City Select Auto Sales Inc v. David Randall Associates Inc

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
Nos. 16-3000 & 17-1851
______________
CITY SELECT AUTO SALES INC., A NEW JERSEY
CORPORATION, INDIVIDUALLY AND AS THE
REPRESENTATIVE OF A CLASS OF
SIMILARLY SITUATED PERSONS,
Appellant
v.
DAVID RANDALL ASSOCIATES, INC.;
RAYMOND MILEY, III
v.
CAROLINE ABRAHAM, d/b/a Business to Business
Solutions; JOEL ABRAHAM, d/b/a Business to Business
Solutions
______________
APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF NEW JERSEY
(D.C. No. 1-11-cv-02658)
District Judge: Honorable Jerome B. Simandle
______________
Argued January 24, 2018
Before: HARDIMAN, VANASKIE, and SHWARTZ,
Circuit Judges.
(Filed: March 16, 2018)
Daniel J. Cohen [ARGUED]
Todd A. Lewis
Bock Hatch Lewis & Oppenheim
134 North La Salle Street
Suite 1000
Chicago, IL 60602
Alan C. Milstein
Sherman Silverstein Kohl Rose & Podolsky
308 Harper Drive
Suite 200, Eastgate Corporate Center
Moorestown, NJ 08057
Counsel for Appellant
F. Emmett Fitzpatrick, III [ARGUED]
Flamm Walton
794 Penllyn Pike
Suite 100
Blue Bell, PA 19446
Counsel for Appellees
2
_____________
OPINION
______________
HARDIMAN, Circuit Judge.
Plaintiff City Select Auto Sales, Inc. received
unsolicited fax transmissions advertising the services of
Defendant David Randall Associates, Inc. (David Randall).
Claiming that those faxes were sent in violation of the
Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227,
City Select sued David Randall and its former president and
co-owner, Raymond Miley, III. The case against Miley was
tried to a jury and he was found not liable under the TCPA.
After the United States District Court for the District of New
Jersey entered judgment in favor of Miley and denied City
Select’s motion for a new trial, City Select filed this timely
appeal.
I
A
At all relevant times, David Randall was a
Pennsylvania-based commercial roofing company. Miley was
its president and, with his wife, owned 90 percent of the
company. The company’s office manager, April Clemmer,
reported to Miley and her responsibilities included “[b]asic
secretarial duties” and “work with the service department.”
App. 354.
In March, April, and May 2006, David Randall hired
Business to Business Solutions (Business Solutions) to fax
3
unsolicited advertisements to thousands of fax numbers. The
first transmissions were sent on March 29 after Clemmer, with
Miley’s handwritten approval, confirmed by fax the content of
the ad, the quantity of faxes to be sent, and the areas to be
targeted. David Randall received complaints in response to that
initial foray into fax advertising, and Clemmer contacted
Business Solutions to have several fax numbers removed from
the list. On March 31, Business Solutions sent a second wave
of faxes, which prompted several recipients to ask that their fax
numbers be taken off the list. Two days later came a third burst
of transmissions and on May 15, 2006, Business Solutions sent
a fourth and final “blast” of 12,000 faxes.
B
1
City Select (on behalf of itself and a class of similarly-
situated fax recipients) sued both David Randall and Miley in
the United States District Court for the District of New Jersey.
City Select’s complaint alleged that the four fax campaigns had
violated the TCPA’s prohibition against unsolicited fax
advertising. After discovery, the parties filed summary
judgment motions. The Court denied David Randall’s and
Miley’s motion for summary judgment. City Select Auto Sales,
Inc. v. David Randall Assocs., Inc., 2014 WL 4755487, at *1,
*4–10 (D.N.J. Sept. 24, 2014). It also denied City Select’s
motion for summary judgment against Miley. It granted City
Select’s motion against David Randall, however, and entered
judgment against the company in the amount of $22,405,000.
