UPDATED: Freedom Forever?: Even in the Ninth Circuit a Court Rejects Unadorned ATDS Allegations at the Pleadings Stage

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While the precise functionalities required to constitute an ATDS in TCPAWorld remain elusive, yet another court has joined the chorus of decisions requiring that a Plaintiff plead more than the mere statutory elements of ATDS usage in order to state a plausible TCPA claim under Iqbal/Twombly.

In Naiman v. Freedom Forever, Case No.19-cv-00256-JSC, 2019 U.S. Dist. LEXIS 69728 (N.D. Cal. April 24, 2019) the court faced a standard fare motion to dismiss challenging the ATDS allegations in the Complaint. While every such motion affords an opportunity to the court to discuss the required functionalities of ATDS usage, the Naiman court declined and merely noted that the recitation of ATDS usage without supporting facts is insufficient to state a claim. As the Court put it: “[t]he complaint contains no further, factual allegations regarding the alleged use of an ATDS… [and] [s]uch ‘a formulaic recitation of the elements of a cause of action’ is insufficient to survive dismissal.”

Many courts have rejected ATDS recitation as sufficient to plead a plausible claim at the pleadings stage—even the formidable Morgan & Morgan saw one of their complaints nipped a few weeks back owing to this failure. Nonetheless, the Naiman decision is somewhat remarkable as it was decided within the Ninth Circuit’s footprint, where Marks is the law of the land and many courts have simply skipped over the ATDS issue at the pleading stage given how broad the Marks formulation is.

Notably the Court also rejected the Plaintiff’s allegations as to who made the calls at issue for lack of factual pleading. In the Court’s view, allegations that a “Defendant” made the calls in question without allegations of “how the caller identified itself or what entity it was calling on behalf of” was insufficient to establish a defendant’s direct liability for the calls at issue. The Court also rejects the Complaint’s boilerplate recitation of agency as “wholly conclusory” and insufficient to state a plausible agency theory.

As such the Court granted Defendant Freedom Forever’s motion to dismiss with leave to amend. So where as Defendant currently has freedom from this TCPA suit, it probably won’t last forever.

As of February 17, 2020 this case has settled on an individual basis and class claims will be dismissed without prejudice.

Editor’s Note: TCPAWorld.com was asked to edit this article to include reference to the individual settlement. The article was edited on February 17, 2020 at 11:26 am pacific time to include that reference. 

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Published by Eric J. Troutman

The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.

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