SAN FRANCISCO – The U.S. Court of Appeals for the Ninth Circuit upheld a federal district court ruling absolving three lenders and two marketing companies from allegations they violated the Telephone Consumer Protection Act in connection with an unsolicited text message sent Dec. 6, 2011, according to a Jan. 10 opinion authored by District Judge Sandra S. Ikuta.
The Ninth Circuit affirmed a ruling entered by the U.S. District Court for the District of Nevada.
The Ninth Circuit said in its opinion that plaintiff Flemming Kristensen received a text message from publisher AC Referral, which was not a party to the lawsuit. Kristensen alleged the defendants, which include Credit Payment Services Inc., Enova International Inc., LeadPile, LLC, Pioneer Financial Services Inc. and Click Media LLC, “ratified the unlawful text messages.”
“Because AC Referral was neither the agent nor purported agent of four of the defendants, they could not have ratified AC Referral’s acts,” the Ninth Circuit opinion said. “Although one of the marketing companies had an agency relationship with AC Referral, it was not bound by AC Referral’s acts because it lacked knowledge that AC Referral was violating the TCPA and did not have knowledge of facts that would have led a reasonable person to investigate further.”
According to the Ninth Circuit opinion, the text message received by Kristensen from a phone number in Ohio said “Do You Need up to $5,000 Today? Easy Quick and All Online at: www.lend5k.com 24Month Repay, All Cred. OK.”
The Ninth Circuit opinion said the text “was generated as an indirect result of marketing campaigns undertaken by three payday lenders,” namely Enova, Pioneer and Credit Payment Services. The circuit court said LeadPile had deals with the lenders to generate sales leads, and Click Media was hired by LeadPile in its effort to provide leads.
“If these leads lead to loans, the loan providers pay Click Media and Click Media pays the publishers, like AC Referral, a portion of that fee,” the Ninth Circuit ruling said.
Click Media said its contract with AC Referral required the latter to comply with the TCPA.
Under the contract with Click Media, the Ninth Circuit said AC Referral sent text messages to phone numbers it had purchased from other advertising lead generation companies. Those messages asked the recipient to follow a link that led to a loan application website. Once at that site, which was run by Click Media, interested potential customers could choose to be redirected to a lender.
“Kristensen did not click on the link nor apply for a loan,” the opinion said. “Instead, he filed a putative class action complaint against Credit Payment Services, Pioneer Services, Enova, LeadPile and Click Media.”
In response to the lenders’ and LeadPile’s motion for summary judgment, the Ninth Circuit said the district court “rejected each of Kristensen’s theories of vicarious liability, including his theory that the defendants ratified AC Referral’s texting campaign by accepting leads while knowing that AC Referral was using texts to generate those leads.”