Warciak v. Subway Rests., Inc.

• Decision Date: 05 February 2020
• Docket Number: No. 19-1577,19-1577
• Citation: 949 F.3d 354
• Parties: Matthew WARCIAK, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. SUBWAY RESTAURANTS, INCORPORATED, a Delaware Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

949 F.3d 354

Matthew WARCIAK, individually and on behalf of all others similarly situated, Plaintiff-Appellant,

v.SUBWAY RESTAURANTS, INCORPORATED, a Delaware Corporation, Defendant-Appellee.

No. 19-1577

United States Court of Appeals, Seventh Circuit.

Argued December 12, 2019

Decided February 5, 2020

Ryan D. Andrews, Roger Perlstadt, Alexander Glenn Tievsky, Attorneys, EDELSON P.C., Chicago, IL, for Plaintiff - Appellant.

Lawrence H. Heftman, Charles H.R. Peters, Attorneys, SCHIFF HARDIN LLP, Chicago, IL, Kristine McAlister Brown, Attorney, ALSTON & BIRD LLP, Atlanta, GA, for Defendant - Appellee.

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 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.

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, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ).

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 , ––– U.S. ––––, 136 S. Ct. 663, 667, 193 L.Ed.2d 571 (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 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, 102 S.Ct. 1935, 72 L.Ed.2d 330 (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...