[00:00:03] Speaker 03:
Good morning.

[00:00:04] Speaker 04:
Welcome.

[00:00:05] Speaker 03:
Good morning. Thank you. Adam Hanson on behalf of Appellant Vicki Coffey. Fast, easy offers, calls, and messages to Coffey were solicitations under the TCPA because they were initiated for the purpose of encouraging the purchase of brokerage services, realtor services, and other real estate services. The district court erred in rejecting the consensus view of courts around the country and concluding otherwise this court should reverse.

[00:00:31] Speaker 02:
Can I ask you to separate your arguments into what I think is the two parts that you make in your brief. Let's assume for a moment that no brokerage services are involved in this solicitation. It's just somebody just calls up and says, I want to buy your house. And I'll buy it for $100,000. And... You must be in a different jurisdiction. That's right. Let's make this a Southern California case. $100 million. And... And...

[00:01:01] Speaker 02:
And part of what I'm willing to provide you when I buy the house as part of the consideration is I'll take care of all the details, closing and everything else. That by itself, it strikes me I would have a hard time viewing as a solicitation policy. of the purchase of anything. It's rather just an offer to buy. Do you agree with that?

[00:01:23] Speaker 03:
We don't.

[00:01:24] Speaker 02:
I know you don't.

[00:01:25] Speaker 03:
I'm trying to figure out why. So we're removing the brokerage services.

[00:01:28] Speaker 02:
Yes.

[00:01:29] Speaker 03:
And we also, of course, need to remove the implicit real estate services.

[00:01:32] Speaker 02:
Right, right. It's just, he's one of these guys, the guys you see on TV all the time, I'll buy your house for, Some number and no closing costs, nothing, anything else. Because that's part of what this guy is trying to do. It is part, right. I might want to just get the house and flip it and sell it to somebody else. I don't see any services being sold there.

[00:01:51] Speaker 03:
Providing those adjunct real estate services, the closing costs, the lawyer's fees.

[00:01:58] Speaker 02:
That's just part of the purchase price. Everybody deducts from their purchase price what their costs are going to be. The offer he's making is I will. I'll buy your house. I'll buy your house for a stated number, and that will cover all the costs. I will, you know, out of that number, I'll take care of all the costs.

[00:02:19] Speaker 03:
I understand the question, and there may just be a fundamental disagreement here, but, you know, there is a difference in economic reality between the seller agreeing to pay those costs, which they normally would do, and then shifting it onto the buyer. Now, if it's not part of, in your hypothetical, the buyer's business model... Wait, sir, I'm confused.

[00:02:36] Speaker 01:
I thought your point was the seller usually doesn't cover these costs. So, therefore, they're covering costs that they ordinarily wouldn't cover.

[00:02:44] Speaker 03:
That is, right. So, normally... Well, I mean, in some instances, the seller does cover those costs.

[00:02:50] Speaker 03:
In this hypothetical, if... If the part of the business model is to routinely cover those costs as a service that is part of the purchase and happening concurrently with the purchase, it is a service.

[00:03:02] Speaker 01:
I have a step-back question. I understand that everybody has understood this provision as not applying to an offer to buy something, but I don't understand why that's so.

[00:03:19] Speaker 01:
Because the provision says it's an initiation of a telephone call or message for the purpose of encouraging the purchase or rental or investment in property goods or services. And this is trying to encourage the purchase. The purchase is going to be by the caller. But as one of the cases say, this is in the passive voice. It doesn't say who's buying and who's selling and why it's been. universally understood that this doesn't apply to an offer to sell only a purpose or an offer to buy.

[00:03:53] Speaker 01:
And that doesn't even make sense because the whole point of this was to prevent people from bothering you by calling you all the time. And the notion is it's okay to call you to sell, to buy something, but not to sell something.

[00:04:05] Speaker 01:
I don't get it.

[00:04:06] Speaker 03:
I understand your point, Judge Brezana. It's just, it's not a point that we've raised or we see raised in much of the case law.

[00:04:11] Speaker 01:
We have a Ninth Circuit case which says that, which says that it only applies to offers to buy and not to sell.

[00:04:17] Speaker 03:
I'm asking you a question.

