Nichols v. eHealthInsurance Services, Inc.

Background

The opinion concerns a proposed class action under the Telephone Consumer Protection Act (TCPA). The complaint alleges that Thomas Matthews owned and used a cell phone whose number was listed on the National Do-Not-Call Registry. Matthews alleged that eHealthInsurance Services, Inc. made several telemarketing calls to that number on June 10 and July 15, 2022, without his consent and without an established business relationship.

The caption identified Terri Nichols and others as plaintiffs, but the opinion states that Nichols was a former named plaintiff who had given notice of voluntary dismissal. Matthews sought to represent a nationwide class of people whose numbers were listed on the registry and who received at least two telephone solicitations promoting eHealth's products or services within a twelve-month period.

Motion to Dismiss

The court granted the motion to dismiss Count 1 without leave to amend. That count appeared to allege that eHealth used an automatic telephone dialing system or prerecorded messages. Matthews conceded that the complaint did not allege either type of conduct, explained that those references were included inadvertently, and agreed at the hearing that Count 1 could be dismissed because Count 2 was the only claim he intended to pursue.

The court denied the motion to dismiss Count 2. That count alleged violations of the TCPA's implementing regulations concerning telephone solicitations to numbers listed on the National Do-Not-Call Registry. The court held that Matthews did not need to allege or prove that he personally registered the number. It concluded that the statutory language and regulations protect registered phone numbers, and that the TCPA does not limit its private right of action to people who personally added their numbers to the registry.

Motion to Strike Class Allegations

The court granted the motion to strike in part and denied it in all other respects. It held that the proposed class definition was a “fail-safe” class because the term “telephone solicitation” requires an evaluation of issues such as consent and an established business relationship. As a result, deciding who belonged to the class would require deciding the merits of each person's claim.

The court allowed the class to be redefined by replacing “telephone solicitations” with “telephone calls.” It explained that whether someone received a telephone call is an objective criterion that does not require an initial decision about consent.

The court declined to strike the class allegations based on eHealth's argument that the class was overbroad because some members might have consented to calls or had an established business relationship. The court found that argument premature because eHealth had submitted no evidence that Matthews or any proposed class member had consented. It also declined to strike or narrow the class based on references to calls made by third parties acting for eHealth, because eHealth could potentially be liable for calls made through an agency relationship and discovery could identify those third parties.

Conclusion and Effect

The court granted the motion to dismiss Count 1 without leave to amend, denied the motion to dismiss Count 2, granted the motion to strike the fail-safe class definition with leave to amend, and denied the motion to strike in all other respects. Judge Eumik.Lee ordered Matthews to file an amended complaint within fourteen days and directed that it omit allegations about Nichols. This was a procedural order addressing the sufficiency of the pleadings and the proposed class definition; the opinion did not decide whether eHealth ultimately violated the TCPA.