Avid Telecom Could Have Cut Off Robocall Traffic to Ariz., Says AGs' Response

The court should deny defendants’ October motion to dismiss a robocall case (see 2310100001) brought by the attorneys general of 48 states in May, said plaintiffs’ Monday response (docket 4:23-cv-00233) to the motion by VoIP provider Avid Telecom, CEO Michael Lansky and Vice President Stacey Reeves in U.S. District Court for Arizona in Tucson.

The AGs' May 23 complaint alleged Avid, Lansky and Reeves facilitated robocalls or helped others make them. It alleged the defendants received 329 notifications from the USTelecom-led Industry Traceback Group, putting them “on notice” that Avid was transmitting illegal robocalls (see 2305240010). The plaintiffs argued Avid, Lansky and Reeves “chose profit over running a business that conforms to state and federal law,” instead of implementing procedures to prevent or mitigate robocalls. In their motion to dismiss, the defendants asserted they "met every applicable regulatory obligation" and haven't violated the law.

In response to defendants’ claim the complaint fails to allege “sufficient facts” to establish that Avid “purposefully directed activities at Arizona or consummated a transaction with an Arizona resident” -- and therefore “lacks specific jurisdiction” over Avid -- the response said Reeves “has waived any personal jurisdiction defense.” She showed a “clear purpose to defend the action,” therefore waiving the defense of lack of personal jurisdiction, it said. The Arizona court has specific personal jurisdiction over Reeves because the AGs’ Telephone Consumer Protection Act and Telecom Sales Rule claims “arise directly” from calls Reeves made or caused to be made to Arizona area codes, the response said.

Specific personal jurisdiction exists when a defendant oversees or causes calls to be made into the forum state, and Reeves “knew of and caused telephone calls to be made into Arizona,” it said. Telco Connection notified Reeves in February and September 2021 that defendants were sending IRS impersonation and Social Security Administration scam calls to Arizona area codes, said the response. From March 2021 to March 2023, the Industry Traceback Group notified Reeves of “at least nine” tracebacks for calls to phone numbers with Arizona area codes, including calls using a prerecorded or artificial voice, it said.

Reeves “had the power to shut off call traffic to an entire state,” said the response. For a time, defendants “curbed their traffic to Vermont’s one area code,” indicating she could stop traffic to specific states, likely by blocking area codes, it said. Though she had the ability to block traffic to Arizona, she did not, it said. Reeves managed the account settings for the Virtual Telecom/Mobi Telecom account, for which Avid Telecom facilitated over 55 million calls with Arizona area codes, said the response. At least 246 Arizona residents of those millions filed do-not-call complaints with the FTC, it said.

Avid Telecom claims it is a “common carrier,” so the defendants can’t bring an enforcement action against it under the TSR; only the FCC has enforcement authority over the company, noted the response. Defendants’ assertion that Avid “'served as a common carrier here’ mischaracterizes its role in the robocalling ecosystem and its representations and actions,” the AGs said. Avid is an information service provider, they said. But if the court finds Avid not to be an information-service provider, it's still not a common carrier under the two-pronged test that the FCC uses under the Communications Act to define common carriers, they said.

Defendants argued that count one of the complaint should be dismissed because they don’t qualify as sellers or telemarketers under the TSR. Plaintiffs didn’t plead that they were, “nor is it a requirement to establish a violation” of the Code of Federal Regulations, said the response. The AGs alleged defendants violated the TSR by providing “substantial assistance or support to sellers and telemarketers that were violating the TSR."

Defendants contend they can’t be held liable under the TCPA because Avid doesn’t make or initiate calls, said the response. The AGs responded that when Avid receives “an attempted call from its customer, an upstream voice service provider or a non-provider like a call center customer, the call has not been ‘made’ or ‘initiated’ in the sense that the intended recipient of the call has received the call.” Avid is “one link in a chain of service providers who each play a role in connecting the call.”

The AGs allege Avid received at least 329 tracebacks pointing to illegal use of its network, but it failed to take steps to prevent further use of its network to route illegal calls. The claims of notice and failure to prevent further illegal transmissions are sufficient to state a claim under the TCPA, said the response. “While the TCPA does not define what it means to make or initiate telephone calls, ‘one can violate the TCPA either by taking the steps necessary to physically place a telephone call, or by being so involved in the placing of a specific telephone call as to be deemed to have initiated it,’” the AGs said.

Defendants contend they didn’t violate a New York general business law governing the use of auto-dialers because they didn’t operate auto-dialers themselves. The law “applies not only to operators themselves but also to anyone 'acting as an … agent … of a person operating’ auto-dialers,” said the response. Defendants “placed consumer telephone calls by auto-dialers and acted as agents of the entities that operated auto-dialers," said the response.