All of us have come across the concept of losing by a “slim” margin more than once in our life. Whether it be a foot race, a board game, or professional sports, we all know what it means to lose by a “slim” amount: It means you lost and the other party won, plain and simple. Of course, this concept rings just as true in TCPA litigation.
This cruel concept recently bore its head in Vessal v. Alarm.com. There, a plaintiff filed a TCPA action against Alarm.com based on an agency theory and “upon information and belief,” claiming that she received at least 75 calls from various home security companies that she claimed were attempting to sell her home security systems on Alarm.com’s behalf. According to the plaintiff, Alarm.com itself had never contacted her, but she claimed it could be held liable for the calls made by the other companies, which, she said, continued to call her even after she placed her number on the National Do-Not-Call Registry and asked them to not call her again.
Vicariously Liable for TCPA Violations
TCPA case law would allow a case like the plaintiff’s to proceed against Alarm.com even though Alarm.com was not the party alleged to be initiating any of the calls, as multiple federal courts have concluded, under the TCPA, a party may be held vicariously liable for TCPA violations committed by those entities that are shown to be the party’s representatives. Where this relationship is shown, the party being sued can be held vicariously liable “under a broad range of agency principles, including not only formal agency, but also principles of apparent authority and ratification.”
As a matter of law, then, it would appear that the plaintiff’s case against Alarm.com could proceed despite the fact that Alarm.com had never itself called her. But the plaintiff’s complaint needs to do more than simply present a viable conclusion of law to proceed. Under Supreme Court precedent, the complaint also must allege enough facts and evidence to show that the claim is “facially plausible,” meaning “the plaintiff must include enough details about the subject-matter of the case to present a story that holds together.”
In moving to dismiss the plaintiff’s TCPA claim, Alarm.com rightfully challenged whether the plaintiff’s complaint provided enough evidence to be “facially plausible,” particularly focusing on how little evidence the plaintiff presented in support of her agency theory. As noted above, the plaintiff’s proof of a commercial relationship between Alarm.com and the various home security companies was made almost exclusively “upon information and belief.” There was no other evidence pointing to such a relationship besides an allegation that each of the home security companies had referenced one of Alarm.com’s products during their call with the plaintiff.
"Quite Slim" is Just Enough
The evidence plaintiff used to show a plausible relationship was slim at best, mostly relying on her subjective belief rather than upon what was discussed in the calls she received. But, according to the District Court, slim was good enough for the case to proceed. According to the Court, even though the allegations of a principal-agent relationship were “quite slim,” they were enough to keep the plaintiff’s TCPA claim from being dismissed. This was so, the Court said, because “the existence of an agency relationship is usually a factual question and any evidence of an agency relationship between Alarm.com and the identified third-party dealers is entirely within Alarm.com’s control.”
Certainly, the District Court has a valid point when it says that most documents are outside of an opposing party’s control during the initial phases of a civil proceeding. But does this mean that a plaintiff should be permitted to maintain her agency-based claim based upon a single objective, factual allegation? One would expect the Supreme Court would require more to meet its “facially plausible standard,” especially where our economy is robust enough not to assume that a manufacturer has directed or approved how a downstream seller decides to sell a good or service once it’s in the stream of commerce.
Hopefully, the agency-based facts surrounding the case against Alarm.com are resolved rather early in the discovery process. But even if they are resolved quickly and it turns out that no such agency relationship exists, that wasted time and the related costs and fees cannot be taken back. Thus, in hopes of curing these risks, the courts should take a hard look at the standard they are applying to claims where most of the evidence is based on a party’s subjective belief, especially in the new world run by professional TCPA plaintiffs.
Slim margins of victory are okay in sports and board games. Indeed, they make for a better game. Such a margin should not suffice, however, where the Supreme Court has required more, and where an incorrect decision will cost substantial time, money, and judicial resources.