A federal judge in the Central District of California recently granted summary judgment in favor of healthcare insurer California Physicians’ Service, d/b/a Blue Shield of California (Blue Shield) in a case that illustrates the courts’ ongoing work to distinguish telemarketing calls from informational calls under the TCPA. 


In December 2015, Shannon Smith, insured by Blue Shield, received a prerecorded call to her mobile phone, reminding her that it was time to review her health plan options for the coming year. This single call was the kindling for Smith v. Blue Shield of Cal. Life & Health Ins. Co., No. SACV 16-00108-CJC-KES (C.D. Cal. Jan. 13, 2017).  

Judge Cormac Carney’s ruling ultimately determined that the call was not telemarketing, and so was exempt from the “prior express written consent” requirement of the TCPA. 

In this case, Ms. Smith had provided her cell phone number as “the best number at which to contact her” when she applied for her health coverage under California’s ACA plan, known as Covered California, provided by Blue Shield. 

Prior to the call in question, the insurance company had sent, via snail mail, a formal automatic healthcare renewal announcing changes to the Plaintiff’s plan and potential alternatives. When the materials returned to the insurer as undeliverable, Blue Shield followed up with a single pre-recorded voice message that stated: 

“This is an important message from Blue Shield of California. It’s time to review your 2016 health plan options and see what’s new. Earlier this month, we mailed you information about your 2016 plan and benefit changes. It compares your current health plan to other options from Blue Shield. You can also find out more online at blueshieldca.com. If you have not received your information packet in the mail, or if you have any questions, please call the number on the back of your member ID card.”  

Ms. Smith subsequently filed suit against Blue Sheild for violation of the TCPA. Blue Shield brought a motion for summary judgment.

Editor’s Note: A motion for summary judgment is based upon a claim by one party (or, in some cases, both parties) that contends that all necessary factual issues are settled or so one-sided they need not be tried. The summary judgment is appropriate when the court determines there no factual issues remaining to be tried, and therefore a cause of action or all causes of action in a complaint can be decided upon certain facts without trial. 

In its motion for summary judgment, Blue Shield argued that 1) Its call was purely informational and therefore the necessary consent was in place once the plaintiff provided her phone number during plan enrollment; 2) Even though plaintiff provided a level of consent by furnishing her number, none was actually required because, they asserted, the call qualifies under the broad “emergency purposes” exception for calls “made necessary in any situation affecting the health and safety of consumers” and 3) Under Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the plaintiff lacked standing because she had not suffered a specific injury arising from the voicemail.

The court rejected the defense’s assertion that lack of concrete injury disqualified Ms. Smith’s standing to bring suit (by invoking the pre-Spokeo case of Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009), underscoring that the essential purpose of the TCPA is to safeguard privacy and finding that a violation of TCPA is itself sufficient harm to establish standing. 

The court also rejected the plaintiff’s argument that, because the message was recorded from copy written by marketers at Blue Shield, and had been originally part in some broader client retention strategy, and had been edited down to a final script used to record the message, it was necessarily telemarketing. The court found the actual final cut and content of the call---the version that made it to the plaintiffs phone---was “devoid of marketing content.” 

The court granted the defendant’s motion, finding that:  

“Simply stated, the text of Blue Shield’s telephone call is informational. It notified recipients that they should have received information about changes to their insurance plan, encouraged them to seek out information about their plan by examining the information packet and visiting Blue Shield’s website, and directed them to call the member service number (as opposed to the sales department) to resolve any questions or issues. (Dkt. 46-5 ¶ 10.) This content is virtually identical to the CMS template letters insurers such as Blue Shield send to customers regarding renewal. Both messages emphasize the importance of their contents, highlight that customers’ insurance plans and benefits had changed, inform recipients that there are alternative plans available, provide the insurer’s contact information, and convey the time-sensitivity of the information and the opportunity to renew or modify one’s insurance coverage. The only additional content in the calls versus the mailing references the mailing—informing recipients that 

(1) Blue Shield mailed them information and

(2) what to do if they had not yet received their mailing—and is similarly informational.” 

The court’s final curtsy did not lack conviction: 

“[i]f the Court accepted Plaintiff’s argument, nearly all innocuous, customer-friendly and informative gestures would be needlessly transformed into telemarketing and advertising...” and ended with “[i]t 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 of liability under the TCPA.” 

insideARM Perspective 

Having disposed of the case on the issue of consent, the court did not address Blue Shield’s argument that its call to the plaintiff was exempt from the TCPA pursuant to the “emergency purposes exception.” Had it done so, the case might have served as a safe harbor for HIPAA-covered entities. 

Instead, we are left to infer where, exactly, the courts might next trace the line between informational calls and marketing calls that require express written consent. One fair source of inference is the difference between the court’s opinion in Smith and the outcome in a substantially similar case. In Flores v. Access Ins. Co., No. 2:15-cv-02883-CAS-AGR (C.D. Cal. Mar. 13, 2017), the court went a different way on the defense’s motion to dismiss. The auto insurer’s (clumsier) voice message in that case was found to be marketing. 

Flores is a case still in motion, and while it does not involve a HIPAA-covered entity, it does showcase the importance of a well-crafted, well-considered outreach strategy and messaging plan that is TCPA compliant--even for messages sent to existing customers about required reminders. We’ll have to keep an eye on Flores, because a decision against Access Insurance could reverberate far beyond the auto insurance industry. 

For now, Smith also reminds healthcare providers and insurers alike that the TCPA has long arms, and the definition of “marketing calls” is still in play. Also, the myth that HIPAA-covered entities are not the purview of the TCPA needs to be dispelled, especially since violations run about $1500 per message or text! The courts have only scratched the surface of these issues, and there is much case law still to be made. 

To be sure, Smith and Flores highlight the need for careful patient engagement outreach--including all aspects of strategy, writing and editorial direction that inform any messaging. It all needs to be designed in the full light of the TCPA. A solid approach for providers and insurers might consider

  1. How could your marketing and other content creation functions better document clear intent and desired outcomes of a piece of messaging?
  2. If required to do so, how would you prove “express consent” to call or text is in place for your patients or customers?
  3. How will you process any ‘revoked consent’ to receive calls or texts?
  4. What is your plan to comply (and make sure any vendors are prepared to comply) with the most conservative readings of the TCPA? 

Finally, in its decision, the Smith court seemed to linger on a certain set of issues we find interesting and expect to see at the heart of future cases: 

  • The judge noted more than once that Blue Shield had placed a single call to Smith: Could this mean the outcome might have differed if the insurer had called more than once?
  • The plaintiff was an existing, insured member: How important was the content of the call, versus who received the call?
  • The communication was part of a mandatory communication about renewal. If Smith’s snail mail had not been returned to Blue Shield, and the call had not been considered a follow-up, would it have been viewed differently? 

The application of the TCPA to the healthcare provider community is an emerging field of case law, and one we’ll continue to monitor closely.