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Sullivan v. All Web Leads, Inc.

United States District Court, N.D. Illinois, Eastern Division

June 1, 2017

WILLIAM SULLIVAN, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
ALL WEB LEADS, INC., a Delaware Corporation, Defendant.


          Harry D. Leinenweber, Judge

         Before the Court is Defendant's Motion to Dismiss Plaintiff's Complaint or, in the Alternative, to Strike the Proposed Class [ECF Nos. 7, 12]. For the reasons stated herein, the Motion is denied.


         Plaintiff William Sullivan (“Sullivan”) filed this lawsuit under the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. (the “TCPA”), to address allegedly deceptive marketing practices of Defendant All Web Leads, Inc. (“All Web”). The following facts are drawn from Sullivan's Complaint and are, for purposes of this Motion, accepted as true, with all inferences drawn in his favor. See, e.g., Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2015).

         All Web offers services to insurance industry customers, typically insurance agents, by generating “leads.” Specifically, All Web places calls to potential purchasers of insurance coverage and then transfers those calls to its customers. (Compl. ¶ 16.) To identify “leads, ” All Web owns and operates various websites claiming to offer insurance quotes. (Id. ¶ 18.) Upon visiting one of these websites, a consumer is directed to fill out a quote request form specific to the type of insurance of interest. (Ibid.) Sullivan was one such consumer. On January 13, 2017, he visited to obtain quotes on health insurance plans that would comply with the Patient Protection and Affordable Care Act, 52 U.S.C. § 18001 et seq. (“Obamacare”). (Id. ¶¶ 31, 37-38.) When prompted (see figure below), Sullivan entered his zip code and clicked “Start Now.” (IMAGE OMITTED) (Compl. ¶¶ 19, 32.) Once directed to the next page, Sullivan filled out the form (reproduced below) by entering personal information, including a “Day phone” number, and then clicked the “Submit” button. (IMAGE OMITTED) (Id. ¶ 20.) Because it appeared in small print at the bottom of the page, Sullivan did not see All Web's consent language before he clicked “Submit”: (IMAGE OMITTED) (Id. ¶ 23.) He therefore had no reason to suspect that he was agreeing to be contacted via autodialed calls. (Id. ¶ 26.)

         Soon after completing the quote form, Sullivan received an autodialed call from a representative at All Web. (Compl. ¶ 34.) Upon answering, Sullivan heard “an immediate pause on the other end, followed by a distinct ‘clicking' noise before the connection with the representative was made.” (Id. ¶ 35.) The representative asked Sullivan a series of questions, confirmed that he was seeking information about health insurance, and then transferred him to a health insurance agent. (Id. ¶ 36.) Sullivan informed the agent that he was seeking a health insurance plan that would comply with the Obamacare individual mandate; yet the agent attempted to persuade Sullivan “to enroll in a limited benefit non-major medical plan, and suggested that it was a better option than an ‘Obamacare-compliant' plan.” (Id. ¶ 38.) When it became clear that the agent was not offering the opportunity to review and compare “Obamacare-compliant” health insurance quotes, Sullivan ended the call. (Ibid.) He continued to receive additional similar phone calls over the next several days. (Id. ¶ 40.)

         Sullivan filed this lawsuit seeking injunctive relief and money damages on behalf of himself and a nationwide class of individuals who utilized the same website, clicked “Submit” on the associated quote form, and then received autodialed calls. (Compl. ¶ 42.)


         The TCPA makes it unlawful for any “person within the United States” to, inter alia, “make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or . . . artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone service.” 47 U.S.C. § 227(b)(A)(iii). (The exception to this prohibition - calls “made solely to collect a debt owed to or guaranteed by the United States” - is a non-issue here.) The TCPA authorizes the Federal Communications Commission (the “FCC”) to promulgate regulations implementing the statute's requirements. 47 U.S.C. § 227(b)(2); see also, Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 370 (2012) (“The Act . . . directs the Federal Communications Commission (FCC or Commission) to prescribe implementing regulations.”); accord, Ira Holtzman, C.P.A. v. Turza, 728 F.3d 682, 687 (7th Cir. 2013).

