918 F.3d 1068

BYBEE, Circuit Judge, dissenting:
I agree with the majority that FCC Orders do not create per se liability under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227. Maj. Op. at 1072; Gomez v. Campbell-Ewald Co. , 768 F.3d 871, 879 (9th Cir. 2014), aff'd , --- U.S. ----, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016). I am also willing to assume for purposes of this case that ratification may create an agency relationship when none existed before. Maj. Op. at 1073-74; Restatement (Third) of Agency § 4.01 cmt. b (2006). I disagree with the majority, however, that there is a material issue of fact as to whether USA Funds ratified the debt collectors' conduct or whether USA Funds granted the debt collectors implied actual authority to violate the TCPA. I would affirm the judgment of the district court.
I
Under the TCPA, it is unlawful "to make any call (other than ... with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice ... to any telephone number assigned to a ... cellular telephone service." 47 U.S.C. § 227(b)(1)(A)(iii). Any debt collector who autodialed Henderson in this case would be liable under this section, because she was called on a phone number she had not provided in connection with her loan. However, we are not addressing the liability of the debt collectors, nor that of Navient Solutions, Inc., the company that contracted with the debt collectors. Instead, this case concerns USA Funds alone, which acquired Henderson's student loan debt from the Department of Education and contracted with Navient to hire and manage the debt collectors. Henderson would have had a much stronger case against the debt collector that called her, and, perhaps, even against Navient. But because that issue is outside the scope of our review, Henderson has to show that USA Funds either (1) ratified practices that violated the TCPA or (2) granted the debt collectors authority to violate the TCPA. I can't get to either proposition from the evidence Henderson has mustered.
Before addressing the merits of Henderson's arguments, however, let's start with what we know about skip-tracing and autodialing. First, skip-tracing is the "[t]he action or practice of locating people who are missing or have defaulted on a debt," typically through online resources. Skip-tracing , Oxford Dictionary (2019). It is a perfectly lawful means of obtaining debtors' additional phone numbers that they did not provide to the lender. Indeed, Department of Education regulations not only approve the practice, they require it. The relevant provision states that "within 10 days of its receipt of information indicating that it does not know the borrower's current address, the lender must begin to diligently attempt to locate the borrower through the use of effective commercial skip-tracing techniques ." 34 C.F.R. § 682.411(h)(1) (emphasis added). Autodialing refers to the process by which a mechanical device or software dials telephone numbers automatically. When the recipient answers the call, the device or software plays a recorded message or connects the recipient to a real person. As anyone who has received these automated calls can attest, autodialing can be an obnoxious practice. That said, it is not, in and of itself, unlawful. Autodialing to collect a debt does not violate the TCPA if the phone number is one that the debtor provided. In fact, the TCPA specifically authorizes autodialed calls if the call "is made solely to collect a debt owed to or guaranteed by the United States." 47 U.S.C. § 227(b)(1)(A)(iii) ; see also In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 , 31 FCC Rcd. 9074, 9082-83 & n.54 (2016) (limiting the provision to debts owed to or guaranteed by the United States). The TCPA thus prohibits an autodialer from calling a phone number that the debtor did not provide-for example, a number obtained through skip-tracing.
Henderson alleges that debt collectors used skip-tracing to obtain a phone number she did not provide and then repeatedly autodialed her on that number. She argues that USA Funds is liable for these violations because it (1) ratified the debt collectors' TCPA violations or (2) gave the debt collectors implied actual authority to violate the TCPA. The majority addressed the first question alone; I am going to address both.
A. Ratification
Under the Restatement of Agency , "[a] person ratifies an act by ... conduct that justifies a reasonable assumption that the person so consents." Restatement (Third) of Agency § 4.01(2)(b). There are two ways to ratify a third party's acts. The first is by a "knowing acceptance of a benefit," which requires "an objectively or externally observable indication ... that the principal has exercised choice and has consented." Id. § 401 cmt. d. This means that the principal must have "knowledge of material facts." Id. § 4.06. The second is through a form of "willful ignorance." Under this theory, the principal may not know the material facts but "ratified [the conduct] with awareness that such knowledge was lacking." Id. § 4.01 cmt. b. In other words, the principal is aware that it does not know the material facts, and yet it ratifies the conduct anyway.