[00:04:20] Speaker 01:
The question is, do we have a Ninth Circuit case?

[00:04:23] Speaker 03:
Not one that I'm aware of.

[00:04:27] Speaker 04:
How do you treat what, at least in my view, is a very common practice, particularly when you're dealing with the low-budget, multi-million dollar properties that my colleague is talking about?

[00:04:42] Speaker 04:
They do brochures, they do tours, they do drone pictures, all kinds of other things that are not cash payable, but they are part of the discussion. How does that fit into the definition in this case?

[00:04:59] Speaker 03:
Sure. Well, that would just fall into the category of traditional realtor services, which we think is an additional reason why we ought to prevail in this case, particularly at the motion at this stage.

[00:05:07] Speaker 02:
Can you get to that part? Because I think it's really the crux of this case. As I understand, the pleadings may or may not be true.

[00:05:15] Speaker 02:
We have a representative of the defendant being quoted as saying nine out of ten times what really happens in these is that we don't just buy them and flip them. We refer somebody to our in-house realtors with the hope that they will sign up for the services. That strikes me as just in the guts of the statute.

[00:05:38] Speaker 03:
That is in the guts of the statute. So do you really need...

[00:05:44] Speaker 02:
The other side says, well, I'm not sure that was plausibly pleaded. Tell me why it was plausibly pleaded.

[00:05:51] Speaker 03:
Yeah, so we've got it, you know, clearly in the complaint. And I can find it here. We've got it, I think it's at paragraph 45 and 46, if I'm right about that. But it's the part that you quoted from where we say, you know, nine out of ten times.

[00:06:07] Speaker 02:
But you just don't say that. You make reference to...

[00:06:11] Speaker 02:
somebody on their side actually saying it.

[00:06:14] Speaker 03:
Sure. I do think we say it. If we don't say it, I think it's the only logical inference, which, of course, we're also entitled to at this phase. And so, indeed, to the broader question, we've got the second part of the case, which is many, our allegation is probably most, of these leads end up funneled to traditional real estate services, which is just a classical service.

[00:06:33] Speaker 02:
So let me ask you to respond to their other argument. Sure. As I read it, maybe I'm making an argument they didn't make, which is that at least on the surface of the solicitation, which is, as I understand it, a text in this case.

[00:06:47] Speaker 03:
Texting calls.

[00:06:48] Speaker 02:
No, but he actually mentions the real estate services. They just say, hey, are you still interested in selling your house?

[00:06:53] Speaker 03:
That's correct.

[00:06:54] Speaker 02:
So what do we look at to determine whether the solicitation was made for the statutory purposes?

[00:07:01] Speaker 03:
You look to... obviously the text is one relevant consideration, but so is broader context. That's what this court said in Jesbro, and then common sense. And so context means, in this context, the sender's identity, its business model, and its ultimate commercial motivations. And these are ultimately questions of proof and questions of fact.

[00:07:19] Speaker 01:
That's why you would- And also, didn't they eventually refer her to their website? Yes.

[00:07:26] Speaker 01:
When she eventually answered them, they referred her to her website, when the website reflects the business model and I don't know. Does it also reflect the traditional real estate services?

[00:07:44] Speaker 03:
The website clearly reflects the business model that explains how the fast, easy offer transaction works. I think there's less on the fast, easy offer website about the traditional real estate services, but we did cite to the YouTube video that's otherwise publicly available. And so all of, I mean, it's, What I just come back to to ultimately answer this question is when a statute uses the word purpose, anything that sheds light on purpose is fair game. It's like any other statute that says purpose or intent.

[00:08:10] Speaker 01:
And does the argument about the referral to the traditional services to Keller Williams Realty Inc. depend on, there was a dispute at the district court and it doesn't seem to have been reflected in the briefing here about whether Keller Williams Realty as such is properly in the case.

[00:08:30] Speaker 03:
Does that matter? The district court didn't reach that question, and it's only the broader, the national Taylor Williams defendant, so we don't have that issue in front of this court. Presumably the district court would take a look at that.

[00:08:40] Speaker 01:
But does it matter to your argument about the referrals to that entity? Or is your notion that this other entity was referring it to that entity, and it doesn't matter what that entity was doing?

