FCC Reverses Course and Finds That Government Contractors Are “Persons” Under the TCPA

Last month, the Federal Communications Commission (FCC) issued an Order on Reconsideration, overturning Commission precedent by clarifying that federal, state, and local government contractors are “persons” under the Telephone Consumer Protection Act (TCPA) and therefore must, under 47 U.S.C. § 227(b)(1)(A)-(D), obtain prior written consent to make certain calls using an automatic telephone dialing system or artificial or prerecorded voice; to initiate a call to any residential telephone line using an artificial or prerecorded voice; to use a fax machine or other device to send an unsolicited advertisement; or to use an automatic telephone dialing system in such a way that two or more telephone lines of a multi-line business are engaged simultaneously. This ruling is the latest in the Commission’s efforts to protect consumers from unwanted robocalls.

The TCPA prohibits certain unsolicited calls made by any “person,” which includes an “individual, partnership, association, joint-stock company, trust, or corporation,” without the prior written consent of the consumer. In 2016, the FCC issued a declaratory ruling stating that the federal government and federal government contractors were not “persons” under the TCPA, and therefore, the limitations on calling enumerated in Section 227(b)(1)(A)-(D) did not apply to them. The FCC reasoned that there is a longstanding presumption that the word “person” does not include the sovereign and that, had Congress intended to subject the government to the TCPA, it would have made that clear in the language of the statute. The Commission also reasoned that federal government contractors were not “persons” under the TCPA because, if they were authorized to act as the government’s agents, they could invoke the immunity provided to the federal government.

In response to a petition for reconsideration of the Commission’s 2016 ruling, the FCC reversed its prior decision regarding federal government contractors and extended the definition of “person” to include state and local government contractors. In the Order on Reconsideration, the Commission made three significant changes to its previous ruling:

• Federal, state, and local government contractors are “persons” under Section 227(b)(1) of the TCPA;
• Federal and state government callers acting on official business are not “persons” under the TCPA; and
• Local government entities, including counties, cities, and towns, are “persons” under the TCPA on the basis that local governments, unlike state and federal governments, are not sovereigns.

The Commission also noted that a government contractor may avoid liability under the TCPA if it is not the maker of the call. A person is a maker of a call by either: (1) taking the steps necessary to physically place a telephone call, or (2) being so involved in the placing of a specific telephone call as to be directly liable for making it. The Commission considers a number of factors to determine who is the maker of the call, including, among other things, who controls the content of the message, who controls the recipients of the message, and who controls the timing of when the message is sent.

This ruling represents a significant change for federal, state, and local government contractors. To avoid an influx of litigation, we can expect government contractors to review their contracts and implement new processes that ensure they obtain written consent prior to calling consumers. We may also see a great deal of cooperation between contractors and the government to create a system where the government is the “maker of the call,” therefore shielding government contractors from TCPA liability. However, despite the adverse impacts to such contractors, this Order seems consistent with the Commission’s stated goal of protecting the public from unwanted calls by requiring more entities to obtain prior written consent and ultimately limiting the amount of unwanted robocalls that reach the consumer.