A federal court in Washington has ruled that real estate brokerage eXp Realty can be held liable for marketing calls made by its agents, a decision that has significant implications for the real estate industry. The ruling allows a class-action lawsuit alleging violations of the Telephone Consumer Protection Act (TCPA) to proceed, challenging the traditional separation between brokerages and the actions of their independent agents.
Key Takeaways
- A U.S. District Court in Washington denied eXp Realty's motion to dismiss a TCPA class-action lawsuit.
- The court found sufficient allegations to potentially hold the brokerage directly liable for calls made by its agents.
- The ruling also established grounds for vicarious liability based on the relationship between eXp and its agent.
- This case serves as a critical warning for real estate brokerages regarding their responsibility for agents' marketing practices.
Details of the TCPA Lawsuit
The case, Hollis v. eXp Realty, was filed in the U.S. District Court for the Western District of Washington. The plaintiff, Mr. Hollis, alleged that he received multiple unsolicited calls and text messages to his cell phone, which was registered on the National Do Not Call Registry. These communications were allegedly made by a real estate agent, Mr. Yoon, who is associated with eXp Realty.
In response to the lawsuit, eXp Realty filed a motion to dismiss the claims, arguing that the company did not personally "make or initiate" the calls in question. The company contended that it could not be held directly responsible for the actions of an independent agent. However, the court disagreed with this assessment at this early stage of the litigation.
What is the TCPA?
The Telephone Consumer Protection Act (TCPA) is a federal law enacted in 1991 to address unsolicited telemarketing communications. It restricts the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages, and faxes. Violations can lead to significant financial penalties, often calculated per call or text message.
Court Finds Grounds for Direct Liability
The court's decision on September 23, 2025, focused on the specific allegations made by the plaintiff. It determined that these allegations, if proven true, could establish a direct link between eXp Realty and the calls.
According to the court documents, the plaintiff claimed that the callers explicitly identified themselves as acting on behalf of or being part of eXp Realty. This direct association was a key factor in the court's reasoning. The complaint stated that one caller told Mr. Hollis the call was "on behalf of [eXp] Realty," while another identified himself as "Mr. Yoon at [eXp] Realty."
Allegations of Control and Scripting
A crucial element in the court's analysis was the inference that eXp Realty may have controlled the content of the calls. The plaintiff alleged that different callers read from "the same or similar scripts of questions to promote eXp Realty."
"By alleging that eXp Realty made the calls at issue and by including supporting allegations to explain his belief that eXp Realty made the calls, Mr. Hollis includes sufficient allegations, if accepted as true, to allow the court to reasonably infer that eXp Realty is directly liable for violating the TCPA," the court stated in its order.
This finding suggests that if a brokerage provides or encourages the use of specific marketing scripts, it may be viewed as controlling the communication and therefore be held directly responsible for any resulting legal violations.
Potential for Vicarious Liability
Beyond direct liability, the court also found that the lawsuit presented a plausible case for vicarious liability. This legal concept holds a party responsible for the actions of another, such as an employee or agent, if a sufficient relationship of control or authority exists.
The plaintiff supported this claim by pointing to several connections between eXp Realty and the agent, Mr. Yoon. According to the complaint, eXp Realty's corporate website advertised Mr. Yoon as one of its brokers and even included a feature allowing consumers to "Send [Mr. Yoon] a Message" directly through the main site.
Managerial Link Strengthens Claim
The plaintiff's case was further strengthened by an alleged conversation with a "Designated Managing Broker" at eXp Realty, Robin McCue. When Mr. Hollis called to complain, Ms. McCue allegedly referred to herself as Mr. Yoon’s “manager” and promised to add the plaintiff’s number to the company’s internal do-not-call list.
Despite this conversation, the plaintiff alleged that the calls continued, including another one from Mr. Yoon himself. The court viewed these allegations—the website promotion, the manager's statements, and the internal do-not-call list—as strong indicators of an agency relationship that could make eXp vicariously liable for the agent's actions.
Implications for the Real Estate Industry
This ruling is a significant development for real estate brokerages across the country. For years, many brokerages have operated under a model that treats agents as independent contractors, creating a legal buffer against liability for their individual marketing activities.
The decision in Hollis v. eXp Realty challenges that assumption, particularly in the context of TCPA regulations. It suggests that courts may look beyond formal classifications and examine the practical realities of the relationship between a brokerage and its agents.
Legal experts note that brokerages can no longer assume they are shielded from TCPA class-action lawsuits stemming from their agents' lead generation efforts. The potential damages in such cases can be substantial, with statutory penalties ranging from $500 to $1,500 per illegal call or text.
A Call for Proactive Compliance
The case underscores the growing need for brokerages to implement and enforce robust TCPA compliance policies. This includes:
- Training: Providing comprehensive training to all agents on TCPA rules and do-not-call list regulations.
- Oversight: Monitoring agent marketing materials and scripts to ensure they comply with federal law.
- Technology: Using compliant dialing and messaging platforms that automatically scrub numbers against the National Do Not Call Registry.
- Policy: Establishing clear, written policies regarding telemarketing and obtaining prior express written consent when required.
While the original article's author noted that eXp Realty is often considered more compliant than many of its peers, this lawsuit demonstrates that even well-regarded companies are not immune to legal challenges. The court's decision to allow the case to move forward signals a heightened level of scrutiny that all real estate firms must now consider.
