Ordinary Meaning of 'Telephone Call' Doesn't Fit FTC's Agenda, Says TSR Defendant

“Technology has evolved but the law has not," said defendants Atlas Marketing Partners and Atlas Investment Ventures in a Wednesday reply (docket 3:23-cv-00313) in support of their motion to dismiss and to strike the FTC’s February complaint (see 2302170050) in U.S. District Court for Southern California in San Diego. The complaint alleges a network of companies and individuals is responsible for delivering “tens of millions” of unwanted VoIP and ringless voicemail (RVM) phony debt service robocalls.

It's a problem for the FTC that the ordinary meaning of telephone call “doesn’t fit the Government’s agenda,” said Atlas, which asserts ringless voicemail messages (RVM) aren't telephone calls as expressed by the Telemarketing and Consumer Fraud and Abuse Prevention Act and the Telemarketing Sales Rule (TSR). “Neither Congress nor the FTC defined ‘telephone call’ because the meaning of that phrase was, and still is, patently obvious,” said Atlas. The TSR text and regulatory history only highlight the “stark contrast between a ‘telephone call’ and ringless voicemail, “thereby further supporting dismissal of the TSR counts," said the reply.

Rather than address the issue by conforming the TSR to technological advances through rulemaking or official pronouncements, “as it has historically done and as sister agencies have done under other federal statutes,” the DOJ “brings this enforcement action to expand the law by prosecutorial fiat,” said the reply: “It seeks to penalize the Atlas Defendants for not knowing what the FTC never fairly expressed.”

DOJ argues that because defendant Stratics Networks Inc.’s (SNI) RVM technology may alert a consumer with a “ping” and include a recipient’s cellphone number in transmission records, the court “should infer” that ringless voicemail must deliver messages to cellphone numbers “via ‘outbound telephone calls,’” said the reply. Atlas refuted that argument, saying an audible voicemail alert is “not the same as a ringing telephone which a live person can pick up and answer.” Today, it said, cellphones “ping” or alert users “for any number of reasons” depending on a user’s settings for email or message alerts. “Recipients of these alerts might say they received your email or message, but no one would say they received your 'telephone call,'" it said.

The ringless voicemails in question ceased nearly three years ago, when there was a lack of authority on how the new technology squared with existing law, the reply said. The FTC’s attempt to “skirt its rulemaking, notice, and due process obligations -- essentially requiring this Court to legislate” -- is a “classic case of government overreach,” it said.

DOJ argues RVM is “obviously covered by the TSR” and asks the court to “rubberstamp its overreach,” said Atlas, calling that argument “belied by common sense and the voluminous briefing in this case.” The court should hold the FTC “accountable to the limits of its authority and decline the invitation to expand the meaning of an ordinary term," it said.

If “telephone call” is to be expanded to cover new technology, it must be done legislatively or through rulemaking, not judicially,” Atlas said. If the court determines the FTC “failed to plead a telephone call, all TSR claims fail as a matter of law and must be dismissed,” it said. That would leave the remaining claim under the FTC Act, “which fails for other reasons,” it said.

Also Wednesday, SNI’s reply in support of its motion to dismiss the FTC’s robocalling complaint asserted the FTC’s response to its motion to dismiss the case “ignores the terms" of the TSR. The DOJ’s response to SNI’s motion to dismiss “ignores SNI’s arguments, misconstrues those it cannot defeat, concocts new allegations” not in the complaint and “ignores other allegations” that are in the complaint, said SNI. DOJ’s response “repeatedly avoids” addressing the complaint’s “failure to allege facts” to support the claims it makes against SNI, arguing it “should be permitted to force SNI into costly and time-consuming discovery,” the reply said.

Though the DOJ cites over 100 cases in its response, none supports the imposition of liability on a provider of interactive computer services “that played no role in the creation of third-party content,” said SNI’s reply. The FTC “plainly did not consider the application of Section 230 immunity to SNI’s RVM and SIP platform software,” it said. Its “failure to plead facts that, if true, would avoid immunity, requires dismissal pursuant to Rule 12(b)(1),” it said.

SNI “is immune” from the suit under Section 230 because its two platforms each “fit squarely” within statutory definitions of an “interactive computer service” and an “access software provider,” said the reply. SNI is “solely a publisher” of content created entirely by other “information content providers,” it said. The FTC’s claim that SNI assisted the TSR violations of others “fails to allege any actionable ‘telephone calls’ or the use of a telephone, fails to allege that SNI ‘knew’ or ‘consciously avoided’ knowing about alleged TSR violations by others, and fails to meet the standards set” by the U.S. Supreme Court’s recent decision in Twitter v. Taamneh and the Northern District of Illinois’ decision in FTC v. Walmart, it said.

The DOJ identified no authority showing an RVM is a telephone call or holding a party liable for “substantial assistance for simply providing a commercially available messaging platform to alleged wrongdoers,” the reply said. And it didn’t plead “with specificity that any communication was made to a recipient’s telephone whose number was on the National Do Not Call Registry.”

SCOTUS “cautioned the FTC against abusing its authority” by pursuing its ends through litigation in AMG Capital Management v. F.T.C., “striking down its attempt to bypass its regulatory function and seek monetary relief in court under the guise of restitution and disgorgement," said SNI. The DOJ’s strategy is similar in this case, “seeking annihilating civil penalties to force SNI to adhere to non-existent FTC regulations rather than adopting such regulations.”