[00:08:51] Speaker 03:
No, it is ultimately relevant to that question because the owner of Fast Easy Offer, Brett Tanner, is actually in charge of according to our allegations, of the national Keller Williams wealth program that rolls out this business model nationally. So, yes, we, you know, again, we're not here to discuss this today, but many of the facts that we're discussing are relevant to that question of direct and vicarious liability for Keller Williams.

[00:09:11] Speaker 04:
Do you want to save any time?

[00:09:12] Speaker 03:
I would love to save some time. Please, let's do that. Thank you so much.

[00:09:26] Speaker 00:
Good morning. Good morning, Your Honor. May it please the court, Archis Parasharami for the defendants. I'd like to make a few key points. I think the court understands, seems to have focused on why this effective payment theory is not a real theory.

[00:09:40] Speaker 02:
Well, let's assume I agree with you on that for the moment. I may be wrong, but let's assume I agree with you that just the offer to buy the house doesn't fall under the statute. Right. But we have more here that's alleged. This is at the motion to dismiss stage. And what we have plausibly alleged is that nine out of ten times what this call results in is referral to a realtor. So why isn't it really a solicitation of the services of a realtor?

[00:10:12] Speaker 00:
Let me step back and say that's not quite what it says, and I'll get to that. I just want to start with a key point.

[00:10:17] Speaker 02:
Well, let's assume it says that. Tell me, if it says that or effectively says it, why isn't that solicitation of the services of a realtor? Is he talking about a down-the-line potential consequence? No, he's calling with the information, I think.

[00:10:33] Speaker 02:
I know that when I call somebody, and at 9 out of 10 times, if they respond, I'm going to send them to my buddies at who are the realtors. Some of them in-house at fast, easy offer.

[00:10:48] Speaker 02:
Nice name.

[00:10:51] Speaker 02:
So why isn't that a call made with the purpose of initiating the purchase of real estate services?

[00:10:58] Speaker 00:
So I think it depends very much on what the word encourage means in the statute. And I want to talk about the Hulse case, the Seventh Circuit decision in Hulse, which is the case that most carefully analyzes the ordinary meaning of the term encourage.

[00:11:13] Speaker 00:
In Hulse, the Seventh Circuit said, encourage means a targeted urging or persuading. It rejected the proposal.

[00:11:22] Speaker 01:
But there is a fundamental statutory interpretation problem here.

[00:11:28] Speaker 01:
What the term means is the initiation of a phone call for the purpose of encouraging. So we have to look beyond what the actual message itself says or even when the message itself is going to be encouraging.

[00:11:42] Speaker 00:
I think you can look at broader context. I don't want to disagree with that. But I do think that what's relevant is what is the purpose of the message? That's what this court said in Chesbrough. And encourage beans.

[00:11:54] Speaker 01:
Where does the court say that? Is that the purpose of the message as opposed to the purpose of the call?

[00:12:01] Speaker 00:
Well, I think I'm using message and call interchangeably, but Chesbrough refers to the purpose of the message. And that comes from the statute, which also refers to the purpose.

[00:12:13] Speaker 00:
And just to step back on what encourage means, the Seventh Circuit said it means a targeted urging or persuading. It rejected the alternative. The alternative argument that was proposed for the meaning of encourage was make more likely to happen. And I think the plaintiffs are pressing make more likely to happen.

[00:12:31] Speaker 00:
When you look at what the communication was, it's not disputed that the company genuinely, as Judge Herr was pointing to, like just in the advertisements you see, wants to buy these homes. That's what's really going on. That's their goal.

[00:12:45] Speaker 02:
Well, it can't be their only goal since they understand that they're only successful at that, according to the pleadings, 10% of the time. And therefore, another purpose of the call is to hook them up with realtors, is it not?

[00:12:59] Speaker 00:
I think that purpose is far too attenuated.

[00:13:02] Speaker 02:
Even though it occurs 90% of the time, it's far too attenuated?

[00:13:07] Speaker 00:
It occurs...

