WASHINGTON (Legal Newsline) – The federal government has made a declaration exempting itself from lawsuits brought through the Telephone Consumer Protection Act, a law at the center of numerous class actions filed every week against businesses.
The ruling the Federal Communications Commission (FCC) made on July 5 exempts the federal government and its contractors from the TCPA, which requires that callers obtain consent before making calls to phones.
The blanket exception gives the federal government sovereign immunity from the law. The FCC said this immunity also includes agents of the government because they are acting under a contract with the government.
“We think it’s hypocritical for the FCC to issue this blanket expectation to themselves and the federal government,” Kimberly Chow, associate at Reed Smith, told Legal Newsline.
“We think the private sector should get the same kinds of exemptions like with debt collections, which is currently pending with the FCC.”
The TCPA, which was signed into law in 1991 and amended the Communications Act of 1934, restricts telephone solicitations to consumers.
It limits calls through automatic dialing systems and pre-recorded voice machines, as well as SMS text messages and fax machines. Businesses are required to call through certain hours of the day and abide by the National Do Not Registry, as well as a slew of other requirements.
“The TCPA is a huge hassle for businesses and a huge compliance issue,” said Chow.
It could raise eyebrows that the federal government can make a law that regulates others while not applying to it.
“It’s something that happens pretty often with government agencies,” Chow said. “It does seem a little counter-intuitive. Congress could have been more explicit in accepting itself, but unfortunately they weren’t.”
Two companies, Broadnet and RTI International, requested clarification from the FCC. The National Employment Network Association also filed a petition.
The FCC ruled that the federal government is not a "person" as defined by the TCPA.
"No commenter has made a showing of statutory intent to the contrary, and no such intent is articulated in the legislative history of the TCPA," the decision says.
"Indeed, had Congress wanted to subject the federal government to the TCPA, it easily could have done so by defining 'person' to include the federal government. That Congress chose not to include such a definition, or (as discussed below) any other language indicating an intent to 'lift' the sovereign immunity that presumptively applies to the United States and its agencies, is conclusive evidence that Congress intended the federal government not to be included within the persons covered by the prohibitions..."
The FCC also ruled that calls made by the federal government are for a "benevolent purpose" and not subject to the TCPA. These include public policy surveys and calls to participants of federal programs like Social Security. These calls are typically handled by contractors for the federal government.
Chow says the ruling by the FCC is inconsistent with a rulemaking mandate that will add a provision to the 2015 Bipartisan Budget Act. The provision exempts the federal government and its agents from the TCPA only for calls made for debt-collection purposes.
The FCC maintained that the inconsistency was a result of Congress having not yet reviewed its request for a broader exemption.
“It seems that the FCC was relying in part on the Supreme Court findings that the federal government was entitled to a certain amount of immunity,” Chow said.
The TCPA has created a rash of litigation for businesses and spawns the largest number of complaints the FCC receives. FCC violations for businesses under the TCPA can be from $500 to $1,500 per occurrence and don't take into account the class-action lawsuits that can be filed on behalf of consumers.
Companies can also be liable if a third-party vendor makes calls on their behalf.