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The Ninth Circuit Court of Appeals recently held that vicarious liability under the Telephone Consumer Protection Act (TCPA) is broad. In Gomez v. Campbell-Ewald Company, the United States Navy hired the Campbell-Ewald Company to assist the military branch with a multimedia recruiting campaign—which included the decision to send text messages to prospective recruits. Campbell-Ewald contracted Mindmatics to execute the campaign and, as is almost always the result of text message advertising, a class action lawsuit was filed by a disgruntled recipient.
Campbell-Ewald sought to place exclusive blame on the text triggerman—Mindmatics. In other words, Campbell-Elwald argued that it should not be liable under the TCPA because its agent was the one that hit the send button. The court disagreed and held “[t]he [TCPA] itself is silent as to vicarious liability. We therefore assume that Congress intended to incorporate ‘ordinary tort related vicarious liability rules.’” Further, “[i]t makes little sense to hold the merchant vicariously liable for a campaign he entrusts to an advertising professional, unless that professional is equally accountable for any resulting TCPA violation.”
The important takeaway from Gomez is that vicarious liability is alive and well under the TCPA and can work to commit you to the actions of your agents’ agents. The prudent business move, therefore, is to understand who your advertising agents use to fulfill campaigns on your behalf. Do those agents know the law? Are they financially solvent enough to indemnify you for legal missteps? If not, do they carry proper insurance—either under an Errors & Omission (E&O) policy or specific policy covering TCPA liability?
Regardless of the advertising channel, agent due diligence and trust are good things. In a TCPA scenario, however, where liability can run into the tens of millions, it is critical that your agents also have you covered—literally.
Eric R. Sloan
Vice President & Legal Counsel
Eric Sloan’s blogs are provided for educational purposes only and should not be construed as legal advice. Readers should not act upon the information provided without the advice of independent counsel. Participation in the webinar does not create or constitute an attorney-client relationship.