United States District Court, E.D. Missouri, Eastern Division
JOSEPH PETRI, individually and on behalf of all others similarly situated, Plaintiff,
MERCY HEALTH D/B/A MERCY HOSPITAL ST. LOUIS, Defendant.
MEMORANDUM AND ORDER
CATHERINE D. PERRY UNITED STATES DISTRICT JUDGE.
Joseph Petri claims that defendant Mercy Health violated the
Telephone Consumer Protection Act, 47 U.S.C. § 227
et seq., when Valarity, LLC, a company Mercy
retained to collect its debts, called his cell phone using an
autodialer without his prior express consent. Now before me
is Mercy's motion for summary judgment. After careful
consideration, I conclude that Petri has failed to provide
evidence sufficient to create a disputed issue of material
fact that Valarity acted as Mercy's agent such that Mercy
may be held liable for Valarity's conduct. Petri has made
no claims regarding Mercy's own actions. Therefore, I
will grant Mercy's motion for summary judgment.
2010, Mercy entered into a Collection Services Agreement with
Valarity, LLC. Under the agreement, Valarity was to perform
various collection services for Mercy including
“telephone calls and requests for payment.” (Def.
SUMF, Ex. B-1, p. 8). The agreement contains a provision
stating that Valarity would be acting as an independent
contractor for Mercy and that nothing in the agreement should
be deemed to create an agency relationship between them. It
further states that each party would be solely responsible
for the acts, omissions, and control of its own employees.
Mercy itself expressly disclaims the existence of any agency
relationship between the entities and states, by affidavit,
that Valarity had no authority to act on behalf of Mercy and
Mercy had no authority to control the activities or actions
complaint, Petri alleges that Valarity used an automated
dialing system to call his cellular phone approximately 26
times between February and April 2014. The calls were made to
collect debt that “supposedly arose from medical
services claimed to be provided by [Mercy] to [Petri], which
was ultimately found to be a mistake.” (Complaint,
¶ 8). He claims Valarity's conduct violated the TCPA
at 47 U.S.C. 227(b)(1), and because Valarity was acting on
behalf of and as an agent for Mercy, Mercy should be held
liable here.[2" name="FN2" id=
"FN2">2] In his opposition to summary judgment,
Petri has included references to corporate and tax records
that he claims show that Valarity is owned by Mercy.
determining whether to grant summary judgment, the court
views the facts-and any inferences from those facts-in the
light most favorable to the nonmoving party. Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986). The movant bears the burden of establishing
that (1) it is entitled to judgment as a matter of law and
(2) there are no genuine issues of material fact.
Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986). Once the movant has met this burden,
however, the nonmoving party may not rest on the allegations
in its pleadings but must, by affidavit and other evidence,
set forth specific facts showing that a genuine issue of
material fact exists. Fed.R.Civ.P. 56(c)(1), (e). Where a
factual record taken as a whole could not lead a rational
trier of fact to find for the nonmoving party, there is no
genuine issue for trial. Matsushita, 475 U.S. at
alleges that Valarity's calls to his cell phone were made
with an autodialer without his prior express consent and
therefore in violation of 47 U.S.C. § 227(b). He claims
that Mercy is vicariously liable for Valarity's
violations because Valarity was acting as Mercy's agent.
In its motion for summary judgment Mercy argues that it
cannot be liable for Valarity's actions because Valarity
was not its agent.
should apply federal common-law principles of agency in
determining the existence of vicarious liability for TCPA
violations. In re Joint Petition Filed by Dish Network,
LLC, 28 F.C.C.R. 6574 (2013). See Cambell-Ewald Co.
v. Gomez, 136 S.Ct. 663');">136 S.Ct. 663, 673 (2016); Golan v.
