Enagic Agrees to $27.6 Million Settlement in Auto Dialer Software Lawsuit

A water filter company that allegedly used auto dialer software to spam call more than a million people, has agreed to pay $27.6 million to settle a class action lawsuit.

The nationwide class includes nearly 1.8 million U.S. residents who received at least one call from Enagic or an Enagic distributer between July 2011 and March 2018. Each class member will be eligible for a $12 award of the $21.6 million settlement pot. Enagic also accepted a $6 million injunction.

By using auto dialer software, or an artificial or prerecorded voice, Enagic is accused of violating the Telephone Consumer Protection Act (TCPA), a federal law that protects consumers from receiving unwanted telemarketing or robocalls unless they’ve given the company prior express permission to make such calls.

Enagic is a company that sells alkaline water filtration and ionization systems by direct-selling through thousands of distributors. The company insisted the individual distributors are independent contractors, but the call recipients alleged Enagic exerted more control over their distributors.

Auto Dialer Software Used

According to lead plaintiff Edward M., in May 2015, Enagic called Edward’s cell phone and presented him with a 22-minute prerecorded sales message encouraging him to not only purchase an Enagic water filtering machine but also to become a distributor.

Just two days later, Edward claims he received another call from Enagic, this time from a live male distributor who was trying to talk Edward into becoming a distributor, too.

After receiving these two unwanted phone calls, Edward filed a TCPA lawsuit in June 2015. Class Members were certified in March 2018.

Another plaintiff alleges that also beginning in 2015, she received unwanted text messages and phone calls from Enagic, trying to convince her to buy its water filtration system. She said Enagic contacted her 40 times over the course of a year even though she said she had never done prior business with the company, according to businessforhome.org.

As part of the $6 million injunction, Enagic will have to ensure its distributors do not use an auto-dialing system. The company also will put its distributors through an extensive TCPA compliance training program. To make sure the company follows through with the training and TCPA enforcement, Enagic will be required to produce a bi-annual status report that is sent to class members, says the motion.

Since the passing of the TCPA, the Federal Communications Commission has restricted telemarketing efforts that use auto dialers and artificial or prerecorded voices.

Businesses used to use the excuse that they already had an “established business relationship” with a customer that the businesses believed provided implied consent to call or text the customer without interruption. TCPA clarifies that telemarketers cannot robocall a customer without receiving prior express consent from the customer. 

Businesses are strictly prohibited from calling numbers that appear on the National Do Not Call Registry or on company-kept “do not call” lists.

Other companies that have faced similar TCPA violation allegations in court include Walmart, Rite Aid, Chase Bank and Wells Fargo.

The Auto Dialer Software Lawsuit is Edward M. v. Enagic USA Inc., Case No. 2:15-cv-05145, in the U.S. District Court for the Central District of California.

Join a Free TCPA Class Action Lawsuit Investigation

If you were contacted on your cell phone by a company via an unsolicited text message (text spam) or prerecorded voice message (robocall), you may be eligible for compensation under the Telephone Consumer Protection Act.

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This article is not legal advice. It is presented
for informational purposes only.