Seventh Circuit Narrows TCPA Vicarious Liability for Multi-Tier Telemarketing Vendors

Case Snapshot

• Court: U.S. Court of Appeals for the Seventh Circuit
• Case: Robert Hossfeld v. Allstate Insurance Company
• Decision Date: June 24, 2026
• Core Issue: Whether an insurer could be held vicariously liable under the TCPA for calls placed by a downstream subcontracted telemarketer and what standard governs treble damages.
• Key Allegation: Plaintiff alleged telemarketing calls violated the TCPA’s internal do-not-call rules despite his placement on Allstate’s internal do-not-call list.
• Court Holding: The plaintiff failed to establish vicarious liability under theories of subagency, apparent authority, or ratification. The court also held that TCPA treble damages require knowing or reckless violations.
• Outcome: Denial of class certification affirmed. Summary judgment for the plaintiff reversed. Judgment was directed in favor of Allstate.
• Notable Detail: The court held that authority must exist at every level of a multi-tier telemarketing relationship before liability can be imposed on the principal.

A federal appeals court has limited the circumstances under which companies can be held liable for Telephone Consumer Protection Act (TCPA) violations committed by downstream telemarketing vendors, while also clarifying that treble damages require proof of a knowing or reckless violation rather than merely intentional conduct.

In Robert Hossfeld v. Allstate Insurance Company, the U.S. Court of Appeals for the Seventh Circuit reversed summary judgment against Allstate, holding that the plaintiff failed to establish that the insurer was vicariously liable for telemarketing calls made by a subcontracted call center several layers removed from Allstate’s direct relationship. The court also affirmed the denial of class certification.

Court Rejects Expanded Agency Theory

The case arose from 12 telemarketing calls that sought to generate auto insurance leads and, in certain instances, transfer Hossfeld to Allstate agencies, between November 2020 and February 2021. The plaintiff, Robert Hossfeld, had been on Allstate’s internal do-not-call list since July 2020.

Rather than placing the calls themselves, two Allstate agency owners hired Transfer Kings to conduct telemarketing on behalf of their agencies. Atlantic obtained telephone leads from another vendor, creating multiple layers between Allstate and the company that actually placed the calls.

The district court concluded that Allstate could nevertheless be held vicariously liable under agency principles. The Seventh Circuit disagreed.

The appellate court held that agency authority cannot simply be presumed through multiple levels of delegation. Instead, authority must exist at each step of the subcontracting chain.

According to the court, because Transfer Kings lacked authority from Allstate to appoint Atlantic as a subagent, liability could not automatically flow back to Allstate for Atlantic’s conduct. The court rejected the district court’s approach of effectively “collapsing” the various contractual relationships into a single agency relationship.

Court Rejects Alternative Agency Theories

The Seventh Circuit also found that Hossfeld failed to establish apparent authority.

Under longstanding agency principles, apparent authority requires some manifestation by the principal that would reasonably lead a third party to believe an agent has authority to act on its behalf. The court found no evidence that Allstate made any such representation to Hossfeld.

The court likewise rejected ratification as a basis for liability.

Ratification generally requires that a principal knowingly accept the benefits of unauthorized conduct or knowingly acquiesce after learning the material facts. Instead, the record showed Allstate investigated the matter and ultimately prohibited its agents from using Transfer Kings or Atlantic rather than accepting or approving the conduct.

Seventh Circuit Raises the Bar for TCPA Treble Damages

Although the court ultimately directed judgment in Allstate’s favor on liability, it addressed the district court’s interpretation of the TCPA’s enhanced damages provision because the issue is likely to arise in future litigation.

The district court had concluded that a violation is “willful” whenever the defendant intentionally performs the underlying conduct, even if it lacks knowledge that the conduct violates the TCPA.

The Seventh Circuit rejected that interpretation.

Instead, the court held that treble damages under 47 U.S.C. § 227(c)(5) require proof that the defendant knowingly violated the TCPA or acted with reckless disregard for whether its conduct complied with the law. Simply placing calls intentionally is not enough to justify enhanced damages. The court aligned its reasoning with the U.S. Supreme Court’s interpretation of “willful” in other civil statutory contexts and with decisions from other federal appellate courts addressing the TCPA.

Class Certification Denial Upheld

The Seventh Circuit also affirmed the district court’s denial of class certification.

Hossfeld identified evidence that 33 unique telephone numbers on Allstate’s internal do-not-call list had been contacted during the same telemarketing campaign. The court found that the evidence was insufficient to establish Rule 23’s numerosity requirement.

The panel emphasized that plaintiffs must present evidence showing not only the likely size of the proposed class but also why joining those individuals individually would be impracticable. Speculation about additional class members cannot satisfy that burden.

Why It Matters

The decision provides important guidance for financial institutions, creditors, collection agencies, insurers, and other businesses that use layered vendor relationships for telemarketing or customer outreach.

Among the key takeaways:

• Companies are not automatically liable for TCPA violations committed by downstream subcontractors simply because they authorized an upstream vendor.
• Plaintiffs must establish an agency relationship at each level of delegation when attempting to impose vicarious liability.
• Prompt investigation and corrective action after learning of questionable telemarketing practices may weigh against claims of ratification.
• Plaintiffs seeking treble damages face a higher evidentiary burden by demonstrating that defendants knowingly or recklessly violated the TCPA rather than merely acting intentionally.

The opinion is likely to become an important precedent within the Seventh Circuit for businesses defending TCPA claims involving outsourced marketing programs and complex vendor networks.