4
City Select Auto Sales, Inc. v. David/Randall Assocs., Inc., 96
F. Supp. 3d 403, 416–22, 427–28 (D.N.J. 2015). 1
The case proceeded to trial on the question of Miley’s
personal liability under the TCPA. The evidence on that point
was mixed. On direct examination, Clemmer testified that
Miley first suggested fax advertising through Business
Solutions and instructed her to contact the company to inquire
about its services. Clemmer said she contacted Business
Solutions on Miley’s behalf, reported back to him, and needed
his approval to engage such advertising services. She also
testified that Miley reviewed proposed advertisements,
authorized payment for the same, and generally acted as the
“ultimate decision-maker” in approving the content, quantity,
timing, and targeting of the transmissions. App. 361. On cross-
examination, however, Clemmer admitted that she had no
actual recollection of the fax campaigns or Miley’s
involvement in them and that her testimony was based on
“[t]he way things worked.” App. 444. She also stated that she
was the only David Randall employee who communicated
directly with Business Solutions, and that Miley, in the
ordinary course, would not have seen or reviewed all of
Clemmer’s outgoing fax communications.
The jury also heard Miley’s response to an
interrogatory, Miley’s pretrial stipulations, and Miley’s own
testimony. In his interrogatory response, Miley conceded that
David Randall was “aware that . . . Miley participated in
1
David Randall filed a third-party complaint and
obtained a default judgment for $22,405,000 against Caroline
and Joel Abraham, d/b/a Business to Business Solutions. City
Select Auto Sales, Inc. v. David/Randall Assocs., Inc., 2015
WL 4507995, at *4–5 (D.N.J. July 23, 2015).
5
decisions to send some facsimile transmissions.” App. 644.
Moreover, the jury was told that Miley stipulated that:
(1) Miley was in charge of David Randall’s marketing and
advertising; (2) Miley instructed Clemmer to investigate
Business Solutions’s fax services; (3) Clemmer contacted
Business Solutions on the company’s and Miley’s behalf and
relayed the information she received to Miley; and (4) with
Miley’s help, Clemmer sent information to Business Solutions
about the fax advertisements David Randall wished to send.
Miley testified in person, however, that he did not: create the
advertisement Business Solutions sent; discuss anything
related to the campaigns with Clemmer; review any
communications to or from Clemmer relating to the fax blitzes;
communicate with Business Solutions; or authorize any of the
conduct at issue in the case. Indeed, he stated that although he
generally signed checks on behalf of David Randall, he “had
no involvement in this at all, none,” App. 618; see also App
624 (“I’ve had no involvement, meaningful or not.”).
2
Based on the evidence presented at trial, the District
Court produced a set of draft jury instructions. As originally
proposed, draft Instruction 17 required the jury to find that
Miley had a “high level” of personal involvement to hold him
liable. App. 651. City Select objected to that language during
the charge conference. It then consented to the District Court’s
suggestion to change “high” to “significant” and to include a
reference to Instruction 18 after the term “significant.” App.
652–53.
City Select also objected to draft Instruction 18, which
stated that to hold a corporate officer liable under the TCPA,
“[t]he officer must have knowledge that he is directly
6
participating in or authorizing the conduct in question.” App.
654. City Select asserted that there was no authority for such a
knowledge requirement. The District Court disagreed,
explaining that “[t]he reason I believe the individual liability
of a corporate officer requires that the person have knowledge,
that what they’re doing is authorizing fax advertising, is
because of the enormous liability . . . that can trigger for the
person.” App. 655.
The District Court then gave the jury the following
instruction (Instruction 17) as to TCPA liability:
As I instructed you at the beginning of this
trial, a TCPA claim for sending an unsolicited
fax generally requires proof that: (1) the
defendant utilized or caused to be utilized a
telephone facsimile machine to send one or more
faxes; (2) that the transmissions constituted
advertisements; (3) that the defendant sent the
transmissions without the recipient’s consent and
outside of any one of the statutory exemptions;
(4) that the defendant qualifies as a “sender” for
purposes of the TCPA, that is, the entity on
whose behalf an unsolicited facsimile
advertisement is sent or whose goods or services
are advertised or promoted in the unsolicited
advertisement, or a person acting on behalf of
that entity; and, in the case of an individual,
(5) that the individual defendant had a significant
level of personal involvement in the unlawful fax
transmissions, as explained below.
