The Telephone Consumer Protection Act, while permitting personal liability against officers and directors, continues to shield related corporate entities from liability. The same corporate formalities that impose liability on officers and directors ironically work to shield corporate entities from the same liability.  

In Holland v. JPMorgan Chase Bank, plaintiff Steven W. Holland sued two different banking entities: JPMorgan Chase Bank, N.A., and Chase Bank USA, N.A., alleging that in 2012 they used an automated dialing system to place a “barrage” of robocalls to him, without his prior express consent, in violation of the TCPA. The two entities at that time were separate; they merged in 2018. The calls, however, were placed only by Chase Bank USA. 

JPMorgan Chase argued that Holland did not have standing to sue it. The Court agreed, noting that corporations can organize in such a way as to insulate related corporate entities from liability. Although the companies involved have a common parent, the Court found that they were entitled to a “presumption of separateness afforded to related corporations.” The Court held that robocalls placed by Chase Bank, which pre-dated the merger, could not be attributed to JPMorgan Chase. Holland attempted to show a unified link between the two, including via JPMorgan Chase’s current ownership of the Chase logo, but could not muster sufficient evidence to overcome the presumption of separateness. 

A potentially troublesome aspect of the merger was JPMorgan Chase’s acquisition of Chase Bank’s assets and liabilities. The Court differentiated between direct and vicarious liability. It noted that Holland might have standing to sue JPMorgan Chase on a vicarious liability theory, based on the merger agreement, but not on a direct liability theory. Although JPMorgan Chase might need to answer for Chase Bank’s conduct, there was no behavior of its own that Holland could allege violated the TCPA.  

JPMorgan Chase and Chase Bank allegedly placed the robocalls when they were legally separate entities. Holland, but for the merger, would have needed to establish that his injury was fairly traceable to the conduct of both Chase Bank and JPMorgan Chase to pursue claims against each. Because he could not do that, the assumption of liabilities in the merger was not applicable in this case. 

The takeaway from this decision is that corporations can continue to use corporate formalities to shield separate entities from liability under the TCPA. While directors and officers of the entities who participated in the alleged violations do not share the same protections, the corporate entities themselves likely are safe. 

Troutman Sanders’ Consumer Financial Services litigation practice, the Law360 Consumer Protection Practice Group of the Year for 2018, regularly litigates TCPA claims throughout the United States.