Are Insurance Renewal Notifications Telemarketing? Maybe.

As discussed here, the Central District of California recently granted summary judgment in favor of an insurance company after finding that a prerecorded call to the insured’s mobile phone, which reminded her to review her health plan options for the following year, was not telemarketing and therefore did not require “prior express written consent.” See Smith v. Blue Shield of Cal. Life & Health Ins. Co., No. SACV 16-00108-CJC-KES (C.D. Cal. Jan. 13, 2017).

But just a few weeks ago, a different judge in the Central District reached the opposite conclusion in a similar case, and denied the defendant’s motion to dismiss. See Flores v. Access Ins. Co., No. 2:15-cv-02883-CAS-AGR (C.D. Cal. Mar. 13, 2017) (available here). These two decisions illustrate how courts continue to grapple with the distinction between “telemarketing” and “informational” calls.

In Smith, plaintiff’s health insurance was scheduled to renew for 2016, and Blue Shield attempted to mail plaintiff a notice before renewal (as required by law) to allow her to review her options, choose different coverage, or otherwise cancel. Slip Op. at 4. The letter was returned as undeliverable. Id. Blue Shield then made a prerecorded call to plaintiff that stated:

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 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.

Id. Plaintiff later claimed this call was “telemarketing” that required written consent under the TCPA. The court disagreed, viewing the call as “informational,” even if it “encouraged [recipients] to seek out information about their plan by . . . visiting Blue Shield’s website.” Id. at 17.

Flores tells a similar story—but with a different ending. Access Insurance sent the following text message to plaintiff the day before his car insurance was set to expire:

Your Access Auto Insurance policy cancels 01/26/2015. To avoid cancellation, make a payment at [this website]. Reply STOP to Opt-out.

Slip Op. at 1. As in Smith, Plaintiff claimed this text message was “telemarketing” that required written consent. Id. The court found the text had a “dual purpose”: “(1) to alert plaintiff to the expiration of his auto insurance policy; and (2) to encourage plaintiff to renew his policy.” Id. at 13. As the court explained, “the communications had both informational and telemarketing purposes because plaintiff was informed about the status of his policy and was encouraged to purchase services from defendant.” Id. The court was not swayed by the fact that, under California law, insurers must notify policyholders of imminent policy expirations, as the law required notice by mail, not text message. Id. at 10.

Under the TCPA, “telemarketing” is a call made “for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services . . . .” 47 C.F.R. § 64.1200(f)(12). The Smith decision arguably struck an appropriate balance by finding the call “informational.” But Flores also involved a communication to an existing customer on the brink of a new year of insurance coverage, which notified him that his policy was set to expire. And the communication was required by law (albeit not by text).

So why the different outcome? To be sure, the context was distinct. In Smith, the court based its decision in part on the healthcare context for the call. It noted that under the Health Insurance Portability and Accountability Act (“HIPAA”) and its implementing regulations, the definition of “marketing” was narrower than that under the TCPA and specifically excluded a health insurer’s communications concerning “replacement of, or enhancements to, a health plan.” Slip Op. at 19 (citing 45 C.F.R § 164.501). Perhaps the tone of the message also made an impact. The text in Flores told plaintiff, rather directly, to “make a payment.” Had the text merely invited plaintiff to visit Access’ website so that he could “review his options,” the result might have been different. The procedural posture also could have informed the courts’ rulings. Smith involved a motion for summary judgment, whereas the Flores court ruled on a motion to dismiss—a point the court specifically referenced in its decision: “Plaintiff alleges that defendant’s messages ‘solicit[ed] Plaintiff to renew his auto insurance policy. . . .’ Accordingly, the Court finds that, at this stage, plaintiff has adequately pleaded that defendant’s messages constitute telemarketing.” Slip Op. at 13 n.4 (emphasis added).

These divergent decisions exemplify the case-specific nature of this inquiry. Courts may review a challenged call or text by focusing only on its specific wording to determine whether it is “informational” or “telemarketing.” And although courts may also analyze a particular call in its overall context (for example, HIPAA’s regulatory scheme), they will not necessarily look more broadly at the underlying purpose or intent behind the communication. Indeed, in Smith there was evidence that the content of the call was drafted by Blue Shield’s marketing department. Slip Op. at 4. But the court’s decision turned on the precise words used in the call, as well as consistency with HIPAA’s specific definition of “marketing.”

Flores thus provides a helpful reminder for businesses and their counsel to carefully consider the risk that a call or text may be deemed “telemarketing”—and then obtain the requisite form of consent.

Matthew J. Adler

About the Author: Matthew J. Adler

Matthew Adler is a trusted advocate and counselor who litigates complex commercial disputes and putative class actions for companies in the retail, technology, insurance, automotive, construction and telecommunications industries. He is known to be a persuasive writer and even-keeled problem-solver who provides practical, cost-effective solutions for his clients. Matt has defended numerous class actions, in state and federal court, involving claims of false advertising, fraud, breach of contract, breach of warranty and alleged violations of the Telephone Consumer Protection Act (TCPA) and of California’s consumer protection statutes, the Unfair Competition Law (UCL), the False Advertising Law (FAL), and the Consumers Legal Remedies Act (CLRA).

Justin O. Kay

About the Author: Justin O. Kay

Justin Kay advises and defends business clients regarding their interactions and communications with consumers. He appears regularly on behalf of clients before federal and state courts, federal agencies and independent self-regulatory bodies, such as the National Advertising Division of the Better Business Bureau. Justin’s practice focuses on defending clients in the growing number of complex class actions arising under federal and state consumer protection and privacy laws such as the federal Telephone Consumer Protection Act, the Illinois Biometric Information Privacy Act and the California Consumer Privacy Act. He is a deputy leader of the litigation practice group.

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