UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

Case Number: 22-23945-CIV-MARTINEZ

OFFICE OF THE ATTORNEY GENERAL,

STATE OF FLORIDA,

DEPARTMENT OF LEGAL AFFAIRS,

Plaintiff,

vs. 

SMARTBIZ TELECOM LLC,

Defendant, 

_____________________________________/ 

ORDER ON MOTIONS FOR SUMMARY JUDGMENT

THIS MATTER came before this Court on Plaintiff Office of the Attorney General, State 

of Florida, Department of Legal Affairs’ Motion for Summary Judgment (“Pl.’s Mot.”), (ECF No. 

51), and Defendant Smartbiz Telecom LLC’s Motion for Summary Judgment (“Def.’s Mot.”), 

(ECF No. 54). After considering the relevant briefing, the record, and being otherwise advised in 

the premises, the Court rules as follows. 

FACTUAL BACKGROUND1

This action concerns Defendant’s alleged transmission of illegal robocalls. Defendant, 

Smartbiz Telecom LLC (“Defendant” or “Smartbiz”), is a Florida limited liability company and is 

registered in the Federal Communications Commission’s (“FCC”) Form 499 Filer and Robocall 

Mitigation databases. (Plaintiff’s Statement of Facts (“Pl.’s SOF”) ¶¶ 1–3, ECF No. 50.) Smartbiz 

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 The following pertinent facts are undisputed unless otherwise noted. When the facts are in 

dispute, they are taken in the light most favorable to the nonmovant. See Chapman v. Am. 

Cyanamid Co., 861 F.2d 1515, 1518 (11th Cir. 1988). 

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is a provider of Voice over Internet Protocol (“VoIP”) communication services, “meaning that it 

receives telephone calls from its customers in the form of packets of information sent over the 

internet, and routes those telephone calls through its suppliers to be connected to recipients in the 

United States.” (Id. ¶ 6; Joint Statement of Undisputed Facts (“JSOF”) ¶ 3, ECF No. 57.) Defendant 

provides its customers with trunks, which are digital pathways for transmitting VoIP phone calls. 

(JSOF ¶ 5; Pl.’s SOF ¶ 9.) Customers send calls through trunks to Defendant’s softswitch, which 

is an online platform owned by the company SIPNav LLC, that routes the calls to Defendant’s 

suppliers. (JSOF ¶ 4; Pl.’s SOF ¶ 8.) The softswitch captures information about each call it routes 

including the date and time on the call, the calling phone number, the called phone number, and 

the billed duration of the call. (JSOF ¶ 7; Pl.’s SOF ¶ 13.) Records that Defendant’s softswitch 

creates about calls transiting Defendant’s network are referred to as Call Detail Records (“CDRs”). 

(JSOF ¶ 7; Pl.’s SOF ¶ 13.) Defendant’s softswitch also records a three-digit integer code denoting 

the call result, called a “SIP code,” for each call. (JSOF ¶ 8; Pl.’s SOF ¶ 14.)

The Industry Traceback Group (“ITG”) is a consortium of telecommunications companies 

appointed by the Federal Communications Commission (“FCC”) to manage private-led efforts to 

trace back the origin of suspected unlawful robocalls. (Pl.’s SOF ¶ 16.) The ITG conducts 

tracebacks, a process that attempts to identify the source of a suspected illegal call by contacting 

each communications service provider who carried the call sequentially starting with the call 

recipient’s provider. (JSOF ¶ 9; Pl.’s SOF ¶ 17.) The ITG conducts tracebacks by sending an email 

notification to a communications provider, starting with the call recipient’s provider, asking it to 

sign into the ITG’s online portal to respond to the traceback request. (JSOF ¶ 10; Pl.’s SOF ¶ 18.)

ITG records indicate that Smartbiz has received at least 256 traceback notifications 

between June 26, 2020, and January 30, 2023. (Pl.’s SOF ¶ 21.) Traceback notices inform Smartbiz 

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that a suspected fraudulent call traversed its network and provide a description of the call and why 

it is suspected to be illegal, the phone number information, and the call time and date. (Id. ¶ 22.)

