Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-19-01577/USCOURTS-ca7-19-01577-0/pdf.json

Parties Involved:
Subway Restaurants, Incorporated
Appellee
Matthew Warciak
Appellant

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit

No. 19-1577

MATTHEW WARCIAK, individually

and on behalf of all others similarly

situated,

Plaintiff-Appellant,

v.

SUBWAY RESTAURANTS, INCORPORATED, a Delaware Corporation,

Defendant-Appellee.

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division.

No. 16 C 08694 — Charles P. Kocoras, Judge.

ARGUED DECEMBER 12, 2019 — DECIDED FEBRUARY 5, 2020

Before BAUER, EASTERBROOK, and ST. EVE, Circuit Judges.

BAUER, Circuit Judge. T-Mobile customers with qualifying

plans can participate in a promotional service called “T-Mobile

Tuesdays” which offers free items and discounts from various

Case: 19-1577 Document: 30 Filed: 02/05/2020 Pages: 6
2 No. 19-1577

well-known stores. Messages are sent every Tuesday and

customers who no longer wish to receive marketing communications may opt-out by contacting T-Mobile’s customer service.

In September 2016, a T-Mobile user, Matthew Warciak,

received this text message:

This T-Mobile Tuesday, score a free 6” Oven

Roasted Chicken sub at SUBWAY, just for being

w/ T-Mobile. Ltd supply. Get app for details:

http://t-mo.co/2bGiBjS.

The text message came from T-Mobile and Warciak was not

charged for this text. Warciak sued Subway claiming Subway

engaged in a common law agency relationship with T-Mobile,

and that Subway’s conduct violated the Telephone Consumer

Protection Act (“TCPA”) and the Illinois Consumer Fraud and

Deceptive Business Practices Act (“ICFA”). T-Mobile is not

included in the lawsuit, per the arbitration agreement in its

subscriber agreement.

Subway filed a 12(b)(6) Motion to Dismiss; the district court

dismissed the TCPA claim and declined to exercise jurisdiction

over the state law ICFA claim. The district court found the

complaint lacked sufficient facts alleging Subway’s conduct to

support Warciak’s claims of actual and apparent authority,

specifically, control over the timing, content, or recipients of

the text message. Further, the district court found that the

wireless carrier exemption applied and therefore, no underlying TCPA violation exists. Warciak appeals this dismissal and

seeks an opportunity to replead and be assigned a new judge.

For the following reasons, we find that the district court

properly dismissed Warciak’s claim.

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No. 19-1577 3

DISCUSSION

A dismissal for failure to state a claim is reviewed under a

de novo standard. Benson v. Fannie May Confections Brands, Inc.,

944 F.3d 639, 644 (7th Cir. 2019). The complaint must state “a

short and plain statement of the claim showing that the pleader

is entitled to relief.” Fed. R. Civ. Pro. 8. A complaint must

allege “enough facts to state a claim to relief that is plausible on

its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

Facial plausibility exists “when the plaintiff pleads factual

content that allows the court to draw the reasonable inference

that the defendant is liable for the misconduct alleged.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550

U.S. at 556).

Congress passed the TCPA in order to protect consumers

by regulating telemarketing communications and prevent costshifting of advertising costs. The TCPA prohibits any

person, absent prior express consent, from making a call using

an automatic system to any telephone number assigned to

a cellular telephone service for which the called party is

charged for the call. 47 U.S.C. § 227(b)(1)(A)(iii). Text messages

to a cellular telephone qualify as a “call” within the meaning

of the statute. Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 667

(2016). “[T]he Federal Communications Commission has ruled

that, under federal common-law principles of agency, there is

vicarious liability for TCPA violations.” Id. at 674 (citing In re

Joint Petition Filed by Dish Network, LLC, 28 FCC Rcd. 6574

(2013)).

In order to be held vicariously liable under the TCPA, an

agent must have express or apparent authority. Express

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authority exists when a principal expressly authorizes an agent

and the agent acts on the principal’s behalf and subject to the

principal’s control. Clarendon Nat'l Ins. Co. v. Medina, 645 F.3d

928, 935 (7th Cir. 2011) (citing Restatement (Third) of Agency

§ 1.01 (2006)). Apparent authority exists when a third-party

reasonably relies on the principal’s manifestation of authority

to an agent. Am. Soc’y of Mech. Engineers v. Hydrolevel Corp., 456

U.S. 556, 565–74 (1982) (referencing the Restatement (Second)

of Agency § 8 (1957)); Restatement (Third) of Agency § 2.03

(2006). Statements by an agent are insufficient to create

apparent authority. Id.

After reviewing the record, we agree with the district court

that Warciak’s complaint failed to include enough facts to state

a plausible claim for relief under the legal theory of vicarious

liability. It is unreasonable for courts to contrive an inference

when the scarce facts barely allege a claim. The only conduct

by Subway alleged in the complaint is engaging in a contractual relationship with T-Mobile. Warciak claims a commercial

contractual relationship between two sophisticated businesses

is tantamount to an agency relationship. While an agency

relationship can be created by contract, not all contractual

relationships form an agency. For example, when a company

wishes to place an advertisement in a circular, the publisher of

the circular does not become the agent of the company. 

Warciak’s complaint lacks sufficient facts showing Subway

manifested to the public that T-Mobile was its agent. Instead,

he relied on T-Mobile’s conduct: that T-Mobile’s statement

led recipients to believe the text came from Subway. However,

statements by an agent are insufficient to create apparent

authority without also tracing the statements to a principal’s

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No. 19-1577 5

manifestations or control. Restatement (Third) of Agency

§ 2.03 cmt. c (2006). Warciak’s complaint further fails to allege

sufficient facts to show how he reasonably relied, to his

detriment, on any apparent authority with which he alleges

Subway cloaked T-Mobile. 

The text message itself has numerous indications that

T-Mobile maintained control over the content, timing, and

recipients. The text message states that the free sandwich is

“just for being w/[ith] T-Mobile,” the promotion is a part of

“T-Mobile Tuesdays” and was sent on Tuesday, sent only to

T-Mobile customers, and included a link to T-Mobile’s website.

Warciak’s allegations are not enough to create apparent

authority between T-Mobile and Subway. Therefore, without

sufficient facts alleging a manifestation by Subway that

T-Mobile is its agent to the public, Warciak’s complaint was

properly dismissed under a 12(b)(6) motion.

Warciak contends his suit is not barred under the TCPA’s

wireless carrier exception. The TCPA exempts calls “to a

telephone number assigned to a cellular telephone service that

are not charged to the called party.” 47 U.S.C. § 227(b)(2)(C).

The Federal Communications Commission stated, “the

Commission does not require prior written consent for calls

made to a wireless customer by his or her wireless carrier if the

customer is not charged ... .” 77 Fed. Reg. 34233 at 34235 ¶ 10

(2012) (expanding on its 1992 Order “concluding Congress did

not intend to prohibit autodialed or prerecorded message calls

by a wireless carrier to its customer when the customer is not

charged.”). Here, Warciak’s complaint concedes that T-Mobile

is his carrier, T-Mobile sent the text, and Warciak was not

charged for the text. Therefore, the district court properly

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6 No. 19-1577

applied the wireless exemption when it found no TCPA

violation existed based on the facts alleged in the complaint.

CONCLUSION

We AFFIRM the district court’s dismissal of the complaint.

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