Exclaim Mktg., LLC v. DirecTV, LLC, 5:11–CV–684–FL.

• Decision Date: 30 September 2015
• Docket Number: No. 5:11–CV–684–FL.,5:11–CV–684–FL.
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: EXCLAIM MARKETING, LLC, Plaintiff, v. DIRECTV, LLC, Defendant.

134 F.Supp.3d 1011

EXCLAIM MARKETING, LLC, Plaintiff,

v.DIRECTV, LLC, Defendant.

No. 5:11–CV–684–FL.

United States District Court, E.D. North Carolina, Western Division.

Signed Sept. 30, 2015.

Joseph H. Nanney, Jr., Meynardie & Nanney, PLLC, Raleigh, NC, for Plaintiff.

Michael E. Williams, Valerie A. Lozano, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA, Robert C. Van Arnam, Williams Mullen, Raleigh, NC, for Defendant.

ORDER

LOUISE W. FLANAGAN

, District Judge.

This matter is before the court on defendant's second motion for judgment as a matter of law, made pursuant to Federal Rule of Civil Procedure 50(b)

, or in the alternative for a new trial on the question of damages. (DE 209). Also pending before the court is defendant's first motion for judgment as a matter of law, (DE 175), and plaintiff's oral motion for judgment as a matter of law, both made pursuant to Federal Rule of Civil Procedure 50(a) and preserved for decision pursuant to Federal Rule of Civil Procedure 50(b). The issues raised have been briefed fully and in this posture are ripe for ruling. For the reasons stated more specifically herein, plaintiff's oral motion is denied, defendant's second motion for judgment as a matter of law is granted, and the jury's award of damages to plaintiff is vacated.¹

BACKGROUND

On October 28, 2011, plaintiff, a marketing company engaged in the business of connecting consumers with retailers of satellite television, filed complaint in the Wake County, North Carolina, Superior Court, against defendant, a provider of satellite television, alleging numerous causes of action arising out of defendant's attempts to interfere with plaintiff's business relationships with its clients. Plaintiff asserted common law causes of action for tortious interference with contract, tortious interference with business relationships and prospective business advantage, and defamation, as well as a statutory cause of action for violation of the North Carolina Unfair and Deceptive Practices Act ("UDPA"), N.C. Gen.Stat. § 75–1.1 et seq.

Plaintiff's UDPA claim rested on various grounds including numerous allegedly false or misleading statements or categories of statements made by defendant to plaintiff's clients, as well as the fact defendant, through its agents or employees, made in excess of 175 phone calls to plaintiff's call center, sometimes using false names, over the course of six years. On December 1, 2011, defendant removed the matter to this court, pursuant to 28 U.S.C. § 1441, invoking the court's diversity of citizenship jurisdiction under 28 U.S.C. § 1332, where the parties are business entities organized under the laws of different states, with their principal places of business in different states, and the amount in controversy exceeded $75,000.00. Thereafter, defendant answered and asserted various counterclaims against plaintiff. As relevant to the instant analysis, defendant alleged plaintiff willfully infringed on its trademark, the name "DirecTV," in violation of 15 U.S.C. § 1114.

The facts pertinent to the present motion, drawn from the court's order on summary judgment, supplemented through testimony received at trial, may be summarized as followed. Plaintiff is a marketing company that provides its clients, including consumer satellite television retailers ("retailers"), marketing services through telephone numbers ("listings") published throughout the United States. When consumers call a listing, a telemarketer screens the call and determines what the customer wants to purchase, then the telemarketer forwards the call to one of plaintiff's clients. Plaintiff's clients pay for each call forwarded.

Defendant provides satellite television services throughout the United States. One way in which it gains new customers is through use of various retailers who market, advertise, and promote defendant's products and services. Defendant has the discretion to choose its affiliated retailers. Once it does so, defendant enters into a contract with those affiliated retailers that imposes certain restrictions on the individual retailer's marketing services, including a restriction that requires the retailers obtain written approval before using third parties, such as plaintiff, to market defendant's products. In 2005, plaintiff approached defendant seeking written approval to act in that capacity. Defendant neither retained plaintiff's services nor gave plaintiff written approval to act as a third-party marketing service for its retailers. Despite that fact, as early as 2007, plaintiff had purchased a number of phone book listings, associated with approximately 30 unique number, under defendant's trademark, "DirecTV," or some variant thereof ("infringing" or "branded" listings). These branded listings made up a small portion of plaintiff's total listings, most of which were "generic" advertisements for "satellite television." The generic listings did not use defendant's trademark.

