■ORDER
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 plaintiffs 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, plaintiffs 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.
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 plaintiffs business relationships with its clients. Plaintiff asserted common law causes of action for tortious interference with contract, tor-tious 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
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 plaintiffs clients. Plaintiffs 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 plaintiffs 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 plaintiffs 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 plaintiffs 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
Through the progress of this case, plaintiffs 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 plaintiffs 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 plaintiffs 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 plaintiffs 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 plaintiffs 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.
In ruling on defendant’s motion as it related to plaintiffs 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 plaintiffs 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 plaintiffs 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 plaintiffs 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 plaintiffs favor. (DE 184). The jury found defendant had called plaintiffs 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.
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 plaintiffs UDPA claim, that is the fact of the calls, is not an unfair or deceptive act or practice as a matter of law, as well as that its conduct was not “in or affecting commerce,” as that term is defined by the relevant statute. In addition, defendant argues that plaintiff failed to show defendant’s conduct proximately caused it any damage. In the alternative, defendant argues that, should the court conclude plaintiff is entitled to damages, that it is entitled to a new trial on the issue of damages because the jury’s $760,000.00 award, which by statute automatically is trebled to $2,280,000.00, is excessive.
COURT’S DISCUSSION
A.Standard of Review
When a party is heard fully on an issue at trial, and, in view of the evidence presented, the court finds that a reasonable jury would not have a legally sufficient basis to find in favor of that party, the court may grant judgment for the opposing party as a matter of law. Fed.R.Civ.P. 50(a)(1). Where a motion for judgment as a matter of law is made during trial but not decided, or where the movant otherwise raises an objection as to the sufficiency of the non-movant’s evidence the court may consider those issues after the jury has returned its verdict. Id. 50(b). A motion for judgment as a matter of law may be granted if the court “determines, without weighing the evidence or considering the credibility of the witnesses, that substantial evidence does not support the jury’s findings.” ' Konkel v. Bob Evans Farms, Inc.,
B. Defendant’s Motion for Judgment as a Matter of Law Made During Trial (DE 175)
Defendant’s motion, made during trial, mounted an attack on plaintiffs UDPA claim only to the extent that claim was grounded in the six allegedly false or misleading statements. That motion now properly is considered as one for judgment as a matter of law, made pursuant to Federal Rule of Civil Procedure 50(b).
At conclusion of trial, the jury found that those statements were not actionable either because they were not made to third parties or because they were protected by qualified privilege. Because defendant incurred no liability from the statements, which formed the basis of its motion, defendant’s motion is DENIED as MOOT.
C. Defendant’s Motion for Judgment as a Matter of Law Made Post-Trial (DE 209)
After the conclusion of trial, defendant filed a motion for judgment as a matter of law as to plaintiffs UDPA claim grounded in the jury’s finding that defendant called plaintiffs call center “over 175 times over a six year period, at times using false names.” Although defendant made no formal motion for judgment as a matter of law on this issue during the course of trial, such motion is not necessary in light of the
The UDPA provides that “[unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.” N.C. Gen.Stat. § 75-1.1(a). The term “commerce” includes “all business activities, however denominated.” Id. § 75-l.l(b). To state a claim under the UDPA, the plaintiff must prove 1) that the defendant committed an unfair or deceptive act or practice, 2) in or affecting commerce, and 3) the defendant’s act proximately caused the plaintiff injury. Bumpers v. Cmty. Bank of N. Va.,
Before turning to the merits of defendant’s motion, it is necessary to address the proper scope of the court’s review when faced with the question of whether a particular act or practice was unfair or deceptive. The parties take substantially divergent views on this point. For example, in briefings plaintiff repeatedly references specific instances of harm caused by defendant and advocates that the court view defendant’s conduct, as found by the jury, in the larger “context” of the dealings between the parties. By contrast, defendant argues that the court should look only to the single fact found by the jury in reaching its verdict, and the evidence presented at trial that supports the jury’s finding.
“Ordinarily, once the jury has determined the facts of a case, the court, based on the jury’s findings, then determines, as a matter of law, whether the defendant engaged in unfair or deceptive practices in or affecting commerce.” S. Atl. Ltd. P-Ship of Tenn. v. Riese,
1. Defendant’s Conduct was not “In or Affecting Commerce”
To be entitled to the UDPA’s remedies, plaintiff first must show defendant’s conduct falls within the statutory framework, including that the conduct was in or affecting commerce. HAJMM Co. v. House of Raeford Farms, Inc.,
Because of the statute’s consumer-oriented goals, it affords broad relief to individual consumers aggrieved by unfair or deceptive practices. Marshall v. Miller,
In light of the facts found by the jury, there is no indication that the calls were made “in or affecting commerce” as required by the statute. Nor can the court extrapolate from the jury’s findings and infer such a relationship, as the jury’s lone finding addressed the existence of the calls themselves and the fact that defendant used, on occasion, fake names. Moreover, the calls could not have been “in or affecting commerce.” It is undisputed that the calls were not made in the course of a commercial relationship, or for the purpose of engaging in consumer activity. Rather, the calls started only once defendant began to suspect plaintiff of trademark infringement.