Defendant has responded to 261 traceback notifications and would frequently leave comments 

informing the ITG of the action it purported to take in response to the traceback. (Id. ¶¶ 27–28.)

Plaintiff commenced this action on December 5, 2022, alleging violations of the Telephone 

Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq. (Counts I and II); the Truth in Caller 

ID Act, 47 U.S.C. § 227(e) (Count III); the Telemarketing Sales Rule, 16 C.F.R. § 310 (Count IV); 

and Florida’s Deceptive and Unfair Trade Practice Act, Chapter 501, Part II, Florida Statutes 

(“FDUTPA”) (Count V). (See generally Compl., ECF No. 1.) Plaintiff seeks statutory damages 

and to enjoin Defendant from transmitting fraudulent robocalls to consumers in Florida and 

elsewhere in the United States. (Id. at 31.)

On January 20, 2023, Defendant moved to dismiss the Complaint, arguing that (1) Plaintiff 

does not have Article III standing; (2) the TRACED Act preempts Plaintiff’s theories of liability; 

(3) Defendant did not “make” or “initiate” calls; (4) Plaintiff has not joined the required parties; 

(5) Count III contains a pleading defect; (6) Defendant did not provide substantial assistance under 

the Telemarketing Sales Rule; and (7) Count V cannot survive absent the others. (Mot. to Dismiss, 

ECF No. 12.) This Court dismissed the Motion to Dismiss in its entirety. (ECF No. 32.) Plaintiff 

now moves for summary judgment on the five counts pled in the Complaint while Defendant 

moves for summary judgment because it (1) did not “make” or “initiate” calls; (2) was exempted 

from the Truth in Caller ID claims; (3) is not subject to the Do Not Call list restrictions; (4) did not 

provide substantial assistance or support; (5) and it did not violate FDUTPA. (See generally Pl.’s 

Mot. and Def.’s Mot.)

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LEGAL STANDARD

Under Federal Rule of Civil Procedure 56, a court must grant summary judgment “if the 

movant shows that there is no genuine dispute as to any material fact and the movant is entitled to 

judgment as a matter of law.” Fed. R. Civ. P. 56(a). A movant may show that there is no genuine 

dispute as to any material fact by “citing to particular parts of materials in the record, including 

depositions, documents, electronically stored information, affidavits or declarations, stipulations . 

. . , or other materials . . . . Fed. R. Civ. P. 56(c)(1)(A). Rule 56 requires granting summary 

judgment “after adequate time for discovery and upon motion, against a party who fails to make a 

showing sufficient to establish the existence of an element essential to that party’s case, and on 

which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 

(1986). The movant is entitled to a judgment as a matter of law when the “nonmoving party has 

failed to make a sufficient showing on an essential element of [their] case.” Id. 

“The moving party bears the initial burden to show, by reference to materials on file, that 

there are no genuine issues of material fact that should be decided at trial.” Clark v. Coats & Clark, 

Inc., 929 F.2d 604, 608 (11th Cir. 1991); accord Kol B’Seder, Inc. v. Certain Underwriters at 

Lloyd’s of London Subscribing to Certificate No. 154766 Under Cont. No. 

B0621MASRSWV15BND, 766 F. App’x 795, 798 (11th Cir. 2019). “Only when that burden has 

been met does the burden shift to the non-moving party to demonstrate that there is indeed a 

material issue of fact that precludes summary judgment.” Clark, 929 F.2d at 608. 

When the moving party has carried its burden, the party opposing summary judgment must 

do more than show that there is “metaphysical doubt” as to any material fact. Matsushita Elec. 

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Indeed, Rule 56 “requires the 

nonmoving party to go beyond the pleadings and, by her own affidavits, or by the depositions, 

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answers to interrogatories, and admissions on file, designate specific facts showing that there is a 

genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (emphasis added) 

(cleaned up). “[C]onclusory allegations without specific supporting facts have no probative 

value.” Myers v. Bowman, 713 F.3d 1319, 1327 (11th Cir. 2013) (citing Evers v. Gen. Motors 

Corp., 770 F.2d 984, 986 (11th Cir. 1985)). 

