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In effect, the Supreme Court’s opinion means that to qualify as an “automatic telephone dialing system” (ATDS) under the TCPA, a device must use a random or sequential number generator; a device that calls a prescribed set of telephone numbers without using such a number generator would stand outside that definition and thus not be regulated by the TCPA.

By way of background, the TCPA imposes a consent requirement on calls or text messages that are placed using an ATDS.  The TCPA defines an ATDS as equipment that has the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator,” and to dial such numbers.  The federal appeals courts were split on how to interpret this definition—specifically whether the clause “using a random or sequential number generator” modifies both “store” and “produce,” or whether the clause modifies only “produce.”  The practical difference is that the former approach excludes devices that have the capacity to dial only a prescribed set of telephone numbers.  The latter approach, which the Supreme Court rejected in Duguid, is more expansive, sweeping in any and all equipment that has the capacity to store telephone numbers to be called and to dial those numbers.

In a 9-0 decision authored by Justice Sotomayor, the Court adopted the narrow interpretation.  The Court held that to qualify as an ATDS—and therefore fall within the ambit of the TCPA—a device must have the capacity to store or produce a telephone number using a random or sequential number generator.  The Court reached this conclusion applying a careful analysis of the statutory text, noting that the narrow interpretation is the “most natural reading” of the statute and that it comports with “conventional rules of grammar.”  The Court also found that this interpretation aligns with the TCPA’s “statutory context,” which suggests that Congress was particularly focused on harms produced by random or sequential number dialing.  Finally, the Court noted that a contrary reading of the statute would render “almost all modern cell phones as autodialers,” an outcome the Court appeared eager to avoid.

Duguid is a significant ruling that places important guardrails on the scope of the TCPA, which has generated substantial and costly class-action litigation in recent years.