6th Circuit Says Text Message is a “Call” under the TCPA; Affirms Summary Judgment in Favor of Defendant for Improper Texts Sent by Subcontractor’s Subcontractor’s Subcontractor

In Keating v. Peterson’s Nelnet, LLC, 2015 WL 4430355 (6th Cir. 2015), the Court of Appeals for the Sixth Circuit affirmed summary judgment in favor a TCPA defendant on whose behalf unauthorized text messages were sent.  First, the Sixth Circuit found that texts were “calls” under the TCPA.

Neither the plaintiff nor the defendants contest the inclusion of text messages in the TCPA’s prohibition of unauthorized “calls” made from an automatic telephone dialing system. Nor, in light of well-established administrative-law jurisprudence, could they do so legitimately. In Chevron v. Natural Resources Defense Council, Inc ., 467 U.S. 837 (1984), the United States Supreme Court announced a two-step framework to be used by courts when reviewing administrative interpretations of federal law. First, a reviewing court must examine the language of the relevant statute. “If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Id. at 842–43. However, if the plain language of the statute does not reveal Congress’s intent in enacting the legislation, courts must defer to “permissible construction[s]” of the statute by the administrative agency entrusted with implementing the law, id. at 843, that is, courts must follow an agency interpretation if the interpretation is not “arbitrary, capricious, or manifestly contrary to the statute.” Id. at 844. *5 It is clear that Congress did not address, or even intend to address, the treatment of text messages when considering and passing the TCPA. In fact, the first text message was not sent until December 3, 1992, almost a full year after the December 20, 1991, enactment of the TCPA. See Joanna Stern, Happy 20th Birthday, Text Message, But You’re Past Your Prime, ABC News (Dec. 3, 2012), http://abcnews.go.com/Technology/happy–20th–birthday–textmssage–now–past–prime/story?id=17864096. Thus, because Congress could not have addressed the relevant issue upon passage of the TCPA, we must defer to the reasonable interpretation of the Act offered by the FCC in its 2003 guidance.  One of the overriding purposes of the TCPA is to “protect the privacy interests of residential telephone subscribers by placing restrictions on unsolicited, automated telephone calls….” S.Rep. No. 102–178, at 1 (1991), reprinted in 1991 U.S.C.C.A.N.1968. It clearly was not “arbitrary, capricious, or manifestly contrary to the statute” for the commission to conclude that automated transmissions of text messages would engender the same unwanted intrusions as automated telephone calls and should be regulated. We thus unhesitatingly afford deference to the agency holding that a text message should be treated as a “call” for purposes of the TCPA.

The Court of Appeals for the 6th Circuit found that agency law under the TCPA did not impose liability on the Defendant for unauthorized texts.

Keating spends much of his appellate brief seeking to justify imposition of vicarious liability upon CUnet based upon an assertion that CornerBlue was an agent of the defendants. This line of attack on the district court’s judgment is unavailing for a number of reasons. First, the clear wording of the operative contract between CUnet and CornerBlue states “that the parties to th [e] Agreement are independent contractors” and that CornerBlue has “no authority to make or accept any offers or representations on [CUnet’s] behalf.” Such contractual language flies directly in the face of the classic definition of common-law agency: “Agency is the fiduciary relationship that arises when one person (a ‘principal’) manifests assent to another person (an ‘agent’) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act.” Restatement (Third) of Agency § 1.01 (2006). Because CornerBlue was never authorized to act on CUnet’s behalf, but rather only pursuant to contractual obligations, no principal-agent relationship was established.   Second, and most damaging to the plaintiff’s position, the improper acts that Keating seeks to impute to CUnet through that defendant’s business relationship with CornerBlue were not performed by CornerBlue at all. Instead, all evidence in the record points to the fact that River City Media sent the unauthorized text messages to the putative plaintiff class—without the knowledge or acquiescence of CornerBlue or of CUnet. Moreover, Keating has offered no evidence to support his bald assertion that River City Media could have been acting at CUnet’s behest. To the contrary, the evidence adduced by the parties makes clear that CUnet and River City Media were unaware of each other’s existence until the filing of this lawsuit. Deposition testimony established: that CUnet never contracted with either AKMG or River City Media; that CUnet was not aware that CornerBlue had subcontracted with AKMG, or that AKMG then subcontracted its responsibilities to River City Media; that River City Media never was given authority by the defendants to send text messages; that River City Media’s only correspondence of any kind regarding the click-to-call campaign was with AKMG, not with the defendants; and that River City Media never had any contact of any sort with Nelnet, Peterson’s Nelnet, CUnet, or even CornerBlue. . . .Nothing in the record before this court gives any indication that the defendants authorized a third party to conduct a text-messaging campaign. Furthermore, Keating has offered no evidence to show that the defendants had any advance knowledge of improper activities by their subcontractor’s subcontractor’s subcontractor. When those misdeeds were brought to light, CUnet took immediate and appropriate action to suspend the campaign until it received assurances from CornerBlue that such missteps would not be repeated. The district court thus did not err in concluding that the defendants also were not vicariously liable to Keating under an apparent-authority theory.   Plaintiff Keating asserts that allowing the defendants in this case to escape liability for the text messages sent by River City Media is tantamount to drawing a roadmap for unscrupulous telemarketers on how to circumvent the protections afforded consumers under the TCPA. Such a concern would be legitimate if a company were to be so lax in the conduct of an advertising campaign that it took no precautions to ensure compliance with relevant statutes and regulations. But inattention to legal restrictions is not present in this case. There is no dispute that neither CUnet nor Nelnet sent any text messages in connection with the CollegeQuest C2C Campaign. Moreover, the defendants’ subcontractor, CornerBlue, also did not send the improper texts and, in fact, could not do so because CUnet supplied CornerBlue with only graphical banners for the campaign—banners that were incompatible with text transmissions. When CornerBlue in turn subcontracted with AKMG to run the campaign—an assignment that was not revealed to CUnet—even CornerBlue took the precautionary step of noting in its advertising platform that text messages were prohibited. Furthermore, when informed of breaches in the campaign’s protocol, CUnet took immediate and appropriate, albeit ultimately ineffective, steps to ensure that such missteps were not repeated.  Keating has failed to identify any genuine dispute of fact that possibly could justify a finding that River City Media was an agent of the defendants or that the offending party had either actual or apparent authority to act as it did on the defendants’ behalf. Thus, we conclude that, in light of the facts before it, the district court appropriately granted summary judgment to the defendants on Keating’s TCPA claim, and we AFFIRM the judgment of the district court.