At summary judgment, this Court must view the evidence and draw inferences in the light 

most favorable to the nonmoving party. See Matsushita Elec. Indus., 475 U.S. at 586; Chapman, 

861 F.2d at 1518. “All reasonable inferences arising from the undisputed facts should be made in 

favor of the nonmovant.” Chapman, 861 F.2d at 1518. “However, an inference based on 

speculation and conjecture is not reasonable.” Id. (citing Blackston v. Shook & Fletcher Insulation 

Co., 764 F.2d 1480, 1482 (11th Cir. 1985)). “Speculation does not create a genuine issue of fact; 

instead, it creates a false issue, the demolition of which is a primary goal of summary judgment.” 

Cordoba v. Dillard’s, Inc., 419 F.3d 1169, 1181 (11th Cir. 2005). “Where the record taken as a 

whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine 

issue for trial.’” Matsushita Elec. Indus., 475 U.S. at 587 (quoting First Nat’l Bank of Ariz. v. 

Cities Servs. Co., 391 U.S. 253, 270 (1968). 

DISCUSSION

I. PLAINTIFF IS NOT ENTITLED TO SUMMARY JUDGMENT AS TO COUNTS I 

AND II.

The Telephone Consumer Protection Act (“TCPA”) prohibits “any person with the United 

States, or any person outside the United States if the recipient is within the Unities States [from 

making] any call (other than a call made for emergency purposes or made with the prior express 

consent of the called party) using . . . an artificial or prerecorded voice to any telephone number 

assigned to a . . . cellular telephone service,” and “[from initiating] any telephone call to any 

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residential telephone line using an artificial or prerecorded voice to deliver a message without the 

prior express consent of the called party.” (47 U.S.C. §§ 227(b)(1)(A)(iii), (b)(1)(B); Compl. ¶¶ 

83, 91.) To state a claim for a TCPA violation, the plaintiff must prove the following elements: 1) 

Defendant or the recipients of Defendant’s calls are within the United States; 2) Defendant made 

or initiated the calls at issue; 3) Defendant was involved in placing the calls; and 4) Defendant’s 

calls went to cellular or residential lines and played prerecorded or artificially voiced messages. 

(Id.)

A. Defendant and the recipients of Defendant’s calls are within the United States.

To satisfy the first element of a TCPA violation claim, the plaintiff must show that the 

defendant and/or the recipients of the defendant’s calls are within the United States. Here, 

Defendant is within the United States because Defendant is incorporated in Florida and has 

maintained at least a nominal address in Florida since 2016. (JSOF ¶ 1; Pl.’s SOF ¶¶ 1, 4–5.)

Additionally, Defendant’s CFO and CEO reside in the United States. (Pl.’s SOF ¶ 12.) These 

connections to the United States establish Defendant’s presence. See Int’s Shoe Co. v. State of 

Wash., Off. Of Unemployment Comp. & Placement, 326 U.S. 310, 316-17 (1945). Furthermore, 

the calls at issue in this case were all transmitted to phone numbers with United States area codes. 

(Id. ¶ 15). Therefore, Defendant was within the United Sates at the time the relevant calls were 

made or initiated, and the calls themselves were directed to recipients of the United States. 

B. Defendant had actual notice of an illegal use, however, cannot be deemed to 

have failed to take steps to prevent such transmissions.

The second element of Plaintiff’s TCPA claim concerns whether Defendant made or 

initiated the calls at issue. In a 1992 order, enacted shortly after the enactment of the TCPA, the 

FCC concluded that liability exists if Defendant demonstrates “a high degree of involvement or 

actual notice of an illegal use and failure to take steps to prevent such transmissions.” In the Matter 

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of Rules & Reguls. Implementing the Tel. Consumer Prot. Act of 1991, 7 F.C.C. Rcd. 8752, ¶ 54 

(1992). In its Motion for Summary Judgment, Defendant renews its claim (previously raised in its

Motion to Dismiss) that because it is an intermediate provider it cannot make or initiate a call and 

therefore cannot be held liable under the TCPA. (Def.’s Motion at 3; see also ECF No. 12.) This

Court has already rejected this argument in its Order Denying Motion to Dismiss, holding that “the 

role Defendant plays in transmitting telephone calls falls within the scope of the FCC’s 1992 

Order.” (ECF No. 32 at 6–8.)

