Hi, Inc. v. Zeetogroup, LLC

District Court, S.D. California·Decided November 29, 2022·No. 3:22-cv-01440·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA HI.Q, INC. D/B/A HEALTH IQ, Misc. Action No.: 22cv1440-LL-MDD

Petitioner, v. PETITIONER’S MOTION TO COMPEL COMPLIANCE WITH ZEETOGROUP, LLC, OUT-OF-DISTRICT SUBPOENA Respondent. [ECF No. 1] This is a subpoena-related dispute concerning a putative class action pending in the Northern District of California. See Toby Hoy, individually and on behalf of all others similarly situated v. Hi.Q, Inc. d/b/a Health IQ, 4:21cv4875-TLT (N.D. Cal.). In that case, Plaintiff Toby Hoy alleges that Defendant HI.Q, Inc. (“Health IQ”) sent unlawful marketing texts and/or prerecorded telemarketing calls about its insurance products to Hoy and other consumers registered on the National Do Not Call list in violation of the Telephone Consumer Protection Act (“TCPA”). See 47 U.S.C. §§ 227, et seq. and 47 C.F.R. § 64.1200(c). Health IQ maintains it had consent to contact Hoy, which would be a complete defense to Hoy’s claims. Health IQ contends here that Respondent Hoy’s consent to contact from Health IQ. Zeeto is a nonparty lead generation service with a principal place of business in San Diego, California. (ECF No. 1). Health IQ served Zeeto with two subpoenas to help establish its affirmative defense of consent in the underlying case. The subpoenas sought information, documents, and testimony about consumers who (1) went through Zeeto’s lead-generation path, (2) provided their consent to telemarketing contact, and (3) arguably saw (or should have seen) Health IQ listed as an affiliated partner for purposes of consent. Zeeto refused to comply with the subpoenas. On September 23, 2022, Health IQ filed this action to compel Zeeto’s subpoena responses. (ECF No. 1). This Court issued a briefing schedule (ECF No. 4), and Zeeto filed its response on October 25, 2022. (ECF No. 6). Plaintiff Hoy also filed a response. (ECF No. 7). Health IQ filed a reply on November 1, 2022. (ECF No. 13). Zeeto opposes the motion to compel, arguing the subpoenas were procedurally defective and raising numerous substantive objections. Brief Conclusion The Court agrees the documents and deposition testimony that Health IQ subpoenaed are relevant, warranted, and proportional to the needs of the case, and therefore, GRANTS Health IQ’s motion to compel Zeeto’s response to the subpoenas. Zeeto shall produce the subpoenaed materials within 21 days of this order, and the subpoenaed deposition shall occur within 30 days of such production. I. Background A. The Difficulty of Tracking Consumers’ Consent to Telemarketing Contact By Companies Such As Health IQ Whether Health IQ had Plaintiff Hoy’s consent to telemarketing contact depends upon whether Health IQ was disclosed to Hoy (and other consumers) as Zeeto’s affiliated partner at the time Hoy provided consent through Zeeto as a lead generator. As a lead generator, Zeeto facilitated a “survey path” whereby online consumers, like Hoy, would interact with that path while viewing certain advertisements. When consumers clicked on relevant advertisements, Zeeto’s survey path would take those consumers through a series of questions, asking consumers to (1) provide their contact information, (2) give consent to Zeeto’s standard disclosures, and (3) answer several other questions. Consumers’ answers matched them with Zeeto’s “affiliated partners,” or advertisers, such as a company named Policyscout (also known as “Cege” and “Enfuego”), who in turn sold leads to companies like Health IQ. (ECF No. 1 at 67 ¶ 3; ECF No. 6 at 4). Health IQ and Hoy have both been seeking documents and testimony from Zeeto throughout the past year. Plaintiff Hoy first subpoenaed Zeeto in connection with the underlying case in January 2022. See Hoy v. ZeetoGroup, LLC, Case No. 22cv0151-LL-MDD (S.D. Cal. Feb. 11, 2022) (ECF No. 1-8). At that time, Zeeto’s counsel, Brian Gillick, accepted