FDS Restaurant v. All Plumbing Inc., 241 A.3d 222

Background

In Sept. 2006 a third-party fax broadcaster (B2B) sent >10,000 unsolicited fax advertisements for All Plumbing; FDS received one at its D.C. business and sued under the TCPA in 2011.
FDS alleged All Plumbing authorized, approved, and participated in the faxes and sought class certification for all recipients from Sept. 14, 2006 onward.
Discovery showed Shafik (All Plumbing) authorized 5,000 faxes to specified Virginia zip codes and paid B2B (written instructions limited to Virginia); B2B nonetheless sent faxes into D.C. and Maryland.
The trial court denied class certification (finding lack of commonality/typicality/adequacy given disputed "on behalf of" issues) and, after a bench trial, found the D.C. fax was not sent on behalf of All Plumbing.
On appeal the D.C. Court of Appeals rejected strict liability for entities merely advertised in a fax, adopted an agency-based vicarious-liability analysis to determine who is the TCPA “sender,” and affirmed the merits judgment and denial of class certification.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an entity whose goods/services are advertised is automatically the TCPA “sender” and strictly liable for third-party fax transmissions	FDS: regulation’s language makes advertised-entity a sender; strict liability applies	All Plumbing: strict liability absurd; liability only if fax sent on the entity’s behalf	Court rejected strict liability; the entity is not automatically liable merely because its goods/services appear in the fax
Proper legal standard for vicarious liability under the TCPA ("on whose behalf" vs strict liability vs agency)	FDS: reading of FCC regulation could support an expansive sender definition	All Plumbing: agency principles control; liability requires sending on the entity’s behalf	Court held agency-law vicarious-liability analysis determines whether faxes were sent on behalf of an entity; no meaningful difference from "on whose behalf" formulation
Application to facts: did All Plumbing send (or have faxes sent on its behalf to D.C.) the fax received by FDS?	FDS: payment discrepancies and volume increase permit inference All Plumbing authorized broader transmissions (including D.C.)	All Plumbing: written instructions limited to Virginia; no evidence it authorized D.C. faxes	Court found trial judge’s credibility and fact findings not clearly erroneous: B2B exceeded its authorization; fax to FDS was not sent on All Plumbing’s behalf; All Plumbing not liable
Class certification and proposed late narrowing to D.C.-only class	FDS: class should be certified; if necessary, permit amendment to D.C.-only class	All Plumbing: disparate factual issues (location/zip/business-type/authorization) defeat commonality/typicality; late narrowing improper	Court affirmed denial of class certification: individualized "on behalf" inquiries defeat commonality/typicality/adequacy; trial court did not abuse discretion in rejecting late class narrowing

Key Cases Cited

Helping Hand Caregivers Ltd. v. Darden Restaurants, Inc., 900 F.3d 884 (7th Cir. 2018) (rejecting strict liability and applying agency principles)
Bridgeview Health Care Ctr., Ltd. v. Clark, 816 F.3d 935 (7th Cir. 2016) (agency rules appropriate to determine who is "on behalf of" sender)
Paldo Sign & Display Co. v. Wagener Equities, Inc., 825 F.3d 793 (7th Cir. 2016) (reaffirming agency approach; rejecting strict liability)
Imhoff Inv., L.L.C. v. Alfoccino, Inc., 792 F.3d 627 (6th Cir. 2015) (earlier Sixth Circuit decision construing post-2006 regulation)
Health One Med. Ctr. Eastpointe P.L.L.C. v. Mohawk, Inc., 889 F.3d 800 (6th Cir. 2018) (declining strict liability; emphasizing liability for parties involved in sending)
Siding & Insulation Co. v. Alco Vending, Inc., 822 F.3d 886 (6th Cir. 2016) (adopting "on whose behalf" factors blending agency/practical culpability)
Palm Beach Golf Ctr.–Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245 (11th Cir. 2015) (deference to FCC view that party on whose behalf fax is sent bears liability; remanding fact issues)
Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368 (2012) (federal jurisdiction over TCPA suits)
Staub v. Proctor Hosp., 562 U.S. 411 (2011) (applying agency principles in federal statutory tort context)
Meyer v. Holley, 537 U.S. 280 (2003) (agency principles inform vicarious liability under federal statutes)
Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998) (use of Restatement agency principles in federal vicarious liability)
Portuguese American Leadership Council of the U.S., Inc. v. Investors' Alert, Inc., 956 A.2d 671 (D.C. 2008) (TCPA fax-broadcaster liability inquiry; remand for fact-based analysis)