Veritas Entertainment, LLC, No. 4:14CV00069, 2016 WL
880402, at *4 (E.D. Mo. March 8, 2016). Federal common law
generally follows the Restatement of Agency. Golan,
2016 WL 880402, at *4 (citing Opp v. Wheaton Van Lines,
Inc., 231 F.3d 1060');">231 F.3d 1060, 1064 (7th Cir. 2000).
is the fiduciary relationship that arises when one person (a
‘principal') manifests assent to another person (an
‘agent') that the agent shall act on the
principal's behalf and subject to the principal's
control, and the agent manifests assent or otherwise consents
so to act.” Restatement (Third) Of Agency § 1.01
(2006); see also S. Pac. Transp. Co. v. Cont'l
Shippers Ass'n, Inc., 2 F.2d 236');">642 F.2d 236, 238 (8th Cir.
1981) (“[a]gency is a legal concept that depends upon
the existence of certain factual elements: (1) the
manifestation by the principal that the agent shall act for
him; (2) the agent's acceptance of the undertaking; and
(3) the understanding of the parties that the principal is to
be in control of the undertaking”). “The party
asserting that a relationship of agency exists generally has
the burden in litigation of establishing its
existence.” Restatement (Third) of Agency § 1.02
cmt. d; see also Nippon Yusen Kaisha v. FIL Lines USA
Inc., 2d 343');">977 F.Supp.2d 343, 350 (S.D.N.Y. 2013) (applying
federal common law of agency and noting that party asserting
agency has burden of proof as to its existence).
argues that Valarity was not its authorized agent and points
to the language of its collections agreement with Valarity,
which contains a provision explicitly stating that Valarity
was not subject to Mercy's control and was acting as an
independent contractor. [ECF #28-1, 2');">p. 2]. Mercy has also
provided an affidavit from one of its vice presidents,
confirming that, as stated in the agreement, Valarity did not
have the authority to act on Mercy's behalf and Mercy had
no right to control Valarity. [ECF #28-2, p.
arguing that Valarity is Mercy's authorized agent, the
only evidence submitted by Petri is an affidavit from his
attorney, John Yanchunis, attesting that he found corporate
and tax records on the internet indicating Mercy is the
parent company of Valarity. This is not enough to create an
issue of material fact as to whether Valarity was acting as
Mercy's agent. Even assuming the records submitted by
Petri constitute admissible evidence, the Restatement
provides that, without more, evidence of a “common
legal relationship, ” such as the relationship between
“parent corporations and their subsidiaries” is
not enough to create an agency relationship. Restatement
(Third) Of Agency § 1.02. A close look at the documents
cited by Yanchunis reveal that they provide evidence only as
to the legal and tax relationship between Mercy and Valarity.
They establish nothing about the day-to-day business
relationship between the companies, and they provide no
evidence that Mercy controlled Valarity's collections
activities. As such, Petri has provided no evidence to
indicate that Valarity was acting as Mercy's authorized
agent when it violated the TCPA.
next cursorily argues that even if a formal agency
relationship did not exist between Valarity and Mercy, an
agency by ratification was created when Mercy accepted the
benefits of Valarity's actions. Petri is correct that in
pursuing TCPA claims, a formal agency relationship is not
required to establish a party's vicarious liability for
the illegal acts of a third-party; plaintiffs can also employ
principles of ratification and apparent authority.
Golan, 2016 WL 880402, at *4 (citing Dish
Network, 28 F.C.C.R. at 6586-87). “Ratification is
the affirmance of a prior act done by another, whereby the
act is given effect as if done by an agent acting with actual
authority.” Restatement (Third) Of Agency § 4.01
(2006). Petri argues that Mercy ratified Valarity's
actions by accepting money obtained in connection with
Valarity's calls. But Petri has neither alleged in his
complaint nor submitted evidence to show that he paid any
money to Valarity or Mercy. In fact, in his complaint, Petri
states that Valarity's attempts to collect money from him
turned out to be “mistaken.” Even if there were
evidence that Mercy received money collected from Petri by
Valarity, Mercy could not have ratified Valarity's
conduct because there is no evidence Mercy knew
Valarity's activities violated the TCPA. A party is not
“is not bound by [a] ratification if it was made
without knowledge of material facts about the act of the
agent….” Id. at § 4.06 cmt. b.;
see also Toney v. Quality Resources, Inc., 75