Sage Phone Solicitation Suit Is Dismissed for Failure to State a Claim

Senior U.S. District Judge Sidney Fitzwater for Northern Texas in Dallas granted debt collector Mercantile Adjustment Bureau’s motion to dismiss Sage Telecom’s phone solicitation complaint for failure to state a claim on which relief may be granted, said his signed memorandum and order Tuesday (docket 3:22-cv-02737). Fitzwater did grant Sage leave to file a second amended complaint within 28 days.

Sage alleges Mercantile engaged in “continuous and repetitive” phone solicitations to low-income households that subscribe to Sage’s wireless and broadband services, in violation of the Texas Telephone Solicitation Act (TTSA) (see 2212080043). Mercantile argues Sage’s lawsuit is “devoid of any allegations” concerning the nature of Mercantile’s business or the substance of its “purported” 187 telephone solicitations to Sage customers (see 2212150047).

Regardless of whether Sage plausibly pleaded that Mercantile is a seller and made telephone solicitations, Sage failed to allege the calls to its subscribers were from a location in Texas or to a purchaser in Texas, “which are essential elements of a TTSA claim,” said the judge. To plead a plausible claim against Mercantile under the TTSA, Sage must also allege Sage meets the TTSA’s definition of a purchaser, he said.

Though Sage’s first amended complaint alleges at least 187 of its subscribers received phone solicitations from Mercantile, it doesn’t allege Sage itself received a single phone call, said the memorandum and order. Since Sage failed to allege it was the recipient of the alleged phone solicitations, it failed to “plausibly plead” it was solicited or offered anything by Mercantile, as is required “to satisfy the TTSA definition of a purchaser,” it said.

Sage doesn’t “adequately allege” in its first amended complaint that it’s a TTSA purchaser, and “the only inference that can reasonably be drawn” from the first amended complaint is that Sage subscribers are purchasers, said the memorandum and order. “Sage ignores this deficiency” in its first amended complaint, “even in the face of Mercantile’s motion to dismiss, which explicitly points out that Sage has failed to allege that it qualifies as a purchaser under the Act,” it said.

The judge granted Sage leave to file a second amended complaint because there’s “no indication” Sage can’t, or is unwilling to, “cure the pleading defects the court has identified,” said the memorandum and order. The second amended complaint is due by May 2.