At trial, plaintiff did not demonstrate that defendant’s actions had a direct and negative impact on its clients. The harmful effects of defendant’s calls asserted by plaintiff in briefing only show, at most, that defendant’s conduct created problems within plaintiff, as well as caused costs for third party satellite retailers with which plaintiff had a contractual relationship. With regard to plaintiffs internal problems, tensions caused by defendant’s conduct did not have a negative impact on plaintiffs clients. Although plaintiff presented evidence that it incurred costs as a result of defendant’s actions, mainly resulting from an initiative to retrain plaintiffs employees to handle defendant’s calls, there was no evidence to suggest that these localized disputes affected its ability to fulfill its obligation to its clients, namely transferring calls made by those inquiring about satellite television services. Even with defendant’s numerous calls, plaintiff had the capacity to handle an even greater volume of calls. (Day 4 Tr., DE 200, 176:3-17). Because defendant’s conduct ultimately did not affect the third-party retailer’s expectation of being forwarded calls inquiring about defendant’s services by plaintiff, no harm to the consuming public was done based simply on the fact the calls caused internal tension or placed a greater burden on plaintiffs call center.
In any event, defendant’s actions also did not have a negative effect on plaintiffs clients solely because it resulted in lost profits or increased costs to such clients. When no business, competitive, or consumer relationship exists between two parties, the “commerce” element of the UDPA is met only where defendant’s actions have a net negative effect on the market of potential consumers. See Food Lion,
The calls were made in the course of defendant’s investigation into plaintiffs infringement of its trademark. Those calls enabled defendant to learn the identity of the retailers working with plaintiff. After learning their identity, defendant was able to contact those retailers and inquire about whether they knew plaintiff was using potentially infringing listings. This practice allowed uninformed retailers to sever their relationship with plaintiff, without being subject to litigation or losing their rights to distribute defendant’s product. (Day 5 Tr. 149:1-165:7). Given that defendant’s conduct actually benefitted plaintiffs clients, the calls to the infringing listings did not have the requisite negative effect on plaintiffs clients necessary to constitute conduct “affecting commerce.” Thus, although defendant’s calls may have cost plaintiffs clients in the moment, it hardly can be argued that the net effect of defendant’s conduct was negative, where otherwise it could have resulted in much more grievous loss.
In sum, plaintiffs damages award must be vacated and defendant’s motion for judgment as a matter of law granted. The parties were not engaged in “business activities” and thus defendant’s conduct was not “in or affecting commerce.” The calls did not take place in the context of a business, competitive, or consumer relationship. In addition, there is no indication that defendant’s actions harmed the broader consuming public.
2. Defendant’s Conduct was not Unfair or Deceptive
In any event, defendant’s motion also must be granted because the conduct found by the jury does not amount to an “unfair or deceptive” act or practice. The UDPA generally prohibits “unfair or deceptive” acts or practices. N.C. GemStat. § 75-1.1(a). That language generally covers five broad categories of conduct: 1) unfair conduct, 2) deceptive misrepresentations, 3) anti-competitive conduct, 4) certain per se violations of the statute, and 5) breaches of contract occurring under aggravating circumstances. Sparks v. Oxy-Health, LLC,
Potentially at issue in this case are the first three categories: unfair, deceptive, and anti-competitive conduct. Conduct is “unfair” when it “offends public policy ... [or] is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers.” Walker v. Fleetwood Homes of N.C., Inc.,
a. Unfair Practices
Unfair conduct is that which a court of equity would find unfair. S.A.L.T.,
Plaintiff suggests the court must view defendant’s conduct in the “larger Context” of the parties’ relationship, citing Sunbelt Rentals, Inc. v. Head & Engquist Equip., LLC,
Moreover, there were no egregious circumstances surrounding defendant’s calls. The total calls placed by defendant represents only 0.002958% of the total volume of calls handled by plaintiffs call center over the relevant time period. (See Pl.’s Ex. 74, DE 211-2; Def.’s Ex. 1140, DE 211-3, 15). At trial, plaintiffs expert testified that the number of calls made by defendant was “[p]robably not” significant, and that plaintiff had the capacity to handle more calls. (Day 4 Tr. 176:3-17). It is difficult to conceive how defendant’s conduct could be unfair given the fact that plaintiff could have handled more calls, and thus was not required to turn any potential customer away. In addition, even though plaintiff contends that defendant’s calls harmed its business relationship with its clients, because plaintiffs clients paid for the calls transferred from plaintiff and defendant’s calls never resulted in a sale, defendant’s conduct cannot be unfair because there is no guarantee that any call forwarded to plaintiffs clients would have resulted in a sale. This is especially true in light of the infinitesimal number of calls actually transferred. (See Pl.’s Ex. 74, at 4-11).
