FCC Clarifies That Government Contractors Must Obtain Prior Express Consent Under the TCPA

On December 14, 2020, the Federal Communications Commission (FCC or Commission) released an Order on Reconsideration (Order) clarifying that federal, state, and local contractors must obtain prior express consent from consumers before making robocalls under the Telephone Consumer Protection Act (TCPA). Specifically, the Order concludes that such contractors are “persons” under the statute and are therefore subject to its restrictions on robocalling. Similarly, the Commission finds that local governments are also “persons” and must obtain consent before placing calls that would otherwise have violated the TCPA. In contrast, the Commission determines that due to their sovereignty under the U.S. Constitution, federal government and state governments are exempt from the TCPA’s prior express consent requirement. In so doing, the Commission partially reversed the Broadnet Declaratory Ruling (Broadnet), partially granted the National Consumer Law Center (NCLC) Petition, and denied the Professional Services Council (PSC) Petition, both described in more detail below. The FCC lauds this decision as the latest in a series “of significant steps to combat unwanted calls by empowering consumers and voice service providers to block them.”

This action comes amongst a flurry of TCPA developments over the past 6 months, including (1) the Supreme Court decision invalidating of the government debt-collection exception; (2) the P2P Declaratory Ruling; and (3) the recent autodialer SCOTUS oral arguments. The Order significantly impacts government contractors, who are made subject to the TCPA’s consent restrictions. However, government contractors may still interpose a derivative sovereign immunity defense, where available.

Background

The TCPA requires that “any person” making autodialed or prerecorded/artificial voice robocalls under the TCPA obtain prior express consent from consumers.¹ After receiving petitions for clarification from three stakeholders between 2014 and 2015 concerning the definition of the term “person,” the Commission concluded in its 2016 Broadnet Declaratory Ruling that the term “person” does not include the federal government. Accordingly, under Broadnet, federal government officials acting in their capacity did not need to obtain express consent before making calls regulated under the TCPA. Moreover the Broadnet Declaratory Ruling found that federal government contractors were immune 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 its prerogative to make autodialed or prerecorded- or artificial-voice calls to communicate with its citizens.”² Specifically, the Commission concluded that federal government contractors’ TCPA exemption is based on the agency rule that “when a principal is privileged to take some action, an agent may typically exercise that privilege on a principal’s behalf.”³ The Broadnet Declaratory Ruling did not address calls made by state or local governments or their contractors.

Following the consequential Broadnet Declaratory Ruling, NCLC and PSC each filed petitions seeking reconsideration. The NCLC Petition argued that, among other things, federal contractors are “persons” under the TCPA and that the Broadnet Declaratory Ruling misinterpreted the Supreme Court’s holding in Campbell-Ewald Co. v. Gomez on that point.⁴ The PSC Petition took issue with the Broadnet Declaratory Ruling to the extent that it required federal government contractors to meet an agency requirement to invoke TCPA immunity when making calls. Specifically, the PSC Petition asked the Commission to provide TCPA immunity to federal contractors “without regard for whether a common-law agency relationship exists” because “government contractors acting on behalf of the federal government and in accordance with the terms of a contract often are not considered agents of the government.”⁵ After seeking renewed comment on both petitions in 2018,⁶ the Commission issued this recent Order, which is briefly summarized below.

Federal Contractors are Subject to the TCPA

The Order concludes that a federal government contractor is a “person” because the TCPA’s definition includes an “individual, partnership, association, joint-stock company, trust, or corporation.”⁷ Reasoning that a contractor always falls into one of these definitional categories, the Order notes that federal contractors may either obtain express consent to make calls regulated under the T...