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FCC Decides TCPA Does Not Apply to Contractors Making Calls on Behalf of Federal Government

On July 5, the Federal Communications Commission (“FCC” or “Commission”) released a Declaratory Rulingclarifying that Section 227(b)(1) of the Telephone Consumer Protection Act (“TCPA”) does not apply to the federal government or its agents, provided the agent is acting within the scope of its authority under common-law agency principles. As a result, consumers cannot seek redress under the TCPA for autodialed or prerecorded- or artificial-voice phone calls, including text messages, made by the federal government or its contractors.

The decision largely resolves three petitions pending before the Commission. In September 2014, RTI International (“RTI”) asked the Commission to clarify that research survey calls made by or on behalf of the federal government are not subject to the TCPA. In August 2014, National Employment Network Association (“NENA”) sought a broader clarification from the Commission that “‘calls can be made through a public or private intermediary or associated third party that “stands in the shoes” of the federal government’ without violating the TCPA.” Finally, in September 2015, Broadnet Teleservices LLC (“Broadnet”) filed a petition seeking clarification that federal, state, and local governments, and their officers acting within their official capacity, are not subject to the TCPA.

In granting RTI, NENA, and Broadnet’s petitions, the Commission held that, because Section 227(b)(1) of the TCPA applies to any “person” located in the United States or placing a call to the United States, the section could not apply to the federal government. The Commission noted that, absent an affirmative showing of statutory intent to the contrary, the word person does not include the sovereign under longstanding Supreme Court precedent. However, while the Commission found that the definition of “person” under the TCPA does not include the federal government, it explicitly declined to decide whether it includes state or local governments, leaving that question pending before the Commission.

Relying on the federal common law of agency, the Commission also clarified that the term “person” as used in Section 227(b)(1) of the TCPA does not apply to a contractor acting on behalf of the federal government. Here, the Commission noted that it found that a third party could be liable for the acts of its agent under the TCPA in its DISH Declaratory Ruling. Therefore, the Commission reasoned that it also has the authority to exempt federal contractors from TCPA liability when the contractor is acting as an agent of the federal government. Additionally, the Commission found that such a decision serves the public interest by making federal government communications easier and would prevent absurd legal results, such as the government being held vicariously liable for an agent’s conduct where the government would otherwise be permitted to engage in the same conduct directly.

The decision comes at an interesting time with the Commission’s Notice of Proposed Rulemaking (“NPRM”) regarding calls made to collect a debt owed to the federal government still pending. In that NPRM, the Commission proposes several limits on calls made to collect a government debt, including limits on the number and duration of debt collection calls. The Commission initiated the NPRM at the direction of Congress, which included the exemption for calls made to collect a federal government debut in the Bipartisan Budget Act of 2015.

But, as Commissioners Jessica Rosenworcel and Ajit Pai noted in their separate statements regarding the Declaratory Ruling, the Commission’s decision to exempt all calls made by or on behalf of the federal government would seem to render the ongoing federal debt collection NPRM proceeding moot. Both Commissioners suggested that the FCC may have provided too broad an exception in exempting federal contractors from the TCPA. Otherwise, as Commissioner Rosenworcel pointed out in her statement, “it is unclear why Congress would need to have specifically provided a debt-related exception to the law in the first place.”

Commissioner Pai also disagreed with the Commission’s extension of TCPA immunity to federal contractors because the FCC does not have the authority to interpret or apply federal common law. While Commissioner Pai conceded that a federal contractor would likely benefit from derivative immunity from a lawsuit over calls made on behalf of the government, he argued that such decisions are properly left to the courts; therefore, he dissented from the Declaratory Ruling with respect to its application to federal contractors.

On the other hand, Commissioner Michael O’Rielly urged the Commission to go farther than it did in his statement. He suggested that the same rational for finding the TCPA inapplicable to the federal government applies to state and local governments and lamented the fact that the Commission chose not to address the TCPA’s application to these entities. Indeed, at least with respect to calls made by a governmental body, Commissioner O’Rielly argued that “a stray call now and then … should not constitute a harm to be remedied through TCPA litigation.”            

If you have any questions about the contents of this Advisory or TCPA compliance, generally, please contact the TCPA Attorneys of The CommLaw Group:  Seth Williams at slw@commlawgroup.com, Jane Wagner at jlw@commlawgroup.com, or Nate Hardy at njh@commlawgroup.com.

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