Nichols v. 360 Financial Group LLC

Background

Terri Lee Nichols alleged that she received a prerecorded telemarketing call left as a voicemail. After returning the call on May 12, 2022, she spoke with a representative who identified herself as promoting Medicare products through 360 Insurance Group LLC. Nichols alleged that she had not consented to the call or other communications from 360 Insurance and sued 360 Insurance under the Telephone Consumer Protection Act, a federal law regulating certain telephone solicitations. She sought to represent a class of similarly situated people.

After the suit began, 360 Insurance filed a cross-complaint against PolicyScout LLC. 360 Insurance alleged that it had purchased lead data from PolicyScout under an Insurance Lead Purchase Agreement and that PolicyScout, rather than 360 Insurance, had made the calls. 360 Insurance sought indemnification under the agreement, and Nichols added PolicyScout as a defendant.

PolicyScout moved to dismiss Nichols’s amended complaint and 360 Insurance’s cross-complaint. It asserted that the court lacked subject-matter jurisdiction and personal jurisdiction, that the pleadings failed to state a claim, and that the agreement’s forum-selection clause required suits concerning the agreement to be brought in Utah.

Personal Jurisdiction

The court focused on personal jurisdiction, which is a court’s authority over a particular defendant. The parties did not dispute that California lacked general jurisdiction over PolicyScout. The issue was whether California had specific jurisdiction based on PolicyScout’s alleged connections to the events at issue.

For claims involving alleged tortious conduct, the court applied the purposeful-direction framework. Under that framework, the plaintiffs had to show an intentional act, expressly aimed at California, that caused harm the defendant knew was likely to occur in California.

PolicyScout denied making the call or leaving the voicemail. It said that it communicates with consumers only after they provide their information and submitted evidence that Nichols had consented to be contacted through FindDreamJobs.com. Nichols stated that she had not consented, had never visited that website, and was not associated with the Internet address identified by PolicyScout.

Because this was a motion to dismiss before discovery, the court resolved the conflicting factual accounts in favor of Nichols and did not reject the declarations as insufficiently supported. The court also found that the allegations and evidence provided enough connection between PolicyScout, Insuralife, Fluent LLC, and the lead information that PolicyScout’s claim that it was not involved could not be accepted as a basis for dismissal at that stage.

The court nevertheless found that the plaintiffs had not shown that PolicyScout expressly aimed conduct at California or knew that harm would likely occur there. Nichols’s telephone number had a 757 area code, which corresponds to Virginia rather than California. The court concluded that the area code made it difficult to infer that PolicyScout knowingly targeted a California resident. The court also rejected reliance on an Internet address associated with Hayward, California, because the address was from a mobile phone, could change, and Nichols denied being associated with it. The court held that the plaintiffs had not cited authority supporting personal jurisdiction based on that information when the phone number had a non-California area code.

Ruling

The court granted PolicyScout’s motion to dismiss for lack of personal jurisdiction. The dismissal applied to both Nichols’s amended complaint and 360 Insurance’s cross-complaint. The court granted leave to amend and gave Nichols and 360 Insurance 30 days to file an amended complaint.

Because lack of personal jurisdiction supplied a basis for dismissal, the court did not decide PolicyScout’s other arguments concerning standing, failure to state a claim, or the forum-selection clause requiring suits concerning the agreement to be brought in Utah. The court also said that PolicyScout’s request for fees under the agreement was premature, although PolicyScout could renew that request after the amendment deadline if no amended complaint was filed. Judge Richard Seeborg signed the order.