Government, Dish Network Trade Blows Over TCPA Liability
The Telephone Consumer Protection Act (TCPA) is a “strict liability statute,” leaving a company responsible for calls dialed by others to market the original company’s goods, said California, Illinois, North Carolina and Ohio in comments with the FCC. Those states, the Federal Trade Commission and the Justice Department brought suit against Dish Network for TCPA violations. The 6th U.S. Circuit Court of Appeals, Cincinnati, asked that the FCC, rather than the courts, make the first decision about whether Dish is liable for improper telemarketing calls made by contractors working for it (CD Jan 3 p5). A lower court dismissed the original claims, but the decision was appealed. The appeals court said the FCC has primary jurisdiction because the likely penalties were below the $75,000 minimum for federal courts to have jurisdiction, because the FCC has the expertise to handle it, and because an FCC decision would apply nationwide. The comments are in docket 11-50.
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Companies will be able to continue to “skirt liability” for calls that violate the TCPA if the FCC finds that only formal agents under the control of a company are working “on behalf of” a seller, the states said. Companies have used “shadow armies of callers to shield themselves from TCPA liability” in the past, they said. Despite “all of the logical and principle reasons for not doing so,” Dish has said “on behalf of” should mean callers with formal relationships with the company, the states said. The TCPA doesn’t “expressly or impliedly” say a formal agency relationship is required, they said.
"A telemarketing call has been made on behalf of a seller if the seller stood to benefit from that solicitation,” the Department of Justice said in its filing. The TCPA doesn’t require direction or control over a telemarketer, it said. Dish’s take on the law would “imbue sellers with virtually limitless TCPA immunity” because a company can always argue they didn’t intend for the violative call to be made, it said. The FCC should “articulate a standard that evaluates the benefit to the seller,” said Justice. Such a standard would adhere to established FCC precedent and would encourage self-enforcement of the TCPA by companies, it said. The FTC said use of the “on behalf of” language is clear: “As the Supreme Court has said, ‘absent sufficient indication to the contrary, Congress intends the words in its enactments to carry ’their ordinary, contemporary, common meaning.'"
Dish Network disagreed, in its comments. “The TCPA was designed, and is jurisdictionally limited to, reaching the actual users of the telephone equipment,” the company said. The liability is directed toward the business or person that places the unlawful calls, it said. If the FCC finds that there is indirect liability in the TCPA, the FCC should use the federal common law of agency as the standard to define the scope of liability, said Dish. That standard requires analysis of whether an alleged principal directed the unlawful telemarketing and is “consistent with how courts routinely interpret federal statues that provide for indirect liability,” it said. The standard would also promote uniformity in the application of the TCPA, it said.
"Independent third parties are the sole entities that should be held responsible for telemarketing they alone elect to conduct and control,” said DirecTV in its comments. While a seller, such as DirecTV, sets boundaries for third parties to market its services, the seller can’t control day-to-day activities, it said. Placing liability with the seller isn’t consistent with the TCPA’s language or goals and “would constitute an unprecedented leap that may actually have far-reaching and unintended consequences, including inducing the very behavior the TCPA seeks to prevent,” DirecTV said.
A company’s liability should be determined by the extent of its involvement and oversight of a third-party’s compliance, said the American Teleservices Association. A seller should have to take certain measures to ensure compliance with the TCPA, such a as monitoring and specific instructions, and only under failure to do so should the seller be liable, said the ATA.