7
Ohio App. 307. The Court described the requirements for personal
liability (Instruction 18) as follows:
As a general matter, if a corporation is
found to have violated a federal statute, its
officers will not be personally liable solely
because of their status as officers. Under the
TCPA, however, an individual acting on behalf
of a corporation may, under certain limited
circumstances, be held personally or individually
liable for the corporation’s violations of the
TCPA if the individual: (1) had direct, personal
participation in the conduct found to have
violated the TCPA, or (2) personally authorized
the conduct found to have violated the TCPA.
This requirement is phrased in the alternative; it
is sufficient if Plaintiff proves either that Mr.
Miley had direct, personal participation in the
conduct found to have violated the TCPA, or that
Mr. Miley personally authorized the conduct
found to have violated the TCPA.
Thus, the personal liability of a corporate
director or officer must be founded upon his
active oversight of, or control over, the conduct
that violated the TCPA, rather than merely
tangential involvement. Involvement is
“tangential” if it is routine, passive or ministerial.
The officer must have knowledge that he
is directly participating in or authorizing the fax
advertising, but he need not know that the
conduct violates the TCPA. Whether the
8
corporate officer knows that the conduct violates
the TCPA is not relevant to your consideration.
App. 309–10. The jury also was given a verdict sheet that asked
them, in Question 1, to decide whether Miley “ha[d] direct,
personal participation in the . . . unsolicited fax campaign[s].”
App. 320–21.
During its deliberation, the jury requested
clarification for the degree of personal
participation for question #1, for the first
unsolicited fax campaign. Our instructions
indicate we have to determine if Miley had a
“significant level” of personal involvement in
the unlawful fax transmissions, or active oversite
[sic], not routine or passive. This is not the
wording of question #1, where it only states
personal participation. Thank you.
App. 318. After considering the parties’ positions, the Court
told the jury that
The requirement of a “significant level of
personal involvement in the unlawful fax
transmissions” applies to determining both
whether he (1) had direct, personal participation
in the conduct found to have violated the TCPA,
or (2) personally authorized the conduct found to
have violated the TCPA.
As explained in Instruction No. 18, such
significant level of personal involvement
requires the officer’s active oversight of, or
9
control over, the conduct that violated the TCPA,
rather than merely tangential, routine, passive or
ministerial involvement. He must, at a minimum,
have knowledge that he is directly participating
in or authorizing the fax advertising, or his
involvement will not be significant.
Thus, for example, if you find, in considering
Question 1, that Mr. Miley had direct, personal
participation at a level of involvement that was
“significant,” then your answer will be Yes.
Otherwise, your answer will be No.
App. 319. The jury answered “No,” absolving Miley of
personal liability.
City Select moved for a new trial pursuant to Rule 59(a)
of the Federal Rules of Civil Procedure, arguing that the
District Court erred in instructing the jury and in responding to
the jury’s question. The Court denied the motion. City Select
Auto Sales, Inc. v. David Randall Assocs., Inc., 2017 WL
1170828, at *4–10 (D.N.J. Mar. 28, 2017). As to Instruction
17, it reasoned that “[t]he use of the word ‘significant’ was
appropriate explanatory commentary,” id. at *6, and it used
that word “to clarify that the Defendant could not merely be
tangentially involved in the operation,” id. at *7. The Court
also noted that had the jury believed Clemmer’s testimony, it
“easily could have found that Mr. Miley was ‘significantly’
involved.” Id. The Court also declined to reconsider its
inclusion of the knowledge requirement in Instruction 18,
reasoning that “[i]t is unclear how one could have direct and
personal participation in a campaign if one did not have any
knowledge of his or her actions,” and again that if the jury had
10
believed Clemmer’s testimony, it would not have had a
problem finding the required level of knowledge. Id. at *10.
II 2
A
City Select appeals the District Court’s instructions as
to personal liability under the TCPA. As an initial matter, we
note that there is a real question as to whether Miley can be
held liable under the statute at all.
We start with the text of the TCPA and its implementing
regulations. The TCPA declares it “unlawful for any person
within the United States . . . to use any telephone facsimile
machine . . . or other device to send, to a telephone facsimile
machine, an unsolicited advertisement.” 47 U.S.C.
