Who's Responsible for Third- Party Dealers’ Violations?
In a case recently decided in the State of Illinois, the plaintiff filed a complaint alleging violations of the Telephone Consumer Protection Act (TCPA). The defendant filed a motion to dismiss the complaint for failure to state a claim.
The plaintiff registered her cellphone on the Do-Not-Call registry and then renewed the registration. About the time she renewed the registration she began receiving calls from entities trying to sell her the defendant’s home security system. The defendant did not sell its services directly to consumers, but relied on a network of third-party dealers to generate subscribers.
The phone calls the plaintiff received — from various alarm companies — were attempts to sell her a wireless home security system from the defendant. She spoke with representatives on multiple occasions requesting removal from their call list and alleged that when various companies contacted her she advised that they remove her from the do-not-call list.
The defendant moved to dismiss the complaint, arguing that the plaintiff failed to allege sufficient facts to draw a reasonable inference that the defendant was liable for the conduct of the caller. The defendant further contended that the plaintiff’s allegations of “dealer agreements” were too conclusory to satisfy even the minimal requirements; the damages alleged did not qualify as actual damages; and there were no allegations of a deceptive act or practice committed by the defendant.
The court pointed out that the TCPA prohibits any person from making any call other than for emergency purposes or with the prior express consent of the called party using any automatic telephone dialing system or an artificial or prerecorded voice to any telephone number assigned to a cellular telephone service unless such call is made solely to collect a debt owed to or guaranteed by the United States.
The plaintiff alleged that the defendant was directly liable for all calls made to plaintiff or alternatively, liable under any agency theory of vicarious liability for the conduct of its alleged third-party dealers. The court pointed out that direct liability under the TCPA applies only to entities that “initiate” the telemarketing calls. The FCC made clear to initiate a call means to physically place a telephone call. There were no allegations in the complaint that the defendant initiated the phone calls by physically placing a call.
The only allegations that established any sort of connection between the defendant and the callers were made on the assertion that some of the callers identified the defendant as their Web address. The court did point out, however, that the existence of an agency relationship is usually a factual question and any evidence of an agency relationship between the defendant and the identified third-party dealers is entirely within the defendant’s control. The court found that the complaint put the defendant sufficiently on notice of the agency relationship through the third party dealer agreement with various dealers so as to warrant discovery on the issue.
With respect to the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) the plaintiff must allege: 1. a deceptive act or practice by defendant; 2. that the act or unfair practice occurred in a course of conduct involving trade or commerce; 3. that the defendant intended plaintiff to rely on the deception; and 4. that actual damages were proximately caused by the deception.
The plaintiff asserted that the defendant engaged in deceptive or unfair practice by having different and multiple third-party dealers call her to sell her the defendant’s security system and by continuing to call her after she asked to be removed from the list. The court indicated that this type of conduct has not been found to be sufficient to state a claim under the ICFA by courts in their district. Moreover, the plaintiff did not allege any plausible likelihood of deception or injuries. Therefore the plaintiff failed to adequately allege actual damages.
Therefore, the court granted in part and denied in part the defendant’s motion to dismiss.
Q: We are an alarm company presently utilizing CCTV video surveillance technology for our subscribers. We normally maintain the video feed for about 30 days. Is there any requirement for us to keep it any longer?
A: I am not aware of any specific requirements, but you should check with your state and local authorities as they may vary. Precautionary, however, if you only retain the feed for 30 days, it should be specifically set out and included in your agreement with your subscriber and make sure your subscriber is aware of this limitation. If, however, there is an actual loss or other questionable incident that is captured on the video, or if you have any indication that there may be a claim filed as a result of any unlawful activity, then I would make sure you retain the video not only for the period of the statute of limitation in your state, but until such time you are assured that the incident has been fully adjudicated or resolved.