service of Hoy’s subpoenas via email, but Zeeto asserted several objections. Id. (ECF Nos. 26 and 30 [5/25/2022 Hr’g Tr.]). Instead of producing documents or identifying a representative to provide deposition testimony, Zeeto produced three declarations over the course of four months from its Chief Revenue Officer, Shayne Cardwell. On March 10, 2022, Cardwell initially declared that, based on his review of relevant information and documents, “Health IQ was disclosed at the time the subject consumers provided consent,” and “during the relevant have seen Health IQ listed as an affiliate.” (ECF No. 1, Ex. 6 [3/10/2022 Cardwell Decl. ¶¶ 9-10]). That sworn statement appeared to provide a defense for Health IQ, namely “that Health IQ was disclosed as a ‘marketing partner’ to at least some of the consumers that visited the Website during the Relevant Time Period.” (ECF No. 13 at 5). Along with Cardwell’s March declaration, Zeeto produced “validation reports” purporting to show that 26 consumers, including Hoy, provided consent to marketing calls and text messages from Health IQ. (ECF No. 1, Ex. 7). The validation reports came from a verification company that Zeeto hired called Jornaya that tracked consumers’ path through Zeeto’s business operations and provided a certification called “LeadID.” (ECF No. 13 at 6; ECF No. 6, Ex. 11 [Cardwell Decl. ¶¶ 5-6]). LeadID created a visual playback designed to validate a consumer’s journey through Zeeto’s survey path. (Id.). This Court previously examined in detail that sampling of 26 LeadID playbacks from Jornaya. (See Hoy v. ZeetoGroup, Case No. 22cv0151-LL- MDD, ECF No. 30 [Hr’g Tr. from 5/25/2022]). The playbacks included specific consumer leads purporting to show that Health IQ was individually identified as a marketing partner to consumers who submitted their information on Zeeto’s website, “GetItFree.com,” which is Zeeto’s trade name. (Id.). This Court held one hearing on the record concerning Hoy’s motion to compel Zeeto’s subpoena responses, and several telephone conferences. (See id.). Health IQ participated in those court proceedings. During the May 25, 2022 hearing, the Court explained that Jornaya’s 26 links gave “mixed results . . . some will work, some will not.” (Id. [Hr’g Tr. at 12, 15]). The Court next explained the importance of getting critical information from this Court urged Zeeto’s compliance in getting “unfettered access to this consent file” into the hands of Hoy and Health IQ through a “gross approach,” rather than a sampling. (Id. [Hr’g Tr. at 14-16]). The Court ordered Zeeto to cooperate with Plaintiff in the underlying case to get the “data related to the calls made by [Health IQ] – calls/texts – track them back to Jornaya, [and] get that data” to Hoy and Health IQ. (Id. [Hr’g Tr. at 16]). The parties expressed their perceived ability to exchange necessary documents and move the underlying case forward, so Hoy informed the Court that his motion to compel was resolved. The Court denied Hoy’s motion to compel as moot and closed that matter. See Hoy v. ZeetoGroup, Case No. 22cv0151, ECF No. 26 (S.D. Cal. July 6, 2022). On June 29, 2022, Zeeto provided a new declaration to Plaintiff Hoy, wherein Cardwell reversed his earlier position, stating instead that “Health IQ did not appear on the marketing partner list or otherwise on Zeeto’s websites between June 24, 2017, and December of 2021.” (See ECF No. 1, Ex. 12 [6/29/2022 Cardwell Decl.], Ex. No. 13 at 6). That sworn statement appeared to void Health IQ’s affirmative defense of consent, at least as far as Zeeto’s records could confirm. A few days later, Zeeto provided a third Cardwell declaration, which included the same statement about Health IQ not appearing as a marketing partner, and Zeeto sought to “withdraw” Cardwell’s March declaration. (Id., Ex. 13 [7/1/2022 Cardwell Decl.]). Unfortunately, Zeeto never produced the documents the par

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