§ 227(b)(1)(C) (emphasis added). The statute delegates to the
Federal Communications Commission (FCC) authority to
“prescribe regulations to implement the requirements of . . .
subsection [227(b)].” Id. § 227(b)(2). And pursuant to that
authority (which includes the power to make rules enforceable
through the TCPA’s express private right of action, Id.
§ 227(b)(3)(A)), the agency has clarified that the sender
subject to liability under the statute is the person “on whose
behalf [the faxes] are transmitted,” In re Rules and Regulations
2
The District Court had jurisdiction under 28 U.S.C.
§ 1331. See Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368,
376, 386–87 (2012). Our jurisdiction lies under 28 U.S.C.
§ 1291.
11
Implementing the Telephone Consumer Protection Act of 1991,
10 FCC Rcd. 12391, 12407 (1995) [hereinafter 1995 Order]. 3
City Select’s argument that Miley is a “sender” relies on
language from the 1995 Order stating that liability falls on the
“author or originator” of the faxes, and from the Eleventh
Circuit’s statement in Palm Beach Golf Center-Boca, Inc. v.
John G. Sarris, D.D.S., P.A., 781 F.3d 1245 (11th Cir. 2015),
that the “on whose behalf” standard is meant to place liability
“at the source of the offending behavior.” City Select Supp. Br.
1–2 (quoting 1995 Order, 10 FCC Rcd. at 12407; Palm Beach
Golf Ctr., 781 F.3d at 1257). Miley is a sender, City Select
asserts, “because [he] was the ‘author or originator’” of the
relevant faxes. Id. at 2.
City Select’s argument is questionable. To the extent
Miley planned and executed a fax campaign, he did so in his
corporate capacity rather than his personal one. “[I]ndividuals
ordinarily are shielded from personal liability when they do
business in a corporate form, and . . . it should not lightly be
inferred that Congress intended to disregard this shield.”
Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299,
1313 (11th Cir. 2013) (quoting Baystate Alt. Staffing, Inc. v.
Herman, 163 F.3d 668, 677 (1st Cir. 1998)) (discussing direct
liability of corporate officers under the Fair Labor Standards
Act). The question is not whether Miley was an “author” of
unsolicited faxes in the colloquial sense, but whether Congress
and the FCC intended that we look behind the corporate form
and impose personal liability on officers who act on the
corporation’s behalf rather than their own.
3
City Select relies on this interpretation, and neither
party questions whether we should defer to it.
12
We question whether Congress intended as much in
cases like this one. Only one court of appeals has explored the
“on whose behalf” standard in a precedential opinion. In Siding
and Insulation Co. v. Alco Vending, Inc., 822 F.3d 886 (6th Cir.
2016), the Sixth Circuit confronted another case in which a
company had hired Business Solutions to conduct fax
advertising. Synthesizing existing authority on the point, the
court explained that “on whose behalf” should not be
interpreted “with a layperson’s understanding of what that
phrase might mean.” Id. at 899. Rather, it is a “term of art that
should be interpreted in a way that seeks to hold liable the
[actor] ultimately at fault in causing a TCPA violation.” Id.
Alco Vending involved determining which of two
companies—Business Solutions or the defendant—would be
held liable for a violation, not allocating liability between a
corporation and its own officer as this case does. So, in addition
to addressing the concerns raised by the Sixth Circuit in Alco
Vending, courts facing situations like ours will have to give
some weight to federal law’s general presumption of respect
for the corporate form.
One possibility is that courts will account for that
presumption by considering whether the relationship between
the corporation and the individual defendant was “eccentric
under accepted norms” of corporate conduct such that faxes
were really sent on behalf of the individual instead of the entity.
Cf. United States v. Bestfoods, 524 U.S. 51, 72 (1998) (holding
that notwithstanding the presumption that parent corporations
are not liable for the acts of their subsidiaries, a parent may be
directly liable under the Comprehensive Environmental
Response, Compensation, and Liability Act as an “operator” of
a subsidiary’s facility when its “actions . . . are eccentric under
accepted norms of parental oversight”). We think the result of
13
this case under that test would be straightforward: Miley was
not in privity with Business Solutions, only David Randall was.