Plaintiff argues that any single call by defendant that resulted in a client canceling its business relationship with plaintiff is sufficient ground to support a UDPA claim. It is not. First, it is speculative to
Finally, defendant’s conduct is not unfair because any unfairness reasonably could have been avoided. SeeIn re Int’l Harvester Co.,
b. Deceptive Misrepresentations
A practice is deceptive if it has the “capacity or tendency to deceive” the average consumer. Johnson,
Proper analysis of defendant’s allegedly deceptive conduct again requires a parsing of the facts. The single fact found 'by the jury is-that defendant called plaintiff in excess of 175 times over a six year period, at times using false names. In and of themselves, the calls to plaintiffs call center were not deceptive. Regardless of the name used by the caller, whether it be the caller’s true name or even defendant’s trade name, the calls still would have occurred. Thus, the fact of the calls involves no deception.
Notwithstanding the limited jiiry findings, plaintiff suggests defendant’s conduct was deceptive because the caller’s failure to identify themselves as defendant’s agents deceived plaintiff into transferring those calls to its clients, resulting in strained or cancelled business relationships. However, even though defendant’s conduct may have been misleading, it was not “deceptive” within the meaning of the UDPA, because it was not accompanied by aggravating circumstances. Dalton,
Although good faith is no defense to a UDPA claim, Marshall,
In any event, the negative effects of defendant’s conduct reasonably could have been avoided. The undisputed facts show that defendant’s calls began and persisted only as a result of plaintiffs willful infringement of defendant’s trademark. Because plaintiff could have avoided any negative effect through proper respect for defendant’s intellectual property rights, plaintiff cannot now recover for the adverse consequences flowing from defendant’s investigation into plaintiffs conduct. Accordingly, because defendant’s conduct occurred without egregious or aggravating circumstances, and because the negative effects of defendant’s conduct were reasonably avoidable, the court holds that under the facts of this case, defendant’s conduct was not deceptive within the meaning of § 75-1.1(a).
c. Anti-Competitive Conduct
Finally, plaintiff suggests defendant’s conduct is actionable because it amounts to “anti-competitive” conduct. Typically, anti-competitive conduct is similar in nature to that conduct which could give rise to a violation of the Sherman Act, 15 U.S.C. §§ 1 through 38. See ITCO Corp.,
Once again, the facts found by the jury do not suggest any relationship between defendant’s conduct and the competitive process. The lack of findings on a connection between defendant’s conduct and the competitive process alone is a sufficient basis to grant defendant’s motion. In any event, defendant’s motion still must be granted, because defendant’s efforts to protect its trademark are not anti-competitive. To the contrary, defendant’s actions fostered competition and strengthened the market. The effect of defendant’s conduct was to reduce likely confusion among end-consumers who wanted to purchase satellite television. (See Day 5 Tr. 35:18-38:19; see also Day 2'Tr. 107:3-18). Because defendant acted toward reducing consumer confusion, thereby increasing the amount of accurate information available in the market, as well as consumer power, defendant’s conduct was not anti-competitive.
Nevertheless, plaintiff argues that defendant’s conduct was anti-competitive because it failed to work eollaboratively with plaintiff toward an agreeable resolution for both parties, despite having the contacts necessary to facilitate such a resolution. Although plaintiff may have perceived defendant’s conduct as violative of profes
3. Calls to Generic Numbers
The preceding discussion addresses calls made to infringing listings only. Plaintiff makes much of phone calls received at “generic” listings from both Haley and KDA, which it argues is evidence of defendant’s mal-intent with regard to all 175 phone calls over a period of six years. Plaintiffs argument is not entitled to great weight for a number of reasons. First, there is no jury finding parsing out defendant’s calls to “infringing” versus “generic” listings on the verdict sheet. In fact, the evidence shows that some numbers were used in both generic and infringing listings. (Day 2 Tr. 102:22-103:1). Plaintiff never presented additional evidence isolating defendant’s calls to a particular ad. (See, e.g., id. 100:17-24). Thus, even assuming all calls received by plaintiff were made to a number used in a “generic” listing, that still is not sufficient evidence to allow the court to draw the inference that defendant obtained the number from a generic listing.
