BAD FACTS BAD LAW: 105 Unwanted SMS Messages Promoting “AI” Trading Signals Enough to Allow TCPA ATDS Claim To Slip Past the Pleadings Stage

Ever since the Supreme Court’s big ATDS ruling in Facebook TCPA ATDS cases have been withering away, even while filings of other types of TCPA cases continue to go through the roof.

Still, extraordinary facts lead to extraordinary rulings.

Take the case of Cupp v. TA Fintech, 2026 WL 1538123 (N.D. Cal. June 1, 2026).

There the Plaintiff alleged the following:

According to the complaint, Defendant began sending Plaintiff text messages and placing calls on or about April 20, 2024, from 5–digit short codes including 40591 and 61893, promoting Defendant’s trading-related services, including “AI” trading signals and membership offerings. Id. ¶¶ 8, 12-13. Plaintiff alleges the messages arrived in recurring daily patterns at approximately 7:55 a.m., 11:55 a.m., and 5:55 p.m., used substantially similar or templated wording, and were sent in a high-volume, campaignlike cadence over less than 30 days. Id. ¶¶ 14-15. Plaintiff asserts these facts, (the use of short codes, recurring timing, uniform content, and sustained volume) support a reasonable inference that Defendant used automated equipment to store telephone numbers and send mass text messages, and that details of the equipment are within Defendant’s possession. Id. ¶¶ 17-18.

On these facts Plaintiff sued for violation of the TCPA’s regulated technology provisions (227(b)) alleging an automated telephone dialing system had been used to send the messages.

As TCPAWorld readers know there is a big difference between DNC and ATDS claims under the TCPA when it comes to SMS messages. One big difference is that SMS messages ARE treated as calls for 227(b) purposes, so the Court had little trouble concluding these messages might trigger the TCPA if an ATDS was used.

But ATDS usage is VERY hard to prove in the Ninth Circuit– essentially the phone numbers dialed need to be randomly created, not just randomly sequenced or stored as is the case in other jurisdictions.

Defendant moved to dismiss arguing allegations of random number creation are not apparent on the face of the complaint. The Court didn’t necessarily disagree but essentially found it was too early to dismiss the case on that basis:

In sum, while Defendant argues the amended complaint must be dismissed because it still does not allege that TA Fintech used equipment that ‘randomly or sequentially’ generated Plaintiff’s telephone number, the Court finds the amended complaint, read as a whole, contains “sufficient facts to show that it is plausible” that Defendant used an ATDS. Twombly and Iqbal do not require a plaintiff to possess or to plead evidence. Rather, “detailed factual allegations are not required,” and a complaint need only have sufficient factual allegations to “state a claim to relief that is plausible on its face.” Iqbal, 566 U.S. at 678 (citing Twombly, 550 U.S. at 570). The Court finds Plaintiff has met this standard.

This feels like a “bad facts make bad law” situation. Had the defendant sent a handful of messages they probably would have walked away here. But the large volume of calls lead to a negative result.

Pretty clear take aways:

1. TCPA ATDS cases are still lurking out there and can still be costly to defend. The defendant here will probably still walk away with the win but it will take hundreds of thousands in defense fees to get there;
2. If you are deploying a high volume cadence for SMS outreach–or trusting AI to run these campaigns– you must be VERY cautious about consent and opt out maintenance. Reach out for a review of you process;
3. Don’t get ATDS and DNC claims confused in the SMS context– strong law now says SMS messages do not trigger the TCPA’s DNC provisions but ATDS claims are definitely still viable in the SMS context, at least where a large volume of messages can be shown.

Again best resource for all of this is the FREE 2026 Troutman Amin, LLP TCPA Annual Review, presented by Contact Center Compliance. Feel free to request one!

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Chat soon.