FCC Rules TCPA Does Not Apply to Federal Government or its Contractors

On July 5, 2016 the Federal Communications Commission (FCC) issued a Declaratory Ruling (Ruling) that the Telephone Consumer Protection Act (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.” A copy of the Declaratory Ruling can be found here.

The Ruling was in response to petitions filed by a three third-party government contractors (Broadnet Teleservices LLC (Broadnet), National Employment Network Association (National Employment), and RTI International (RTI). The petitions requested clarification of how the TCPA applies to autodialed or prerecorded- or artificial-voice phone calls, including text messages, made by the government and government contractors.

Broadnet works with elected officials to set up so-called “tele-town halls,” where legislators can talk to their constituents. Broadnet asked whether they need to get express consent from each person involved in these calls.

RTI has contracts with federal agencies to do telephone research survey calls. It was concerned that they would be considered in violation of the TCPA because they were not being made by the government directly, but rather through a contractor with a federal agency.

The third petitioner, National Employment, is a contractor for the Social Security Administration (SSA).   Pursuant to the contract with SSA they make calls to people receiving government benefits. National Employment was asking the FCC to confirm that this sort of activity was exempt from TCPA prohibitions.

Specifically, the petitioners asked the FCC to clarify the definition of “person” as used in the TCPA. They asked,

• Does “person” only mean an individual?
• Does “person” mean a corporation?
• Is the Federal Government a “person”
• Is a contractor working on behalf of the government a person?

The FCC Ruling relies heavily on Campbell-Ewald Co. v. Gomez, a January 20, 2016 decision of the Supreme Court of the United States. The Ruling cites language from the case:

“The United States and its agencies, it is undisputed, are not subject to the TCPA’s prohibitions because no statute lifts their immunity.” While the Court indicated that a government contractor may be eligible for “derivative immunity” when it acts under authority validly conferred on it by the federal government, the Court emphasized that derivative immunity cannot shield a contractor when it “violates both federal law and the Government’s explicit instructions.”

The ruling states:

“The TCPA, as codified in section 227 of the Communications Act, makes it unlawful for any “person” within the United States, or any “person” outside the United States if the recipient is within the United States, to place certain calls to wireline and wireless telephone numbers, absent prior express consent, an emergency, or other exceptions. RTI and Broadnet ask the Commission to clarify that the term “person,” as used in section 227(b)(1), does not include the federal government. We find merit in these requests and therefore clarify that the term “person,” as used in section 227(b)(1) and our rules implementing that provision, does not include the federal government or agents acting within the scope of their agency under common-law principles of agency. Based on this clarification, as supported by the Supreme Court’s recent decision in Campbell-Ewald Co. v. Gomez, we grant the three Petitions before us to the extent indicated below.

Specifically, in response to the Broadnet Petition, we find that robocalls to organize tele- town halls, when made by federal legislators or agents acting under authority validly conferred by the federal government, are not subject to the TCPA’s robocall consent requirement, as long as the robocalls are conducted in the legislators’ official capacity and not, for example, as part of a campaign for reelection.

Similarly, we find that the TCPA does not restrict the kind of research survey calls described by RTI or the Social Security-related informational calls described by National Employment, provided those calls are lawfully made by the federal government or by agents acting under authority validly conferred on them by the federal government. We emphasize that in each of these scenarios, a call placed by a third-party agent will be immune from TCPA liability only 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 accord with federal common-law principles of agency.

We also emphasize that this Declaratory Ruling focuses only on calls placed by the federal government or its agents, and does not address calls placed by state or local governments or their agents. (Emphasis added by insideARM)

insideARM Perspective

Commissioner Jessica Rosenworcel concurred with the Ruling, but issued a statement that raised an interesting issue, one that insideARM believes is quite compelling. Rosenworcel wrote:

“I concur because this declaratory ruling does not fully consider the impact of recent changes in the Telephone Consumer Protection Act that are presently before this agency.

In last year’s Bipartisan Budget Act, Congress modified the Telephone Consumer Protection Act to make clear 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 that otherwise apply under the law. At the same time, Congress instructed the Commission to conduct a rulemaking within nine months to consider regulations that “may restrict or limit the number and duration” of such calls.

This rulemaking began last month. It is still ongoing. So our actions here have an odd result. In effect, we prejudge the outcome of our narrower proceeding under the Bipartisan Budget Act by here providing a blanket exemption from the Telephone Consumer Protection Act to the federal government and its agents. Moreover, I am concerned that our decision risks trampling on the will of Congress. After all, if the federal government is truly outside the scope of the Telephone Consumer Protection Act, it is unclear why Congress would need to have specifically provided a debt-related exception to the law in the first place.” (Emphasis added by insideARM)

insideARM has written extensively about the TCPA provision in last year’s Bipartisan Budget Act. See our November 5, 2015 story. We have also written about the FCC Notice of Proposed Rulemaking (NPRM) to consider regulations in accordance with the 2015Bipartisan Budget Act. See our May 9, 2016 story and our June 16, 2016 story.

It is amazing that only Commissioner Rosenworcel recognized the fact that this Declaratory Ruling was connected to the NPRM. We suspect there will be significant legal discussion in the coming weeks on the correlation between this Ruling and the ongoing NPRM.