Contract Requirements May Help TCPA Defendant Secure Early End to TCPA Lawsuit

TCPA Connect

A Telephone Consumer Protection Act (TCPA) defendant may be able to evade a lawsuit after pointing to contract terms that required its third-party vendor to comply with the statute in a new decision from Missouri.

In the summer of 2021, Velma Howell, whose phone number had been registered on the National Do Not Call Registry since 2009, filled out several forms on the “Simply Jobs” website, which is owned and operated by Digital Media Services (DMS). In October 2021, she received four telemarketing calls from SmartMatch Insurance Agency and filed a TCPA action against SmartMatch.

SmartMatch said it obtained Howell’s express written consent to receive telemarketing calls from DMS, but Howell countered that the required clear and conspicuous disclosure was not provided to her when she gave consent to be called, that SmartMatch wasn’t a party to any purported consent agreement, and SmartMatch could not demonstrate any established business relationship pursuant to which the calls were made.

SmartMatch moved to dismiss, arguing that Howell’s injury was not traceable to its conduct or capable of redress because the calls were the result of the independent action of third-party DMS, which transfers calls to SmartMatch for marketing purposes.

In support, SmartMatch provided its contract with DMS, which expressly forbids DMS from transferring calls to SmartMatch unless DMS provides TCPA-compliant clear and conspicuous disclosures and obtains written consent from the called party to receive calls from SmartMatch.

SmartMatch also produced a declaration from a corporate officer stating that SmartMatch did not authorize DMS to act outside of the contract, SmartMatch had no knowledge of conduct by DMS that violated the TCPA and any calls that were placed to Howell were not made by SmartMatch but rather DMS or another third party.

While SmartMatch pointed to case law – Baccari v. Carguard Admin., Inc., a Pennsylvania case from 2022 where the Court dismissed the plaintiff’s TCPA claims for lack of subject matter jurisdiction because the plaintiff failed to respond to the defendant’s evidence demonstrating that the third party who placed the calls to the plaintiff was “contractually prohibited” from telemarketing on behalf of the defendant – the Court found the decision distinguishable.

Howell “responded to SmartMatch’s evidence,” the Court wrote. “Plaintiff’s evidence demonstrates her belief, and the belief of counsel, that the calls are attributable to SmartMatch’s conduct.”

Judge Brian Wimes also relied upon a 2023 Arizona case, Goodell v. BH Automotive, LLC, where the Court also granted the defendant’s motion to dismiss under similar circumstances – but only after jurisdictional discovery.

“While on the current record the Court cannot conclude Plaintiff demonstrates standing by a preponderance of the evidence, this litigation is in its early stages,” the Court said. “Consistent with Plaintiff’s arguments, the evidentiary record is not yet developed and through the discovery process, SmartMatch may produce information through which Plaintiff might demonstrate standing by a preponderance of the evidence, either through the theory currently alleged or through another.”

Therefore, the Court denied the defendant’s motion to dismiss without prejudice and ordered that the case proceed to jurisdictional discovery.

To read the order in Howell v. SmartMatch Insurance Agency, LLC, click here .

Why it matters: This case is an excellent example of an early defense strategy that can be employed when a contract between the calling party and the end seller expressly prohibits and/or does not authorize the alleged calling activity. Because a plaintiff must satisfy the requirements of Article III standing in order to proceed with their claim, a fact-based challenge to the complaint under Federal Rule of Civil Procedure 12(b)(1)—here, specifically on traceability and redressability grounds (two of the requirements for Article III standing)—provides an opening for the Court to dismiss the case at an early stage for lack of subject matter jurisdiction. While the Court here found the defendant’s evidence insufficient to justify granting the motion to dismiss, it elected to refocus the case on early limited jurisdictional discovery and held the door open for a subsequent Article III challenge to resolve this threshold standing issue.



pursuant to New York DR 2-101(f)

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