MAXIMUM TCPA CONFUSION: Federal Government Agency (and 86 Million People) Caught in the TCPA Morass

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Its that time again!

Time to talk about whether–and to what extent–the TCPA applies to government-entities. This is absolutely my favorite TCPA topic because of all the ridiculous patchwork, non-intuitive, shifting, and unclear components of U.S. telecom law, the application of the TCPA to government entities is absolutely the most difficult to understand (read: preposterous.)

The setting for today’s discussion: a letter from the Secretary of Health and Human Services–nice federal government agency, whose mission includes trying to keep people healthy. And not in the “wear a mask” sort of way, but more in the “sign up for medicare” sort of way.

To help Americans who qualify for various programs to get enrolled in services they may need, the ole HHS wants to send texts and robocalls to people. But they can’t. Because the TCPA may, or may not, or may partially apply to those messages.

What do I mean?

Well here’s the specific ask from HHS. And as we go through these one by one you’ll see how tricky this really is.

HHS wants the FCC to confirm:

  1. State and federal government employees who deliver such text messages and automated, pre-recorded calls to individuals generally will be immune from suit under the TCPA;
  2. State and federal government contractors who deliver such text messages and automated, pre-recorded calls to individuals generally will be immune from suit under the TCPA when the government agency authorizes and directs the contractor’s actions and the agency validly confers that authorization;
  3. In cases where a state government agency has delegated the authority to determine eligibility for Medicaid, CHIP, or the BHP to local government entities (e.g., agencies of cities and counties), the local government employees who deliver such text messages and automated, pre-recorded calls to individuals generally will be immune from suit under the TCPA, as will its contractors when the local government entity authorizes and directs the contractor’s actions and the agency validly confers that authorization; and
  4. Managed care entities and, if applicable, their parent companies providing coverage to Medicaid, CHIP, or BHP enrollees under contract with a state agency that deliver such text messages and automated, pre-recorded calls to individuals generally will be immune from suit under the TCPA, as will their contractors when the managed care entity or its parent company authorizes and directs the contractor’s actions and the entity validly confers that authorization.

Ok, so got the ask? Real bar exam question element here. 1. Does TCPA apply to state and federal government?. 2. Does it apply to contractors sending messages for government?; 3. Does it apply to local governments sending messages on delegated authority? 4. Does it apply to managed care services supporting the government efforts?

Let’s dig in. First some background (largely cribbed from my earlier article on the subject.):

So first principles: the TCPA applies to “person[s]” but does not define what a “person” is. Ok.

The Communications Act of 1934, to which the TCPA was an amendment, does define “person,” however. There a person is defined as an “individual, partnership, association, joint-stock company, trust or corporation.” Notably absent from that definition: the government. So maybe the government really isn’t covered by the TCPA.

But what a minute, back in 2015 Congress amended the TCPA to clarify that it does not apply to folks that are collecting on government-backed debt. That exemption, of course, converted the TCPA into a content-specific restriction on speech that, in turn, lead to a Supreme Court ruling that nearly lead to another Supreme Court ruling. But more to the point– if Congress amended the TCPA to carve out contractors working for the federal government, that must mean that the federal government’s contractors were covered by the TCPA after all, right?

Well, no.

In 2016—after the amendment to the TCPA—the FCC got involved and in something called the Broadnet Ruling, clarified that the federal government actually isn’t a “person” subject to the TCPA after all. And it likewise clarified that contractors working for the government to make calls aren’t persons either.

Ok. Perfect. So after Broadnet folks could feel free to make calls on behalf of the government because—not a “person,” right?

Well, no.

About two months after Broadnet, the FCC then issued an NPRM implementing the old 2015 amendment carving out collectors of government-backed debt. Although such parties were presumably already exempted from the TCPA due to the fact that they are not “persons” the FCC used the opportunity to bring collectors of government-backed debt back into TCPA coverage. In the FCC’s view—at the time—the Congressional authority granted to it to implement the government-backed debt exemption allowed it to apply its regulations implementing the exemption to the TCPA to non-persons. So although collectors of government-backed debt were not “persons” for purposes of the TCPA they were for purposes of the FCC’s proposed regulations implementing the exemption to the TCPA that was supposed to prevent application of the TCPA to them in the first place.

