Here is a really interesting one.

An auto warranty company is trapped in a TCPA lawsuit after a court found allegations of direct liability sufficient to find calls made by an apparent seller were actually made by the warranty company itself directly. And the fact that the warranty company and the seller had the same lawyer had a lot to do with it.

In Doyle v. Matrix Warranty, 2023 WL 4188313 (D. N.J. June 26, 2023) the warranty defendant moved to dismiss arguing the complaint failed to allege facts demonstrating either vicarious or direct liability for the calls at issue.

The Court agrees with Matrix that the complaint lacked vicarious liability allegations. Nothing in the complaint showed control over the seller or ratification.

Despite this fact, however, the Court still found Matrix was directly liable for the calls–and you don’t see that every day.

In essence, the Court found the two companies were one and the same, and the fact that they were using the same lawyer had a lot to do with it:

Element’s website instructs customers to contact “our” lawyers — at an email address of the Defendant, legal@matrixprotection. This allegation is especially probative given the care that lawyers are expected to take to separate out their work between one client and another.

So apparently the seller’s website directed consumers with legal inquiries to contact Matrix’s legal department–characterizing Matrix’s lawyers as its own.

Hmmm.

Certainly, Element’s statement that Matrix lawyers represented it is very damaging–but only if it is true. I think it is interesting that the Court accepted Element’s recitation–which may have just been a lie–as binding on Matrix, without any allegation that Matrix knew about the website or permitted the email address to be supplied.

Moreover, even if Matrix did know about it, that seems to be a fact supporting an allegation of apparent authority for vicarious liability purposes–not a fact demonstrating Matrix and Element are the same company.

So really an odd ruling.

In the end, the Court found:

“a “plausible” inference, made in light of “experience and common sense,” is that the Defendant and Element are, for present purposes, functioning as one and the same entity and that the Defendant, for purposes that include the call the Plaintiff received, is doing business under the name Element. This means the Defendant can be liable for Element’s alleged phone call to the Plaintiff — and that, on a direct liability theory, the Amended Complaint passes muster.

Never a dull moment in TCPAWorld.

So takeaways here–if a company uses your legal department as its lawyers, you can assume a court will hold YOU liable for their misconduct. So be careful with that.