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Vicarious Liability Allegations Implausible: Case Dismissed

Are cursory references to a telehealth provider in another party’s health insurance application materials sufficient to support a “plausible” complaint under the Telephone Consumer Protection Act (TCPA) for vicarious liability? Not so says the Honorable Judge Vincent Briccetti.

In Hale et.al v. Teledoc Health, Inc. 2021 U.S. Dist. LEXIS 56967, Case No. 20 CV 5245 (VB), United States District Court for the Southern District Of New York, March 25, 2021, the two individual plaintiffs, who had registered their cellphones on the national Do Not Call list, received prerecorded message marketing calls. After attempting to “opt-out” in various ways, each faked an interest to identify the caller and received quotes from Health Insurance Innovation, Inc. (HHI) for an insurance product called MyBenefitsKeeper. Plaintiffs obtained an actual application for the program, which Hale claimed also included an application for Teledoc Health, Inc. (Teledoc) services.

So the plaintiffs leapt to the conclusion that HII “operates an outbound call center and lead generator for Teledoc, and acts as Teledoc’s agent.” Since vicarious liability under the TCPA turns on federal common law principles of agency, plaintiffs complained that Teledoc gave HII actual and apparent authority to “represent that [HHI] had “partnered with” the defendant. If not, then Teledoc had ratified HHI’s actions by accepting the benefits of HHIs efforts. Moreover, plaintiffs claimed that Teledoc “knew or should have known” that HHI had been sued for TCPA violations in the past when it “contracted with HHI to make telemarketing calls on its behalf.” The result – a class action TCPA suit against Teledoc alleging it was vicariously liable for HHI’s actions.

In a scholarly seriatim tour through the common law principles of agency as applied to the facts alleged, Judge Briccetti found the plaintiff’s allegations decidedly lacking in “plausibility” on all three agency prongs.

As to HHI’s actual authority, “the Court started by noting that “to be liable for the acts of its agent, a principal must exercise control over the conduct or activities of the agent.” However, none of the plaintiffs’ factual allegations raised even an “inference” that “Teledoc exercised any control over HHI’s calls to plaintiffs.” Plaintiff’s failed to allege that HHI’s callers “ever mentioned Teledoc or its services” on the phone. There were no allegations suggesting that “Teledoc directed HHI to make the calls at issue” and no claim that “Teledoc wrote or approved any call scripts.” Finally, the “inclusion of Teledoc’s services in the insurance bundle, alone, is insufficient to permit even a circumstantial inference that HHI called plaintiff’s at Teledoc’s direction or subject to Teledoc’s control.” Thus, no plausible allegations of any agency relationship based on actual authority and no vicarious liability. Strike one!

What about apparent authority? Did Teledoc “communicate either directly or indirectly” to plaintiffs or “take some action that instill[ed]” in plaintiffs “a reasonable belief that [HHI] had authority to act as [Teledoc’s] agent’? Again, plaintiffs cited the inclusion of Teledoc in a list of coverage for MyBenefitsKeeper. But they “failed to trace this representation to any conduct or manifestation by Teledoc.” There were no allegations of “‘statements or actions’ of Teledoc, the alleged principal.” Thus, no plausible allegations of any apparent authority and no vicarious liability under this theory. Strike two!

Perhaps third time is the charm. So the plaintiffs moved to ratification, alleging that Teledoc “‘ratified HHI and its lead generators actions by accepting the benefits from Hill and its lead generators telemarketing practices….’” Continuing its recitation of the principles of agency law, Judge Briccetti ruled that ratification requires “‘acceptance by the principal of the benefits of the agent’s acts, with full knowledge of the facts in circumstances indicating an intent to adopt the unauthorized arrangement.’” Alternatively, ratification may occur “through willful ignorance, or not knowing the material facts, but ‘ratif[ying] with awareness that such knowledge was lacking.’” But plaintiffs failed to allege any facts permitting the Court to infer that Teledoc accepted any benefits from HHI. For example, there were no allegations that plaintiffs had signed up for Teledoc services based on the HHI entreaties and then paid Teledoc for its services. Even if that had occurred, the plaintiffs failed to allege an “‘an objectively and externally observable indication’ that Teledoc exercised choice and [] consented to the acts.’” As to the issue of HHI being sued and Teledoc’s knowledge thereof, the “complaint contains no factual allegations regarding what Teledoc knew or should have known.” Thus, no plausible allegations of ratification and no vicarious liability under this theory. Strike three and plaintiffs are out! Case dismissed.

A roadmap for assessing the “plausibility” of vicarious liability allegations under the TCPA.

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 88
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About this Author

Paul Besozzi Telecommunications Attorney Squire Patton Boggs Washington DC
Senior Partner

Paul Besozzi concentrates his practice in the wireless, broadband and emerging technology areas. His extensive experience of more than 30 years in the telecommunications field includes regulatory, transactional, legislative and litigation matters for clients ranging from wireless service and infrastructure providers to resellers of long-distance service, including cellular, personal communications services, specialized mobile radio, point-to-point microwave, advanced wireless services and other emerging wireless technologies.

Paul represents clients before the federal and state...

202-457-5292
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