The faxes advertised David Randall’s services, not Miley’s.
The company—not Miley—paid Business Solutions. And
most importantly, there is no allegation, much less any
evidence, that Miley disregarded or violated corporate norms
with respect to David Randall. Under these circumstances, the
faxes were sent on behalf of David Randall, so it is hard to see
how Miley could be deemed a “sender” under the TCPA.
The question of whether Miley was a “sender,”
however, was never presented to the District Court, and it was
raised here only on our order requesting supplemental briefing.
Prior to our mention of the issue, the parties and the District
Court relied on the longstanding consensus among district
courts that the contours of corporate officer liability under the
TCPA are defined by federal common law rather than by the
text of the statute. On that view, an officer is personally liable
for an illegal fax if he “had direct, personal participation in or
personally authorized the conduct found to have violated the
statute.” Texas v. Am. Blastfax, Inc., 164 F. Supp. 2d 892, 898
(W.D. Tex. 2001). As initially briefed, this appeal was about
whether the District Court properly instructed the jury on that
theory.
We doubt as well, however, whether such common-law
personal-participation liability is available against corporate
officers under the TCPA. To be sure, the idea that Congress
may establish statutory liability without expressly providing
for it is not without precedent. Courts generally assume that
“when Congress creates a tort action, it legislates against a
legal background of ordinary tort-related . . . liability rules and
consequently intends its legislation to incorporate those rules.”
Meyer v. Holley, 537 U.S. 280, 285 (2003) (discussing
14
vicarious liability). But the United States Code abounds with
examples of Congress expressly authorizing personal-
participation liability or something quite like it. For example,
corporate antitrust violations are “deemed to be also that of the
individual directors, officers, or agents . . . who shall have
authorized, ordered, or done any of the acts constituting in
whole or in part such violation.” 15 U.S.C. § 24. Because
Congress has demonstrated in many statutes that it “kn[ows]
how to impose” personal-participation liability “when it
cho[oses] to do so,” the argument that Congressional silence
indicates an intent to do so here is a weak one at best. Cent.
Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A.,
511 U.S. 164, 176–77 (1994).
Moreover, to the extent that some of our cases appear to
hold that traditional forms of common-law personal liability
remain available under federal statutes by default, that
assumption may no longer be valid. More than 20 years ago,
the Supreme Court held in Central Bank of Denver that where
“the text of the 1934 Act [did] not itself reach those who aid
and abet a § 10(b) violation,” “that conclusion resolve[d] the
case” because “[i]t is inconsistent with settled methodology in
§ 10(b) cases to extend liability beyond the scope of conduct
prohibited by the statutory text.” Id. at 176–77.
Central Bank of Denver addressed aiding-and-abetting
liability rather than personal-participation liability, but we see
little reason why its reasoning would not apply with equal force
here. Under the circumstances just described, the fact that
personal-participation liability was available against corporate
officers at common law (emphasized by our colleague’s
concurring opinion) would not seem dispositive. As the Court
made clear in Central Bank of Denver, it would have reached
the same result “[e]ven assuming . . . a deeply rooted
15
background of aiding and abetting tort liability.” Id. at 184. Put
simply, in the wake of Central Bank of Denver, “statutory
silence” as to the continuing availability of common-law
liability arguably “means there is none.” Boim v. Holy Land
Found. for Relief and Dev., 549 F.3d 685, 689 (7th Cir. 2008)
(en banc) (Posner, J.).
We may, of course, affirm for any basis supported by
the law and the record. See, e.g., Migliaro v. Fidelity Nat’l
Indemnity Ins. Co., 880 F.3d 660, 664 n.6 (3d Cir. 2018). And
carried to their logical ends, our doubts as to the existence of
either a statutory or common-law basis for Miley’s liability
would permit us to affirm the judgment of the District Court on
the ground that Miley cannot be held liable under the TCPA at
all. Yet we are reluctant to decide such an important question
when it was neither litigated in the District Court nor fully
briefed and argued on appeal. Accordingly, we will assume
without deciding that Miley may be held liable for David
Randall’s TCPA violations under a personal-participation
theory. For the reasons that follow, however, we will affirm the
judgment of the District Court because we perceive no
reversible error in the jury instructions.
