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Jones v. Royal Admin. Servs.

United States Court of Appeals for the Ninth Circuit

June 15, 2017, Argued and Submitted, San Francisco, California; April 4, 2018, Amended

No. 15-17328

Opinion

 [*446]  N.R. SMITH, Circuit Judge:

Charles Jones and Josh Watson seek to hold Royal Administration Services, Inc. ("Royal") liable for several telephone calls made in violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, by telemarketers employed by All American Auto Protection, Inc. ("AAAP"). Though a broad range of agency theories may form the basis for a principal's liability for the actions of an agent, Jones and Watson limit their appeal to two theories.

First, they assert that AAAP telemarketers were Royal's agents acting within their actual authority in placing the unlawful calls. Any claim that AAAP had actual authority to place the calls is precluded by the express language in Royal's contract with AAAP expressly prohibiting telemarketing methods that would violate state or federal law, including laws governing robocalls.

Second, they assert that Royal had sufficient authority to control the manner and means of AAAP's telemarketing activity that it may be held vicariously liable as if it were the employer of the AAAP telemarketers. We adopt the ten non-exhaustive factors set forth in the Restatement (Second) of Agency § 220(2) (Am. Law Inst. 1958) for determining whether a principal exercises sufficient [**3]  control over an agent to be held vicariously liable as if it were the agent's employer. Applying these factors here, we conclude that Royal did not exercise the level of control necessary to be subject to vicarious liability for the AAAP telemarketer's placement of the unlawful calls. Because the evidence is insufficient to allow the issue of Royal's liability to go to the jury under either theory, we affirm.

Royal sells vehicle service contracts ("VSC"). A VSC "is a promise to perform (or pay for) certain repairs or services [on an automobile]." Auto Service Contracts and Warranties, FTC: Consumer Info., https://www.consumer.ftc.gov/articles/0054-auto-service-contracts-and-warranties (last updated August 2012). A VSC is "[s]ometimes called an 'extended warranty.'" Id. Royal sells its VSCs through automobile dealers and through "marketing vendors." These marketing vendors sell Royal's VSCs "through direct mail or telemarketing." Royal sells VSCs through about 20 different marketing vendors.

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887 F.3d 443 *; 2018 U.S. App. LEXIS 8587 **; 2018 Comm. Reg. (P & F) 36; 2018 WL 1631476

CHARLES A. JONES; JOSH WATSON, on behalf of themselves and all similarly situated persons, Plaintiffs-Appellants, v. ROYAL ADMINISTRATION SERVICES, INC., Defendant-Appellee, and ALL AMERICAN AUTO PROTECTION, INC.; HAROUT PAMBUCKCHYAN; RAFFI SADEJYAN; JASON GARCIA, Defendants.

Prior History:  [**1] Appeal from the United States District Court for the District of Nevada. D.C. No. 3:14-cv-00199-LRH-WGC. Larry R. Hicks, District Judge, Presiding.

Jones v. Royal Admin. Servs., 866 F.3d 1100, 2017 U.S. App. LEXIS 14671 (9th Cir. Nev., Aug. 9, 2017)

Disposition: AFFIRMED.

CORE TERMS

telemarketers, actual authority, consumer, vicarious liability, telephone, district court, factors, vicariously liable, sales, sufficient control, summary judgment, regulations, selling, contracts, employees, marketing, violates, parties, vendors, tools

Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, Standards of Review, Judgments, Summary Judgment, Evidentiary Considerations, Entitlement as Matter of Law, Genuine Disputes, Materiality of Facts, Business & Corporate Compliance, Communications Law, Federal Acts, Telephone Consumer Protection Act, Business & Corporate Law, Agency Relationships, Authority to Act, Establishment, Definitions, Duties & Liabilities, Evidence, Burdens of Proof, Allocation, Authority to Act, Actual Authority, Actual Authority, Oral & Written Authority, Duties & Liabilities, Authorized Acts of Agents, Liability of Principals, Torts, Vicarious Liability, Agency Relationships, Elements, Right to Control by Principal