Dizzy yet? We’re just getting started.

With the TCPA amended to exclude calls on government-backed debt the courts then needed to wrestle with whether the exemption would apply retroactively (it doesn’t according to the Ninth Circuit) and whether it would apply at all pending the outcome of the FCC’s NPRM implementing the exemption with new regulations. This lead to a lengthy back-and-forth battle between consumers and collectors of government-backed debt–mostly Navient– with district courts splitting all over the place.

The latter issue was, somewhat, put to bed after the newly-constituted FCC under Chairman Pai did not publish the NPRM in the Federal Register which therefore did not take effect. The Courts seem to have since coalesced around the position that even in the absence of FCC implementing regulations mandated by congress in enacting the amendment, the statutory exemption still took effect at the time of passage. So at least we know that companies calling to collect on government-backed debt are not subject to the TCPA.

Except that they are.

Rather famously the Supreme Court struck the government-backed debt exemption from the statute in order to save the TCPA in a real disaster for free speech. That leaves government-backed debt collectors subject to the TCPA again–at least from the U.S. Supreme Court’s perspective. (Whatever that’s worth.)

But then in December, 2020–five months after the Supreme Court’s ruling–the FCC jumped back into the fray and issued an order on reconsideration of the old 2016 Broadnet ruling. This time the Commission really seems to have figured it out. Basically the federal and state governments themselves are exempt. But not their contractors, unless they are. But platforms used to send messages are ok, unless they’re deemed the initiator of the call. Unless they aren’t. Which they won’t be if they follow certain rules, subject to exception. But local governments definitely are subject to the TCPA. Probably.

Its all right here. Clear as French onion soup: FCC Reconsideration Ruling. 

So in light of… well, everything that’s happened over the last 7 years, folks are a bit confused about the state of the law. And those folks include HHS and their various contractors.

Now I suspect the FCC will try to help the HHS out here. But I also expect that may take a little time. So let me weigh in. Now–bear in mind that what the Czar says is not technically legally binding. But probably a pretty good guide–although I’m not giving legal advice here, think of it more as predictive forecasting. (And this is totally the sort of blog I could never have written when I was still in Big Law, btw :):):))

  1.  Does TCPA apply to state and federal government? That’s a pretty clear “no” following both the original and reconsidered rulings on the Broadnet petition.
  2. Does it apply to contractors sending messages for government?; Well, the amended ruling on Broadnet answers this pretty clearly as well. I mean, there’s a section heading entitled “Federal contractors are Subject to [the TCPA]” which is about as clear a directive as the Commission can give. But…there’s also a ton of discussion about sovereign immunity. And my read is that the FCC was not intending to tinker with those rules. So, essentially, federal contracts are not statutorily exempted from the TCPA but they might be exempted by the operation of SI. (And in the special case of text/calling platforms you are very likely not liable so long as you follow some specific procedural steps that I am happy to discuss with you. Call the (real) Troutman Firm)
  3. Does it apply to local governments sending messages on delegated authority? Real tweener here. On the one hand the FCC was very clear that messages local governments want to send regarding parade routes and garbage pick up days are not going to be exempt from the TCPA: “We clarify that local government entities…are subject to the TCPA.” See 20-182A1 par. 29. Again, pretty clear. But the use case from HHS is delegated federal authority. I’m going to guess the FCC is going to protect the local governments here. But I invite interested stakeholders to give me a buzz to chat this through.
  4. Does it apply to managed care services supporting the government efforts? Managed care services should definitely NOT be sending texts on their own and without consent. Sorry, not sorry. Too far removed from my perspective and the risk can be quite high. I’m not saying the FCC won’t ultimately grant these entities protection–it very well may. But you’re too visible a target in the interim.

Of course, the Commission may just punt on the underlying issue and find that all of these messages qualify under pre-existing “emergency” and “non-marketing healthcare” exemptions and avoid the whole on-again-off-again relationship between government contractors and the TCPA.

So sayeth the Czar.

As always feel free to reach out if you have questions. And if you want to read the HHS’ full letter (86 million people effected here) you can find it here:  HHS TCPA LETTER TO FCC

Relatedly, what would folks do without me?

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Published by Eric J. Troutman

The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.

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