B
We exercise plenary review of a district court’s jury
instruction to determine whether the instruction misstated the
applicable law. Egan v. Del. River Port Auth., 851 F.3d 263,
269 (3d Cir. 2017). City Select argues that the Court erred in
instructing the jury that it needed to find that Miley’s
involvement was “significant,” that he exercised “active
oversight,” and that he had “knowledge that he [was] directly
participating in or authorizing the fax advertising.” City Select
Br. 25–26. We disagree.
16
Assuming that personal-participation liability is in fact
available under the TCPA, a corporation’s officer “may be
personally liable under the [statute] if he had direct, personal
participation in or personally authorized the conduct found to
have violated the statute, and was not merely tangentially
involved.” Am. Blastfax, 164 F. Supp. 2d at 898; see also, e.g.,
Ott v. Mortg. Inv’rs Corp. of Ohio, Inc., 65 F. Supp. 3d 1046,
1060 (D. Or. 2014); Balt.-Wash. Tel. Co. v. Hot Leads Co., 584
F. Supp. 2d 736, 745 (D. Md. 2008). In other words, a
corporate officer can be personally liable if he “actually
committed the conduct that violated the TCPA, and/or [he]
actively oversaw and directed this conduct.” Am. Blastfax, 164
F. Supp. 2d at 897. 4
The District Court’s instructions did not misstate the
applicable law. First, Instruction 17’s use of the words
“significant level,” App. 307, plainly referred to Instruction
18’s provisions that Miley could be liable if he “(1) had direct,
personal participation in the conduct found to have violated the
TCPA, or (2) personally authorized the conduct found to have
violated the TCPA,” and its additional statement that liability
for an officer “must be founded upon his active oversight of,
or control over, the conduct that violated the TCPA, rather than
merely tangential involvement,” App. 309. Those
requirements were simply concrete descriptions of what
4
Some courts have required more, holding that “[s]ome
showing of intentional misconduct or gross failure to
implement policies that comply [with the TCPA] should be
required.” Appelbaum v. Rickenbacker Grp., Inc., 2013 WL
12121104, at *3 (S.D. Fla. July 31, 2013) (quoting Mais v. Gulf
Coast Collection Bureau, Inc., 2013 WL 1283885, at *4 n.1
(S.D. Fla. Mar. 27, 2013)).
17
constitutes a “significant” level of involvement, and the word
“significant” did not impose a higher burden of proof.
Second, the District Court appropriately answered the
jury’s question about the word “significant” because, in its
response, the Court tied that word to the requirement that the
officer exercised “active oversight of, or control over, the
conduct that violated the TCPA, rather than merely tangential,
routine, passive or ministerial involvement.” App. 319. Third,
that other courts have not used the word “significant” does not
mean that the District Court’s instructions were contrary to
those decisions. Indeed, the use of the word “significant” is
consistent with cases that have held that corporate officers can
be personally liable when they “actively oversaw and directed
th[e] conduct.” Am. Blastfax, 164 F. Supp. 2d at 897. Fourth,
the District Court did not erroneously add an element of proof
regarding a defendant’s state of mind. Requiring a finding that
the defendant-officer had “knowledge that he [was] directly
participating in or authorizing the fax advertising,” App. 309,
was simply part of proving direct participation. An officer
could not have directly and personally participated in a fax
advertising campaign without having knowledge of his actions.
Accordingly, the District Court did not err in instructing the
jury. 5
5
Even assuming the District Court erred in instructing
the jury, any error was harmless because it is “highly probable
that the error did not contribute to the judgment.” Egan, 851
F.3d at 276 (citation and internal quotation marks omitted). As
the District Court noted, Clemmer’s and Miley’s testimonies
differed in significant ways. In finding in favor of Miley, the
jury necessarily rejected Clemmer’s testimony.
18
C
City Select also contends that the District Court erred in
denying its motion for a new trial. A court may grant a new
trial “for any reason for which a new trial has heretofore been
granted in an action at law in federal court,” Fed. R. Civ. P.
