You Have the Right to Defend Your Business Model: Court Allows Online Lead Generator to Intervene in Putative TCPA Class Action

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Online lead generation is huge business, and present across all manner of consumer industries including lending, home services, insurance, healthcare – you name it.  By the time these leads reach the caller, a consumer will have visited the lead generator’s website, provided their contact information, accepted TCPA consent disclosures, and sometimes even an arbitration agreement.  But it’s usually the caller who relied on the lead that gets sued for violating the TCPA in connection with calls to that consumer.

So where does that leave the lead generator?  Because in many instances, the consumer’s claim will involve an attack on some aspect of the lead generator’s business model, as was the case in Turner v. Efinancial, LLC, No. 18-cv-292-CMA-GPG, 2018 U.S. Dist. LEXIS 150980 (D. Colo. Sept. 5, 2018).  But Fed. R. Civ. P. 24 provides those lead generators the right to assert themselves into such litigation and defend their business interests.

Setting the stage, Efinancial had called Plaintiff regarding its insurance services based on an online lead generated after Plaintiff had apparently visited a website operated by All Web Leads, Inc. (“All Web”) (www.insurancequotes.com), submitted her contact information, accepted All Web’s TCPA consent disclosures, as well as an arbitration agreement.  But Plaintiff claimed she never visited the website, that the calls from Efinancial were made without her consent, and – because TCPAland – sued Efinancial in a nationwide class action.

But All Web wasn’t going to just stand idly by while Efinancial got stuck holding the bag defending a lawsuit based on a lead that All Web generated, or while issues that would directly impact All Web’s business model were litigated in its absence.  So All Web moved under Fed. R. Civ. P. 24 to intervene in the action.  After finding All Web’s motion to be timely, the court went on to the meat of the question: did All Web claim a protected interest relating to the property or transaction that is subject of the action to justify intervention under Rule 24?

All Web argued it did: that interest was its “entire business model.”  As explained by the court, “All Web contracts with various insurance companies to provide leads from interested consumers . . . [who] have provided contact information, and have agreed to arbitration.  On that basis, All Web – with consumer permission – passes the information onto the downstream insurance provider.”  The court therefore found that All Web’s assertion that its entire business model was at stake not to be “overly dramatic.”  To the contrary, it was “highly logical” to conclude that if Efinancial found out it was being sold bunk leads, it would “likely determine to leave All Web in the dust and find some other way of obtaining customer leads.”

The court also rejected Plaintiff’s argument that All Web shouldn’t be allowed to intervene because Plaintiff hadn’t “alleged any wrongdoing by All Web.”  The court found the argument to be “nonsensical” since Plaintiff’s claims were directly based on activities that either did, or did not occur on All Web’s website.  Thus, All Web deserved “a full and fair opportunity” to defend its interests.  As the court observed, “[a]llowing suit of one entity because the perceived facts better benefit Plaintiff without allowing intervention of the real party at interest is exactly the type of machination Rule 24 is designed to stop.”  Fair is fair, after all.

And Karen Saunders v. Dyck O’Neal, Inc., Case No. 1:17-cv-335, 2018 WL 3453967 (W.D. Mich. July 16, 2018) – the VoApp direct drop case – gives us an example of what could go wrong when a stakeholder’s interests are litigated in their absence. As the VoApp’s CEO told us on the Ramble, things would have gone much differently had the company been present in the action control the defense of its own product.

So to all the lead generators out there – take heed.  When the buyers of your leads are sued based on something that happened on your website, your business interests are likely at stake.  Are you going to just stand there on the sidelines, or get in there and defend your own interests?


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