The threshold for what constitutes actual knowledge is rather low. In FTC v. Fleetcor 

Techs., Inc., the court found that an individual had actual knowledge of a corporation’s unlawful 

practices based on the volume of email communications and customer complaints. FTC v. Fleetcor 

Techs., Inc., 620 F. Supp. 1268, 1343 (N.D. Ga. 2022); see also FTC v. Partners in Health Care 

Ass’n, Inc., 189 F. Supp. 1356, 1368 (S.D. Fla. 2016) (holding that knowledge based in part on 

numerous complaints constituted actual knowledge).

Here, Defendant had actual notice of an illegal use. The Industry Traceback Group (ITG) 

conducts tracebacks, a process that attempts to identify the source of a suspected illegal call by 

contacting each communications service provider who carried the call sequentially starting with 

the call recipient’s provider to uncover the provider who originated the call being traced and who 

the caller is. (Pl.’s SOF ¶ 17). The ITG then sends an email notification to the communications 

provider asking them to respond to the traceback request. (Id. ¶ 18). ITG records indicate that 

Defendant received over 250 traceback notifications between June 2020 and January 2023, all 

providing notice of suspected illegal calls that have traversed Defendant’s network. (Id. ¶ 21–22). 

ITG records also indicate that Defendant responded to 261 traceback notifications. (Id. ¶ 27). 

Additionally, besides actual notice of suspected illegal activity from the ITG, Defendant’s 

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upstream providers’ complaints provided Defendant with actual notice that illegal calls were 

transiting its network. Directo, a supplier of VoIP services used by Defendant, sent at least fifteen 

complaints to Defendant regarding illegal activity, such as spoofed ANIs, calls that were associated 

with fraud, calls characterized as scams and robocalls, and imposter scam calls. (Id. ¶ 30). Other 

suppliers used by Defendant issued complaints with similar reasoning, clearly notifying Defendant 

that illegal activity was transiting its network. Therefore, Defendant had actual notice of the illegal 

use of its network through the traceback notifications and numerous complaints from suppliers. 

These notifications provided specific information about the illegal nature of the calls and required 

Defendant to locate and respond to the tracebacks, demonstrating that Defendant had actual 

knowledge of the illegal use of its network.

The language of 47 CFR § 64.6305(b)(2) sets forth the robocall mitigation program 

requirements, stating that, “Any robocall mitigation program . . . shall include reasonable steps to 

avoid carrying or processing illegal robocall traffic and shall include a commitment to respond 

fully and within 24 hours to all traceback requests from the Commission, law enforcement, and 

the industry traceback consortium, and to cooperate with such entities in investigating and 

stopping any illegal robocallers that use its service to carry or process calls.” 47 CFR § 

64.6305(b)(2). This broad language sets the standard for what would be considered adequate 

robocall mitigation efforts and should be applied to Defendant to determine whether their efforts 

meet this requisite level.

While Defendant did have notice that that illegal calls were transiting its network, it cannot, 

as a matter of law, be concluded that it failed to take steps to prevent such transmissions. (See Pl.’s 

Mot. at 10-15.) Defendant claims to have implemented various procedures to prevent illegal traffic, 

and Plaintiff argues that these measures were either ineffective or not properly implemented. Id. 

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The effectiveness of Defendant’s KYC program, Acceptable Use Policy, STIR/SHAKEN 

implementation, Proactive Network Monitoring, and cooperation with tracebacks is a question for 

a jury to decide. Plaintiff alleges that that “Defendant ignored warnings that its practices allowed 

illegal traffic to flow through its network, failed to follow the nominal procedures it did put in 

place, and actively blended suspicious, short duration traffic with longer duration traffic to 

circumvent downstream providers’ robocall mitigation programs,” and that Defendant’s five-part 

mitigation procedure was ineffective. (Pl.’s Mot. at 10–11.) However, while Plaintiff has presented 

strong evidence regarding the Defendant’s actual notice of illegal use and the ineffectiveness of its

purported preventative measures, the effectiveness of such procedures is a question for a jury to 

decide.

