THE WOLF STRIKES AGAIN!: Massive New Certification Ruling Against Citizens Disability May Lead To Even More TCPA Headaches for Lead Buyers

So just landed in Denver last night for Contact.io and I already have some bad TCPA news for folks.

Just yesterday the Wolf–Anthony Paronich–earned a stunning certification victory against Citizens Disability, LLC related to leads it purchased from DMS and Fluent and that’s a real problem for folks who make outbound calls in reliance on purchased leads.

The Wolf discussed pursuing lead buyers on Deserve to Win (Ep. 1)

First, the case provides a great little primer on what leads are and how they are generated:

Citizens assists disabled persons with applying for Social Security Disability Insurance (“SSDI”) benefits in exchange for a percentage of the benefits they are ultimately awarded. Citizens markets itself to potential customers directly by contacting them via telephone, text message, or email. To identify potential customers, Citizens works with marketing partners—referred to as “lead generators”—that operate websites frequented by individuals who may qualify for SSDI benefits. These websites often promise access to online shopping discounts or other benefits to induce potential SSDI applicants to fill out consent forms. After an individual fills out a form on a lead generator website, the lead generator sells the individual’s contact information to Citizens. Citizens then uses that information to contact the individual to sell its services. The identities of potential customers and their contact information are referred to as “leads.”

Nicely put.

The Plaintiffs contend they were called despite the fact that they did not actually provide consent (although oddly the decision does not address whether the Plaintiffs did, or did not, actually visit the website and submit forms.)

The Plaintiffs sought to certify an extremely broad class consisting of everyone that received calls from the same marketing partners:

All persons in the United States who (1) received a text message call or telephone call by or on behalf of Defendant, (2) on his, her, or its cellular telephone, (3) from the last four years through the date notice is sent to the Class, (4) for the same purpose as Defendant (or its agent) placed the text message or telephone call to Plaintiffs, (5) using the same equipment that was used to call or text the Plaintiffs, and (6) for who Defendant claims it obtained express consent to place the text message or telephone call in the same manner that Defendant contends it obtained express consent to call or text Plaintiffs.

In Thrower v Citizens Disability, LLC, 2022 WL 3754737 (D. Mass. Aug. 30, 2022) the Court certified this class finding all requirements of the federal rules were met. Indeed, in the Court’s mind it wasn’t a particularly close call.

As to ascertainability, the Court–unsurprisingly–rejected the Defendant’s argument that it lacked sufficient records to identify class members. Courts commonly expect a caller–who has the responsibility to prove consent–to come forward with actual evidence and claims of a lack of documents generally go very poorly. That was the case in Thrower as the Court refused to “incentivize” callers not to maintain records in holding, in essence, that Citizens was banned from taking advantage of its own lack of data.

Moving on to commonality, the Court found the class “clearly” was bound by common issues. And, interestingly, found the Plaintiffs were adequate to represent the class merely because they suffered the same harm–not because they visited the same website as class members. (This is a bit of a truncated adequacy analysis and I don’t think it is correct, but I haven’t pulled the parties’ briefing to understand why so little attention was paid to this important issue.)

As to predominance–the toughest showing and the one where most TCPA class certification efforts are defeated–the Court found common issues as to: 1) whether the individual was called by Citizens within the statutory period; 2) whether the call was placed via the same system used to call the plaintiffs; 3) whether Citizens willfully placed the call; 4) whether Citizens placed the call to market its services; and 5) whether the individual had previously consented to receiving the call by filling out a form on a lead generator website. Common issues predominate because each of those five questions can be addressed either on a class-wide basis, or in an individualized manner that is neither inefficient nor unfair.

Now I can live with 1), 2) and 4) being viewed as common. But those issues rarely drive the outcome of a TCPA case. So from a certification standpoint the fact that class members have commonality on issues that aren’t really in dispute should barely budge the needle in assessing whether or not to certify.

