Stick the landing part 2 - Telemarketers vs Sellers

Lawsuit Woodard v. Health Insurance Alliance, 2024 WL 942629 (N.D. Ill. March 5, 2024) illustrates a difficulty some TCPA plaintiffs have in suing multiple parties for the same calls. One of those difficulties can be describing telemarketers vs sellers in TCPA lawsuits.

This Plaintiff received calls from a third party promoting HIA's products and she didn't know how to describe this appropriately in her complaint, leading to a (fixable) dismissal.

Woodard v Health Insurance Alliance.pdf

Download PDF • 160KB

The confusion is very understandable, many companies hire someone else to make their telemarketing calls. The FCC uses the terms Seller and Telemarketer to distinguish the roles:

47 CFR § 64.1200(f)(10) defines “Seller” as

"The term seller means the person or entity on whose behalf a telephone call or message is initiated for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person."

47 CFR § 64.1200(f)(12) defines “Telemarketer” as

"The term telemarketer means the person or entity that initiates 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."

If a Seller dials the phone, it is also a Telemarketer. It is easy to get turned around like Woodard because Telemarketers might directly use the Sellers name as their own, or might affiliate themselves with the Seller

"she claims that a person named Ryan “promoted” HIA’s health insurance services and that another individual, a “Mr. Kelly,” “identified his company was calling for Health Insurance Alliance and provided the Defendant’s website.”"

Some plaintiffs assume that if Entity A calls to promote Entity B's services, a court will connect the dots and assume the plaintiff is alleging Entity B is responsible. Courts typically don't like that.

"This is precisely what Woodard does in her Complaint: Woodard attempts to attribute the promoters’ calls to Defendant with no allegation of direct Defendant liability . . . But Woodard’s Complaint remains salvageable. The Court has attempted to provide a roadmap of the information required to cure it, should Woodard choose to file an Amended Complaint."

An Example to consider

There are a variety of ways this Telemarketer-Seller relationship can work, and so there are many ways lawsuits make allegations. A good introduction to Woodard's situation might have been (assuming the facts fit):

There are telemarketers in America whose long-term business model is placing lots and lots of unsolicited calls. Companies who sell a particular widget are looking for customers interested in such widgets, and telemarketers are eager to introduce widget makers with possibly interested customers. 

These telemarketers call all the phone numbers they can, and they advertise the widget maker's wares to anyone who answers the phone.

47 CFR § 64.1200(f)(10) defines “seller” as

“The term seller means the person or entity on whose behalf a telephone call or message is initiated for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person."

47 CFR § 64.1200(f)(12) defines “telemarketer” as

“The term telemarketer means the person or entity that initiates 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.”

Health Insurance Alliance "HIA" hired an unknown Telemarketer to initiate calls to Woodard to promote HIA's products and services. HIA knew the Telemarketer was initiating telemarketing calls on its behalf and authorized the Telemarketer to do so. The Telemarketer believed it had the apparent authority to place the calls on HIA's behalf because the Telemarketer was paid by HIA to place the calls. HIA knew the Telemarketer was placing calls on its behalf and accepted the financial benefits of the calls.

This is just an example from reading the court's opinion, but the court itself is flashing a neon sign this direction -> Woodard needs to separate the roles of Seller vs Telemarketer, allege who was doing which roles, and allege that the Telemarketer was making the calls as an agent of the Seller.

As a positive example, see Gonzalez v. Burger Law 2024 WL 1014058 No. 4:23-CV-1094 RLW (E.D. Mo. March 8, 2024). Pro se plaintiff Gonzalez sued Burger Law for calls initiated by a Consumer Legal. Burger Law was the beneficiary of the calls but didn't initiate them. As usual, Burger Law filed a Motion to Dismiss which was denied because Gonzalez plead allegations and facts sufficient to rope them in under theories of vicarious liability:

GONZALEZ v Burger Law Dkt. 52 ORDER.pdf

Download PDF • 173KB

"In its Motion, Burger Law argues Plaintiff’s allegations as to vicarious liability are conclusory and insufficient to state a claim against it. Citing to cases from Texas courts and from United States Court of Appeals for the Fifth Circuit, Defendant Burger Law argues Plaintiff’s allegations are insufficient to establish vicarious liability under the theories of agency, apparent authority, and ratification. Burger Law also argues Plaintiff does not allege Consumer Legal was acting at the directive or on behalf of Burger Law or that she was transferred to Burger Law during the phone calls."

And the sign of a novice, Burger Law's attorney tried to argue facts in their MTD "Finally, Burger Law argues Plaintiff’s allegations are untrue, and it submitted the declaration of Gary K. Burger, which contains many assertions of fact that contradict Plaintiff’s allegations."

None of this is going to work. Why?