59(a)(1)(A), but “it should do so only when the great weight of
the evidence cuts against the verdict and . . . a miscarriage of
justice would result if the verdict were to stand,” Leonard v.
Stemtech Int’l Inc., 834 F.3d 376, 386 (3d Cir. 2016)
(alteration, citation, and internal quotation marks omitted). We
review an order denying a motion for a new trial pursuant to
Rule 59 for abuse of discretion. Id. Because the District Court
did not err in instructing the jury, it did not abuse its discretion
in refusing to grant a new trial based on those instructions.
III
For the reasons stated, we will affirm the District
Court’s judgment and order.
19
SHWARTZ, Circuit Judge, concurring.
I agree with my colleagues that the District Court’s jury
instructions were not erroneous and its judgment should be
affirmed. However, the majority questions—in dicta—
whether a corporate officer may be held personally liable under
the TCPA. I write separately because a corporate officer
indeed may be held personally liable under the TCPA for
sending unsolicited fax advertisements for the officer’s
corporation.
I
Like the majority, I start with the statute’s text. The
TCPA makes it “unlawful for any person within the United
States . . . to use any telephone facsimile machine . . . to
send[ ] to a telephone facsimile machine[ ] an unsolicited
advertisement[.]” 47 U.S.C. § 227(b)(1)(C). Any “person”
includes individuals and corporations. 1 U.S.C. § 1. The
statute is silent, however, “as to who should be classified as a
sender of unsolicited fax advertisements.” Palm Beach Golf
Center-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d
1245, 1256 (11th Cir. 2015). Faced with this silence, the FCC
addressed the question of whether fax broadcasters can be
liable under the TCPA for sending unwanted faxes on behalf
of another. The FCC stated that “the entity or entities on whose
behalf facsimiles are transmitted are ultimately liable for
compliance with the rule banning unsolicited facsimile
advertisements, and that fax broadcasters are not liable for
compliance with this rule.” Rules and Regulations
Implementing the Telephone Consumer Protection Act of
1991, 10 FCC Rcd. 12391, 12407 (1995). That interpretation,
however, does not address whether individuals such as
1
corporate officers who authorized a broadcaster to send fax
advertisements may be held liable.
Given the statute’s and FCC’s silence on this particular
question, we look to the legislative backdrop to the TCPA. The
TCPA codifies common law torts such as invasion of privacy,
nuisance, and trespass to chattels. See Mims v. Arrow Fin.
Servs., LLC, 565 U.S. 368, 372 (2012) (stating that Congress
enacted the TCPA to, among other things, curtail “intrusive
invasion[s] of privacy” (citation and internal quotation marks
omitted)); Maryland v. Universal Elections, Inc., 729 F.3d 370,
376-77 (4th Cir. 2013) (explaining that the TCPA is meant to
protect privacy); Bell v. Survey Sampling Int’l, LLC, No. 3:15-
CV-1666 (MPS), 2017 WL 1013294, at *3 (D. Conn. Mar. 15,
2017) (explaining that the TCPA embodies the common-law
tort of invasion of privacy); Klein v. Hyundai Capital Am., No.
8:16-cv-01469-JLS-JCGx, 2016 WL 10519281, at *2 (C.D.
Cal. Dec. 6, 2016) (stating that “‘[t]he TCPA codifies one
application of the long-recognized common law tort of
invasion of privacy’ as well as ‘the tort of nuisance.’”
(alterations omitted) (quoting LaVigne v. First Cmty.
Bancshares, Inc., No. 1:15-CV-00934-WJ-LF, 2016 WL
6305992, at *7 (D.N.M. Oct. 19, 2016)); Mey v. Got Warranty,
Inc., 193 F. Supp. 3d 641, 645, 647 (N.D.W. Va. 2016) (stating
that “the TCPA can be seen as merely liberalizing and
codifying the application of th[e] common law tort [of
intrusion-upon-seclusion as invasion of privacy] to a
particularly intrusive type of unwanted telephone call” and that
unwanted calls bear “a close relationship” to the “ancient
common law tort” of trespass to chattels). “[W]hen Congress
creates a tort action, it legislates against a legal background of
ordinary tort-related . . . liability rules and consequently
intends its legislation to incorporate those rules.” Meyer v.
