Judge Denies Smartbiz Motion to Dismiss Fla. AG’s Robocall Complaint

Moody's complaint alleges violations of several statutes, including the Telemarketing and Consumer Fraud and Abuse Prevention Act, the FTC's Telemarketing Sales Rule, the Telephone Consumer Protection Act, and Florida's Deceptive and Unfair Trade Practice Act. Despite more than 250 tracebacks, Moody alleges Smartbiz continues to transmit fraudulent calls and profit from them, rather than implement measures to prevent fraud on its network.

Smartbiz argued Moody lacks Article III standing to bring the action because the complaint fails to allege the victims suffered a concrete harm. But looking at the statutes alleged to have been violated, it’s clear the Florida AG’s office “has standing to bring this suit on behalf of its citizens,” said Martinez’s order.

Case law shows an invasion of privacy that comes with even a single unwanted text “is similar in kind to a tort harm and enough to establish a concrete injury,” said the order. Martinez likewise finds the transmission of more than 250 fraudulent calls to be a concrete injury, it said.

The judge also rejected Smartbiz’s argument that the federal Telephone Robocall Abuse Criminal Enforcement and Deterrence Act preempts Moody’s claims in this action, said his order. Smartbiz “fails to cite any case or other authority to support its proposition that a federal administrative agency’s regulations preempt the federal statutes under which this action is brought,” it said. The Constitution “makes federal law preemptive of state law but does not mandate that federal regulations preempt federal statutes,” it said.

Smartbiz also wrongly argues the TCPA didn’t apply to it because it didn’t actually initiate or make the robocalls at issue, said the order. Though the TCPA doesn’t define what it means to initiate or make calls, the FCC analyzed whether entities that provide transmission facilities, such as Smartbiz, “face potential liability under the statute,” it said.

The FCC, in its 1992 order, likened those services to common carriers’ liability for the transmission of obscene or indecent material, said the order. The commission said those providing transmission services “could be liable under the TCPA” where they demonstrate a high degree of involvement or actual notice of an illegal use and failure to take steps to prevent such transmissions, it said. The role Smartbiz plays in transmitting calls “falls within the scope” of the FCC’s 1992 order, it said.