FCC Finds Federal Government and its Contractors Immune From TCPA Liability

By Joseph C. Wylie II, Molly K. McGinley, Nicole C. Mueller

On July 5, 2016, the Federal Communications Commission (the “FCC” or “Commission”) released a Declaratory Ruling clarifying that the Telephone Consumer Protection Act (the “TCPA”) does not apply to autodialed or prerecorded- or artificial-voice phone calls, including text messages, made by the federal government and its contractors who are acting within the scope of their authority.  The FCC did not address whether the TCPA continues to apply to state and local governments and their agents.

Petitioners Broadnet Teleservices LLC, National Employment Network Association and RTI International (the “Petitioners”) each filed petitions for declaratory ruling seeking clarification regarding the scope of the term “person” as it is used by the TCPA after each petitioner made calls on behalf of the federal government or one of its agencies. The TCPA is codified within the Communications Act, which defines “person” to include “an individual, partnership, association, joint-stock company, trust, or corporation.”  In its ruling, the FCC clarified that the term “person” as used in the TCPA and the FCC’s rules implementing the TCPA does not include the federal government.  The federal government’s agents are likewise immune from TCPA liability where (i) the call was placed pursuant to authority that was “validly conferred” by the federal government; and (ii) the third party complied with the government’s instructions and otherwise acted within the scope of his or her agency.

In precluding the federal government and its agents from the definition of “person” under the TCPA, the FCC pointed to the text of the TCPA itself and Supreme Court precedent describing the “longstanding interpretive presumption” that the word “person” does not include the sovereign except upon some affirmative showing of statutory intent to the contrary. The FCC concluded that the lack of such statutory intent in the TCPA, when Congress could easily have included it in the Act, was conclusive evidence that Congress intended the federal government not to be included within the persons covered by the TCPA’s prohibitions.

The FCC relied upon principles of federal common law of agency in finding that contractors employed by the federal government are similarly excluded from the TCPA’s definition of “person.” Specifically, the FCC looked to one of its own prior rulings where it ruled that a principal can be held vicariously liable for telephone calls placed by third-party agents acting within the scope of their actual authority.  To decline to extend the immunity to government actors in this instance, the FCC determined, would create the untenable result of allowing the government to be held vicariously liable for conduct in which the TCPA allows the government to engage in.  The FCC further noted that allowing the federal government to use autodialers without consent will foster public safety and save resources by allowing the government to use the most cost-efficient method of communicating with the public.

The FCC further found that its interpretation of “person” was supported by the recent Supreme Court decision Campbell-Ewald Co. v. Gomez.  (Our previous analysis of Campbell-Ewald can be found here and here.)  In Campbell-Ewald, a government contractor conducting a recruitment campaign for the United States Navy violated the TCPA by sending automated text messages to a recipient who had not agreed to receive them and the Court stated that while the U.S. government was not subject to the TCPA’s prohibitions (because no statute had lifted its immunity) and the contractor was eligible for derivative immunity, the contractor in that instance had exceeded its authority by sending text messages to persons who had not opted to receive them, in contravention with the Navy’s instructions.

The FCC found further support for its interpretation in the record, finding that the limited application to the federal government and the specific facts before the Commission did not allow for “loopholes” for parties making calls outside of this specific framework as some commenters fretted. The FCC believes it unlikely that its recent ruling will lead to “an explosion of unwanted calls accompanied by ‘chaos and abuse.’”

However, the FCC determined that while the TCPA still applied to non-governmental activities including political campaign events conducted by federal officeholders, the record before it was insufficient to distinguish robocalls made in an “official” capacity from those made in a “non-official” capacity. The ruling directed those looking for further clarification to Congressional guidelines governing the spending of “representational funds” by members of the House and Senate.

Commissioner Rosenworcel submitted a concurring statement noting that the FCC’s ruling did not “fully consider the impact of recent changes” in the TCPA that are still pending before the agency. She noted a potential point of tension between the ruling and the Bipartisan Budget Act, which modified the TCPA to provide that calls made solely to collect a debt owed to or guaranteed by the United States were not subject to the consent requirements for robocalls.  By placing the federal government completely outside the scope of the TCPA through this Declaratory Ruling, Commissioner Rosenworcel argued that the FCC could be at odds with the Congressional mandate it had previously received to limit debt-related calls.

Commissioner Pai submitted a statement approving of the ruling with regard to the federal government and dissenting with the portions of the ruling that address federal contractors. He argued that contractors, unlike the federal government, fall squarely into the definition of “person” as an “individual, partnership, association, joint-stock company, trust or corporation.”  Further, Commissioner Pai took issue both with the FCC’s interpretation of Campbell-Ewald Co. and the FCC’s right to define the contours of the federal common law of immunity or its application to federal contractors.

Commissioner O’Rielly also submitted a statement supporting the relief provided in the ruling but expressing frustration that the FCC left unanswered whether state or local agencies may be subject to TCPA lawsuits for making calls similar to those that are allowed when made by the federal government. This arbitrary line drawing, he asserted, “leaves state and local governments, and the people they serve, exposed to predatory TCPA lawsuits that divert tax dollars away from serving the public.”

This ruling, while providing clarification for the federal government and the contractors it employs regarding its liability under the TCPA, also is instructive in that it shines a light on a variety of opinions and agendas held by the FCC commissioners regarding the purpose of the Act and the litigious consequences of its enactment.

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