Insurer Potentially Liable For TCPA Violations By Claimed Agents

By Don R. Sampen, published, Chicago Daily Law Bulletin, September 23, 2021

The 7th U.S. Circuit Court of Appeals recently held that an insurance company could be held liable on an agency theory for unauthorized robocalls under the Telephone Consumer Protection Act, 47 U.S.C. Sec. 227, and the Illinois Automatic Telephone Dialing Act, 815 ILCS Sec. 305/30(a)-(b).

The case is Bilek v. Federal Insurance Co., 2021 U.S. App. Lexis 23655 (7th Cir. Aug. 10, 2021). The plaintiff, Christopher Bilek, was represented by Burke Law Offices LLC, of Evanston and Gupta Wessler PLLC of Washington, D.C. Walker Wilcox Matousek LLP of Chicago, represented Federal, the insurer. Tabet, Divito & Rothstein LLC of Chicago represented Health Insurance Innovations, Inc., a marketing entity.

Federal contracted with Health Insurance Innovations to assist in marketing health insurance policies. Innovations in turn contracted with lead generators to conduct telemarketing for Federal. On two occasions, a lead generator called Bilek’s cellphone in Illinois with a pre-recorded message.

The message instructed him to press “1,” whereupon a live agent provided a quote for Chubb health insurance written by Federal, a member of the Chubb family of companies. Bilek filed suit against Federal and Innovations three months later, alleging the calls were made with an automated dialing system in violation of the federal TCPA and Illinois related statute.

The complaint alleged, among other things, that both Federal and Innovations were liable for the calls because the lead generators acted with their actual and apparent authority, or they ratified the conduct of the lead generators. Bilek took the same agency position in establishing personal jurisdiction over Innovations, as to which the district court otherwise lacked jurisdiction.

In response to the defendants’ motions, the district court dismissed Federal for failure to state a claim on the ground Bilek failed to allege a valid agency theory. The court dismissed Innovations for lack of personal jurisdiction for the same reason. Bilek took this appeal.

Agency Allegations

In an opinion by Judge Thomas L. Kirsch II, the 7th Circuit reversed. He did so with respect to Federal based on the adequacy, in Kirsch’s view, of Bilek’s allegations of agency. He focused on those allegations specifically going to actual authority.

Thus, he noted that Bilek alleged that Federal authorized the lead generators to use its approved scripts, trade name, and proprietary information in making the calls. Bilek further alleged the lead generators were paired with quotes in real time by Innovations, with which Federal contracted, and Innovations then emailed quotes to call recipients.

Kirsch acknowledged that the complaint did not allege that Federal controlled the timing, quantity, and geographic location of the robocalls. In Kirsch’s view, however, minute details of the parties’ business relationship were not required to allege a plausible agency claim.

In sum, according to Kirsch, the complaint alleged more than a bare bones contractual relationship, and it sufficiently stated a claim that the lead generators acted with Federal’s authority.

Personal Jurisdiction

As to Innovations, Bilek argued that its agency relationship with the lead generators, and the lead generators’ initiation of robocalls to Bilek in Illinois, together gave rise to specific personal jurisdiction over Innovations.

Kirsch pointed out that the 7th Circuit had never before explicitly held that an agent’s conduct attributed to a principal to establish specific personal jurisdiction, comported with federal due process. He said, though, that the court now did so hold, thus joining other circuits that recognized the same.

Having achieved that milestone, Kirsch proceeded to find Bilek’s allegations of actual authority regarding Innovations were just as sufficient as they were for Federal. He noted that Innovations was alleged to have contracted directly with the lead generator agents, and that Innovations participated in the calls by providing quotes and emailing them to call recipients.

Kirsch distinguished specific personal jurisdiction — jurisdiction with respect to a specific transaction — from general personal jurisdiction, by which a court could obtain jurisdiction over a defendant for any and all purposes. As to the latter only, Daimler AG v. Bauman, 571 U.S. 117 (2014), placed limitations on the attribution of an agent’s contacts to a principal.

The court’s holding here thus was limited to specific personal jurisdiction arising from Innovations’ contacts with Illinois through its alleged agents, the lead generators.

Based on the foregoing, the court reversed the judgment of dismissal as to both defendants and remanded for further proceedings.

Key Points

• An insurance company can incur liability for violations of the TCPA and related state legislation for unauthorized robocalls if the lead generators responsible for the calls are found to be agents of the company.

• An agent’s conduct in a state may be attributed to the principal for purposes of establishing specific personal jurisdiction over the principal.