Opinion ID: 4380656
Heading Depth: 4
Heading Rank: 1

Heading: Ratification May Create An Agency

Text: Relationship When None Existed Before USA Funds argues it could not have ratified the actions of the debt collectors because there is no agency relationship between it and the debt collectors. We disagree. Restatement § 4.01 cmt. b makes clear that, in most jurisdictions, ratification may create an agency relationship when none existed before if the acts are “done by an actor . . . who is not an agent but pretends to be.” Kristensen v. Credit Payment Servs. Inc. is the only case in our circuit, or any circuit, that analyzes in what circumstances ratification may create an agency relationship when none existed before as described in the Restatement (Third) of Agency. 879 F.3d 1010 (9th Cir. 2018). It also happens to be a TCPA case. In Kristensen, Plaintiff Kristensen received a text message from a texting publisher, AC Referral, on his cell phone without his prior consent. Id. at 1012. AC Referral sent the text messages as part of a marketing campaign for payday lenders. Id. Kristensen brought a TCPA class action against the lenders and marketing companies but not AC Referral, the entity that sent the texts. Id. at 1013. The district court granted summary judgment in favor of the defendants, rejecting Kristensen’s theories of vicarious liability, including his theory that the defendants ratified AC Referral’s unlawful texting campaign by accepting customer leads while knowing that AC Referral was using texts to generate those leads. Id. We affirmed the district court’s grant of summary judgment, holding that “[b]ecause AC Referral (which is not a party to the suit) was neither the agent nor purported agent [ ] of the defendants, they could not have ratified AC Referral’s acts.” Id. at 1012. 12 HENDERSON V. UNITED STUDENT AID FUNDS Unlike the texting publisher in Kristensen, here, a reasonable jury could find that the debt collectors pretended and demonstrably assumed to act as USA Funds’ agents. See Restatement § 4.01 cmt b. As previously described, the debt collectors collected on unpaid loans by calling the studentborrowers. The collectors told the borrowers that they were calling about a loan owned by USA Funds. Without needing USA Funds’ approval, the collectors negotiated, deferred, and took payments on USA Funds’ behalf. In Kristensen, the texting publisher did not pretend to be the lenders’ agent because the publisher did not identify itself in the text message. Id. at 1012. Rather, the text message simply included a link to the lenders’ website. Id. Before the litigation, none of the text message recipients knew that AC Referral had sent the text messages. Kristensen v. Credit Payment Servs. Inc., 12 F. Supp. 3d 1292, 1297 (D. Nev. 2014). Because here, unlike in Kristensen, the debt collectors did purport to act as agents of USA Funds, Kristensen’s material facts are distinguishable from the facts in this case, and therefore, its holding is not binding here.