State Farm Named in Fed Lawsuit on Car Insurance Robocalls

Plaintiffs in a federal class-action lawsuit filed this month in Southern California claim their privacy was invaded when State Farm partnered with a marketing company to robocall consumers’ cell phones with automated messages about purchasing auto coverage.

The allegations of privacy invasion center on federal laws set by the Telephone Consumer Protection Act (TCPA), which was passed by members of U.S. Congress who found that “automated or prerecorded calls are a nuisance and an invasion of privacy, regardless of the type of call,” plaintiffs said in the initial court complaint.

According to court documents, Instant Insurance Marketing (IIM) “maintained apparent authority to act on behalf” of State Farm, the nation’s largest provider of personal auto coverage, in instances where the plaintiffs claim they allegedly answered robocalls about car insurance, reached an IIM representative and were eventually transferred to State Farm.

The robocalls allegedly constitute TCPA violations because the plaintiffs never entered “into a business relationship” with State Farm or IIM and never consented to providing “their cellular phone numbers … through any medium.”

The plaintiffs cited a Seventh Circuit ruling in their claim that they were charged unfair cell phone costs for answering automated messages they did not consent to receiving.

According to that ruling handed down last year, consumers are burdened with unwanted costs when companies use automatic telephone dialing systems (ATDS) to call their cell phones.

“Subscribers often are billed by the minute as soon as the call is answered — and routing a call to voicemail counts as answering the call,” that court decision read. “An automated call to a landline phone can be an annoyance; an automated call to a cell phone adds expense to that annoyance.”

Court Docs Describe Alleged Robocalls

The initial court complaint described robocalls received by plaintiffs that they allege infringed on their privacy.

One plaintiff, Casey Blotzer, said she received a July cell phone call with a prerecorded message and was connected with IIM when she called the number back. An IIM representative allegedly “attempted to solicit business from Ms. Blotzer regarding automobile insurance,” court documents read.

Blotzer offered her vehicle information and was transferred to a State Farm representative. Mr. Blotzer separately provided information on a different vehicle when calling the same number and was also transferred to a State Farm representative, according to the complaint.

Court documents allege another plaintiff, Josh Friedman, received a call on his cell phone in June “concerning the lowering of insurance rates.”

“When a person calls back the number … the person hears a prerecorded message stating, among other things, that automobile insurance companies such as State Farm are competing for the consumer’s business.”

Friedman eventually reached a State Farm representative by dialing further into the phone call and asking for an auto insurance quote, according to the court.

Yet another plaintiff, Jillian Green, called the number she received in a prerecorded message on her cell phone. According to court documents, that number led Green to an IIM representative that told her the company “regularly sends clients” to State Farm.

IIM, a Los Angeles-based company, was described in court documents as a “privately held marketing firm that provides sales and marketing services to insurance agents.”

The plaintiffs allege in their suit that IIM “was acting as the agent for State Farm, the principal, at all times relevant.”

In addition, according to the complaint, State Farm allegedly “knowingly accepted the benefits of the TCPA violations by receiving compensation from consumers solicited on behalf of” the insurer. State Farm also allegedly “solicits and/or accepts insurance leads” provided by IIM.

Sides Mostly Mum about Ongoing Court Case

In the lawsuit submitted to the U.S. Southern District Court of California last week, the plaintiffs are pursuing damages for each alleged TCPA violation and injunctive relief preventing future occurrences of those violations.

Abbas Kazerounian, a partner at the Kazerouni Law Group representing the plaintiffs, told Online Auto Insurance News (OAIN) that the lawsuit was centered on his clients’ “right to privacy.”

“They invaded my clients’ right to privacy according to federal statutes,” he said about State Farm and IIM.

Kazerounian said he was “not surprised” by the alleged relationship between State Farm and IIM because his firm has litigated similar cases in which it brought action against large banking institutions on claims that they used smaller companies to robocall consumers.

“You can’t use another entity to escape liability,” he said.

Kazerounian also said that the final number of plaintiffs in the class-action lawsuit is still developing, but declined further comment.

OAIN obtained a statement from State Farm about the suit in which the company said it “places great emphasis on consumer privacy and is committed to compliance with all applicable laws.” The insurer declined further comment on the ongoing litigation.

“We can’t say anything else at this time because the matter is being litigated,” the statement read. “We don’t want our public comments interfering with the legal process.”

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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