C. Defendant was involved in the placing of the telephone calls.

The scope of liability under the TCPA was addressed extensively in the 2015 FCC Order. 

See Rules & Regs. Implementing the Tel. Consumer Prot. Act of 1991, 30 FCC Rcd. 7961, 7890 

(2015). The FCC found that “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.” Mey v. All Access Telecom, Inc., No. 5:19-CV-00237-

JPB, 2021 WL 8892199, at *4 (N.D.W. Va. Apr. 23, 2021). In making this determination, the 

adjudicator must ‘look to the totality of the facts and circumstances surrounding the placing of a 

particular call.’” Id. Factors relevant to this analysis include: 1) the extent to which the defendant 

controls the call’s message; 2) the extent to which the defendant controls the timing or initiation 

of the call; 3) the extent to which the defendant controls who receives the call; 4) whether the 

service is “reactive in nature,” meaning that it places calls in a manner that is arranged by the 

customer rather than the defendant; 5) the extent to which the defendant “willfully enables 

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fraudulent spoofing of telephone numbers” by offering that functionality to clients; 6) the extent 

to which the defendant “assists telemarketers in blocking Caller ID” by offering that functionality 

to clients; and 7) whether a defendant “who offers a calling platform service for the use of others 

has knowingly allowed its client(s) to use that platform for unlawful purposes.” Cunningham v. 

Montes, 378 F. Supp. 3d 741, 747-48 (W.D. Wis. 2019). Two principles emerge from the 2015 

FCC Order: TCPA liability attached to those who control or are deeply involved in making specific 

calls, and to those who knowingly allow an auto-dialing system to be used to make prohibited 

robocalls. Id.

In Cunningham, the court found that TCPA liability extended to those who “knowingly 

allow an auto-dialing system to be used to make prohibited robocalls.” Id.; see also Hurley v. 

Messer, No. 3:16-cv-9949, 2018 WL 4854082, at *9 (S.D.W. Va. Oct. 4, 2018) (“With respect to 

the second prong for those that offer calling platform services for others to use, the FCC stated that 

it also will consider as a factor whether they ‘knowingly allowed [their] client(s) to use that 

platform for unlawful purposes.)’”

Defendant was involved in the placing of the telephone calls because it knowingly allowed 

fraudulent calls to transit its network. Plaintiff argues that Defendant is “is deeply involved in the 

calls that transit its network because it plays a vital role in connecting the calls.” (Pl.’s Mot. at 16.) 

Here, TCPA liability would extend to Defendant because it has already been established that 

Defendant had actual knowledge that illegal, fraudulent calls were transiting its network. Like in 

Cunningham, where the court said that a party was liable under the TCPA when it knowingly 

allowed an auto-dialing system to be used to make illegal robocalls, Defendant knowingly allowed 

fraudulent scam calls to transmit its network. See Cunningham, 378 F. Supp. 3d at 747-48. While 

Defendant argues that Plaintiff omitted the term “auto-dialing” in its application of Cunningham, 

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this omission does not affect the scope of TCPA liability. See id. Likewise, Defendant argues that 

Hurley was misapplied because, here, Defendant does not utilize a “calling platform.” See Hurley, 

2018 WL 4854082, at *9. Similarly, this slight variance in the precedent case law would not exempt 

Defendant from being liable under the TCPA. The crux of the findings in both Cunningham and 

Hurley was that under the 2015 Order, TCPA liability can extend to parties who knowingly allow 

illegal, fraudulent calls to transit its network. See id; see Cunningham, 378 F. Supp. 3d at 747-48. 

It is undisputed that Defendant knowingly did exactly that, and therefore, it is liable under the 

TCPA.

D. Calls transmitted by Defendant went to cellular or residential lines and played 

prerecorded or artificially voiced messages.

