PACE Regulatory Alert: 11th Circuit Adopts Strict ATDS Interpretation

In a great decision for our members, the 11th Circuit has established an exacting definition for Automatic Telephone Dialing Systems (ATDS) in their two to one decision in the appeal of Hilton Grand Vacations Company, LLC, v. Pennsylvania Higher Education Assistance Agency and set the stage for a circuit split.

The Telephone Consumer Protection Act (TCPA) defines automatic telephone dialing systems as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” One of the most significant questions related to ATDS interpretation is whether the phrase “random or sequential number generator” modifies both “store or produce” or just “produce”. 

In its decision, the 11th Circuit applied a strict reading of the statutory definition, citing fundamentals of grammar as well as past complimenting interpretations by lower courts. After its analysis, the 11th Circuit decided that “random or sequential number generator” modifies both “store” and “produce,” instead of just “produce.”

Accordingly, under the 11th Circuit's interpretation, an ATDS must “(1) store telephone numbers using a random or sequential number generator and dial them or (2) produce such numbers using a random or sequential number generator and dial them.” This case law directly contradicts the 9th Circuit's Marks decision, which may inevitably force the Supreme Court to take up the issue of the scope of the TCPA's definition of an ATDS.