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Holley, 537 U.S. 280, 285 (2003). A statute’s silence as to
those background rules “cannot show that [Congress] intended
to apply an unusual modification of those rules.” Id. at 286.
Thus, we consider the TCPA’s language in light of common-
law tort principles.
The most relevant tort principle here is that corporate
officers can be personally liable for their own torts.
Specifically, “[a] corporate officer is individually liable for the
torts he personally commits and cannot shield himself behind
a corporation when he is an actual participant in the tort.”
Donsco, Inc. v. Casper Corp., 587 F.2d 602, 606 (3d Cir.
1978); see also, e.g., Zubik v. Zubik, 384 F.2d 267, 275 (3d
Cir. 1967) (“The general, if not universal, rule is that an officer
of a corporation who takes part in the commission of a tort by
the corporation is personally liable therefor; but that an officer
of a corporation who takes no part in the commission of the tort
committed by the corporation is not personally liable to third
persons for such a tort . . . unless he specifically directed the
particular act to be done, or participated, or cooperated
therein.” (quoting 3 Fletcher Cyclopedia of the Law of
Corporations § 1137 (perm. ed. rev. 1965)); Hitchcock v. Am.
Plate Glass Co., 259 F. 948, 953 (3d Cir. 1919) (holding that
an officer of a corporation is a joint tortfeasor, along with the
corporation, as to torts “which he actually brings about” and
“in which he actually participates”). Applying this common-
law rule to TCPA claims is consistent with the FCC’s
interpretation of “sender” because, as long as the officer is
sufficiently involved in the illegal fax transmissions, liability
lies with him or her as a “person” who is the source of the
wrongful conduct. See Palm Beach Golf Center-Boca, 781
F.3d at 1257 (“By construing the sender as the party ‘on whose
behalf facsimiles are transmitted,’ the FCC has placed liability
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at the source of the offending behavior that Congress intended
to curtail.” (citation omitted)). Moreover, other statutes that
use the term “any person” also have been interpreted to apply
to corporate officers. See, e.g., Maryland v. Universal
Elections, 787 F. Supp. 2d 408, 416 (D. Md. 2011) (noting
several statutes that impose liability on “any person,” including
corporate officers in their personal capacity). Thus, corporate
officers who personally engage in or authorize actions that
violate the TCPA may be held liable for those violations.
Miley argues that he cannot be liable under the
personal-participation theory because it is equivalent to an
aiding-and-abetting claim. His argument fails. Aiding-and-
abetting liability “create[s] secondary liability in persons other
than the violator of the statute,” id. at 184 (citation and internal
quotation marks omitted), and thereby extends liability to those
who aid the violator, id. at 176. Personal-participation liability
differs from aiding-and-abetting liability. The former
penalizes a tortfeasor for conduct that violates or causes the
violation of the statute, while the latter penalizes conduct that
does not itself violate the statute. See Balt.-Wash. Tel. Co. v.
Hot Leads Co., 584 F. Supp. 2d 736, 745-46 (D. Md. 2008)
(rejecting a claim for aiding-and-abetting a TCPA violation but
stating that individual corporate defendants can be liable under
the TCPA because of their involvement in sending unsolicited
faxes or causing such faxes to be sent); cf. Elec. Lab. Supply
Co. v. Cullen, 977 F.2d 798, 803-08 (3d Cir. 1992) (rejecting
an aiding-and-abetting theory of liability under the Lanham
Act’s ex parte seizure provision because the provision
specifically governs the “applicant” whose trademark was
violated, and the term “applicant” is narrower than the term
“any person” under § 43(a) of the Lanham Act, which provides
a basis for personal liability of corporate officers). The fact
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that a statute does not explicitly provide for aiding-and-
abetting liability does not mean that it forecloses personal
liability for violations of the statute.
Accordingly, notwithstanding the TCPA’s silence as to
personal liability for corporate officers and the FCC’s
interpretation concerning whether a fax broadcaster can be
liable, a corporate officer can face personal liability under the
TCPA for actions he personally authorized or took. The
District Court’s instructions properly informed the jury of this
basis for liability.
II
For these reasons, I concur.
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