Telephone and Texting Compliance News: Litigation Update — Hulce – The TCPA’S “Free” Pass

With exceptions, the Telephone Consumer Protection Act prohibits “telephone solicitations” to residential telephone numbers on the National Do Not Call Registry. The Seventh Circuit’s recent decision in Hulce v. Zipongo offers important insights as to what actually qualifies as a “telephone solicitation” under the TCPA.[1]

The Case: Free Services and Third-Party Payments

In Hulce, the plaintiff allegedly received approximately 20 calls and text messages from Foodsmart, which contracted with a healthcare plan to provide free consultations to plan members.[2] The communications discussed Foodsmart’s services, which were available to Hulce at no cost through his state- and Medicaid-funded healthcare plan.[3] When Hulce used Foodsmart’s services, his healthcare provider, not Hulce, would pay Foodsmart.

Foodsmart moved for summary judgment and argued that because its calls and text messages were for the purpose of providing Hulce with information about a free service, they did not encourage the purchase of a good, service, or property and therefore could not be considered “solicitations” under the TCPA.[4] Hulce countered that his health insurer would have paid for the services if he had accepted them, and these calls and messages were therefore initiated for the purpose of encouraging Hulce to purchase Foodsmart’s services.[5] Foodsmart prevailed in the Eastern District of Wisconsin and Hulce appealed. 

The Seventh Circuit focused on the TCPA’s definition of “telephone solicitation” as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, good, or services.”[6] The majority sided with Foodsmart and held that while the “purpose of the communications was to encourage plaintiff to utilize Foodsmart’s service, it does not follow that their purpose was to encourage him to purchase Foodsmart’s services” since the services were available for free.[7]

The Key Takeaway

Since Foodsmart’s communications encouraged Hulce to use services that were free to him, they could not constitute “telephone solicitations” because they did not encourage Hulce to make a purchase. Hulce is an excellent defendant-friendly development, and we will continue to monitor this space for related developments throughout the various jurisdictions.

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