Fla. AG: Smartbiz Motion to Dismiss Has 'Unpled' Claims, Liability Theories

Florida Attorney General Ashley Moody’s (R) response to Smartbiz Telecom’s motion to dismiss the state’s robocall lawsuit against it has new unpled allegations and theories of liability and shouldn't be considered in determining the allegations at issue, said the defendant’s Friday response (docket 1:22-cv-23945) in U.S. District Court for Southern Florida in Miami. The plaintiff asked that its motions to dismiss and to join required parties be granted.

Moody asked the court to deny the telecom company’s Feb. 2 motion to dismiss (see 2302130018), saying SmartBiz “knowingly plays a significant role in connecting scammers to consumers in Florida and elsewhere.” Moody sued SmartBiz in December for violating the Telemarketing and Consumer Fraud and Abuse Prevention (Traced) Act and other statutes, plus the FTC's Telemarketing Sales Rule (TSR).

Smartbiz said Friday Moody admitted the complaint doesn't allege the length of time over which some allegations spanned and attempted to introduce those facts via response. The company said the complaint didn't allege violations of the Traced Act or have any counts directed to the act and if it wants to make those allegations, “it should amend” the allegations and “clarify the Complaint.”

“The Attorney General mentions TRACED Act regulations and alleges how SBT’s conduct has violated 47 CFR,” it said: That “voice service providers may block calls so that they do not reach a called party.” Moody is “attempting to criminalize otherwise lawful conduct,” the response said. “If SBT ‘may’ block calls under certain circumstances, the Attorney General cannot create liability for choosing not to block them,” it said: “The language does not say ‘shall.’”

Moody also suggested in his response that Smartbiz may be generating illegal robocalls itself, said the defendant’s response. This was after the complaint went into detail about “upstream providers” and named more than 20 alleged bad actor upstream providers, said Smartbiz. In response to the motion, Moody “claims SBT may be making the calls themselves,” said the defendant.

The attorney general “is stepping into the shoes of the FCC to enforce its laws,” said Smartbiz. Moody “seemingly” says the FCC has the authority to tell providers under Traced Act regulations that they “may” block calls from invalid numbers “but then pursue those same providers under the Telephone Consumer Protection Act for choosing not to block those numbers,” the company said.

Under Moody’s “theories,” Smartbiz said, “the FCC would be allowed to tell providers via regulation that they did not have to mitigate following a traceback, and then simultaneously pursue TCPA liability for failing to mitigate following a traceback.” It said: “If the FCC itself could not engage in this kind of regulatory catch-22 ping-pong, then the Attorney General cannot do so either.” As the Traced Act is the more recent and specific legislation governing conduct of intermediate providers, any attempt to “squeeze legitimate Traced Act conduct into a TCPA telemarketer liability hole is misplaced,” it said.

Moody claimed Smartbiz provided an “essential service in the fraudulent callers’ scheme, and therefore meets the threshold for TSR liability,” the defendant noted. Given the nature of “upstream” and “downstream” provider relationships, “it’s possible for any VoIP provider to be numerous contractual layers removed from the originations of any call,” the company said. Moody’s allegations of “substantial assistance should be questioned considering SBT only received 255 tracebacks over almost 3 years,” it said.