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Karl Rove & Co. v. Thornburgh - 39 F.3d 1273 (5th Cir. 1994)

Rule:

Agency is a legal relationship created by an express or implied agreement or by operation of law whereby the agent is authorized to act for the principal, subject to the principal's control. As in the formation of any contract, the consent of both parties is necessary to establish an agency relationship. Agency is never to be presumed; it must be shown affirmatively. The party who asserts the existence of agency relationship has the burden of proving it. To prove an agency relation under Texas law, there must be evidence from which the court could conclude that the alleged principal had the right to control both the means and the details of the process by which the alleged agent was to accomplish the task. 

Facts:

Karl Rove & Company (Rove) filed action against Richard Thornburgh (Thornburgh), senate candidate and his general agent, Murray Dickman (Dickman"), to recover for contractual obligations incurred by the committee to elect Thornburgh during his campaign for senate. The district court granted judgment in favor of Rove and held that Thornburgh and Dickman were personally liable for such obligations because Thornburgh had personally and through Dickman authorized, assented to, or ratified the committee's contract. 

Issue:

Was Thornburgh as principle liable for the actions of Dickman, Thornburgh's apparent agent?

Answer:

Yes

Conclusion:

The court held that the Federal Election Campaign Act of 1971, 2 U.S.C.S. § 453, had not preempted state law as to the question of who could have been liable for campaign committee debts. The court held that Thornburgh and Dickman could have incorporated the committee to shield themselves from personal liability by the corporate entity and that they could have included in the contracts a provision expressly stating that Rove could have looked only to the committee and its assets for compensation. The court held that Dickman was Thornburgh’s agent and that Thornburgh was liable for Dickman’s actions. The court affirmed a judgment of the district court.

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