Charles Jones v. Royal Administration Services
2017 U.S. App. LEXIS 14671
| 9th Cir. | 2017Background
- Royal Administration Services (Royal) sells vehicle service contracts (VSCs) through dealers and independent marketing vendors; All American Auto Protection (AAAP) was one such telemarketing vendor.
- AAAP telemarketers placed calls to consumers (including Jones and Watson) that allegedly violated the TCPA by calling numbers on the national Do-Not-Call registry using an autodialer; plaintiffs do not dispute call violations for purposes of this appeal.
- Royal and AAAP had a marketing agreement (2011) setting sales procedures, approved scripts/materials, reporting and security requirements; Royal provided training and occasional oversight but did not control telemarketers’ hours, quotas, or the initial VSC pitch.
- AAAP sold VSCs for many companies, used its own phones/computers/office, paid telemarketers by commission, and operated independently; Royal only controlled the sale process if a telemarketer chose to pitch a Royal VSC (which did not occur in the calls at issue).
- District court entered default against AAAP and granted summary judgment for Royal on vicarious liability; Ninth Circuit reviews de novo and applies the Restatement (Second) of Agency § 220(2) ten-factor test to determine agent vs. independent contractor status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Royal is vicariously liable under the TCPA for AAAP’s calls because AAAP telemarketers were Royal’s agents | Jones: AAAP telemarketers acted as Royal’s agents (agency existed), so Royal is vicariously liable for TCPA violations | Royal: AAAP telemarketers were independent contractors; Royal lacked sufficient control over calls to create an agency relationship | Held: Telemarketers were independent contractors under the §220(2) factors; Royal not vicariously liable; summary judgment for Royal affirmed |
Key Cases Cited
- Gomez v. Campbell-Ewald Co., 768 F.3d 871 (9th Cir. 2014) (vicarious liability for TCPA violations depends on federal common-law agency)
- Mavrix Photographs, LLC v. LiveJournal, Inc., 853 F.3d 1020 (9th Cir. 2017) (agency requires authority to act on principal’s behalf and right to control agent)
- United States v. Bonds, 608 F.3d 495 (9th Cir. 2010) (extent of employer control is essential to distinguishing agents from independent contractors)
- Schmidt v. Burlington N. & Santa Fe Ry. Co., 605 F.3d 686 (9th Cir. 2010) (adopts Restatement §220(2) factors for agency analysis)
- Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) (no single factor is determinative; totality of circumstances governs employee/independent contractor analysis)