7th Cir. Says No TCPA Vicarious Liability for Business with Contractual Relationship with Caller to Promote Sale of Goods

In Warciak v. Subway Rests., Inc., No. 19-1577, 2020 U.S. App. LEXIS 3487 (7th Cir. Feb. 5, 2020), the Court of Appeals for the Seventh Circuit said that Subway was not responsible under the TCPA for contractually participating in T-Mobile’s text message campaign advertising “T-Mobile Tuesdays”.

After reviewing the record, we agree with the district court that Warciak’s complaint failed to include enough facts to state a plausible claim for relief under the legal theory of vicarious liability. It is unreasonable for courts to contrive an inference when the scarce facts barely allege a claim. The only conduct by Subway alleged in the complaint is engaging in a contractual relationship with T-Mobile. Warciak claims a commercial contractual relationship between two sophisticated businesses is tantamount to an agency relationship. While an agency relationship can be created by contract, not all contractual relationships form an agency. For example, when a company wishes to place an advertisement in a circular, the publisher of the circular does [*5]  not become the agent of the company. Warciak’s complaint lacks sufficient facts showing Subway manifested to the public that T-Mobile was its agent. Instead, he relied on T-Mobile’s conduct: that T-Mobile’s statement led recipients to believe the text came from Subway. However, statements by an agent are insufficient to create apparent authority without also tracing the statements to a principal’s manifestations or control. Restatement (Third) of Agency § 2.03 cmt. c (2006). Warciak’s complaint further fails to allege sufficient facts to show how he reasonably relied, to his detriment, on any apparent authority with which he alleges Subway cloaked T-Mobile. The text message itself has numerous indications that T-Mobile maintained control over the content, timing, and recipients. The text message states that the free sandwich is “just for being w/[ith] T-Mobile,” the promotion is a part of “T-Mobile Tuesdays” and was sent on Tuesday, sent only to T-Mobile customers, and included a link to T-Mobile’s website. Warciak’s allegations are not enough to create apparent authority between T-Mobile and Subway. Therefore, without sufficient facts alleging a manifestation by Subway that T-Mobile is its agent to the public, Warciak’s complaint was properly dismissed under a 12(b)(6) motion. Warciak contends his suit is not barred under the TCPA’s wireless carrier exception. The TCPA exempts calls “to a telephone number assigned to a cellular telephone service that are not charged to the called party.” 47 U.S.C. § 227(b)(2)(C). The Federal Communications Commission stated, “the Commission does not require prior written consent for calls made to a wireless customer by his or her wireless carrier if the customer is not charged … .” 77 Fed. Reg. 34233 at 34235 ¶ 10 (2012) (expanding on its 1992 Order “concluding Congress did not intend to prohibit autodialed or prerecorded message calls by a wireless carrier to its customer when the customer is not charged.”). Here, Warciak’s complaint concedes that T-Mobile is his carrier, T-Mobile sent the text, and Warciak was not charged for the text. Therefore, the district court properly applied the wireless exemption when it found no TCPA violation existed based on the facts alleged in the complaint.