So I’m freaking out a bit.
Allstate has just been ordered to produce its entire internal DNC list for Alex Burke.
Allstate. Complete list of internal DNCs. Delivered to Alex Burke.
Huge. Terrible. Huge. Terrible. Huge. Terrible.
How? ‘Or’ What?
Let me set the scene here.
Many of you have been around long enough to remember the mind-boggling result of the old one. Dish Network ruling resulting in penalties of $ 283 million.
The most important thing to take away from this decision was that sellers who rely on third parties to market their goods should coordinate between sellers to ensure that a DNC report to one of them is correctly communicated upstream to the seller, then re-communicated downstream return to the web of the traders who launch the products of the sellers.
In the alternative, a request from the DNC to any trader must be treated as a DNC request to each trader sell the same good or service for the seller. And a seller’s failure to coordinate these requests through all of the marketers can have very bad results.
So, for example, if merchant A is asked to stop calling about vendor X’s products, vendor X should make sure that merchants B and C, who also sell X’s products, are notified and stop. to call. If B or C call the same consumer who requested termination of the calls, Seller X is responsible for a TCPA violation, although B and C are unlikely to be directly responsible.
So there is some mismatch between the seller’s need to stop calls and the incentives of traders, who are not directly responsible for the calls they make in this scenario, making contract terms and policies critical. .
But I digress.
The point of all of this is that the Requestor Bar has apparently landed on a way to effectively determine whether salespeople are coordinating properly with their marketing network – and that’s really terrifying from a data perspective.
The scheme is simple: they require the marketer who made the disputed calls to produce their internal DNC list. Then they require the seller to produce their list. If the two lists do not match, there has been a mis-coordination and, according to the argument, the seller is responsible for calls made to people who are only one list, but not both.
For this system to work, of course, applicants must obtain the vendor’s internal DNC list. And in some cases, that can mean a HUGE list and a giant puzzle for a large company.
Take Allstate for example.
Allstate is a big brand that sells a big product and has hundreds of thousands if not millions of customers.
Undoubtedly, however, many numerous people have probably told Allstate and its network of merchants and third-party agents to stop calling about this lens or program in the past five years. I can only imagine how difficult it would be for a multifaceted institution of this type to maintain all of its inbound and outbound DNC requests seamlessly between all of its agents and vendors.
Well, the applicant in Hossfeld v. Allstate Ins. Co., Case No. 20-CV-7091, 2021 US Dist. LEXIS 199023 (ND Ill. October 15, 2021) has just convinced a court to require Allstate to produce its entire internal DNC list – dating back at least five years – to test its theory that Allstate was not monitoring not correctly its suppliers.
For context, something called Transfer Kings apparently called the plaintiff on behalf of something called Atlantic Telemarketing, which in turn had the relationship with Allstate.
Those of you who attend Leadscon in the coming daysYou have to be really careful here – Allstate’s supplier was Atlantic. It’s not clear to me if Allstate even knew about Transfer Kings. But if TK’s internal DNC list doesn’t match Allstate’s, someone’s going to have trouble (and it’s probably not TK.) Here’s why:
Hossfeld says he plans to compare Allstate’s internal DNC list to Transfer Kings internal DNC list (and Atlantic Telemarketing’s internal DNC list) to show that the lists are significantly different from Alllstate’s internal DNC lists. Presumably, this important difference will allow Hossfeld to assert that Allstate and its suppliers do not coordinate.
CAVEAT VENDITOR (Sellers beware) pal. (And yes, that was a vague allusion to the Rounders).
I cannot stress enough how important this decision is to people. Sellers MUST ensure that they effectively communicate DNC requests through all marketing channels that use outgoing calls or SMS. MUST. Because the day may come when YOUR internal DNC list will be imposed and tested.
A few notes here from a litigation point of view.
First, this is why you ALWAYS see me stressing the need to fork the discovery between class issues and merit issues. Yes, it can be a costly and time consuming battle, but that’s why you are doing it. Allstate apparently did not get such an order and the examining magistrate who ordered the production rubbed it in the face a bit: on December 30, 2021.
Next, TCPA defendants should NEVER expect the “but the plaintiff is a bastard” argument to save them. Yes, most of them are all bastards. But that doesn’t mean they can’t turn you upside down if you don’t do the right procedural gestures:
The Court accepted Allstate’s argument that Hossfeld’s conduct in recalling and engaging the telemarketing salespeople who called him, “” pretending to be other people and otherwise providing false information to salespeople. telemarketing in order to continue the call long enough to transfer to an independent agent, “and on at least one call,” consent[ing] being transferred to an Allstate agent after being informed that his number was on the Allstate DNC list ”, could lead to the conclusion that Hossfeld is not an adequate class representative.
But the court went ahead and ordered production anyway. Because there was no bifurcation order and the discovery closed before certificate. So applicant had get the discovery before the question of his dignity to represent the class can be decided.
And that’s why TCPA defendants must never, never, never, never, ever allow discovery to close until certification is decided.
One last thing here, the production comes with a few caveats. First, Allstate’s internal DNC list will be treated as confidential under the parties’ agreed confidentiality order. Its good.
Second, Hossfeld and his council are prohibited from: (a) contacting anyone on Allstate’s internal DNC list unless and until a class is certified and (b) using the list Allstate internal DNC for any purpose in the event that a class is not approved.
Alright, here’s your nightmarish TCPA report for the day. I sincerely hope you have all been following this as this is a major development especially for those who sell products through third party marketers. I’ll be in Vegas for the next few days. Connect with me if you’re there and we can chat.