After the firestorm caused by the sinking of the train Mantha finding it so refreshing to be able to discuss a BIG case with a clean, simple, correct analysis involving TCPA disclosures online. Additionally, a repeat TCPA requester ended up on the losing side of the TCPA ledger – again.
For those of you who haven’t been following, in Mantha a court recently ruled that a caller cannot rely on a TCPA consent disclosure on a website unless the consumer has separately entered into an ESIGN agreement to do business with the caller electronically. Nutso.
And, previously on TCPA.WORLD, frequent TCPA flier Ken Johansen saw his career as a TCPA class rep end seemingly in a lonely death when a court found his behavior in the “investigation” on the TCPA lawsuits (by pretending to be interested in the goods and services offered by appellants) was too “misleading” to allow it to represent a class.
Well, those two stories just collided in dramatic fashion in Johansen v Efinancial LLC, CAS No. 2:20-cv-01351-DGE, 2022 US Dist. LEXIS 8798 (WD Wash. Jan. 18 2022)(Johansen LVI).
In Johansen LVI the defendant sought summary judgment arguing that Mr. Johansen had provided his number on a website and then engaged in a lengthy discussion with an agent selling terminal expense insurance during which he (Johansen) had provided lots of personal information and still seemed interested in the product being sold by Efinancial. Although Johansen claimed he was just playing along to “investigate” who was calling him, the Court didn’t have it.
First, the Court found that consent to be called can properly be obtained via online disclosure WITHOUT any ESIGN agreement. Nice simple analysis here:
The FCC has determined that the requirement for a “signed written agreement” can be satisfied by submitting a website form. Applying these guidelines, courts have found that a person can provide prior express permission by submitting a web form with personal information when the web form includes a notice that the person agrees to be contacted.
Johansen, however, claimed that he had not actually visited the website and given his consent. But the Court remained impassive. Johansen did not object when he received the call and instead provided detailed personal information consistent with the actual search for the product on offer. Additionally, the email used to submit the request was associated with a physical address that Johansen provided during his appeal, so the Court found “no evidence” to support his claim that he had not given his consent.
Now on that last point Johansen LVI deviates from the weight of authority – typically a court will credit (at the SYM stage) a plaintiff’s refusal – under oath – to have visited a website and find a question about it for the jury to resolve. (In other words, a defendant will generally lose this argument.) But EFinancial won. Why?
Well, looking at FN1, we see that the Court wasn’t in love with Johansen’s track record in the TCPA lawsuit “investigations” and just wasn’t going to credit what the guy had to say:
Other courts have questioned the plaintiff’s actions of impersonating a customer of an entity responsible for initiating a telemarketing call. Plaintiff has filed approximately 60 lawsuits under the TCPA and has developed what a district court described as an “extensive and successful history with lawsuits involving TCPA claims”: Plaintiff acknowledges that he has developed a ” typical practice” of deceptive conduct used to successfully pursue TCPA claims. The caller poses as a customer of the entity responsible for initiating the telemarketing call and tricks the representative into believing that they are, in fact, an established customer and genuinely interested in the product or service offering , thus prolonging the alleged harm that the plaintiff claims to have suffered and increasing the potential damages that he could, in theory, recover. Johansen vs. Bluegrass Vacations Unlimited, Inc., #20-81076-CIV-SMITH, 2021 WL 4973593 at *1.5 (SD Florida September 30, 2021). In that case, the Court denied the plaintiff’s motion for class certification, citing the plaintiff’s assertion that engaging in deception was appropriate behavior for a class representative, and “serious concerns” about the ” credibility, honesty, reliability and motives” of the claimant in setting up the putative class. action. (Id. to 5-6.)
In another case, the plaintiff admitted he had “passed himself off” as an interested customer when he received a telemarketing call and called the company back when the initial phone call was disconnected. Johansen v. Nat’l Gas & Elec. LLC, No. 2:17-cv- 587, 2017 WL 6505959, at *3 (SD Ohio Dec 20, 2017) Plaintiff has acknowledged that he does not intend to engage the services of the company , but played the game “as he usually does” and “affirmatively took the necessary steps to apparently register” with the company while knowing that “no matter what happened, he would not receive [the company’s] services” because he deliberately provided the company with the wrong address and account number. (Id.) The Court found that the plaintiff’s confession “cast serious doubts on his fitness to serve as an adequate representative of the class” and “also appeared[ed] to undermine the viability of its cause of action under the TCPA. (Id.) The district court in that case found that plaintiff’s “misleading conduct gave [the defendant] an objectively reasonable basis to believe that [plaintiff] had established a business relationship with [defendant].” (Id. to 4.)
Yes, it was long, but it was definitely worth reading.
In light of this “misleading” conduct by Johansen in previous cases, the Court was simply unwilling to credit his assertion that he had not submitted the lead in question to Efinancial. And I can’t blame him.
Corn JohansenLVI gets even better. This is because this is one of the few cases to apply the TCPA’s DNC affirmative good faith defense at the MSJ stage.
As a reminder, the DNC provisions of the TCPA, unlike the strict liability sections on “regulated technologies”, contain an affirmative defense for callers who have good DNC practices and procedures and who have placed a call as a result of a bona fide mistake. Although this is a powerful defence, many defendants forget to raise it for some reason (why?) and, even when raised, courts often do not give credence to such policies in the phase. MSJ – they send it to the jury for a determination of the “reasonableness” of the proceedings and the defendant’s actions.
In JohansenLVI, however, the Court opted for the jugular. He concluded that it was common business practice for Efinancial to conform to the standards required by the safe harbor provision and had substantially complied with the TCPA’s objective, “to protect consumers from the unwanted intrusion and nuisance of unsolicited telemarketing telephone calls and fax advertisements”, calling only those who have requested a life insurance quote and agreed to be called. And the Court held that because of these procedures, even though the claim had been fraudulently submitted by a seller, Efinancial could not be held liable because it had mistakenly believed that it was a call to a customer. satisfied.
What a decision.
So Efinancial now finds its internal policies BLESSED as meeting TCPA standards by a federal judge – that’s just an incredible ruling.
Some big takeaways here:
- Despite the crushing blow in Mantha, obtaining consent online remains viable in most courts, thank goodness;
- The antics of people like Johansen who sue while pretending to be interested in products and services have not gone unnoticed in some courts – and a well-documented motion for summary judgment can hit the mark;
- Do NOT forget the affirmative defense of policies and procedures in DNC cases – even calls to invalid leads can be forgiven when there is a solid written TCPA policy that is strictly adhered to and trained;
- On the other hand, do NOT make the mistake of thinking you have a similar safe haven when using pre-recorded calls or ATDS to contact customers – you don’t. And in this context, lead fraud and wrong numbers can lead to strict liability and very serious problems for your organization.
Another excellent job to the Efinancial team.