FCC’s TCPA Draft Ruling Uses Agency Law Liability Standard

A draft version of the FCC’s declaratory ruling on third-party violations of the Telephone Consumer Protection Act (TCPA) would use agency law rather than strict liability to determine liability, said industry executives. While the draft could be changed while on circulation, the use of agency law would mark a partial win for commercial interests, such as Dish Network. Both commercial interests and the government have been meeting frequently with commissioners’ staff over the last week.

The Justice Department and FTC have said the FCC should not use agency law to determine liability under the TCPA. The agencies have asked the FCC to impose a strict liability standard, which would essentially leave the sellers liable for third-party TCPA violations even if the seller had explicitly told them not to violate the statute, said an industry executive. The DOJ had also asked the FCC to create a separate liability standard. The government has shown a surprising amount of interest in the case, said a communications lawyer. To see two arms of the federal government “walking the halls of the eighth floor” is especially unusual, said a communications lawyer. The FCC, DOJ, FTC, and Dish didn’t comment.

Agency law is more common within business arrangements, allowing sellers to contract out work without being liable for actions the seller isn’t a party to, said an industry executive. It would have been very surprising for many businesses to suddenly “find themselves strictly liable,” said Gerry Waldron, a communications lawyer at Covington and Burling. Agency law liability for TCPA is “familiar territory” and while the liability standard had never been “pinned down,” that standard was “the general approach and attitude,” he said.

The FCC was asked earlier this year by the 6th U.S. Circuit Court of Appeals in Cincinnati to weigh in on the law’s ambiguities for a case on who is ultimately responsible for TCPA violations by telemarketers hired by Dish. A lower court dismissed the original claims, but the plaintiff appealed (CD Jan 3 p5). The FCC isn’t tasked with reviewing the specifics of the case, only interpreting parts of the law the appeals court considered vague.