party (non-sender) liable for text messages. A few observations about the case:

• it’s a bummer the court chose to issue an unpublished opinion–the case involved consequential issues, and the court was covering new ground
• it’s possible the factual scenario presented by a franchisee advertisement is unique–how will this track to traditional advertiser/sender relationships (will the typical advertiser agreement provide the requisite degree of control (over the “manner and means” of advertising) to satisfy agency principles)?
• it’s worth contrasting this case with Satterfield, the original 9th Circuit case that started it all–that case did not delve into agency issues, although it involved an attempt to hold a third party (Simon & Schuster) liable
• the apparent authority and ratification prongs that the court says can be additional routes to third party liability are murky and the court does not specify what exactly they mean in this context

On the one hand, this is a defense-favorable ruling in its result. On the other hand, future plaintiffs will welcome this ruling in its expansion of avenues to liability (the effect of the ruling will perhaps be tempered by its unpublished status).

Case citation: Thomas v. Taco Bell Corp., No. 12-56458, 2014 WL 2959160 (9th Cir. Jul. 2, 2014)

Related posts:

* TCPA Claim Over Yahoo!’s IM to SMS Messaging Survives Summary Judgment

* Confirmatory Opt-out Text Message Not Actionable Under the TCPA — Ryabyshchuck v. Citibank

* Franchisor Isn’t Liable Under the TCPA for Franchisees’ Text Message Campaign – Thomas v. Taco Bell

* Confirmatory Opt-Out Text Message Doesn’t Violate TCPA – Ibey v. Taco Bell

* Group Text Services Grapple with TCPA Class Actions

* Court Rejects Constitutional Challenge to TCPA Based on Vagueness in “Prior Express Consent” Exception — Kramer v. Autobytel, Inc.

* Ghostwritten Attorney Newsletter is an “Ad” for TCPA Junk Fax Law Purposes–Holtzman v. Turza

* Another Court Finds that TCPA Applies to Text Messages — Lozano v. Twentieth Century Fox Film Corp.

* Court Finds that SMS Spam Messages are Subject to the TCPA and Rejects First Amendment Defense — Abbas v. Selling Source, LLC

* Ninth Circuit Revives TCPA Claim–Satterfield v. Simon & Schuster