The FCC Reverses Course—Finds Government Contractors Subject to the TCPA
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The FCC Reverses Course—Finds Government Contractors Subject to the TCPA

Brownstein Client Alert, December 15, 2020

The Telephone Consumer Protection Act (TCPA) bars certain types of automated calls without first obtaining the consent of the called party. Indeed, with uncapped statutory damages, the TCPA is a staple of the plaintiff’s bar, generating thousands of lawsuits each year. In 2016, the Federal Communications Commission (FCC) ruled that the federal government is not subject to the TCPA’s requirements, and that contractors making calls on behalf of the federal government and acting as the government’s agents are also exempt from having to first obtain consent.

The FCC has now reversed that ruling, declaring that contractors must obtain consent before making automated non-emergency calls on behalf of the federal government. In addition, despite dissenting votes from the two current Democratic commissioners, the FCC found that state governments, like the federal government, are exempt from the TCPA when state officials make calls to conduct official government business, but not if making other types of calls, such as campaigning for re-election. Contractors calling on behalf of state officials, however, remain subject to the TCPA absent other immunity. Further, the FCC did not extend the government exemption to local governments, which also remain liable under the TCPA. The order can be found here.

Although federal government contractors are no longer exempt from the TCPA, such contractors that get sued under the TCPA may still argue in court that they share in the government’s immunity from suit if they meet certain requirements. This is called derivative sovereign immunity or Yearsley immunity. Such immunity, however, may be difficult or impossible to prove depending on the government’s directives to the contractor or the jurisdiction where the case is brought. At a minimum, a contractor must be able to demonstrate (1) the federal government authorized the contractor’s actions (i.e., automated calls or texts); and (2) the government “validly conferred” that authorization.

The FCC further confirmed that entities that simply facilitate government communications, such as convening town halls, may not be liable if they are not the “maker” of the call. This is a fact-specific, case-by-case determination. To provide guidance, the FCC clarified that when the government makes the decisions about whether to make the call, who to call, when to call and provides the content of the message, an entity that provides a platform to facilitate the calls likely will not be liable under the TCPA.

The order—which is effective immediately—will have far-ranging implications for the many entities that make calls or texts on behalf of governments. Federal contractors who communicate with consumers via calls or texts should review the scope of their contracts with the government to best position themselves to qualify for derivative immunity, including by expressly addressing the ability, or even requirement, of the contractor to make automated calls or texts to fulfill the government’s directives.

This document is intended to provide you with general information regarding an FCC order on TCPA requirements. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.

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