Court Opinion

ID: 4504763
Source: CourtListenerOpinion
Date Created: 2020-02-05 18:00:29.213985+00
Date Added: 2024-06-11T14:54:18.403314
License: Public Domain

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, INCORPO-
RATED, 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
2                                                  No. 19-1577

well-known stores. Messages are sent every Tuesday and
customers who no longer wish to receive marketing communi-
cations 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 underly-
ing 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.
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 cost-
shifting 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
4                                                    No. 19-1577

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 contrac-
tual 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
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
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.