TCPA “Telephone Solicitation” Requires Purpose to Urge the Decision-Maker to Pay (Not Merely to Use a Free Service)

I. Introduction

In James Hulce v. Zipongo Inc., the Seventh Circuit addressed a recurring TCPA question: when calls and texts promote a service that is “free” to the recipient but reimbursed by a third party (here, a Medicaid-related healthcare plan), do they qualify as prohibited “telephone solicitations” under the Telephone Consumer Protection Act (“TCPA”) and the FCC’s implementing rules?

Plaintiff-Appellant James C. Hulce, a member of Chorus Community Healthcare Plans (“CCHP”) through BadgerCare Plus, alleged that Foodsmart (Zipongo Inc.) called and texted him repeatedly despite his number being on the national do-not-call registry and despite his stop requests. Foodsmart’s outreach encouraged Hulce to schedule “no cost” nutritional consultations (and offered incentives like gift cards and a giveaway). Hulce contended these communications were profit-driven because CCHP would pay Foodsmart when members used the services.

The key issue on appeal was narrow and dispositive: whether Foodsmart’s communications fit the statutory and regulatory definition of “telephone solicitation”—i.e., calls/messages initiated “for the purpose of encouraging the purchase … of … services.” 47 U.S.C. § 227(a)(4); 47 C.F.R. § 64.1200(f)(15).

II. Summary of the Opinion

The Seventh Circuit affirmed summary judgment for Foodsmart. The court held that a “telephone solicitation” requires that the call or message be initiated with the purpose of persuading or urging someone to pay for goods or services, and that the encouragement and purchasing components cannot be separated: the person being encouraged must be the party making the purchasing decision.

Because Foodsmart’s services were free to Hulce (no fee, copay, or coinsurance), Foodsmart could not have been urging Hulce to pay for the services; and the communications were not directed at CCHP (the entity that would reimburse Foodsmart). Therefore, the calls/texts were not “telephone solicitations,” defeating the TCPA do-not-call claims premised on that definition.

Judge Brennan dissented, reading § 227(a)(4) as focusing on the caller’s purpose to “encourage the purchase” generally, without requiring that the call’s recipient be the purchaser.

III. Analysis

A. Precedents Cited

1. Review standards and interpretive method

  • Craftwood II, Inc. v. Generac Power Sys., Inc. (de novo review of summary judgment) anchored the appellate posture: the panel reviewed whether any material fact disputes existed and whether Foodsmart was entitled to judgment as a matter of law.
  • Ambassador Animal Hosp., Ltd. v. Elanco Animal Health Inc. (de novo statutory interpretation) supported the court’s approach to construing the TCPA text.
  • Delaware v. Pennsylvania and Taniguchi v. Kan Pac. Saipan, Ltd. framed the “ordinary meaning” methodology and cautioned against adopting a dictionary breadth that departs from common usage in context.
  • Wis. Cent. Ltd. v. United States and United States v. Costello were cited on timing and use of dictionaries (meaning at enactment), with the court noting consistency between older and current dictionary definitions.

2. “Encouraging” as urging a purchase: telemarketing/solicitation cases

  • Chesbro v. Best Buy Stores, L.P. was used to illustrate how courts commonly assess whether communications “encouraged” recipients to engage in purchasing activity (telemarketing shares the same definition as “telephone solicitation”).
  • Spiegel v. Reynolds and Schulz v. Infogroup, Inc. supported the notion that where a communication does not seek a sale/rental of goods or services from the recipient, it may fall outside solicitation concepts.

3. Seventh Circuit’s TCPA “unsolicited advertisement” line as contextual support

  • Smith v. First Hosp. Labs., Inc. and Ambassador Animal Hosp., Ltd. v. Elanco Animal Health Inc. informed the court’s understanding of “encouraged to buy” and “exchange for consideration” in the related “unsolicited advertisement” context (47 U.S.C. § 227(a)(5)). The majority used these cases not to equate the provisions, but to reinforce that “encouraging” ordinarily contemplates urging a person to buy.
  • The court distinguished (and rejected as inapposite) reliance on Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, because it interpreted “unsolicited advertisement,” not “telephone solicitation.”

4. Text/structure canons and “obvious alternatives”

  • Azar v. Allina Health Servs., Advocate Health Care Network v. Stapleton, and Lozano v. Montoya Alvarez supported a key textual inference: if Congress had intended to cover calls that merely “make a purchase more likely to happen,” it could have used more direct causal language (“causing,” “resulting in”), and its failure to adopt obvious alternatives signals a narrower intent.
  • Nielen-Thomas v. Concorde Inv. Servs., LLC and again Ambassador Animal Hosp., Ltd. v. Elanco Animal Health Inc. supported reading the statute as a whole and presuming word-choice differences reflect meaning differences—central to the majority’s refusal to conflate “commercial purpose” with “encouraging the purchase.”

5. FCC regulatory context and “commercial purpose” vs “telemarketing”

  • Golan v. Veritas Ent., LLC was cited both by the majority and dissent in relation to “purpose” controlling whether calls were “telemarketing,” and by the majority as an example of FCC rules treating “commercial purpose” as broader than “telemarketing.”

6. Free-service outreach district court decisions

  • Trujillo v. Free Energy Sav. Co. and Cacho v. McCarthy & Kelly LLP were used to support the majority’s view that invitations to schedule free services do not necessarily reflect intent to encourage a purchase, and to illustrate how courts distinguish between urging use of free services and urging someone (recipient or third party) to buy.
  • Less v. Quest Diagnostics Inc. was addressed in the court’s response to Hulce’s counter-authority; the panel declined to follow non-precedential district cases and noted procedural posture differences (12(b)(6) vs summary judgment).

