A judge in California recently dismissed a putative Telephone
Consumer Protection Act class action against Blue Shield of
California, an insurance provider. In Smith v. Blue Shield of
California Life & Health Insurance Co. (C.D. Cal.), the
judge found that the telephone call at issue was, as a matter of
law, not the type of call regulated by the TCPA, rejecting
plaintiff Shannon Smith's efforts to subject Blue Shield to
millions of dollars in statutory damages.
Smith had health insurance coverage through Blue Shield, which
was permitted to auto-renew her policy while still making certain
changes, such as raising premiums. Blue Shield was required to
provide consumers such as Smith written notice of the renewal. Blue
shield complied with that obligation by mailing consumers a packet
of information on their upcoming insurance renewal and, having seen
numerous packets come back undeliverable, Blue Shield also
instituted a policy to call existing members using a pre-recorded
message to alert them to the fact that packets had been mailed. The
prerecorded message simply informed recipients, including Smith,
that information about upcoming policy changes had been mailed to
them and was also available online, and that if they did not
receive the packet, or if they had questions, they could contact
Blue Shield directly.
Smith received a call from Blue Shield in December 2015 at the
number she provided Blue Shield in her application, informing her
of her forthcoming renewal packet. Smith did, in fact, renew her
coverage. She then sued, alleging Blue Shield's call violated
the TCPA because it was a prerecorded call made without prior
express written consent. She sought to represent herself and a
class of persons nationwide who received similar calls. Blue Shield
moved for summary judgment, and the court granted the motion.
Blue Shield's primary argument, and the one that was
dispositive for the court, was that the calls at issue were not
advertising calls of the type that requires express written consent
under the TCPA's regulations. The court agreed, noting that it
had to evaluate the content of the call using a "measure of
common sense." The court agreed with Blue Shield that the call
made to Smith was purely informational, rejecting Smith's
arguments that the calls constituted advertising due to the fact
that they were (1) intended to retain existing customers, (2)
written by Blue Shield's marketing team, and (3) initially (but
not in the end) included a specific link to a Blue Shield renewal
page and a statement that the company hoped to retain the
The court found the call was akin to an informational message
one might receive immediately after joining a rewards program, or a
communication providing an update about an order status. It also
contrasted the calls with the types of telemarketing and
advertising content that ran afoul of other courts, which were
communications that overtly advertised a particular product and the
caller's ability to benefit the recipient, none of which was
present in Blue Shield's calls. In the end, the court concluded
that Blue Shield was within its rights to keep an existing customer
informed about an important mailing, bookending its opinion with
the finding that 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 in liability under the TCPA."
The Troutman Sanders' Consumer Financial Services
Law Monitor blog offers timely updates regarding the financial
services industry to inform you of recent changes in the law,
upcoming regulatory deadlines and significant judicial opinions
that may impact your business. To view the blog, click
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The California Supreme Court recently held in City of San Jose v. Superior Court, California Supreme Court Case No. S218066, that public employees' digital messages existing in private electronic devices...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).