Graham v. National Web Design LLC

Background

Chester C. Graham, representing himself, sued National Web Design LLC (NWD) under the Telephone Consumer Protection Act. He alleged that NWD used an automatic dialing system to make more than ten telemarketing calls to his cellphone during the first half of 2020. He alleged that nine calls occurred after his number was placed on the Federal Trade Commission’s National Do Not Call Registry and that he had not given NWD permission to make the calls. Graham also alleged that he sent NWD six letters requesting its do-not-call policy and that NWD did not provide the policy.

Graham sought a default judgment for $24,000. NWD did not answer or otherwise respond after the summons and complaint were served—or purportedly served. The Clerk entered default against NWD on November 12, 2021. Graham’s motion for default judgment had been filed earlier, on August 2, 2021.

Reasons for the Ruling

The court identified four problems with the motion:

1. The motion was premature. Under Federal Rule of Civil Procedure 55, the Clerk’s entry of default must come before a court may enter a default judgment. Graham filed his motion before the Clerk entered default.

2. No memorandum of law was filed. Graham did not comply meaningfully with the local rule requiring a supporting legal memorandum for civil motions. The court explained that it was Graham’s responsibility to present the reasons and legal authority supporting default judgment.

3. Service of process was uncertain. A court must have authority over a defendant before entering judgment, and the defendant must have been properly served. The process receipt said that a deputy marshal delivered the summons and complaint to Ashley Harada, a legal assistant for attorney Dion Custis, at the address associated with Registered Agents of Wyoming, NWD’s purported registered agent. But the record raised questions about whether Registered Agents of Wyoming had resigned as NWD’s agent before service and whether Custis or his firm had authority to accept service for Registered Agents of Wyoming. The court therefore could not determine that NWD had been properly served. It warned that the Clerk’s entry of default might later be set aside if effective service had not occurred.

4. The requested damages were not supported. Graham sought $15,000 based on treble damages for ten alleged Telephone Consumer Protection Act violations and another $9,000 based on six alleged failures to provide a written do-not-call policy. The court found that the record did not establish that treble damages were appropriate. It also found that Graham had not explained why the regulation requiring a written policy available upon demand applied to a policy concerning the national do-not-call registry rather than only to a company’s internal do-not-call list. The court therefore could not conclude that the policy-related allegations stated a valid basis for relief or that the requested amount was established.

Disposition

The court denied without prejudice Graham’s motion for default judgment. This allowed him to refile. A renewed motion would need a memorandum of law addressing effective service, the factual and legal basis for treble damages, and legal authority supporting his interpretation of the do-not-call-policy regulation. If service still had not been completed, the court stated that Graham could request additional time or make another service attempt through the U.S. Marshals Service. The court also stated that the case might later be dismissed without prejudice for failure to prosecute if effective service could not be accomplished within a reasonable time.