Seventh Circuit Rules Allstate Not Liable for Unauthorized Telemarketing Calls
A federal appeals court has ruled that Allstate Insurance Company cannot be held liable under the Telephone Consumer Protection Act (TCPA) for telemarketing calls made by a subcontractor that Allstate neither hired nor knew was participating in the campaign.
In a decision issued on June 24, 2026, the U.S. Court of Appeals for the Seventh Circuit reversed a lower court’s ruling that had found Allstate vicariously liable for twelve unwanted telemarketing calls made to a consumer whose number had already been placed on the insurer’s internal do-not-call list.
Instead, the appeals court concluded that the plaintiff failed to establish an agency relationship that would make Allstate legally responsible for the subcontractor’s actions.
The ruling offers important guidance for businesses that rely on third-party marketing partners, particularly when multiple contractors and subcontractors are involved in telemarketing campaigns.
How the telemarketing campaign unfolded
The calls at the center of the dispute were placed between November 2020 and February 2021, despite the plaintiff having requested to be added to Allstate’s internal do-not-call list on July 10, 2020.
According to the court, two Allstate insurance agents hired an outside telemarketing company to market insurance products. That company later subcontracted the work to Atlantic Telemarketing Center without notifying either the agents or Allstate.
The Seventh Circuit noted that neither Allstate nor its agents knew Atlantic existed or was marketing Allstate insurance until after the lawsuit had been filed. Because of that lack of knowledge, the court found there was no legal basis to conclude that Allstate had authorized the subcontractor to act on its behalf.
Appeals court rejects vicarious liability
The district court had previously ruled that liability flowed through the chain of contractors and awarded treble damages after finding the TCPA violations were willful.
The Seventh Circuit disagreed.
The court explained that agency authority cannot automatically pass through multiple levels of subcontracting. Each delegation of authority must itself be authorized. While Allstate’s contracts required its agents to ensure that outside marketing providers complied with applicable laws and the company’s do-not-call policies, nothing showed that the telemarketing firm had authority to appoint another company on Allstate’s behalf.
The ruling also rejected the plaintiff’s argument that the callers created apparent authority simply by claiming they represented Allstate. The court said apparent authority must arise from the principal’s own words or conduct, not from statements made by the alleged agent.
The plaintiff also acknowledged that he never intended to purchase insurance and merely pretended to be interested during the calls. As a result, the court found he could not demonstrate that he relied on any conduct by Allstate.
After learning about the calls, Allstate investigated the matter and prohibited its agents from working with both companies involved in the campaign, further undermining any claim that it had ratified the conduct.
Court raises the standard for treble damages
The decision also clarified what constitutes a “willful” violation under the TCPA.
The district court had concluded that the calls were sufficiently intentional to justify treble damages. The Seventh Circuit disagreed, holding that merely engaging in a voluntary act is not enough. Instead, a plaintiff must show that the defendant acted knowingly or recklessly before enhanced damages are available under the statute.
The court noted that it had not previously defined the meaning of “willful” in this section of the TCPA, making the decision a notable precedent for future litigation.
Class certification was also denied
The appeals court also upheld the lower court’s refusal to certify the case as a class action.
The plaintiff identified only thirty-three phone numbers connected to the telemarketing campaign. That fell short of the roughly forty-member threshold courts commonly consider when determining whether a proposed class is sufficiently numerous for class certification.
The Seventh Circuit ultimately sent the case back to the district court with instructions to enter judgment in Allstate’s favor. The decision also reinforces the court’s recent position on multi-tier telemarketing liability.
The Seventh Circuit has made clear that companies cannot automatically be held responsible for the actions of downstream subcontractors unless authority exists at every level of delegation, a principle that proved decisive in this case.
