October 22, 2019

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

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 Maiman 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 whereas Defendant currently has freedom from this TCPA suit, it probably won’t last forever.

© Copyright 2019 Squire Patton Boggs (US) LLP


About this Author

Eric Troutman Class Action Attorney
Of Counsel

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...