The fourth and final element of Plaintiff’s TCPA claim is that calls went to cellular or 

residential lines and played prerecorded or artificially voiced messages. At least 166,628 calls 

transited Defendant’s network and connected to cellular or residential phone lines and left 

prerecorded or artificially voiced messages. (Pl.’s SOF ¶ 48.) Therefore, the fourth element of 

Plaintiff’s TCPA claims is satisfied because the calls were transmitted to cellular or residential 

lines and played prerecorded or artificially voiced messages.

On balance, because a reasonable jury could differ on the question as to whether Defendant 

took adequate steps to prevent the fraudulent transmissions after having actual knowledge that

there was illegal activity transiting its network, Plaintiff is not entitled to summary judgment as to 

Counts I and II.

II. PLAINTIFF IS ENTITLED TO SUMMARY JUDGMENT AS TO COUNT III OF 

THE COMPLAINT.

Plaintiff’s third Count alleges that Defendant violated 47 U.S.C. § 227(e), the Truth in 

Caller ID Act. Under U.S.C. § 227(e)(1), “it is unlawful for any person within the United States, 

or any person outside the United States if the recipient is within the United States, in connection 

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with any voice service or text messaging service, to cause any caller identification service to 

knowingly transmit misleading or inaccurate caller identification information with the intent to 

defraud, cause harm, or wrongfully obtain anything of value, unless such transmission is exempted 

pursuant to FCC regulations.” (Compl. ¶ 99). To state a claim for violation of the Truth in Caller 

ID Act, the moving party must prove the following elements: 1) Defendant is in the United States; 

2) Defendant acted “in connection with any Voice Service;” and 3) Defendant knowingly caused 

a caller identification service to transmit misleading or inaccurate caller identification information 

with the intent to defraud, cause harm, or wrongfully obtain anything of value. 

It has already been established that Defendant is in the United States, so the first element 

has been satisfied. The second element of Plaintiff’s Truth in Caller ID Act violation claim is that 

Defendant acted in connection with any Voice Service. Voice Service is defined as “any service 

that is interconnected with the public switched telephone network and that furnishes voice 

communications to an end user using resources from the North American Numbering Plan.” 47 

U.S.C. § 227(e)(8)(E)(i). This element is clearly satisfied because Defendant routes voice 

telephone calls using United States’ phone numbers conforming to the North American Numbering 

Plan which are subsequently answered by the end users. Therefore, Defendant is acting in 

connection with a Voice Service because Defendant is directly providing Voice Service.

The third element of Plaintiff’s Truth in Caller ID Act claim is that Defendant knowingly 

caused a caller identification service to transmit misleading or inaccurate caller identification 

information with the intent to defraud, cause harm, or wrongfully obtain anything of value. In 

United States v. Rhodes, the United States alleged that the defendant made thousands of robocalls 

playing a prerecorded voice message and did so using a dialing platform’s service to display caller 

ID numbers that were not assigned to him. United States v. Rhodes, No. CV 21-110-M-DLC, 2022 

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WL 2466796, at *7 (D. Mont. Apr. 1, 2022), report and recommendation adopted, 2022 WL 

17484847 (D. Mont. Dec. 7, 2022). The United States further claimed that the defendant selected 

caller IDs that matched the area code of the call’s recipient rather than his own. Id. The court found 

that the United States had “alleged sufficient facts demonstrating the defendant knowingly caused 

a caller identification service to transmit misleading or inaccurate caller ID information in 

connection with a voice service.” Id.

Like in Rhodes, Plaintiff has asserted factual allegations that Defendant “knowingly 

caused” fraudulent transmissions and thus has satisfied the final element of the Truth in Caller ID 

Act claim. See id. Here, Defendant was alerted upwards of 200 times to the fact that its network 

was being used to transmit calls with misleading or inaccurate, spoofed phone numbers. See 

Rhodes, 2022 WL 2466796, at *7. Defendant was notified of the transmission of misleading or 

inaccurate information through various means, including traceback notifications and complaints 

from downstream providers. These notifications informed Defendant of specific instances where 

its network was transmitting calls where the caller was impersonating law enforcement or a wellknown brand. Therefore, it is undisputed that Defendant had actual knowledge that calls including 

misleading or inaccurate caller ID information were transiting their network. 

