In Kristensen v. Credit Payment Services, 2014 WL 1256035 (D.Nev. 2014), Judge Gordon denied defendant’s Motion to Dismiss a TCPA class action, finding that vicarious liability might exist. The facts were as follows:
The Complaint alleged that the website in the text message—www.lend5k.com—automatically redirected to websites owned and operated by CPS and/or its agents who promoted CPS’s payday loan products. Upon the approval of a completed loan application, customers received a loan agreement with a truth-in-lending disclosure which identified CPS’s MyCashNow.com entity as the lender. Kristensen further alleged that CPS and/or its agents sent text messages using a dedicated telephone number and automated dialing equipment, and that he did not consent to receive the above text message. Kristensen claims this conduct violated 47 U.S.C. § 227(b)(l)(A)(iii), a subsection of the federal Telephone Consumer Protection Act of 1991.
Judge Gordon denied the defendants’ motion to dismiss:
The FAC pleads sufficient facts to render it plausible that the party who “made” the “call”—i.e., the party who actually sent the text message to Kristensen—was acting as an agent or subagent of Lead-Pile and/or Click Media. The Lender Defendants contracted with LeadPile, who in turn contracted with Click Media. Click Media directed another entity to send a text message to multiple persons. That message included a link which automatically redirected to a site controlled by Click Media. Upon completing a loan application on Click Media’s site, the consumer was directed to a site owned by LeadPile. LeadPile then sold the leads to the Lender Defendants. ¶ Thus, there was a “downhill” series of contractual relationships starting with the Lender Defendants down through Click Media, and the benefits of the text message (leads for potential payday lending customers) flowed back “uphill” through Click Media and LeadPile to the Lender Defendants. Kristensen has sufficiently pleaded a plausible agency relationship based on actual authority (arising through contractual relationships), apparent authority (based on a reasonable person’s perception of who authorized the sending of the text message), and ratification (based on the apparent benefits received by Click Media and LeadPile). Kristensen need not plead the identity of every player in the alleged scheme nor every nuance of the relationships among the Defendants; indeed, the information necessary to connect all the players is likely in Defendants’ sole possession. Kristensen also sufficiently pleads that he did not consent to receive the text message and that the message was sent using an ATDS. Accordingly, LeadPile’s and Click Media’s motions to dismiss are denied.
Judge Gordon went on to grant the Plaintiff’s Motion for Class Certification.
As set forth above, vicarious liability turns on the federal common law of agency and can arise from actual authority, apparent authority, or ratification. Actual authority depends only on relationships among the Defendants. Ratification depends on Defendants’ post-message behavior without concern for any con-duct by the class members. Apparent authority de-pends on whether a reasonable person would believe that the sender of the text messages, or the person that caused the text messages to be sent, had authority to act on behalf of Defendants. Because the inquiry is limited to how a reasonable person would perceive the text message at issue, there is no need to determine how individual class members perceived the text message or the successive web pages they may have visited. Agency can be resolved on a class-wide basis. ¶ The parties dispute whether consent is an element of the prima facie case or an affirmative defense, but, as the Fifth Circuit has held, that issue is irrelevant for class certification. Kristensen’s burden at the class certification phase is to “advance a viable theory employing generalized proof to establish liability with respect to the class involved.” If consent is an element of the prima facie case, as Meyer instructs, Kristensen must prove that lack-of-consent can be addressed with class-wide proof If Kristensen is correct that consent is an affirmative defense, then he must prove that he can defeat Defendants’ consent argument with class-wide proof. The practical effect is the same: for purposes of class certification, Kristensen must prove that consent, or the lack thereof, can be resolved “on evidence and theories applicable to the entire class.” ¶ The Ninth Circuit has held that in the absence of any evidence of consent by the defendant, consent is a common issue with a common answer. This does not necessarily mean that defendants have an affirmative burden to produce evidence of consent to prevail at trial, however. It simply means that courts should ignore a defendant’s argument that proving consent necessitates individualized inquiries in the absence of any evidence that express consent was actually given. It also means that courts should afford greater weight to a plaintiff’s theory of class-wide proof of lack-of-consent when that theory is entirely unrebutted by the precise type of evidence which could do it greatest harm—evidence of express consent. ¶ Defendants have not submitted any evidence of express consent. Their reliance on James Gee (of AC Referral Systems) and Michael Ferry (of 360 Data Management and Absolute ROI) is misplaced, as neither has personal knowledge whether Kristensen or the other purported class members consented when they visited one of the “hundreds” of websites that Defendants allege were the original sources of the cell phone numbers. In addition, AC Referral did not appear to have a mechanism to verify consent. Finally, the relevant records of AC Referral and 360 Data Management apparently are no longer available.FN103 If, as it appears, Defendants can provide no evidence of consent, Defendants will probably lose on this issue regardless of who carries the burden at trial. Class members could provide individual affidavits averring lack of consent, and Defendants would be unable to rebut with anything other than the unfounded testimony of James Gee and Michael Ferry. Reviewing these affidavits would not be unduly burdensome for the Court, especially in light of the alternative of dealing with thousands of individual lawsuits. ¶ Also, AC Referral acquired the cell phone numbers from two sources—360 Data Management LLC and Identity Defender—who in turn obtained the numbers from Absolute ROI. AC Referral sent the text messages, and AC Referral was under contract with defendant Click Media for marketing services. Kristensen correctly argues that, in light of the absence of evidence from Defendants about consent, a review of these entities’ procedures as to obtaining consent should produce a common answer. Kristensen therefore has advanced a viable theory of class-wide proof of lack-of-consent. If Defendants develop proof of consent that requires burdensome, individualized inquiries, the Court can take remedial measures up to and including decertification.