The majority concludes that Henderson put forth sufficient facts, that if accepted by a jury, prove either theory of ratification: "USA Funds ratified the debt collectors' calling practices by remaining silent and continuing to accept the benefits of the collectors' tortious conduct despite knowing what the collectors were doing or, at the very least, knowing of facts that would have led a reasonable person to investigate further." Maj. Op. at 1075. I will address each theory of ratification in turn.
1. Actual Knowledge
The majority first holds that there are sufficient facts in the record on summary judgment to prove that "USA Funds had actual knowledge of the debt collectors' allegedly unlawful calling practices." Id. (emphasis added). The majority recites two facts: "USA Funds knew that both auto dialing and skip tracing are ubiquitous in the debt collection industry" and "USA Funds' audits found that its debt collectors might have violated the TCPA." Id. . From these two claims, the majority deduces that USA Funds knew that debt collectors "violated the TCPA by combining [skip-tracing and autodialing]" and "assent[ed] to these practices." Id. at 1075-76. There is no support in the record for this conclusion. As I have pointed out (and the majority concedes), skip-tracing and autodialing are lawful collection techniques, so their ubiquity is not surprising. It is only when they are used in tandem that the practice violates the TCPA. There is some evidence that USA Funds knew that debt collectors employed by Navient had used improper practices, but scant evidence they knew the debt collectors used skip-tracing and autodialing in combination. And there is no evidence whatsoever that USA Funds approved of such practices. In fact, the only evidence in the record is to the contrary: when USA Funds learned of wrongful practices, it reported them to Navient and asked Navient to correct the problem.
Here is what the record shows us. USA Funds' agreement with Navient required that Navient and its vendors comply with all federal regulations. For its part, USA Funds maintains an 800-number to receive customer complaints and has an email on its website for complaints or inquiries. USA Funds also conducts regular audits of its accounts, as required by statute and regulation. See 20 U.S.C. § 1094(c)(1)(C)(i) ; 34 C.F.R. § 682.410(b)(1). When USA Funds learns of possible TCPA violations through an audit or customer complaint, it reports them to Navient, and asks Navient to take corrective action. All of the information we have on USA Funds' audits comes from the deposition of one USA Funds employee-Kevin Tharp, the manager of the delinquency and default management section, who had been employed at USA Funds for thirty-seven years and had been the section head for twenty years. Under the audit guidelines, USA Funds examines at least 150 randomly selected accounts for compliance with repayment programs, such as loan rehabilitation and wage garnishment. In the process of reviewing the selected accounts, USA Funds reviews collection efforts and, in particular, skip-tracing, because it is required by Department of Education regulations. 34 C.F.R. § 682.411(h)(1).
Tharp explained that USA Funds has no contractual relationship with the debt collectors and no authority to hire, fire, or discipline them. What USA Funds did when it learned of potential violations was "recommend corrective action" to Navient. This corrective action might range from Navient directing the debt collector to remove the phone number from the autodialer to withholding payment from the debt collector. Tharp was asked if he knew of any instance in which a debtor complained to USA Funds of being autodialed or even called on a number he or she did not consent to be called on. Here is the exchange:
Q: "Has USA Funds ever received a complaint from a borrower ... about the borrower being called on a cellular telephone that they hadn't consented to being called on by a collections agent calling about a USA Funds' guaranteed loan?"
A: "Not that I'm aware of."
He was then asked about auto-dialing:
Q: "Do you know whether USA Funds has ever received a complaint from a borrower relating to the use of a dialer on a USA Funds' guaranteed loan?"
A: "None that I'm aware of [aside from this case]."
