The US Court of Appeals for the Ninth Circuit recently affirmed a US District Court for the Central District of California decision dismissing a Telephone Consumer Protection Act (TCPA) claim. The Ninth Circuit agreed with the District Court’s conclusion but clarified the TCPA vicarious liability standard.

Plaintiff brought a TCPA action after receiving a text message as part of a promotion conducted by the Chicago Area Taco Bell Local Owners Advertising Association, a corporation comprised of Taco Bell restaurant operators in the Chicago area. One of the members of the Association is Taco Bell Corp., which represents approximately 160 restaurants. In 2005, the Association’s advertising agency hired ipsh!net, Inc. which then sent the promotional text in violation of the TCPA. Under the TCPA, an entity can be directly liable or vicariously liable. The District Court determined that Taco Bell Corp. was not directly liable because it did not actually send the text. The District Court also held that Taco Bell Corp. was not vicariously liable because, under agency law, it had no right to control the manner and means of Ipsh’s text campaign. 

The Ninth Circuit affirmed, but also held that principles of apparent authority and ratification may also provide a basis for vicarious liability under the TCPA. The Ninth Circuit noted that Taco Bell Corp. was not liable under either theory because plaintiff did not reasonably rely on any apparent authority, nor did Taco Bell Corp. ratify the text message. 

Thomas v. Taco Bell Corp., No. 12-56458 (9th Cir. July 2, 2014).