A single informational call could not form the basis of a Telephone Consumer Protection Act class action, a California federal court judge ruled in granting summary judgment in favor of the defendant.
Blue Shield of California Life & Health Insurance Company was hit with the lawsuit in 2015 by California resident Shannon Smith. Smith alleged that she received a pre-recorded phone call from the health plan to notify her that she had been mailed a packet with information about renewing her policy.
Insurers are required by federal law to provide written notice to consumers of changes to their policies (such as an increase in premiums or modifications to coverage for particular services) prior to the annual open enrollment period, Blue Shield explained. But because numerous information packets were returned as undeliverable in prior years, the insurer decided to call each of its existing members to alert them to the fact that their packets had been mailed.
The final script of the pre-recorded call read: “Hello. This is an important message from Blue Shield of California. It’s time to renew 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 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. Thank you. Goodbye.”
Smith claimed that the message was a telemarketing call for which she had not provided consent to receive because the call was part of the insurer’s retention strategy, was written by the defendant’s marketing team, and included a link to Blue Shield’s renewal page with the phrase “We want to keep you covered.”
But U.S. District Court Judge Cormac J. Carney—after determining that the plaintiff stated sufficient allegations of concrete harm to establish standing in line with Spokeo, Inc. v. Robins—rejected Smith’s argument that the call constituted an advertisement.
“Simply stated, the text of Blue Shield’s telephone call is informational,” the court said. “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.”
The call had an “informative, non-telemarketing nature,” the judge noted, similar to calls found by other courts not to be advertisements (such as a text message received after opting into a rewards program and a welcome message after submitting an online registration form) and contrasting “starkly” with messages that courts have deemed to be telemarketing or advertising.
The suggestion that recipients visit Blue Shield’s website did not sway the court, as the insurer’s goal was to direct customers to the renewal tool, which was also purely informational. “The mere fact that parts of Blue Shield’s website [contain] the capability of allowing consumers to engage in commerce does not transform any message including its homepage into telemarketing or advertising.”
And Blue Shield’s “overarching incentive to retain customers and receive premium payments” was “simply too attenuated to give rise to a clear, unequivocal implication of advertising.”
Deeming the call informative rather than advertising or telemarketing was also consistent with the Health Insurance Portability and Accountability Act (HIPAA), the court said, which allows insurers to contact their members about matters relating to renewal or replacement of their insurance coverage. “The call in this case is, therefore, not marketing under HIPAA as it is entirely about changes to and replacement of Plaintiff’s health insurance,” Judge Carney wrote.
“Were this Court to hold otherwise, it would transform practically all communication from any entity that is financially motivated and exchanges goods or services for money into telemarketing or advertising, which would contravene the delineated definitions of telemarketing or advertising in [TCPA regulations],” the court concluded. “Evaluating Blue Shield’s call with a measure of common sense, the Court must conclude that the call is not telemarketing or advertisement within the meaning of [TCPA regulations].”
To read the order in Smith v. Blue Shield of California Life & Health Insurance Company, click here.
Why it matters: The court adopted a common sense approach to what constitutes advertising or telemarketing pursuant to the TCPA’s regulations, particularly in light of the defendant’s potential liability under the statute. “It 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,” Judge Carney wrote. This decision adds yet another arrow to a healthcare company’s quiver when defending against a TCPA claim based on prerecorded informational calls to members.