The only examples of "improper" efforts that Tharp was questioned about do not reveal any information about the use of skip-tracing and autodialing. The first was a 2010 audit by USA Funds, which identified what was described as the "calling of an incorrect phone number." Although the majority assumes the worst, Tharp was never asked whether the phone number was obtained through skip-tracing. In fact, there is no evidence that the "incorrect phone number" was even another phone number of the debtor's or was just a wrong number entirely. The only other "improper collection effort[ ]" identified in the deposition reflects the same lack of information. A 2000 audit revealed that a phone "not associated with the borrower was repeatedly called." However, again, it is unclear whether it was a number the debtor did not consent to or just a wrong number. The questioning, in fact, suggests that it was not even an additional number of the debtors': "the repeat finding was that there had been a number called that wasn't the borrower." This questioning of Tharp yielded no evidence that numbers were obtained through skip-tracing or called with autodialers. There is simply no support for the majority's conclusion that USA Funds knew that the collectors were using autodialers in combination with skip-tracing and approved of the practice.
Henderson also deposed Mark Verbrugge, senior director of operations for Navient, but his answers don't help her either. Verbrugge testified that Navient conducts its own audits. It monitors whether the debt collectors were autodialing or manually dialing phone numbers through on-site visits. Navient also reviews customer complaints, including those made directly to Navient, or through an ombudsman or an agency, such as the Better Business Bureau. Navient has taken corrective action, including directing the debt collector to change its collection methods and cease all contact. Verbrugge also testified that Navient did not typically inform USA Funds of what dialers the debt collectors used, and he did not know of any instances where Navient informed USA Funds that autodialers were used to call skip-traced numbers. Nor did he know whether USA Funds was able to obtain that information through its own audits.
Nothing here shows that USA Funds ratified "improper collection efforts." The sum of Henderson's evidence regarding USA Funds' ratification of improper dialing consists of USA Funds' own audit that shows that it disapproved of general TCPA violations and took affirmative steps to discourage it. That is not ratification under any fair reading of the Restatement of Agency . The whole point of the audits by USA Funds and Navient is to ensure compliance with federal law. Both Tharp and Verbrugge testified that when their audits disclosed improper collection efforts, Navient-sometimes on its own initiative and sometimes at the direction of USA Funds-took corrective action, such as withholding payment, suspending a debt collector, or reducing its placements with the collector. The only record evidence shows that USA Funds took steps to ameliorate any TCPA violations, not to ratify them. The majority's claim that "USA Funds made no effort to end its relationship with any of these debt collectors or to ensure future TCPA compliance" is thus contrary to all the evidence in the record. Maj. Op. at 1076. In the end, the only evidence Henderson has of an unlawful practice is her own testimony that she was autodialed on a phone number she didn't provide to her lender. That might be sufficient to show that someone violated the TCPA, but it doesn't prove a thing about USA Funds' complicity any violations. But under the majority's theory of ratification, if a debt guarantor like USA Funds knows that there are violations "in the debt collection industry," id. at 1075, it is liable for the debt collectors' actions, even if USA Funds has taken corrective action. That is not a theory of ratification -it is strict liability , and nothing in the TCPA authorizes such a broad theory.
2. Willful Ignorance
The majority holds, in the alternative, that "[e]ven if the facts are insufficient to infer actual knowledge by USA Funds that the debt collectors were violating the TCPA, USA Funds at a minimum 'had knowledge of facts that would have led a reasonable person to investigate further.' " Id. at 1076 (quoting Restatement (Third) of Agency § 4.06 cmt. d). It states that "USA Funds' audit findings combined with its knowledge about common practices in the industry should have alerted USA Funds that it needed to investigate further," but it willfully chose not to. Id. Once again, the record does not support this holding.
As discussed above, the only evidence in the record shows that when USA Funds discovered TCPA violations through an audit or customer complaint, it reported the complaint to Navient and recommended corrective action-it did not "willfully ignore" anything. The debt collectors were not USA Funds' vendors to hire and fire; they were hired and supervised by Navient. It was then Navient's responsibility to ensure the offending debt collector corrected its actions. Henderson provided no evidence that Navient failed to follow up on USA Funds' requests for action, or that USA Funds made these requests and then looked the other way. The majority emphasizes that USA Funds did not "terminate its contact with Navient," id. ; however, there is no evidence in the record that USA believed-or even had reason to believe-that Navient was mishandling the complaints or ignoring USA Funds' recommended corrective action. To the contrary, the undisputed testimony from the only Navient witness (Verbrugge) is that Navient took USA Funds' requests "under strong consideration."
