Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—NDIll: Insurance Agency Not Sufficiently Connected to Affiliate’s Alleged TCPA Violation for Liability, (Nov 28, 2012)

By E. Darius Sturmer, J.D.

An Illinois insurance agency did not face liability under the Telephone Consumer Protection Act (TCPA) for the sending of an allegedly unsolicited fax to a consumer that had never done business with the agency, an affiliated entity, or its principals, the federal district court in Chicago has ruled (Zersen v. PT Insurance Group, LLC, November 27, 2012, Guzman, R.).

Although the defending agency—Underwriters Insurance Group, Ltd.—admitted that its half-owner contacted an outside vendor to send faxes on the affiliate’s behalf and that it had paid the bill for those faxes, the TCPA only imposes liability on entities that send faxes. As the agency had not sent the fax, it did not fall under the express language of the statute or a 2006 FCC Order stating that “a fax broadcaster also will be liable for an unsolicited fax if it demonstrated a high degree of involvement in, or actual notice of, the unlawful activity.” The court rejected the consumer’s argument that the FCC intended to include any party in the law’s “high degree of involvement” language. In the absence of express language to that effect, the court said, such an interpretation would mark an inadvisable expansion of the FCC ruling.

Even were a “high degree of involvement” standard to apply, the consumer still failed to satisfy that standard with respect to Underwriters, in the court’s view. He cited no authority explaining what constituted a high degree of involvement; further, under the plain meaning definition that had to be assumed instead, the facts did not support a finding that the agency was sufficiently connected to the misconduct. The half-owner who negotiated the advertising deal with the vendor and approved the fax at issue was not shown to have been acting on behalf of Underwriters at the time rather than his other business, PT Insurance Group, LLC, the entity advertised in those faxes. The complaining consumer made no showing as to how the fact that Underwriters had paid the check to the vendor for the fax transmission established that it had a “high degree of involvement,” the court concluded.

Owing to the determination that the TCPA claim lacked merit, the court decided not to address the defending agency’s argument that the claim was time-barred. In addition, the court declined to exercise jurisdiction over an Illinois Fraud and Deceptive Business Practices Act claim also asserted by the consumer.

The case is 11 C 7919.

Brian J. Wanca (Anderson & Wanca) for Jerry Zersen. Jonathan N. Ledsky (Varga, Berger, Ledsky, Hayes & Casey) for PT Insurance Group, LLC.

Cases: Advertising ConsumerProtection Privacy StateUnfairTradePractices IllinoisNews