Havassy v. Keller Williams Realty: Franchisor Control Supports Specific Jurisdiction Over Agent Calls

Background

The plaintiff registered his two cell numbers with the National Do Not Call Registry. Over three days in December 2018, he received 24 voicemails, built from two prerecorded messages, from two agents identifying themselves as part of a Keller Williams team and seeking to list his home. He sued the franchisor under the Telephone Consumer Protection Act (TCPA) and later added the two agents.

The case took a long route. It was transferred to the Western District of Texas under the first-to-file rule and consolidated with other class actions against the franchisor. The franchisor then settled a nationwide class action in Florida state court, but claims based on these two agents' calls were expressly excluded. The Texas court transferred the case back, and the franchisor moved to dismiss after jurisdictional discovery.

No General Jurisdiction

The franchisor is incorporated and headquartered in Texas; it maintains no offices in Pennsylvania and employs 16 people in the state who work from home. It licenses 121 market centers in Pennsylvania, which sold over 160,000 properties during the class period and paid at least $14 million in royalties (about 3% of its gross revenue). Applying Daimler, the court held that was not enough to make the franchisor "at home" in Pennsylvania. Its website, which only lists agents and offices and allows no transactions, did not change that under the Zippo sliding scale.

Specific Jurisdiction

Specific jurisdiction was a different matter. The franchisor did purposefully avail itself of the Pennsylvania forum, however, through its licensing agreements, advertising and royalty revenue. The harder question was relatedness, and the court found it satisfied by the franchise agreement's control provisions.

The agreement requires market centers to use the franchisor's "System," including its integrated software. The franchisor supplies the lead database, retains control over advertising, governs telemarketing training, and can stop a noncompliant center from doing business. The court found the agents used the franchisor's system and recommended script, and that the plaintiff's number came from its database. The agents invoked the franchisor's brand name in the calls and their email addresses. That the franchisor's own employees did not dial was not dispositive: its conduct was connected to the calls. Under Ford Motor Co. v. Montana Eighth Judicial District Court, relatedness does not require strict causation.

This contrasts with rulings declining jurisdiction where the defendant's link to the calls runs only through layers of contractors without comparable control.

The Release Defense

The agents argued a general release the plaintiff signed in earlier state cases against other agents from the same office barred his claims. The court held that release is an affirmative defense under Rule 8(c), not a Rule 12(b) ground, and it was not apparent on the face of the complaint. Whether it covers these agents remains open.

Practical Points

• Franchisors: Control over lead databases, scripts and telemarketing training can create forum contacts tied to agent calls.
• Defendants relying on releases: Plead them in the answer and flesh out the record. A motion to dismiss is usually the wrong vehicle.

Read the Eastern District of Pennsylvania memorandum opinion.