The majority asserts that because USA Funds did not instruct Navient to fire the collectors and "made no effort ... to ensure future TCPA compliance," the debt collectors were " 'likely to draw [the] inference' that USA Funds' silence manifested its assent" to the TCPA violations. Id. at 1076 (quoting Restatement of Agency § 4.01 cmt. f). But USA Funds had no contractual relationship with the debt collectors-it could not fire them because it never hired them in the first place. Rather, it reported any complaints to Navient and gave Navient full authority to handle them-including the authority to fire offending debt collectors without USA Funds' interference. But in any event, the majority's minor premise-that USA Funds "made no effort"-is contrary to the only evidence in the record, and its conclusion-that debt collectors would "infer[ ] ... assent"-is pure speculation, because Henderson did not sue, or even depose, any debt collector. Id. I simply do not see how USA Funds can be deemed to have willfully ignored wrongful practices if the only evidence provided shows that it consistently tried to correct them.
Lastly, the majority asserts that the "collection structure" between USA Funds and Navient allowed USA Funds "to remain willfully ignorant and avoid liability." Id. I am not naive about what is going on here, and the majority may have a broader point to make. The way that USA Funds structured its collection efforts-hiring Navient to manage the hiring of collection agencies-may suggest that USA Funds is trying to shield itself from the dark underbelly of the debt-collection business. But unless we are prepared to indict the entire industry and hold everyone involved responsible based solely on general industry violations and collection structures (which likely would include the Department of Education itself), I do not see the evidence to satisfy agency principles. I repeat that the majority's holding sounds in strict liability, and I think this decision will send shudders through the industry. Maybe that is a good thing, but I don't see our mandate in the TCPA to cause such disruption. It is better for the Department of Education, the FCC, or Congress to address the matter.
B. Implied Actual Authority
Because I find that Henderson did not create a genuine issue of material fact that USA Funds ratified the debt collectors' actions, I must also briefly address her claim that USA Funds gave the debt collectors implied actual authority to violate the TCPA. This argument fails for much the same reasons as her ratification theory. "The legal consequences of an agent's actions may be attributed to a principal when the agent has actual authority (express or implied) or apparent authority." Salyers v. Metro. Life Ins. Co. , 871 F.3d 934, 940 (9th Cir. 2017) (citing Restatement (Third) of Agency § 2 intro. note). "Implied actual authority comes from a general statement of what the agent is supposed to do; an agent is said to have the implied authority to do acts consistent with that direction." NLRB v. Dist. Council of Iron Workers of Cal. & Vicinity , 124 F.3d 1094, 1098 (9th Cir. 1997).
Henderson argues that the debt collectors acted with implied actual authority from USA Funds because they "reasonably believed, based on USA Funds' manifestations and actions, that they had authority to act as USA Funds' agent in all aspects of the transactions with debtors." We have no evidence in this record from any debt collector as to what the debt collector believed about USA Funds or why that belief was reasonable. Henderson's speculative assertions are insufficient to create a genuine issue of material fact that the debt collectors reasonably believed that USA Funds approved of their TCPA violations-particularly when the only evidence in the record is that Navient would withhold payment or cease working with the debt collectors if TCPA violations occurred. Any debt collector who believed that USA Funds approved of TCPA violations would do so unreasonably. See Restatement (Third) of Agency § 2.01 (requiring the agent's belief be reasonable); see id. cmt. c ("The focal point for determining whether an agent acted with actual authority is the agent's reasonable understanding at the time the agent takes action.").
Although a "smoking gun may not be needed" to overcome a motion for summary judgment, Ms. Henderson still must provide "something more than speculative, conclusory allegations." Towers v. Iger , 912 F.3d 523, 532 (9th Cir. 2018).
II
Henderson has not provided sufficient evidence to create a genuine issue of material fact that USA funds knew or willfully ignored TCPA violations, nor that it granted implied actual authority to the debt collectors to violate the TCPA. For these reasons, I respectfully dissent. I would affirm the judgment of the district court.

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