In addition, although there is evidence both Haley and KDA were connected to retailers selling exclusively Dish Network products, that fact alone is insufficient to support the inference that defendant called plaintiffs call center on a number obtained from a generic listing. (PL’s Ex. 74) (listing calls transferred to “Dish Network” or some variant thereof). The telemarketer who received the call was not able to determine whether the call came in from a generic or infringing listing and never tried to steer the caller to one service over another. (See id. 101:12-19; 238:21-239:10; Day 3 Tr. 54:2-9). Although calls made by Haley or KDA transferred to Dish Network may have been a result of the caller’s request, there is no affirmative evidence that was the case.
In any event, defendant’s calls made to generic listings were neither unfair or deceptive nor in or affecting commerce, and thus are not actionable. The calls were not “in or affecting commerce” because plaintiff and defendant had no business, commercial, or consumer relationship. In addition, there was no net negative impact on the consuming public where the calls were made to check compliance issues with defendant’s various retailers. (Day 5 Tr. 184:1-6). The calls were not “unfair or deceptive” because defendant’s calls, made through Haley or KDA, to publieally listed telephone numbers is neither inequitable, an unfair assertion of power, nor anti-competitive. The calls were not “deceptive” within the meaning of the statute because they were related to defendant’s legitimate efforts to police retailer compliance. (See id.).
Plaintiff suggests defendant intended the calls to disrupt plaintiffs business. Although evidence that the calls were intended to disrupt plaintiffs business may give rise to a violation of the UDPA, there is no evidence of such intent here. First, there was no jury finding on the issue of intent. Instead, the jury was asked only to find the fact of the calls. In addition, inferring defendant’s intent to disrupt plaintiffs business from the evidence presented at trial, at best, is tenuous. There was no way to identify plaintiff as the owner of any “generic” listing. (Day 2 Tr. 103:2-11). Moreover, although Haley admitted calling generic numbers, she did not know
CONCLUSION
Based on the foregoing, defendant’s first motion for judgment as a matter of law (DE 175) is DENIED as MOOT. Plaintiffs oral motion for judgment as a matter of law is DENIED. Defendant’s second motion for judgment as a matter of law (DE 209) is GRANTED, and the jury’s award to plaintiff, in the amount of $760,000.00, is VACATED. As a result, because defendant is not liable to plaintiff, plaintiffs motions for attorney’s fees (DE 205) and prejudgment interest (DE 207) are DENIED.
Notes
. Several additional motions are pending in this matter. (DE 212, 216, 219). The court will address these motions by separate order to follow.
. "Churn rate” refers to the rate at which subscribers discontinue their subscriptions to a certain service within a given period of time. (DE 50, at 21).
. The court briefly turns its attention to plaintiff's oral motion for judgment as a matter of law. Plaintiff contends that defendant failed to present sufficient evidence from which a reasonable jury could find that plaintiff infringed defendant's trademark. DirecTV’s trademark infringement counterclaim required it prove 1) it possesses a mark; 2) Exclaim used the mark; 3) Exclaim's use of the mark occurred in commerce; 4) Exclaim’s use of the mark occurred in connection with the sale, offering for sale, distribution, or advertising of goods or services; and
The parties stipulated to elements 1 and 3. (Pretrial Order, DE 163, 1-2). Upon review of the record, the court concludes the remaining three factors also were met. At trial the evidence suggested that plaintiff had purchased numbers using variations of defendant's trademark, and also that plaintiff had corresponded with Verizon about certain telephone listings, asking Verizon to correct or change spellings of "DirecTV'' as to two phone listings. (See, e.g., Day 3 Tr., DE 199, 56:17-57:24; see also Day 2 Tr., DE 198, 84:2-91:19; Def.’s Ex. 32). This evidence satisfies the use and use in connection with the offering or advertising of services requirement. In addition, the evidence showed that plaintiff received phone calls at the various listings from consumers who believed they were connecting to defendant. (See Day 5 Tr. 35:18-38:19; see also Day 2 Tr. 107:3-18). Because defendant presented sufficient evidence as to all five elements of its claim, plaintiff's motion for judgment as a matter of law is DENIED.