Legg v. Voice Media Group, Inc.
2014 U.S. Dist. LEXIS 67623, 2014 WL 2004383, 20 F.Supp.3d 1370 (2014)
Rule of Law:
The Telephone Consumer Protection Act (TCPA) prohibits calls made using an automatic telephone dialing system (ATDS) to a cellular telephone without prior express consent, and an ATDS is broadly interpreted to include equipment with the capacity to dial numbers without human intervention, even if from a pre-programmed list. Vicarious liability under the TCPA can arise where a principal exerts substantial control over an agent's messaging activities.
Facts:
- Christopher Legg subscribed to Voice Media Group (VMG)'s alert services in 2012 and early 2013.
- VMG operates alert services that transmit text-message advertisements to consumers' cellular telephones.
- VMG contracts with a third party, Phaz2, Inc., to handle the logistics and details of sending the text messages.
- Individuals subscribe to VMG’s alert services by sending a text-message request to a 'short code' maintained by Phaz2, which then stores their telephone numbers.
- VMG employees draft the substance of messages, then input the message, desired sending time, and recipient categories into a software interface that communicates with Phaz2’s systems.
- Phaz2 receives the message instructions and arranges for transmission to the cellular telephones of designated subscribers at the appropriate time.
- In July 2013, Legg sought to unsubscribe from VMG's services by sending text messages containing variations of 'STOP' and 'STOP ALL' to its short code.
- VMG allegedly continued to send text messages to Legg after he attempted to unsubscribe.
Procedural Posture:
- Christopher Legg commenced this action on September 20, 2013, against Voice Media Group (VMG) for violations of the Telephone Consumer Protection Act (TCPA).
- Legg filed a Motion for Summary Judgment.
- VMG filed a Motion for Summary Judgment.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
1. Is equipment that sends text messages to numbers from a pre-programmed list, without human intervention, an "automatic telephone dialing system" (ATDS) under the Telephone Consumer Protection Act (TCPA)? 2. Can a company be held vicariously liable under the TCPA for messages sent by a third-party vendor that it directs and substantially controls? 3. Are the affirmative defenses of an established business relationship, prior express consent (after revocation), and due process challenges to TCPA damages valid?
Opinions:
Majority - James I. Cohn, District Judge
No, Christopher Legg has not established his entitlement to summary judgment on whether VMG’s text messages were sent using an ATDS or on VMG's vicarious liability for Phaz2's actions, as genuine issues of material fact remain. However, yes, VMG's affirmative defenses regarding the established business relationship exemption, prior consent after revocation, and due process challenges to TCPA damages are without merit. Regarding the ATDS issue, the Court adopts the FCC’s expansive interpretation from the 2003 FCC Order, which defines an ATDS by its "capacity to dial numbers without human intervention," regardless of whether it uses a random or sequential number generator. This interpretation encompasses systems that automatically dial numbers from pre-programmed lists. While evidence suggests VMG's services operate through automated means (e.g., "scheduled broadcasts," "autodialed" references), Legg failed to provide conclusive evidence (such as expert testimony or Phaz2 representative testimony) specifically linking the described systems to VMG's messages or definitively proving transmission without any human intervention. Thus, factual questions preclude summary judgment for Legg on this point, and conversely, VMG also failed to demonstrate the absence of an ATDS. On vicarious liability, the Court found Legg adequately pled the theory in his complaint. An advertiser can be vicariously liable under the TCPA for a vendor's actions if an agency relationship exists, typically evidenced by the principal exercising substantial control over the agent's actions, or through ratification or apparent authority. While VMG and Phaz2's contract stated Phaz2 was an independent contractor, VMG dictated the content, timing, and recipients of the messages and had the right to terminate the contract if dissatisfied. These "indicia of control" create an issue of fact sufficient to preclude summary judgment for both parties on this issue. The Court also denied VMG's motion for summary judgment regarding its direct liability, noting that the nature of VMG's software interface with Phaz2 (e.g., automatically triggering Phaz2's systems) remains a factual mystery. Finally, for VMG’s affirmative defenses, the Court granted summary judgment in Legg’s favor because VMG did not oppose Legg’s arguments: (1) The established business relationship exemption applies only to landlines, not cellular telephones. (2) Legg effectively revoked his consent to receive messages by sending "STOP" and "STOP ALL" messages, rendering subsequent messages unsolicited. (3) VMG’s due process challenge to statutory damages was moot regarding class action penalties (as class certification was denied) and premature for individual damages, with numerous courts upholding the TCPA's damages provisions as facially constitutional.
Analysis:
This case significantly reinforces the broad scope of the Telephone Consumer Protection Act (TCPA) by affirming the FCC's interpretation of an Automatic Telephone Dialing System (ATDS) to include systems that dial numbers from pre-programmed lists without human intervention, moving beyond the statutory text's outdated focus on random/sequential generation. It clarifies that companies cannot easily evade TCPA liability by outsourcing messaging to third-party vendors if they maintain substantial control over the messaging process, emphasizing a functional rather than formalistic approach to agency relationships. Furthermore, the decision solidifies a consumer's right to revoke consent for text messages and limits the applicability of common affirmative defenses, signaling a pro-consumer stance in TCPA enforcement.
