City Select Auto Sales Inc v. David Randall Associates Inc
885 F.3d 154
3rd Cir.2018Background
- David Randall Associates ran unsolicited fax-advertising campaigns in 2006 through a third-party vendor (Business to Business Solutions); the company received complaints and asked some numbers be removed.
- City Select sued David Randall and its president/co-owner Raymond Miley under the TCPA for unsolicited fax advertisements; the company (David Randall) was held liable and default-judgmented against the vendor for the campaign.
- Trial focused on whether Miley could be personally liable under a personal-participation theory; evidence included office manager Clemmer’s testimony that Miley suggested and approved the campaigns and Miley’s contrary testimony denying involvement.
- The District Court instructed the jury that an officer is personally liable only if he had "direct, personal participation" or "personally authorized" the conduct and that such involvement must be "significant," involving active oversight or control and knowledge of participating in or authorizing the faxing.
- The jury found Miley not personally liable; City Select moved for a new trial arguing the jury instructions improperly added a knowledge/significance requirement; the District Court denied the motion.
- The Third Circuit affirmed, assuming (but not deciding) that personal-participation liability is available under the TCPA and holding the jury instructions were not erroneous or reversible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a corporate officer may be personally liable under the TCPA via a common-law personal-participation theory | Miley was the "author or originator" and acted on behalf of himself as sender; officers can be held personally liable when they personally participate | Corporate acts are attributable to the corporation; imposing personal liability ignores corporate form and statutory/FCC guidance that liability rests with the entity on whose behalf faxes were sent | Court assumed without deciding that personal-participation liability may exist but expressed serious doubts; declined to resolve the broader question because it was not litigated below |
| Whether the District Court erred by instructing the jury that officer liability requires "significant" personal involvement/"active oversight" rather than mere tangential involvement | No heightened standard; jury should not be told to require "significant" or knowledge beyond direct participation or authorization | Instruction was proper to distinguish tangential or ministerial involvement from actual participation/authorization and to clarify what constitutes direct participation | Affirmed: "significant" was explanatory and tied to established requirement of direct personal participation or authorization (active oversight or control) |
| Whether requiring knowledge that the officer was participating in or authorizing fax advertising added an improper mental-state element | Instruction improperly added knowledge requirement beyond participation/authorization | Knowledge that one is participating/authorizing is inherent to proving direct personal participation; not a separate element of TCPA liability | Affirmed: the knowledge language described the nature of direct participation and did not impose an extra element |
| Whether denial of a new trial was an abuse of discretion based on the challenged instructions | Jury instructions warranted a new trial because they misstated law and misled jury | Any error was harmless; jury rejected key witness testimony and instructions were legally sound | Affirmed: no abuse of discretion; instructions correct and any error harmless |
Key Cases Cited
- Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299 (11th Cir. 2013) (corporate-form presumption against imposing personal liability on officers)
- Palm Beach Golf Ctr.-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245 (11th Cir. 2015) (FCC "on whose behalf" standard places liability at the source of offending behavior)
- Siding & Insulation Co. v. Alco Vending, Inc., 822 F.3d 886 (6th Cir. 2016) ("on whose behalf" is a term of art focusing liability on the actor ultimately at fault)
- Meyer v. Holley, 537 U.S. 280 (2003) (statutory torts are read against background common-law liability rules)
- Central Bank of Denver v. First Interstate Bank, 511 U.S. 164 (1994) (statutory silence can preclude importing common-law secondary liability)
- Donsco, Inc. v. Casper Corp., 587 F.2d 602 (3d Cir. 1978) (corporate officer individually liable for torts personally committed)
- United States v. Bestfoods, 524 U.S. 51 (1998) (parent/individual liability may arise where conduct is "eccentric" to ordinary corporate norms)
- Balt.-Wash. Tel. Co. v. Hot Leads Co., 584 F. Supp. 2d 736 (D. Md. 2008) (individuals can be liable under TCPA for active involvement in sending unsolicited faxes)