The Battle is On!: First Reasoned Order Denying Stay of TCPA Case Pending Facebook Highlights What Not to Do When Seeking a Stay

As I just reported earlier today Squire Patton Boggs earned the nation’s first opposed stay of a TCPA case pending the big Facebook SCOTUS appeal. A client of a different firm—that will remain unnamed— did not fare so well, however.

You didn’t expect the Plaintiff’s bar to give up without a fight did you?

In Komaiko v. Baker Techs., Case No. 19-cv-03795-DMR, 2020 U.S. Dist. LEXIS 143953 (N.D. Cal.  Aug. 11, 2020) the defendant—a prominent CRM and text platform for the cannabis industry—saw its stay motion denied because it failed to deny allegations that its system has the capacity to dial randomly or sequentially. In denying the stay the Court reasoned that even if SCOTUS overturned Marks and adopted a narrower statutory definition it would have no result on the case—the capacity of the Defendant’s system to send random messages was sufficient for liability to be determined no matter what the Supreme Court rules.

Here is the key language:

Baker is notably evasive on a key fact: whether its software has the capacity to generate random numbers and call them, regardless of whether it used that capacity in sending the texts at issue.

Tsk. Tsk.

The Defendant’s oversight in Komaiko may be bad on them, but it easy enough to avoid for Defendants in TCPA cases more generally. When seeking a stay a Defendant should always specifically address the issue of the capacity of its system in addition to an explanation of how the specific messages/calls at issue were actually sent. With a firm denial that the system has the ability to operate randomly or sequentially the Court should be easily persuaded to stay the case and allow the Supremes to answer the lingering questions around the required ATDS functionalities.

In short, Komaiko should be an interesting, but rarely followed case. Notably this same defendant was already roughed up by this court in an extremely interesting ruling—issued on 4/20—that seemed to be a warning shot to cannabis dispensaries and platform providers. Perhaps it is unsurprising, therefore, that the Court took a close and skeptical look at its papers supporting a stay.

We’ll keep an eye on this.


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