Issue 3) should never have been viewed as a common issue. In order to establish willfulness a Plaintiff must demonstrate the caller knew it lacked consent to make calls to the person it was trying to call. Again, I have not pulled the briefing here but to the extent the Plaintiffs contend they did not actually visit the website, or as to calls to wrong numbers, plainly there will not be common evidence as to Citizens Disability’s intention to call class members that it either did not know it was calling at all or that it believed it had consent to call and didn’t. Zero percent chance of commonality on this issue–unless Plaintiffs admit that they did visit the website and common evidence exists that Citizens knew the webforms were insufficient.

Indeed, when a Plaintiff pushes “willfulness” at the certification stage it makes me smile. It is a built in individualized issue that almost always helps me to defeat certification. But not in Thrower. There the Court simply found that all messages were intentionally sent and, apparently, viewed that as sufficient on the issue (it is unclear because the analysis on this point is extremely slim.)

And that just leaves consent.

In Thrower the court identified two issues to be resolved. First, whether the individual filled out a form on a lead generator website.

Pause.

Now in a TCPA class action involving lead fraud this is an EXTREMELY important issue. There will be no way to tell–in many instances–which leads are real and which leads are fake (if any). And that being the case there should be no path to certification where a Plaintiff claims that they did not actually visit a website and that other class members were similarly called as a result of invalid leads. In all such instances certification should be swiftly denied–the callers’ records will show uniform consent and only a trial as to each class members’ (possible) claim that a record was invalid can resolve the issue of whether consent actually existed.

As already explained above, however, in Thrower it is not even clear whether the plaintiffs claim they were victims of lead fraud or whether they admit to visiting the website. That is a CRITICAL basic issue and I really dont understand how the court certified a case without addressing it.

Regardless, the Court found that Citizens apparently conceded the issue away!:  Citizens admits that those determinations can be made through a simple analysis of its own internal data. Individualized customer-by-customer evidentiary hearings will not be necessary.

What. In. The. World.

Picking my jaw up off the floor and moving on, the Court turns to the second issue–which is whether the lead forms provided valid consent. On this point the Court suggests that Citizens again failed to introduce evidence of individualized issues:

Citizens does not claim that the wording of these forms varies between lead generator websites or between users of the same website. Indeed, given that lead generators each operate multiple websites, the number of unique forms requiring analysis will likely mirror the number of lead generators. A few determinations of whether the wording of a given form conveyed express consent to be contacted will likely suffice to cover the proposed class.

Again I have not pulled the briefing here, but this appears to be another really big miss by the defense. Yes, multiple websites might be used by the same generator–but the generators (especially monsters like DMS and Fluent) might work with hundreds of publishers. And even if they only operated their own sites they might have hundreds of URLs with different disclosures and layouts. Indeed it would be remarkably rare for a lead supplier to have only a handful of disclosures at issue in a large portfolio.

In our suits we typically succeed in having a case focused on only a single URL because of these issues. But here, somehow, the Plaintiffs succeeded in certifying a class on an undisclosed–but potentially huge–number of properties. Should never have happened.

As anyone in the industry knows DMS and Fluent are HUGE players that operate and work with thousands of websites. It is INSANE to me that the Court could come to the conclusion that all leads from these sources are somehow subject to a common showing as to consent. ZERO percent chance.

So at bottom, Thrower feels more like a case about a defendant missing critical issues–again I did not review the briefing and I am only looking at the ruling–than a reliable roadmap for what callers in TCPA cases should expect at the certification stage. Still it goes to show how extremely DANGEROUS these cases can be.

The ruling does not identify the number of calls at issue but it is safe to assume that Citizens Disability is fighting for its life right now. And it is too bad.

I’ve said it before and I’ll say it again, TCPA class litigation is not for the faint of heart or the green of horn. Make sure you have EXTREMELY experienced and knowledgeable class action defense lawyers on your side ESPECIALLY if you’re going to dance against the Wolf.

See you in Denver TCPAWorld.

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1 Comment

  1. I just do not get it. What responsible seller would buy a lead (let alone, many leads) from a lead warehouser like Fluent or DMS and then begin telephoning those leads thinking that the requirements for prior express consent have been complied with? If the warehouser had the lead in their database at the time of making the purchase request, then by definition, there could not possibly have been “express consent” for that seller to initiate a call to that consumer lead. Looks like Citizens Disability is in line to get a well-deserved whooping.

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