We’ve been comprehensively covering the seesaw application of Facebook at the district court level, so I can confidently state that this is the worst post-Facebook ATDS ruling yet.

A court in California held yesterday that Facebook is essentially irrelevant at the pleadings stage. Here’s the language:

The newly clarified definition of an ATDS is more relevant to a summary judgment motion than at the pleading stage.

You have got to be kidding me.

And the best part is that the Plaintiff didn’t even have a lawyer.

In Gross v. Gg Homes, Case No. 3:21-cv-00271-DMS-BGS, 2021 U.S. Dist. LEXIS 127596 (S.D. Cal.  July 8, 2021) the Defendant allegedly used an ATDS to send cold texts and calls to a real estate agent soliciting information about pocket listings. Defendant moved to dismiss the case arguing: i) the TCPA does not apply to business calls *eye roll*; ii) Plaintiff lacks Article III standing; iii) the ATDS allegations were insufficient after Facebook; and iv) the messages were not solicitations and so no 227(c) claim is available.

I won’t waste time with arguments i) and ii)–the TCPA does apply to business to business calls (except under 227(c)) and Article III standing is easy to show in the Ninth Circuit (unfortunately) so both of those arguments were destined to fail, and they did.

The fourth argument–that offers to purchase services offered by a called party are not solicitations–is a better argument and the case law is split on this point. The Court went in favor of Defendant on the 227(c) claim and dismissed it. And that’s a great win!

Unfortunately, that win is overshadowed by the monumental loss on the ATDS issue.

Backing up, everyone should know by now that Facebook requires a system to have the capacity to use a random or sequential number generator do so…. something. Obviously, if your system is randomly generating phone numbers and dialing them, you’re in trouble. But under FN7 if your system is using a random or sequential process to determine dialing sequence you may also be in trouble. Then again, at least one court has held that FN7 only applies to random lists of numbers. So that issue is in flux.

Bottom line, however, every court has acknowledged that an R&SNG is a necessary component of ATDS allegations post-Facebook.

Until now.

The Gross court dispensed with a pleading requirement related to the use of a R&SNG altogether. As noted above, the Court deemed Facebook to be irrelevant at the pleadings stage. In its view meager allegations related to volume and templatization of text messages suffices:

She further alleges that the ATDS Defendant used “has the capability to insert a new name for each person [to whom] it sends spam text messages” and “the capacity to store numbers and dial them automatically.”

Automatic dialing from a list triggers the TCPA? It's Marks all over again folks.

This is why I put blast text platforms into the “yellow” category after Facebook. There is still some risk that a court is going to do something weird with respect to these systems. And now one has.

Obviously, everyone needs to keep an eye on this one. If other Courts adopt the Gross approach Facebook essentially never happened for purposes of the pleadings stage. That means 10x the cost and expense in a TCPA class action, and that’s just awful.