This is a big one folks.
A fairly common practice in the marketing game is to buy leads from third-parties that obtain written consents to permit calls on a certain subject matter but that do not specifically identify the ultimate seller of the product or service in question. The practice is generally justified on the theory that the called party knows who is calling and why, and the ultimate identity of the seller cannot be known until the caller has a chance to gather some additional information from the called party to determine which service provider is best able to assist the called party.
Nonetheless the applicable regs are pretty clear that the written consent disclosure obtained in the first instance needs to actually name the seller.
So this creates a real tension for sellers and marketing companies that commonly rely on the “written consent to call, oral consent to transfer” approach to lead generation consent.
Well in Williams v. PillPack LLC, C19-5282 TSZ, 2021 U.S. Dist. LEXIS 27496 (W.D. Wash. February 12, 2021) that entire practice is under assault and round one just went to the bad guys.
Before we get into what went wrong in Williams—spoiler alert: a lot—let’s discuss how this analysis should go. It’s a simple two step dance. Step one: did the caller obtain the needed level of consent to attempt the call? Answer: probably. Since the consent was conveyed in writing and names both the caller and the purpose of the call it likely qualifies as written consent. But let’s assume it doesn’t. That brings us to step two—can the seller be liable? Well since the seller did not actually place the call it cannot be liable for it unless vicarious liability principles apply. And although those principles are fuzzy and gray, where a party is generating leads for multiple sellers within a single vertical the ultimate seller should not be liable for the call—they lack sufficient “control” over the actual caller to be deemed liable for placing the call in their own right.
That’s how it should go. But let’s see what happens when the issues get muddled.
In Williams the Court granted certification of a case against PillPack related to calls made by a third-party call center that generated leads for it. The call center, in turn, obtained leads from third party (and their own) websites. It was undisputed that consumers went on these websites and accepted disclosures authorizing the call center to call. it is also undisputed that PillPack was not specifically identified in the disclosure.
Plaintiff argued that PillPack could not meet its burden at the rule 23 stage of proving that class members consented to receive the calls at issue. PillPack argued that it had met that burden. Of course, both parties were wrong right out of the gate because the Plaintiff owes the burden of proving every element of Rule 23–including affirmatively demonstrating that the absence of consent can be proven on a classwide basis—and not the Defendant. (PillPack apparently conceded this issue away, however, which makes me absolutely sick to my stomach.)
Moving on, the Court determined that the viability of the online disclosures to permit the calls at issue could be determined on a classwide basis. More importantly, the court came pretty close to determining—at the certification stage—that PillPack was going to lose on the merits. Here’s the analysis:
More critically, Defendant does not dispute that during the relevant period, the website opt-in forms failed to list “PillPack” as a Marketing Partner who could call the proposed Class Members. Defendant argues that it may avoid TCPA liability so long as the called parties provided written consent to be called by Prospects DM, and that once called, the called party need only provide oral consent to be transferred to Defendant. The Court cannot identify any language in the TCPA or the regulations to support that argument, as the regulations expressly require that callers inform the called parties that their consent will “authorize the seller to deliver or cause to be delivered . . . telemarketing calls using an [ATDS] or an artificial or prerecorded voice.
So PillPack took on a burden that it did not need to carry and then tried to meet that burden by raising a merits issue—that should not even have been explored at the certification stage—only to have the Court reject it and determine a critical substantive issue in favor of the class.
As these cases generally go, once the Court determines the consent issue can be explored on common evidence the certification die was cast. The Court had little trouble concluding that common issues predominated and otherwise found that Rule 23(a) factors were met. The Court swept under the rug additional serious issues—such as the ability to determine whether phone numbers were residential or business line—in a rush to certify the case.
Bottom line here, anyone relying on oral consents to authorize transfer of calls to sellers who are not specifically named in the underlying consent disclosure should pay very close attention to this decision. While the Court has not yet ruled on the critical substantive issue here, it is definitely leaning in a painful direction. Sellers that have the market share to demand specific mention in disclosures should really push for it. And third-parties making calls to generated leads based on webform consents should analyze how they can best protect upstream seller by using more robust disclosures.
There are obviously lessons here for TCPA class action counsel as well, but we can discuss those offline.