"In no uncertain terms, Plaintiff alleges Consumer Law is an agent of Burger Law. More specifically, she alleges Burger Law hired Consumer Legal and directed it to place telephone solicitation phone calls to potential clients on its behalf. Plaintiff also alleges Burger Law set criteria for qualifying leads, and Consumer Legal then transferred “live, hot leads” to Burger Law, and Burger Law accepted those leads. She further alleges there is a contract between Burger Law and Consumer Legal, and Consumer Legal was acting as Burger Law’s agent when it made the prohibited calls. “Consumer Legal, acting with actual authority, made the prohibited calls, qualified Plaintiff according to Burger [Law]’s criteria, and then live transferred Plaintiff to Burger [Law]’s advisor to continue marketing legal representation.”"

That is how you get it done and Gonzalez succeeded where I have seen experienced plaintiff attorneys fail.

"Turning to the merits of the motion, the U.S. Supreme Court has recognized there is vicarious liability for TCPA violations under “federal common-law principles of agency.” See Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 168 (2016), as revised (Feb. 9, 2016). See also Golan v. FreeEats.com, Inc., 930 F.3d 950, 961 (8th Cir. 2019) (allowing instruction for vicarious liability under the TCPA). “[A] defendant may be held vicariously liable for TCPA violations where the plaintiff establishes an agency relationship, as defined by federal common law, between the defendant and a third-party caller.” Gomez v. Campbell-Ewald Co., 768 F.3d 871, 877–79 (9tt Cir. 2014), aff'd, 577 U.S. 153 (2016)."

Never be surprised if the defendant outright lies about the content of the complaint. Also don't expect a court to do anything about the lying except perhaps throw some shade:

"In moving for dismissal, Burger Law makes a number of assertions regarding Plaintiff’s allegations that are not supported by the record. Contrary to Burger Law’s assertion, Plaintiff does allege Burger Law directed Consumer Legal to make solicitation calls on its behalf. Plaintiff alleges there is a formal agency relationship between Burger Law and Consumer Legal, including a contract that governs Consumer Legal’s telemarketing for Burger Law. She alleges that Burger Law controls a telemarketing scheme whereby Burger Law sets the criteria for leads, and Consumer Legal makes solicitation calls to potential clients on Burger Law’s behalf. Plaintiff alleges she received more than one solicitation call on behalf of Burger Law, and during at least one call, she was transferred by Consumer Legal to Burger Law, and Burger Law continued to market to her legal representation. In sum, the Court finds Plaintiff has alleged sufficient facts to support a reasonable inference that there was a formal agency relationship between Burger Law and Consumer Legal, or alternatively, that there was apparent authority and ratification, such that Burger Law may be held vicariously liable for Consumer Legal’s phone calls to Plaintiff."

What about Burger Law's arguing of the facts?

"As an initial matter, when ruling on a Rule 12(b)(6) motion to dismiss for failure to state a claim, this Court must take the allegations of the complaint as true and liberally construe the complaint in a light most favorable to the plaintiff. Kottschade v. City of Rochester, 319 F.3d 1038, 1040 (8th Cir. 2003). Mr. Burger’s declaration, which was attached to Burger Law’s Motion, sets forth facts in an attempt to counter the allegations made in the First Amended Complaint and, therefore, it falls squarely within the definition of matters outside the pleadings. Gorog v. Best Buy Co., 760 F.3d 787, 791 (8th Cir. 2014). Under Fed. R. Civ. P. 12(d), the Court may not consider “matters outside the pleadings” without first converting the Rule 12(b)(6) motion into one for summary judgment under Fed. R. Civ. P. 56. Considering this litigation is in its initial stages, and as Burger Law has not moved for the entry of summary judgment, the Court will not convert the Rule 12(b)(6) motion into one for summary judgment pursuant to Rule 12(d). Accordingly, the Court will not consider Mr. Burger’s declaration in deciding Burger Law’s Motion to Dismiss for Failure to State a Claim."

Gonzalez did a great job alleging the calls she received, who dialed the calls and the business relationship between Burger Law and Consumer Legal such that the court could see how Burger Law was vicariously liable for Consumer Legal's dialing the phone. Gonzales made it look easy but it isn't always easy because of course telemarketers try to disclose a little truth as possible in their calls.

Gonzales probably did a fair amount of social engineering to get both Burger Law and Consumer Legal to give up their identities.

Would you like a free case review? Do you have a question or a telemarketing, debt collection, or bankruptcy case that would make a great blog article? We might even review your pro-se complaint or motion in a blog post. Email peter@nwdebtresolution.com and/or nathen@nwdebtresolution.com and we may answer it for everyone!

Are telemarketers harassing you in Washington, Oregon, or Montana? My Washington State TCPA plaintiff law practice can help, just give us a call at 206-800-6000 or email peter@nwdebtresolution.com.

The thoughts, opinions and musings of this blog are those of Peter Schneider, a consumer advocate and Washington State plaintiff's TCPA attorney at Northwest Debt Resolution, LLC. They are just that, his thoughts, opinions and musings and should be treated as such. They are not legal advice. If you are looking to file a lawsuit for TCPA violations and unwanted calls please contact me for a consultation.