Additionally, consumers who reportedly answered spoofed calls transmitted by Defendant 

confirm that the intent of the calls was to steal things of value, including money or personal 

information. (Pl.’s Mot. at 20-21.) Calls impersonating the “department of tax debt and financial 

settlement” offering to help an individual with nonexistent tax problems, or Amazon imposters 

who have scammed individuals out of thousands of dollars confirm that fraudulent caller ID 

information were tactics used in calls that transited Defendant’s network and the callers’ intent in 

making these spoofed calls was to steal something of value, whether that be someone’s money or 

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personal information. (Id. at 21.) Therefore, Defendant knowingly transmitted call traffic that 

caused consumers’ caller identification services to display inaccurate or misleading information in 

furtherance of attempts to steal from the call recipients. 

Lastly, Defendant argues it is exempt from the Truth in Caller ID Act (Def.’s Mot. at 13–

15), but the prohibition under 47 U.S.C. § 227(e) is subject to two exceptions: “(1) Lawfully 

authorized investigative, protective, or intelligence activity of a law enforcement agency of the 

United States, a State, or a political subdivision of a State, or of an intelligence agency of the 

United States; or (2) Activity engaged in pursuant to a court order that specifically authorizes the 

use of caller identification manipulation.” 47 C.F.R. § 64.1604(b). Smartbiz does not fall into either 

exception. Plaintiff is entitled to summary judgment as to Count III because there is no genuine 

issue of material fact regarding whether the Defendant has violated the Truth in Caller ID Act.

III. PLAINTIFF IS ENTITLED TO SUMMARY JUDGMENT AS TO COUNTS IV 

AND V OF THE COMPLAINT.

The Telemarketing Sales Rule (“TSR”) prohibits abusive and deceptive acts or practices 

by sellers or telemarketers and further prohibits other persons from providing substantial assistance 

or support to any seller or telemarketer when that person knows or consciously avoids knowing 

that the seller or telemarketer is engaged in any act or practice that violates the TSR. See § 

501.203(3), Florida Statutes. To prove that the Defendant was liable for Count IV and Count V, 

Plaintiff must prove the following elements: 1) Defendant transmitted calls that violated 16 C.F.R. 

§§ 310.3(a) or 310.4; 2) by transmitting the calls Defendant provided substantial assistance or 

support to the sellers or telemarketers associated with the calls; and 3) Defendant had actual 

knowledge or deliberate ignorance that the sellers or telemarketers were violating the TSR. See 

FTC v. Glob. Mktg. Grp., Inc., 594 F. Supp. 2d 1281, 1288 (M.D. Fla. 2008); see also Statement 

of basis and purpose and final rule, Telemarketing Sales Rule, 60 FR 43842, 43851-52.

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A. Defendant Transmitted Calls that Violated the TSR.

A violation of the TSR constitutes an unfair or deceptive act or practice in or affecting 

commerce. FTC v. Life Mgmt. Servs. Of Orange Cnty., 350 F. Supp. 3d 1246, 1264 (M.D. Fla. 

2018). In FTC v. Life Mgmt. Servs. Of Orange Cnty, it was undisputed that “employees of Loyal 

and LMS violated this provision when selling the LI program by misrepresenting, both directly 

and by implication, that they were representatives of or otherwise affiliated with customers’ banks, 

credit card issuers, and credit card associations such as MasterCard and Visa.” Id. Additionally, in 

FTC v. Lalonde, the defendant’s actions were deemed to violate the TSR where the defendant had 

the ability to control the telemarketing program and knew or should have known of its clients’ 

violations including inducing the purchase of credit repair services by way of multiple telephone 

calls. 545 F. App’x 825, 840 (11th Cir. 2013). Likewise, here, the caller pretended to be from the 

“Medical Coverage Center” in over 16,000 calls and of those calls, over 10,000 call-receivers were 

on the National Do Not Call Registry. (Pl.’s Mot. at 24.) These calls that transited Defendant’s 

network are in violation of the TSR. And for these same reasons and the ones discussed above, 

Defendant’s argument that it is not subject to the Do Not Call List restrictions “because it has no 

knowledge about the contents of a call transiting its network” fail. (Def.’s Mot. at 15.)

