The FCC recently issued a declaratory ruling addressing petitions that had been filed by Broadnet Teleservices LLC (“Broadnet”), National Employment Network Association (“NENA”), and RTI International (“RTI”), each of which sought guidance or clarification on the extent of the TCPA’s governmental exception when a contractor is placing calls or texts pursuant to its work on behalf of the government. Each of the petitioners provide, or have members that provide, calling services on behalf of federal government entities; Broadnet offers teletown hall calling services for state and local governments as well and RTI performs social science survey work for entities such as the Centers for Disease Control and Prevention (CDC). NENA represents providers of employment services to beneficiaries of Social Security Disability Insurance and Supplemental Security Income. These providers are required to contact program-eligible beneficiaries to provide information about potential programs and services.
Among other restrictions, the TCPA precludes “any person within the United States, or any person outside the United States if the recipient is within the United States,” from placing autodialed or prerecorded calls to wireless telephone numbers. 47 U.S.C. § 227(b)(1) (emphasis added). The petitioners argued that the United States government cannot properly be considered a “person” under the plain language of the TCPA definition of that term, which encompasses an “individual, partnership, association, joint stock company, trust or corporation.” See 47 U.S.C. § 153(39). The petitioners also highlighted the longstanding presumption against interpreting the term “person” to include the sovereign. Finally, petitioners noted that “federal government” is defined elsewhere, providing further support for the proposition that “person” and “federal government” are distinct. Finally, the petitioners argued that calls made on behalf of federal government entities should not be part of behavior restricted by the TCPA because federal agencies should be permitted to hire contractors to place calls that such agencies would be empowered to perform on their own. Id.
The Declaratory Ruling clarified that “the TCPA does not apply to calls made by or on behalf of the federal government in the conduct of official government business, except when a call made by a contractor does not comply with the government’s instructions.” In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Declaratory Ruling, FCC 16-72 (July 5, 2016) (“Declaratory Ruling”). While the FCC agreed in general with the petitioners, Id. at ¶¶ 12, 14-17, the Declaratory Ruling emphasized that the ruling is “limited to the specific statutory provision before us: section 227(b)(1) of the Communications Act.” Id. at ¶ 13. It further noted that “some uses of the word ‘person’ within the original text of the Communications Act of 1934 have been construed to include the federal government, and we do not question those interpretations here.” Id. citing Nardone v. United States, 302 U.S. 379, 384 (1937) (holding that the government qualifies as a “person” under the wiretap restrictions in Section 705 of the Communications Act). Nevertheless, the FCC explained that “when Congress enacted Title VI of the Communications Act in 1984, it specifically defined ‘person’ within that title to include any ‘governmental entity’—an elaboration that would not have been necessary if the term ‘person’ were ordinarily presumed to include the government.” Id. at ¶ 14.
The FCC accepted the argument that federal contractors are exempt from the TCPA’s requirements when they place calls or text on behalf of the federal government, but only when contractors are acting within their role as agents in accordance with the common law principles of agency. Id. at ¶ 16. The Declaratory Ruling observed that, in the FCC’s DISH Declaratory Ruling, 28 FCC Rcd 6574 (2013), the agency clarified that the TCPA’s prohibitions incorporate the federal common law agency principles, namely that a seller may in some circumstances be held vicariously liable under the TCPA for calls placed on its behalf by third party telemarketers. Although the DISH Declaratory Ruling involved the application of agency principles to support liability, rather than to guard against liability, the FCC concluded that these same principles still were applicable in exempting federal contractors from otherwise applicable TCPA consent requirements. Id. at ¶¶ 16-17. Specifically, the Declaratory Ruling stated that:
a government contractor who places calls on behalf of the federal government will be able to invoke the federal government’s exception from the TCPA when the contractor has been validly authorized to act as the government’s agent and is acting within the scope of its contractual relationship with the government, and the government has delegated to the contractor its prerogative to make autodialed or prerecorded-or artificial-voice calls to communicate with its citizens. Id. at ¶ 17.
This public interest in enabling the federal government to communicate directly with citizens, as well as the lack of legislative history suggesting any congressional intent to impose the TCPA’s consent restrictions on the federal government were both cited as additional reasons supporting the results reached in the Declaratory Ruling. Id. at ¶¶ 18-19.
The Declaratory Ruling also cited the Supreme Court’s recent decision in Campbell-Ewald v. Gomez, 136 S. Ct. 663 (2016), as additional support for the FCC’s reading the TCPA as applied to the federal government and its contractors. Id. at ¶ 20-21. In particular, the Supreme Court in that case determined that [t]he United States and its agencies . . . are not subject to the TCPA’s prohibitions because no statute lifts their immunity.” The FCC concluded that Congress’ decision not to “lift” the federal government’s immunity by, for example, explicitly defining the term “person” to include the federal government suggested that the term should not be read in a way that would implicitly include the federal government. Notably, the FCC clarified nearly all of the questions raised by the petitioners. Id. at ¶ 22. The FCC did not, however, rule on whether the TCPA should apply to calls or texts sent by contractors acting on behalf of state and local governmental entities. The Declaratory Ruling stated that this question remains pending.
Commissioner Michael O’Rielly issued a statement approving of the FCC’s determinations at the federal level, but admonishing the FCC for not going further to provide the same type of relief to contractors working for state or local governmental agencies. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Declaratory Ruling, FCC 16-72 (July 5, 2016) (Statement of Commissioner O’Rielly).
Commissioner Ajit Pai also issued a statement approving in part and dissenting in part. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Declaratory Ruling, FCC 16-72 (July 5, 2016) (Statement of Commissioner Pai Approving in Part and Dissenting in Part). While Commissioner Pai agreed with the FCC’s determination that the term “person” does not include the federal government, he diverged with the conclusion that the statute excludes work performed by federal contractors using an agency analysis. Commissioner Pai observed that each such federal contractor is an “individual, partnership, association, joint stock company, trust or corporation.” See id. at *1, citing 47 U.S.C. § 153(39). Thus, Commissioner Pai concluded that the definition on its face appears to apply to contractors regardless of the entity for whom they are placing calls. Id. at *1-2. Commissioner Pai noted, however, that contractors may well be entitled to derivative immunity on the basis of their relationship with their federal entity customers. However, Commissioner Pai expressed the view that this immunity determination should be left to the courts, rather than to the FCC. Id. at *2-3.
Commissioner Jessica Rosenworcel issued a concurring statement that took exception to the FCC’s action in resolving the scope of TCPA applicability before addressing a narrower proceeding that is currently pending before the Commission, in which the FCC will implement an exception to TCPA liability for calls seeking to collect debt owed to the federal government. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Declaratory Ruling, FCC 16-72 (July 5, 2016) (Statement of Commissioner Rosenworcel Concurring) citing In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Notice of Proposed Rulemaking, FCC 16-57 (May 06, 2016). Commissioner Rosenworcel contended that the FCC’s action on this declaratory ruling would prejudge the outcome in that narrower proceeding. Id. It is fair to say that as in many other TCPA rulings, there was not a unanimous view expressed by the FCC Commissioners.
Drinker Biddle’s TCPA team will continue to monitor developments on the scope of TCPA applicability—including the FCC’s approach to liability for state and local government contractors—as these issues evolve.
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