Defendant, upon learning of these branded listings, believing that they were in violation of its trademark, began calling the numbers in an effort to identify who purchased them. Those calls were made by two parties. At first, defendant used Ketchum Marketing ("KDA"), a third-party agency, to investigate the listings. After a period of time Kristin Haley ("Haley"), one of defendant's employees, also began making calls to various listings. Around that same time, KDA and Haley also began calling some "generic" listings, several of which also belonged to plaintiff. Of those generic listings plaintiff owned, which also were called by KDA or Haley, the listing contained no evidence of plaintiff's ownership. In any case, during some of these calls to branded and generic listings, either KDA or Haley gave the telemarketer handling the call a false name. Occasionally, either KDA or Haley would stay on the call long enough to be transferred to one of plaintiff's retailer clients. Defendant never purchased satellite television services from those retailers. Rather, each time defendant would hang up without buying anything.

Through the progress of this case, plaintiff's claims have been parred down or otherwise refined for purposes of trial. On July 24, 2012, the court entered order granting in part and denying in part a motion to dismiss filed by defendant, made pursuant to Federal Rule of Civil Procedure 12(b)(6)

. The court dismissed plaintiff's tortious interference claims, but otherwise allowed the complaint to progress. Later, on March 31, 2014, the court entered order on the parties' cross-motions for summary judgment. As pertinent to the instant analysis, the court granted summary judgment in favor of defendant on plaintiff's defamation claim, holding that action was barred by the applicable one-year statute of limitations. However, the court granted in part and denied in part defendant's motion for summary judgment as to plaintiff's UDPA claim. The court held that six of the allegedly false statements or categories of statements potentially were actionable. Those six statements or categories of statements included: 1) statements that plaintiff was engaging in illegal conduct; 2) statements that plaintiff was using non-compliant marketing and poor sales practices; 3) statement plaintiff was engaging in "white page" violations, arising out of plaintiff's improper use of defendant's trademark; 4) that defendant would be sending plaintiff a "cease and desist" letter because of its white page violations; 5) that plaintiff's co-owner, Aaron Zydonik, "burned" defendant in the past; and 6) that plaintiff had a "high churn" rate.² In addition, the court held that plaintiff could pursue its claim grounded in the fact of defendant's 175 phone calls to plaintiff's call center over a six year period.

In ruling on defendant's motion as it related to plaintiff's UDPA claim, the court established certain parameters for that claim inasmuch as it was grounded in the six allegedly false or misleading statements or categories of statements, should the case proceed to trial. In particular, the court held that those statements were actionable only if plaintiff could prove that they were made to a third party. In addition, the court held that defendant would be allowed to prove that those six statements were qualifiedly privileged, and thus not actionable, so long as the jury found defendant made such statements without malice and in an effort to further its legitimate business interest. No such affirmative defense was available as to defendant's act of calling plaintiff's call center and occasionally giving false names, because the fact of those calls was actionable regardless of the substance of the conversation.

Trial began on November 13, 2014. On November 18, 2014, at the conclusion of plaintiff's case-in-chief, defendant made motion for judgment as a matter of law, (DE 175), pursuant to Federal Rule of Civil Procedure 50(a)

. In that motion, defendant addressed plaintiff's UDPA claim only to the extent that claim was grounded in those six statements. The court took the motion under advisement, but did not issue any ruling. On November 24, 2014, the jury returned a verdict in plaintiff's favor. (DE 184). The jury found defendant had called plaintiff's call center "over 175 times over a six year period, at times using false names," and further found that such conduct proximately caused plaintiff injury, resulting in $760,000.00 in damages.

With respect to the six statements, the jury found that they either had not been made to a third party or were not actionable by virtue of defendant's qualified privilege. In addition, the jury also returned a verdict in defendant's favor on its counterclaim, finding that plaintiff willfully violated defendant's trademark through use of phone listings containing various spellings of "DirecTV."

Defendant's second motion for judgment as a matter of law, (DE 209), was filed on January 19, 2015. Defendant argues the jury finding underlying plaint...