In response to petitions filed by three government contractors seeking clarification that the federal government and its agents were exempt from liability under the Telephone Consumer Protection Act, the Federal Communications Commission issued a declaratory ruling on July 5, finding that the federal government is not a “person” as defined under the TCPA, and is therefore exempt from liability under the statute. The FCC also exempted agents of the federal government from the TCPA when (1) the call was placed pursuant to authority that was “validly conferred” by the federal government; and (2) the agent complied with the federal government’s instructions.

The TCPA prohibits any “person” from placing autodialed or prerecorded calls without the prior express consent of the consumer. The TCPA defines “person” as an “individual, partnership, association, joint-stock company, trust, or corporation.” The petitioners asked the FCC to clarify that the federal government and its agents are not included in the definition of “person” for purposes of the TCPA.

The FCC granted all three petitions. It exempted the federal government and its agents for three reasons: (1) the federal government is not explicitly included in the definition of “person” under the TCPA; (2) the federal government exemption is supported by the Supreme Court decision in Campbell-Ewald Co. v. Gomez; and (3) imposing TCPA liability on the federal government would significantly constrain the government’s ability to communicate with its citizens.

The FCC found that there is a “longstanding interpretive presumption” that the word “person” excludes the federal government unless stated otherwise. Because the definition of “person” under the TCPA did not explicitly include the federal government, the FCC determined that Congress intended to exempt the federal government from liability under the TCPA.

The FCC also clarified that this exemption applied to agents of the federal government, including private government contractors. However, the agency limited the scope of the exemption only to the federal government and did not expand its reach to the states or municipalities.

In arriving at these conclusions, the FCC considered its decision in DISH Network Declaratory Ruling, where it concluded that the TCPA “incorporate[s] the federal common law of agency” to both establish and excuse liability for third-party agents. There, the Commission held that the principles of agency allow a seller to be vicariously liable under the TCPA for calls placed on its behalf by third-party telemarketers. Likewise, a third party calling on behalf of a principal is able to invoke a privilege or exemption belonging to the principal to escape liability under the TCPA. As a result, the FCC ruled that government contractors are exempt from liability under the TCPA as long as they are acting within the scope of authority “validly conferred” by the federal government.

The FCC found that its interpretation of “person” was also supported by the Supreme Court’s decision in Campbell-Ewald. In Campbell-Ewald, the Supreme Court found that “[t]he United States and its agencies . . . are not subject to the TCPA’s prohibitions because no statute lifts their [sovereign] immunity.” The Court went on to find that government contractors may be eligible for “derivative immunity” when the government contractor acts within the scope of its agency. Therefore, the FCC found that Campbell-Ewald held that as long as the government contractor acts within the scope of its authority conferred by the federal government, it is exempt from the TCPA.

Last, the FCC found that imposing TCPA liability on the federal government would significantly constrain the government’s ability to communicate with its citizens, thus impairing its ability to collect data and make policy decisions. For example, Congress has statutorily mandated that some federal agencies conduct phone surveys to collect data needed for public policy decisions. Likewise, it found that if tele-town hall meetings or government-to-citizen communications were subject to the TCPA’s consent requirement, citizens would be less able to participate in government.

To read the FCC’s ruling, click here.

Why it matters: The FCC’s ruling is consistent with other of its rulings regarding the question of whether governmental entities and private companies acting on their behalf are subject to liability under the TCPA. Most important in this ruling is the granting of an exemption for private companies to reach consumers on their cell phones and landlines when acting within the “scope of ‘validly conferred’ ” authority. However, the ruling also raises some interesting questions, such as why the exemption only extends to the federal government and not states and municipalities. This intended exclusion leaves open the possibility of companies performing services for these smaller sovereigns to petition the agency to expand the exemption.