Additionally, Government imposter scams constitute violations of the TSR. See 

Telemarketing Sales Rule, 2015 Statement of Basis and Purpose, 80 FR 77520-01, 77529. 

Defendant’s practices violated the TSR by transmitting large numbers of calls that misrepresented 

material aspects of the performance, efficacy, nature, or central characteristics of goods or services 

to be sold to induce payment for goods or services. Notably, Defendant received numerous 

traceback notifications about calls transiting their network where the caller was impersonating the 

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Social Security Administration. (Id. at 25.) Since the calls transmitted by Defendant were 

Government imposter scams, these calls also constitute violations of the TSR.

Therefore, Defendant transmitted calls that were in violation of the TSR, and the first 

element of these counts is satisfied.

B. Defendant Provided Substantial Assistance by Knowingly Transmitting Scam 

Calls.

To show that a party has provided substantial assistance to telemarketers in violation of the 

TSR, there must be “something more than causal or incidental help to the telemarketer but does 

not have to show a direct connection between the assistance and the misrepresentation for an entity 

to be liable under § 310.3(b).” FTC v. Partners in Health Care Ass’n, Inc., F. Supp. 3d 1356, 1369 

(S.D. Fla. 2016). “The threshold for what constitutes substantial assistance is low.” FTC v. Lake, 

181 F. Supp. 3d 692, 699 (C.D. Cal. 2016). In United States v. Dish Network, L.L.C., the court 

found that there was substantial assistance where the defendant paid dealers to engage in 

telemarketing that violated TSR and allegedly knew or consciously avoided knowing of the 

violations. 667 F. Supp. 952, 961(C.D. Ill. 2009). See also FTC v. HES Merch. Servs. Co., No. 

6:12-cv-Orl-22, 2014 WL 6863506, at *7 (M.D. Fla. Nov. 18, 2014) (finding that substantial 

assistance was present, as a matter of law, where the defendant provided just two merchant 

accounts that were essential for processing credit card payments).

With a rather low threshold, Defendant’s essential role in the transmission of these scam 

calls surpasses this threshold. See FTC v. Lake, 181 F. Supp. 3d at 699. Defendant had the power 

to stop every call that transited its network. (See Pl.’s SOF ¶ 9.) While it has already been 

established that Defendant had knowledge of suspected illegal calls through its customer’s 

complaints and ITG traceback notifications, by continuously playing a role in connecting these 

calls, Defendant has provided substantial assistance. (See id.)

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C. Defendant had Actual Knowledge that the Telemarketers were Violating the 

TSR.

As previously discussed, Defendant had actual knowledge that the telemarketers were 

violating the TSR. The hundreds of traceback notifications received, to which Defendant replied, 

and the numerous complaints by its own downstream providers demonstrate that Defendant knew 

or should have known that there was illegal activity transiting its network. (See Pl.’s SOF ¶¶ 21, 

30–32, 36–38.) Therefore, Defendant had actual knowledge that the telemarketers placing calls 

through its network were violating the TSR. Plaintiff is therefore entitled to summary judgment as 

to Counts IV and V. 

CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED that: 

1. Plaintiff’s Motion for Summary Judgment, (ECF No. 51), is GRANTED in part

and DENIED in part. 

2. Defendant’s Motion for Summary Judgment, (ECF No. 54), is DENIED. 

3. This case shall proceed to trial as to Counts I and II, specifically in regard to 

Defendant’s mitigation efforts.

DONE AND ORDERED in Chambers at Miami, Florida, this 19th day of September 

2024. 

 

 JOSE E. MARTINEZ

 UNITED STATES DISTRICT JUDGE

Copies provided to: 

All Counsel of Record 

Case 1:22-cv-23945-JEM Document 110 Entered on FLSD Docket 09/19/2024 Page 17 of 17