December 14, 2015
In a decision that could have wide-ranging effects for government contracting, the Federal Communications Commission (FCC) has sought comment on a petition for declaratory ruling requesting that the FCC declare that the Telephone Consumer Protection Act (TCPA) does not apply to calls made by or on behalf of federal, state, and local governments when such calls are made for official purposes.
On July 30, 2015, Broadnet Teleservices LLC (Broadnet) filed the petition seeking a ruling that the TCPA does not apply to government contractors and service providers when making calls to wireless telephone numbers on behalf of governmental entities. The TCPA prohibits “any person,” defined as an “individual, partnership, association, joint-stock company, trust or corporation,” from initiating calls to wireless numbers using automated technology without prior express consent. 47 U.S.C. § 153(39). Broadnet contends that the plain language of the TCPA demonstrates that the TCPA does not apply to calls made by government entities based on the express definition of “person,” and “the term ‘person’ does not include the sovereign.” Further, the FCC has previously recognized that exemptions under the TCPA, such as calls made by tax-exempt nonprofit organizations and for health care messages by certain health providers, should also apply to third parties acting on behalf of the exempt party. Accordingly, Broadnet urges the FCC to find that calls made by or on behalf of government entities, including legislative, judicial, and executive bodies, and those working on behalf of government entities and officials, are not subject to the TCPA. Absent such a declaration, Broadnet argues, “citizens [who] rely on their wireless phones as their primary, or only, means of telephone communication will be deprived of important opportunities to engage with their government that wired citizens currently enjoy.”
The FCC’s declaratory ruling could have important implications for pending cases such as Campbell-Ewald Company v. Gomez, No 14-857, currently before the United States Supreme Court. In Campbell-Ewald, the US Navy awarded government contractor Campbell-Ewald Company a contract to develop and conduct a mobile marketing campaign that included sending out recruitment-related text messages to about 150,000 individuals between the ages of 18 to 24. Gomez filed suit against Campbell-Ewald on behalf of himself and a putative class of 100,000 individuals seeking damages for violations of the TCPA. The Supreme Court granted certiorari to decide whether an unaccepted offer of complete relief to the named plaintiff moots the suit and whether derivative sovereign immunity bars the suit. Because derivative sovereign immunity is predicated on the principle that a federal government contractor should not be subjected to private party damages in litigation, an adverse FCC ruling in Broadnet may mean that government contractors could be “left holding the bag” for making calls on behalf of government officials and entities, though the governmental entity itself would not be subject to the TCPA. As Dentons argued in an amicus brief filed in Campbell-Ewald, “Allowing private parties to pursue damages claims against contractors arising out of the services that they perform for the US military and numerous other federal departments and agencies—claims that sovereign immunity bars from being brought against the government itself—would undermine the federal procurement process, including by deterring contractors from participating in the expanding universe of government work and/or by increasing the government’s costs of using contractors for such work.” (Click here for a summary of the Campbell-Ewald amicus brief filed on behalf of DRI – The Voice of the Defense Bar and the Professional Services Council.)
We will continue to monitor this petition. If you or your clients have questions regarding TCPA compliance and litigation strategies, please contact Nathan Garroway, Petrina McDaniel, or Mark Silver.