Defendant Moves to Dismiss Telemarketing Case on Violation of Texas Solicitation Code

Only a week after removing Sage Telecom’s telemarketing complaint to U.S. District Court for Northern Texas in Dallas (see 2212080043), defendant collection agency Mercantile Adjustment Bureau filed a motion (docket 3:22-cv-02737) to dismiss the case for failure to state a claim.

The complaint alleges Mercantile engaged in “continuous and repetitive” telephone solicitations at least 187 times in the past two years to low-income households that subscribe to Sage’s wireless and broadband services. Sage alleges Mercantile violated the Texas Business and Commercial Code (Section 302.101) when it made the solicitations without procuring a certificate of registration from the Texas secretary of state. To get the certificate, telemarketers must submit a registration application, pay a filing fee and post a $10,000 security bond.

The “sole factual allegation” in Sage’s complaint is that Mercantile placed 187 telephone calls to Sage’s customers, said the motion to dismiss. The remaining allegations “are merely regurgitations of Section 302.101 and other relevant provisions of Chapter 302 of the Texas Business and Commerce Code,” it said. The lawsuit is “devoid of any allegations” concerning the nature of Mercantile’s business or the substance of its “purported 187 telephone solicitations.

Sage’s “conclusory and speculative” allegations are “insufficient to state a claim” under Section 302.101, said the motion. Its entire claim is based on 187 telephone calls that Mercantile allegedly made to Sage customers, which Sage contends, “without any factual support, were telephone solicitations requiring [Mercantile] to adhere to the Section 302.101 registration requirement,” it said. The complaint “must be dismissed with prejudice,” it said.

Sage alleges “no actual facts” that would establish, under Section 302.101, that Mercantile is a “seller” that made a telephone solicitation from a location within Texas or made a telephone solicitation to a “purchaser” located in Texas, said Mercantile. Sage’s entire claim “rests on the unsupportable conclusions” that Mercantile “is a seller of some unknown product or service who makes calls from within Texas” and that it solicits “potential purchasers of some unknown product or service,” it said.

Sage’s allegations are “nonsensical” because it acknowledges Mercantile “never contacted or attempted to solicit anything” from Sage via telephone, said the motion. The complaint is devoid of any “factual allegations” that plausibly support Sage’s claim that Mercantile initiated phone calls to induce Sage or its customers “to purchase, rent, claim, or receive a product or service,” it said.

A claim under Section 302.101 “requires actual damages,” said the motion. Courts have said a private right of action for violating the statute must include economic damages or damages for mental anguish, it said. Sage attempts to prosecute its sole claim on behalf of its unidentified customers that purportedly received a telephone solicitation from Mercantile, it said.