[00:13:08] Speaker 00:
First of all, I don't know that that is actually what he's saying. And when you look at the full video in context, which is incorporated by reference in the motion to dismiss, the video mainly talks about mailers. There is a brief stray reference to calls. But putting that aside, what is being alleged is a daisy chain of three conditional steps. First, the recipient of the call has to respond to the initial communication by expressing interest in selling the home. We don't.

[00:13:36] Speaker 02:
We don't, with this statute, we only deal with the communication, right?

[00:13:41] Speaker 02:
We don't worry about the response. Either you violated the statute by the communication or you didn't. It's not the response.

[00:13:48] Speaker 00:
I agree with that the communication is what's actionable, but I think in applying a measure of common sense, you have to look at the likelihood. And what courts have said is that situations like this are attenuated.

[00:14:04] Speaker 00:
On this issue, no court has agreed with the plaintiff's position. The Bramlett case, the plaintiff's side rejected this exact same theory as too attenuated.

[00:14:14] Speaker 04:
Council, what about the Chesbrough case where there was encouragement of future purposes?

[00:14:20] Speaker 00:
Purchases, excuse me. The message itself was directly encouraging a purchase. It said, essentially, use your rewards points to buy something from the best buy site. That is a solicitation. That couldn't be more clear.

[00:14:33] Speaker 01:
This is not about... I thought, excuse me, I didn't think that was what happened in Chesborough. I thought what happened in Chesborough, because in fact, if you were buying it with points, it would be free. And there's other caseload saying it's free, then it's not being sold. But the point seemed to be that you couldn't actually buy it without going there and buying something. You couldn't just take your points and buy them for nothing.

[00:15:00] Speaker 00:
Right? In Chesborough, I realize.

[00:15:02] Speaker 01:
In Chesborough, the... Therefore, there was another step. You had to actually buy something.

[00:15:08] Speaker 00:
CHESBRO, IT WAS IMPLICIT FROM SAYING YOUR REWARD POINTS ARE ABOUT TO EXPIRE, USER REWARD POINTS, THAT YOU HAD TO MAKE A PURCHASE. AND THESE CERTIFICATES WERE $5, SO IT WAS ALSO VERY PREDICTABLE THAT YOU WOULD BE SPENDING YOUR OWN MONEY THERE. I THINK THIS IS TOTALLY DIFFERENT.

[00:15:25] Speaker 04:
OUR BEST CASE... DO YOU THINK CHESBRO IS TOTALLY DIFFERENT?

[00:15:28] Speaker 00:
TOTALLY DIFFERENT, JUST LIKE THE DISTRICT COURT DID. JUDGE LOGAN LOOKED AT IT CAREFULLY, SAID IT'S DISTINGUISHABLE BECAUSE THE AIM OF BEST BUY IN THAT CASE WAS TO GET PEOPLE TO PURCHASE goods from Best Buy.

[00:15:39] Speaker 02:
We're at the pleading stage here. Chesbrough was a summary judgment case. So maybe you can show up at trial and say, oh, we had no purpose whatsoever of getting them to deal with real estate services. And maybe they won't provide any evidence to the contrary. But we're here at the pleading stage. And they've alleged that one of the dominant purposes of the call was to encourage the purchase a real estate service.

[00:16:05] Speaker 00:
With respect, they don't say that. It's clear that it's the backup plan. They say as much. They say plan A. What about their plan A?

[00:16:15] Speaker 01:
Their plan A is that if this company bought their house and paid all the costs of doing so, that would be a purchase of service.

[00:16:27] Speaker 00:
Yeah, I think for the reasons Judge Hurwitz stated, they pay nothing. As the district court found, the plaintiff would not pay a cent. And the word payment means paying money.

[00:16:40] Speaker 01:
And the word purchase in the statute— In an ordinary real estate deal, there are services that have to be paid for by somebody. And it's negotiable who pays it, right? Ordinarily— It isn't known until the deal is constructed who's going to pay for the escrow and for the inspections and so on.

[00:17:05] Speaker 01:
And that's a service, which is then a question of who's going to pay for it. So here, there's... Go ahead.

[00:17:13] Speaker 00:
No, I'm sorry. But in this case, Judge Berzan, it's undisputed that the allegations make clear that the caller is the one paying for it. There's no question of the call recipient paying for these items.

