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COOK COUNTY RECORD

Thursday, March 28, 2024

eTelequote parent doesn't do enough business in Illinois to make it 'at home' for telecommunications lawsuit

Chicagofederalcourthouse

A federal lawsuit brought in Chicago by residents of states on the U.S.’s West Coast against an insurance telemarketer will be allowed move forward, but without the telemarketer’s sister company, which a judge said doesn’t do enough business in Illinois to make Chicago’s courtrooms the appropriate place for the legal actions against them.

On Oct. 13, U.S. District Judge Robert M. Dow Jr., ruling in federal court in Chicago, granted the request of foreign company TRG Holdings to be dismissed from a lawsuit brought against it and its sister company e-TeleQuote Insurance, Inc. by plaintiffs Lydia Nicholson and Brad Bassett, who sued on behalf of themselves and others in a class action, claiming e-TeleQuote called telephone numbers on the federal Do Not Call list in attempts to sell insurance.

E-TeleQuote, based in Florida, is a subsidiary of a British company, 80 percent of which is owned by holding company The Resource Group International, Ltd., based in Bermuda. TRG Holdings is a wholly-owned subsidiary of The Resource Group and provides “strategic advice” to the Bermudan business regarding its entire portfolio of companies.

In his opinion, Dow noted that e-TeleQuote responded to the plaintiff’s claims, but TRG Holdings moved to dismiss the suit for lack of personal jurisdiction, as neither company is based in Illinois, neither plaintiff lives in Illinois and there is no claim that TRG had conducted any business in Illinois. TRG also argued it had no connection to the business operations of e-TeleQuote.

The plaintiffs, who live in California and Washington, said they sued in Illinois state court because “over half” of e-TeleQuote’s income in fiscal year 2011 came from transactions in this state and 10 percent of its 2012 income came from Illinois. While e-TeleQuote is registered to do business in Illinois, TRG is not, the judge noted, and in 2011 and 2012, e-TeleQuote was organized under a different corporate name.

“Plaintiffs Nicholson and Bassett … allege that they received unsolicited telephone calls from e-TeleQuote in January and April of 2014, … and so it is not entirely clear how e-TeleQuote’s Illinois sales statistics from parts of 2010, 2011 and 2012 are even relevant here,” Dow wrote.

Besides being from an irrelevant time period, Dow said the sharp decline in Illinois sales from one year to the next also failed to demonstrate the “substantial and pervasive” business connection to the state required by law to establish jurisdiction.

The plaintiffs argued TRG exercised substantial control over e-TeleQuote – that TRG was the telemarketer’s one-time owner, TRG now dominates its board of directors, TRG has provided free services and equipment and TRG has kept the company afloat through millions in loans and capital contributions. According to court documents, they referred to e-TeleQuote as the “alter ego” of TRG.

For the Illinois state court to have jurisdiction, the plaintiffs would have to prove that not only did TRG exercise so much control over e-TeleQuote that the telemarketer’s contacts were also the holding company’s, but that those Illinois contacts are “substantial and pervasive” enough to make the company “at home” in Illinois.

“Plaintiffs fail to argue the second component of this argument entirely, expending all their efforts … [imputing] e-TeleQuote’s Illinois contacts onto TRG,” Dow wrote. “TRG’s overall ties to Illinois likely would be a watered-down version of e-TeleQuote’s ties. 

“Even giving plaintiffs the benefit of the doubt, … doing 10 percent of your business in Illinois does not make a corporation ‘at home’ in Illinois,” the judge said.

Dow said the court did not need to determine whether TRG substantially controls e-TeleQuote, because even e-TeleQuote’s business connections to Illinois are not strong enough to establish that the company is “at home” here.

Dow dismissed the suit against TRG Holdings without prejudice. The claims against e-TeleQuote remain pending, and that case is next due in court for a status hearing Oct. 22.

TRG and e-Telequote were represented in the action by attorneys with the firm of Sheppard Mullin Richter & Hampton, of Chicago.

Bassett and Nicholson were represented by the firm of Edelson P.C., of Chicago.

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