7. Dissent’s passive voice and “actor off the stage” cases

  • The dissent relied on Dean v. United States, Watson v. United States, and Bartenwerfer v. Buckley to argue that passive voice can render Congress “agnostic” about who performs the act (here, who purchases), focusing instead on whether the caller’s purpose was to encourage a purchase by someone.
  • The dissent also cited Corner Post, Inc. v. Bd. of Governors of Fed. Rsrv. Sys. for the interpretive point that when Congress wants to specify a viewpoint (recipient/called party), it knows how to do so.

B. Legal Reasoning

1. The majority’s core construction: “telephone solicitation” requires urging payment by the decision-maker

The majority’s holding turns on two linked moves:

  1. “Encouraging” in context means persuading/urging a person to pay, not merely increasing the likelihood that the speaker will profit from some downstream transaction.
  2. The “encouragement” element cannot be severed from the “purchase” element; thus, the intended target of the urging must be the party who makes the purchasing decision.

This construction is reinforced by the court’s structural comparison to the TCPA’s “unsolicited advertisement” definition, which explicitly uses “commercial” framing. Because Congress chose not to define telephone solicitations as “commercial calls” but instead required the purpose of “encouraging the purchase,” the majority treated “commercial motive” as insufficient.

2. Application to Foodsmart’s facts

Under the majority’s rule, the key facts were decisive:

  • Foodsmart’s communications were directed to Hulce and pitched services described as “zero cost”/“no cost” as part of his plan membership.
  • Hulce did not pay; CCHP reimbursed Foodsmart (and, for Medicaid members, paid additional per-user fees and performance bonuses).
  • Because Hulce was not asked or urged to pay, and because CCHP was not the recipient being urged to buy, the communications lacked the statutorily required purpose to encourage a purchase.

The court also rejected efforts to infer solicitation from “marketing professionals,” informal style, or emojis: those facts might show outreach strategy, but they do not supply the missing statutory purpose (urging someone to pay).

3. The dissent’s competing textual account

Judge Brennan agreed that “telephone solicitation” focuses on purpose, but disputed the majority’s identification of whose purchase must be encouraged. In the dissent’s view:

  • The statute’s grammar and passive voice (“encouraging the purchase”) do not specify the recipient as the purchaser.
  • Given Congress’s frequent use of “called party” and “recipient” elsewhere in § 227, the absence of those terms in § 227(a)(4) suggests Congress did not require recipient-as-purchaser.
  • Thus, if Foodsmart’s purpose was to encourage a purchase by someone (e.g., CCHP paying for services), calls to Hulce could qualify.

C. Impact

The decision establishes (within the Seventh Circuit) a meaningful limitation on do-not-call “telephone solicitation” claims in third-party-payor arrangements:

  • Healthcare and benefits outreach: Vendors communicating to plan members about plan-covered services described as “free” to the member have a stronger argument that such outreach is not “telephone solicitation,” even if the vendor is reimbursed by insurers, employers, or government programs—so long as the communications do not urge the recipient (or another purchaser) to pay.
  • Litigation pleading and proof: Plaintiffs will likely need to develop evidence that the caller’s purpose was to persuade the person who controls payment to pay (or that the recipient was urged to incur some charge), not simply that the caller is a for-profit entity benefiting from utilization.
  • Regulatory line-drawing: The majority’s approach draws a sharper boundary between “commercial purpose” and “telemarketing/telephone solicitation,” potentially narrowing “solicitation” where monetization is indirect.

The court cautioned against “overread[ing]” the ruling as creating a sweeping loophole, emphasizing the “unique set of facts” involving “entirely free services available through … state and Medicaid funded healthcare plan.” Still, the interpretive rule it announces (urging someone to pay; recipient as purchaser) will predictably be invoked beyond Medicaid contexts—e.g., employer-paid wellness programs, insurer-covered screenings, and other “covered benefit” promotions.

IV. Complex Concepts Simplified

  • TCPA & national do-not-call registry: The TCPA authorizes rules limiting certain calls/texts to numbers listed on the do-not-call registry. A key trigger is whether the communication is a “telephone solicitation.”
  • “Telephone solicitation” / “telemarketing”: Under the statute and FCC rules, this means initiating a call/message with the purpose of encouraging the purchase/rental/investment in goods or services. (“Telemarketing” shares the same definition.)
  • “Unsolicited advertisement” (fax provision): A different TCPA concept defined as material advertising “commercial availability or quality.” The Seventh Circuit has treated this as turning on whether a recipient would objectively understand it as encouraging a purchase, and whether the thing promoted can be acquired for consideration.
  • Summary judgment: A case can end before trial if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Here, the dispositive issue was legal: the meaning of “telephone solicitation.”
  • Statutory interpretation canons used here: ordinary meaning in context; avoiding conflation of distinct statutory terms; inference from Congress’s omission of “obvious alternative” wording; and whole-statute reading.
  • Passive voice debate (dissent): The dissent argued that because the statute does not say “encouraging the recipient to purchase,” it does not matter who purchases—only whether the caller’s purpose was to encourage a purchase by someone.

V. Conclusion

James Hulce v. Zipongo Inc. announces a Seventh Circuit rule that narrows “telephone solicitation” to calls/texts made with the purpose of persuading or urging the purchasing decision-maker to pay for goods or services. Where the recipient is urged only to use a service that is free to them, the communication is not a “telephone solicitation,” even if a third party ultimately reimburses the caller.

The dissent spotlights an alternative reading—one that would treat third-party-funded promotion as solicitation if the caller’s purpose is to induce a purchase by someone (such as an insurer). For now, within the Seventh Circuit, TCPA do-not-call “solicitation” liability in benefit-covered contexts will hinge on whether the caller is urging payment by the person being targeted to buy—not merely utilization that leads indirectly to revenue.