[00:17:25] Speaker 01:
All right, so what I'm saying is that in a real estate deal, there are services that have to be paid for, and they are not...

[00:17:32] Speaker 01:
necessarily or even ordinarily incorporated in the purchase price. That's up for negotiations. And what they're saying here is it's not going to be up for negotiations. You're not going to have to pay anything. We're going to pay all of it.

[00:17:46] Speaker 00:
I think it would be Orwellian to say that when somebody isn't paying for the service, they're not paying a cent, that somehow that constitutes payment. I wanted to hit, with the court's permission,

[00:18:00] Speaker 01:
It sounds true. But can I just back up for a minute and ask the question I asked before? I understand that neither of you have argued this, but I absolutely don't understand why the statute is being read not to apply to sales, to an offer to sell.

[00:18:15] Speaker 00:
Yeah, so I think Hulse answers that question. It talks about the meaning of encouraging the purchase of Purchase means to obtain by paying money or its equivalent. When somebody is offering to buy something, the recipient is not paying anything.

[00:18:30] Speaker 01:
Just who is offering to buy something? I mean, the purchaser, the caller is offering to buy something. And they're encouraging.

[00:18:39] Speaker 01:
And so why are you assuming that he has to be encouraging the recipient of the call to buy something as opposed to him buying something?

[00:18:51] Speaker 00:
Is it encouraging the purchaser to say, do you want to sell something to me? I think the best answer is Hulse, which says that the ordinary meaning of that is to refer to the recipient. But why?

[00:19:03] Speaker 01:
And there was a sentence that said that this is a passive voice sentence, and it is.

[00:19:11] Speaker 00:
Yeah, I mean, I guess I'd say that the ordinary understanding of the meaning of encourage is to persuade somebody to do something. And so if the recipient of the... Tell it to me. If the recipient of the call is not the one being persuaded, it's hard to see how some third party.

[00:19:29] Speaker 01:
If the recipient of the call is being persuaded, it's being persuaded to sell it to him.

[00:19:33] Speaker 00:
But not persuaded to make the purchase. And I think that's at the core of the majority opinion in the House. I know I'm over time. I'd hope to get one point.

[00:19:40] Speaker 04:
Go ahead and make your point.

[00:19:42] Speaker 00:
The Edelsberg versus Vroom case is our best case for why this is too attenuated.

[00:19:50] Speaker 00:
Contrary to what the plaintiffs say in their brief, that was a business that buys and sells cars. The plaintiff in that case was texted, and the theory was that when they called that the real goal was not to buy their car, it was to sell cars to them. Edelsberg rejected that, and Edelsberg also cited a case called May versus Pep Boys, 717 Southeast 2nd, 235 West Virginia, 2011. Both of those cases are squarely in our favor. The court would have to disagree with those cases.

[00:20:21] Speaker 00:
May was on the motion to dismiss. I know I'm over time.

[00:20:24] Speaker 03:
Very well, thank you very much. A bit of rebuttal time.

[00:20:29] Speaker 03:
Thank you. I do want to highlight one fact, going back to Judge Hurwitz's hypothetical to me in my primary time, and that's the function of fast, easy offer operating as a brokerage and essentially funneling these properties to third parties. Because forget about Keller Williams for a second, and forget about the things that happen in every sale. That brokering of the properties to third party investors is different.

[00:20:51] Speaker 02:
But he's not selling the brokering. He's selling, if he buys the property, then the seller should not have the slightest interest in the world who buys it next or to whom the contract is assigned to.

[00:21:06] Speaker 03:
That's true.

[00:21:08] Speaker 02:
I must say you're going to have a hard time convincing me on that one.

[00:21:11] Speaker 03:
Fair enough. I just wanted to make the point that that act of brokering to a third party is, in effect, tantamount to what a service or realtor would perform, at least in the context of fast, easy offers business model. Other than that, unless the court has questions, I would... Questions by my colleague?

[00:21:25] Speaker 04:
No.

[00:21:26] Speaker 03:
I appreciate the course of a coffee versus fast, easy offer is submitted.