         Under the express language of the TCPA, an automated call may be lawfully made to a cell phone in certain circumstances, only one of which is relevant to this case. Specifically, a call is not unlawful if it is made “with the prior express consent of the called party.” 47 U.S.C. § 227(b)(A)(iii). The FCC recognizes that the statute itself is mute on what form of express consent - oral, written, or some other kind - suffices “for calls that use an automatic telephone dialing system or prerecorded voice to deliver a telemarketing message.” In the Matter of Rules & Regs. Implementing the Tel. Cons. Prot. Act of 1991, 27 F.C.C. Rcd. 1830, 1838 ¶ 21 (Feb. 15, 2012) (hereinafter, the “2012 Order”).

         At one time, FCC implementing regulations required only “prior express consent” for automated calls to cell phones, meaning that a person had only to “knowingly release their phone number [to the caller] . . . absent instructions to the contrary.” 2012 Order at 1833 ¶ 7 n.20 (citation omitted). In 2012, however, the FCC announced a new rule to take effect on October 16, 2013, that modified the consent requirements for automated telemarketing calls under the TCPA. See, 2012 Order at 1831 ¶ 1; 47 C.F.R. § 64.1200. The new rule for automated telemarketing calls to cell phones requires the “prior express written consent of the called party.” 47 C.F.R. § 64.1200(a)(2). The FCC defines “telemarketing” as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.” 47 C.F.R. § 64.1200(f)(12). Prior express written consent means:

an agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice, and the telephone number to which the signatory authorizes such advertisements or marketing messages to be delivered.

47 C.F.R. § 64.1200(f)(8). To be effective, such consent also must satisfy further requirements:

(i) The written agreement shall include a clear and conspicuous disclosure informing the person signing that: (A) By executing the agreement, such person authorizes the seller to deliver or cause to be delivered to the signatory telemarketing calls using an automatic telephone dialing system or an artificial or prerecorded voice; and (B) The person is not required to sign the agreement (directly or indirectly), or agree to enter into such an agreement as a condition of purchasing any property goods, or services.
(ii) The term “signature” shall include an electronic or digital form signature, to the extent that such form of signature is recognized as a valid signature under applicable federal law or state contract law.

Ibid. In tandem with elevating these consent requirements, the FCC also promulgated certain exceptions. As relevant, it created an exemption from the prior express written consent requirement for health care messages made to cellular lines.

         That exception states that no person or entity may:

(2) Initiate, or cause to be initiated, any telephone call that includes or introduces an advertisement or constitutes telemarketing, using an automatic telephone dialing system or an artificial or prerecorded voice, to any of the lines or telephone numbers described in paragraphs (a)(1)(i) through (iii) of this section, other than . . . a call that delivers a “health care” message made by, or on behalf of a “covered entity” or its “business associate, ” as those terms are defined in the HIPAA Privacy Rule, 45 CFR 160.103[.]

47 C.F.R. § 64.1200(a)(2) (emphasis added). Despite some ambiguity in the wording of this “health care rule” (the parties' shorthand), the FCC has clarified that such calls are exempted only from the written consent requirement. See, Consumer & Governmental Aff. Bureau Seeks Comment on Petition for Expedited Declaratory Ruling & Exemption from Am. Ass'n of Healthcare Admin. Mgmt., 29 F.C.C. Rcd. 15267, 15267 n.7 (Dec. 17, 2014); cf. Jackson v. Safeway, Inc., No. 15 C 4419, 2016 WL 5907917, at *7 n.10 (N.D. Cal. Oct. 11, 2016) (“[B]oth parties assume that there is a ‘prior express consent' requirement for such ‘health care' calls.”).

         The “health care rule” speaks in HIPAA-defined terms and, as with most administrative alphabet soup, requires further explication. Under the Health Insurance Portability and Accountability Act (“HIPAA”), “health care” is defined as “care, services, or supplies related to the health of an individual, ” including, but not limited to, “(1) [p]reventive, diagnostic, therapeutic, rehabilitative, maintenance, or palliative care, and counseling, service, assessment, or procedure with respect to the physical or mental condition, or functional status, of an individual or that affects the ...

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