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BAD NEWS IN STATE LAW WORLD: TCPA AND NCSTA Defendant Reliance First Capital, LLC Loses All FIVE Arguments!
Wednesday, February 15, 2023

Duchess here bringing you some TCPA and NCSTA action with mortgage sprinkled on top, my fav!

Many of you know just how important the TCPA is, this is TCPAWorld after all, but equally as important is following state-specific telemarketing laws. My other love.  The case I am bringing you today highlights why you need to not only be buttoned up on the federal side but also on the state side. Good news, we can help you with both here at the Troutman Firm.

In Davis v. Reliance First Capital (RFC), the district court in the E.D. North Carolina denied RFC’s motion to strike and motion to dismiss on the basis that the plaintiff did establish personal jurisdiction and standing, the plaintiff did provide sufficient evidence that the at-issue calls were “prerecorded”, and plaintiff did establish sufficient evidence of “solicitation” of a “residential” phone number under the NCTSA. Additionally, the court held defendant’s motion to strike the proposed classes was premature.

RFC brought five arguments. It lost all five.

The plaintiff seeks to certify 3 different classes and brought one claim under the TCPA and two under North Carolina Telephone Solicitation Act (NCTSA) for the alleged four prerecorded messages to his residential cellphone while his number is on the national DNC. Davis also sought treble damages in this matter for RFC’s alleged “willful and knowing conduct”. The Classes are as follows:

  • “Since January 31, 2018, Plaintiff and all persons within the United States to whose residential telephone number Defendant placed (or had placed on its behalf) a prerecorded or artificial voice telemarketing call.”

  • “Since January 31, 2020, Plaintiff and all residents of the State of North Carolina to whose telephone number Defendant placed (or had placed on its behalf) a telephone solicitation when the telephone number to which the telephone solicitation was made was on the National Do-Not-Call Registry at the time of the call.”

  • “Since January 31, 2020, Plaintiff and all residents of the State of North Carolina to whose number Defendant placed (or had placed on its behalf) an unsolicited telephone call using identical, or substantially identical, equipment and recorded message used to contact the Plaintiff.”

Of course, RFC pushed back on all the alleged claims and stated that Davis had not established personal jurisdiction or standing, insufficient evidence that the calls were recorded or “willful or knowing”, along with insufficient evidence of “solicitation” of a “residential” phone number under the NCTSA, and finally to strike all three Classes. However, the Court was unmoved, and all claims will move forward.

Let’s unpack this one!

First, RFC argues that the suit should be dismissed based on lack of personal jurisdiction, however, the calls were made to a North Carolina number. RCF is licensed and has branch locations within the state but even if they did not have an NC location, under the NCTSA the specific definition of “Doing business in this State” is To make or cause to be made any telephone solicitation to North Carolina telephone subscribers, whether the telephone solicitations are made from a location inside North Carolina or outside North Carolina. You are best to assume the area code you are dialing that the consumer is a resident of that state. The Court determined it indeed has personal jurisdiction in the matter.

Second, the defendant argued plaintiff did not have standing to request injunctive relief. The Court swiftly found that Davis does have standing to request an injunctive relief with proper showing under the TCPA. “However, the TCPA bestows this Court with the power to grant ‘a permanent or temporary injunction” upon proper showing.”

Third, the defendant argued Plaintiff did not sufficiently plead a claim under the TCPA and NCTSA. For Davis’s TCPA claim it is the following alleged prerecorded message that put this suit in motion. I have to admit the message strikes a chord with my compliance marketing background and not in a good way. If you have an in-house compliance team, be sure to use their expertise for all marketing, but I digress.

“Good Morning. Do you have just five to ten minutes to chat today? One of our analysts here at Reliance First Capital would love to show you options that take the money you currently spend and put more of it back into your pocket where it belongs, get you debt free sooner, and show you ways to get cash out in the most cost-effective manner. Money that I believe could be a blessing for your family. We are held in high regard by many. So let us show you why today. Call us back at 877-271-3082. Thanks!”

While RFC argues there is insufficient evidence that the calls were “prerecorded”, Davis states in his complaint “(1) the time and frequency of the calls, (2) a transcript of the voicemail, (3) plaintiff’s allegation that the “cadence and tenor” of the message sounded prerecorded, and (4) other online  complaints indicating that other people had received prerecorded calls from defendant.” That’s right folks, online Google reviews were entered as part of the plaintiff’s evidence to support the claims of “willful or knowing”. This is a reminder that reputation matters, especially in situations like this! Also entered was a similar suit prior to the calls received by the plaintiff, the Court did not grant the defendant’s motion to dismiss.

As for the two NCTSA claims the Courts found that the message from the call did meet the state standard for a solicitation, the NCTSA does not require evidence of a residential number, but Davis states the number in question is his and was on the nation DNC prior to the calls, which it typically only available to register residential phone numbers.

Fourth, defendant sought to strike certain paragraphs of plaintiff’s complaint regarding online reviews/complaints about defendant’s telemarketing. The Court ruled these paragraphs are relevant to the validity of plaintiff’s proposed classes.

And lastly, defendant attempted to move to strike plaintiff’s 3 proposed classes. The court denied defendant’s motion to strike on the basis that its arguments were premature: “A ruling on class should normally be based on ‘more information than the complaint itself affords.”

Geez. What a loss.

Also, keep in mind that some states carve out specific recoveries for consumers to receive relief under both the TCPA and state-specific acts. In this case, the defendant was claiming foul with “double recovery” but the NCTSA allows for a private right of action as do many other states.

Until next time, because there is always a next time around the corner it seems.

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