Jewell v. Magnolia Bank: Unanswered Follow-Up Calls, a Warm Transfer and a Non-Fail-Safe Class Survive the Pleadings

The Calls

The plaintiff alleged she had her number on the registry. In November 2022, she received a call from a third-party telemarketing agency marketing mortgage refinancing on behalf of the bank. The next day another agency call came, and she was transferred to a representative who continued the refinancing pitch, and gave her a callback number. She later received two more calls from that number which she did not answer. She alleged no transaction or inquiry with the bank in the prior 18 months nor consent.

Direct Liability: Unanswered Calls Can Be Solicitations

The bank argued that the two unanswered calls from the representative's number were not shown to be solicitations. The court disagreed. The relevant question is the caller's purpose in initiating the call, not what happened on it. Applying common sense, calls from the number of a representative who had just pitched refinancing plausibly had a marketing purpose.

The bank argued that the plaintiff had to plead that she never made an inquiry to the bank, which would create an established business relationship. The court rejected that argument. An established business relationship is an affirmative defense, citing Bridging Communities Inc. v. Top Flite Financial Inc., 843 F.3d 1119 (6th Cir. 2016). The bank's reasoning that she never said she was uninterested committed the logical fallacy of denying the antecedent. In any event, she alleged no inquiry.

Vicarious Liability: The Warm Transfer

Following the Federal Communications Commission's 2013 Dish Network ruling, sellers can be vicariously liable under agency principles. The court found implied actual authority plausibly alleged. The agency held itself out as authorized to market the bank's services, and the plaintiff was smoothly transferred to a bank employee who accepted the call and followed up. With implied authority adequately pleaded, ratification was premature to resolve. The court called apparent authority a close question, because apparent authority must rest on the principal's conduct, but did not need to decide.

Class Allegations Stay

Striking class allegations before discovery requires showing certification is impossible. The proposed class covered registered numbers that received two or more telemarketing calls within 12 months from the bank "or its agents."

• Not overbroad or fail-safe. The bank said the class swept in people who consented or had a business relationship. But defining the class to exclude them would create an impermissible fail-safe class. Members have a claim even if some face affirmative defenses.
• Commonality. Defenses affecting some members do not defeat common questions.
• Objective. Membership turns on registry status and receipt of solicitations, not a merits ruling.
• Not vague. "Or its agents" reflects both direct and vicarious theories.
• Typical. The plaintiff fit the class because unanswered calls can be telemarketing and vicarious liability was plausibly pleaded.

Practical Points

• Consent and established business relationship arguments generally wait for evidence.
• A seamless transfer from a vendor to an in-house representative is strong agency evidence at the pleading stage.
• Courts may treat attempts to carve consenting people out of a class definition as a fail-safe problem, not a cure.

Read the Western District of Kentucky memorandum opinion and order.