Central District of California Holds That Insurance Renewal Notifications Are Not Telemarketing Under the TCPA

The Central District of California recently granted summary judgment to a health insurer after finding that a pre-recorded message delivered to the insured’s cell phone reminding her to review her health plan options for the coming year was not telemarketing. Smith v. Blue Shield of Cal. Life & Health Ins. Co., No. 16cv108 (C.D. Cal. Jan. 13, 2017), ECF No. 73.

In Smith, the plaintiff completed an application for health insurance through California’s Affordable Care Act Healthcare Marketplace, Covered California. As part of that application process, Plaintiff provided her cell phone number as “the best number at which to contact her.” As required by law, the insurance was set to automatically renew for 2016, and in 2015, Blue Shield attempted to contact Smith by sending written materials to her mailing address (as also required by law) to inform her of the changes to her plan and provide her with alternatives. Plaintiff’s materials, however, were returned to Blue Shield as undeliverable. As with other insureds whose materials were returned, Blue Shield followed up with a pre-recorded message stating in relevant part: “This is an important message from Blue Shield of California. It’s time to review your 2016 health plan options and see what’s new. Earlier this month, we mailed you information about your 2016 plan and benefit changes. It compares your current health plan to other options from Blue Shield. You can also find out more online at blueshieldca.com. If you have not received your information packet in the mail, or if you have any questions, please call the number on the back of your member ID card.” Plaintiff received the call on December 3, 2015; on December 6, 2015, she completed an application for a different insurance plan for the 2016 year.

After six months of discovery, Blue Shield moved for summary judgment, arguing that (i) its call was purely informational and therefore plaintiff provided the necessary consent when she provided her phone number; (ii) no consent was required in any event because the calls were health-care related and therefore fit within the broad “emergency purposes” exception for calls “made necessary in any situation affecting the health and safety of consumers” (an argument we pioneered in Kolinek v. Walgreen Co., 13cv4806 (N.D. Ill. filed July 3, 2013) and have written about extensively (here, for example)); and (iii) Plaintiff lacked standing under Spokeo because she had not suffered a concrete and particularized injury. See Motion for Summary Judgment, Smith v. Blue Shield of Cal. Life & Health Ins. Co., No. 16cv108 (C.D. Cal. filed Aug. 26, 2016), ECF No. 40. Plaintiff filed her opposition in mid-December, arguing that (i) she had established standing under Article III; (ii) the “emergency purpose” exception did not apply because the calls were neither “necessary” nor addressed an “emergency,” but rather were planned by Blue Shield’s marketing team; and (iii) there was a triable issue of fact regarding whether the calls were “telemarketing” (and therefore required “prior express written consent”) and a reasonable jury could conclude that the calls were telemarketing because they were made pursuant to a client retention strategy executed by the marketing team and directed recipients to visit the Blue Shield website. See Opposition to Motion for Summary Judgment, Smith v. Blue Shield of Cal. Life & Health Ins. Co., No. 16cv108 (C.D. Cal. filed Dec. 12, 2016), ECF No. 61.

One month later, the court ruled, granting Defendant’s motion. The court first rejected Blue Shield’s argument that the plaintiff had failed to allege concrete and particularized harm, finding that “Plaintiff alleges a concrete and particularized injury by laying out the elements of a TCPA violation” and “alleg[ing] that her privacy was invaded.” Slip Op. at 12. To reach that conclusion, the court invoked pre-Spokeo reasoning from the Ninth Circuit in Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009) regarding the purpose of the TCPA—to prevent the invasion of privacy—and adopted the post-Spokeo reasoning of a recent decision from the Northern District of Illinois that “‘[u]nlike the statute at issue in Spokeo . . . the TCPA section at issue does not require the adoption of procedures to decrease congressionally-identified risks. . . . It directly forbids activities that by their nature infringe the privacy-related interests that Congress sought to protect by enacting the TCPA.’” Slip Op. at 9 (quoting A.D. v. Credit One Bank, N.A., No. 14 C 10106, 2016 WL 4417077, at *6-7 (N.D. Ill. Aug. 19, 2016)). In so doing, the court rejected the reasoning in the Romero line of cases we previously highlighted here, agreeing with other courts that have criticized Romero and its progeny for “ignor[ing] the existence of intangible harms that have been recognized in the legislative history and in the case law” and employing a “rather draconian analysis” under which “a plaintiff would find it almost impossible to allege a harm as a result of these robocalls.” Slip Op. at 11 (quoting LaVigne v. First Cmty. Bancshares, Inc., No. 1:15-CV-00934-WJ-LF, 2016 WL 6305992, at *6 (D.N.M. Oct. 19, 2016)).

After addressing the standing issue, the court turned to the issue of consent, and found that “[s]imply stated, the text of Blue Shield’s telephone call is informational” because it “notified recipients that they should have received information about changes to their insurance plan, encouraged them to seek out information about their plan by examining the information packet and visiting Blue Shield’s website, and directed them to call the member service number (as opposed to the sales department) to resolve any questions or issues.” Slip Op. at 17. The court found support for its reading based on the similarities and differences between Blue Shield’s message and messages in other cases where the nature of the call was at issue, and because its reading was consistent with the Health Insurance Portability and Accountability Act (“HIPAA”) definition of marketing, which expressly excluded the calls at issue. Slip Op. at 17-19.

The court rejected the plaintiff’s arguments that directing call recipients to Blue Shield’s website (where, plaintiff argued, users could engage in commerce) transformed the calls into telemarketing because the website to which call recipients were directed was a renewal tool that permitted users to compare plans, but if they “wanted to switch plans or purchase a plan [they] would have to access a different portion of the website.” Slip Op. at 19. According to the court, “[t]he mere fact that parts of Blue Shield’s website contains the capability of allowing consumers to engage in commerce does not transform any message including its homepage into telemarketing or advertising.” Id. at 19-20.

The court also rejected the plaintiff’s arguments that “various contextual facts make the call telemarketing or advertising” (such as that it was conceptualized by the marketing department to retain customers, or that earlier drafts of the pre-recorded message contained statements regarding customer retention), focusing instead on the content of the call itself, which was “devoid of marketing content.” Slip Op. at 20-21. The court reasoned that “[i]f the Court accepted Plaintiff’s argument, nearly all innocuous, customer-friendly and informative gestures would be needlessly transformed into telemarketing and advertising.” Id. at 21. Utilizing “a measure of common sense,” the court held that “[i]t makes no sense to the Court that a single call tracking Blue Shield’s mandatory communications regarding insurance enrollment and renewal would expose Blue Shield to millions of dollars of liability under the TCPA.” Because it disposed of the case on the issue of consent, the court expressly declined to address Blue Shield’s argument that the call was exempt from the TCPA pursuant to the emergency purposes exception.

Entities in the healthcare industry looking to communicate with patients/consumers should take note of this decision, but should also be aware of the ways plaintiff’s counsel will look to distinguish it. First, there was no dispute here regarding the scope of the plaintiff’s consent—the only issue was whether the message was telemarketing that required “prior express written consent.” Second, the court repeatedly noted that the message was to an existing customer about renewal. Third, the communication at issue was in furtherance of a mandatory requirement—alerting a customer to changes in their coverage. Fourth, the court’s final statement noting that the dispute focused on a “single call” leaves the door open for the argument that the result might have been different if Blue Shield had made many such calls to the plaintiff.