Locke Lord Obtains Groundbreaking Ruling on Behalf of Stratics Networks in Case With Major Telemarketing Sales Rule and TCPA Implications

In a case that could have broad implications under the Telemarketing Sales Rule and Telephone Consumer Protection Act (TCPA), a Locke Lord team of Michael McMorrow (Chicago), Meagan Tom (San Francisco) and Kip Mendrygal (Dallas) secured a significant ruling in favor of Stratics Networks Inc. (Stratics), an interactive communications software corporation offering ringless voicemail and voice over internet protocol (VoIP) services, protecting Stratics from actions seeking to hold it liable for alleged unlawful use of its platforms by third parties. The U.S. District Court for the Southern District of California dismissed the Federal Trade Commission’s (FTC) claims against Stratics with prejudice on March 6, 2024. In United States v. Stratics Networks, Inc. 2024 WL 966380 (S.D. Cal. March 6, 2024), the Department of Justice (DOJ) argued on behalf of the FTC that a Nevada-based company allegedly used Stratics’ ringless voicemail service to pitch debt relief services to consumers, and that the defendants had violated the Telemarketing Sales Rule and the Federal Trade Commission Act, which prohibit unfair or deceptive acts or practices. The DOJ sought to impose massive civil penalties upon Stratics. Locke Lord argued that Stratics was protected under Section 230 of the Communications Decency Act of 1996, which provides immunity to providers of “interactive computer services” from civil liability based on third-party content disseminated using providers’ platforms. The Court determined that while Stratics developed the ringless voicemail technology at issue, it was not responsible for alleged misuse of that technology by third parties.
Posted on March 7, 2024