Privacy & Information Security Law Blog

On May 9, 2013, the Federal Communications Commission (“FCC”) released a declaratory ruling clarifying the liability of a seller for violations of the Telemarketing Consumer Protection Act (“TCPA”) made by third-party telemarketers and others who place calls to market the seller’s products or services.

Among its provisions, the TCPA makes it unlawful to “initiate any telephone call to any residential telephone line using an artificial or prerecorded voice without the prior express consent of the called party.” The statute also provides for the national Do Not Call registry and restricts the initiation of telephone solicitations to consumers’ telephone numbers that appear on this registry. The FCC has promulgated regulations implementing these restrictions, and the TCPA provides a private right of action to any “person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations” (emphasis added).

In federal cases in which the plaintiffs sought to hold the DISH Network LLC and EchoStar Satellite, LLC liable for alleged violations of the provisions mentioned above committed by third parties who were marketing those entities’ services to consumers, the courts sought the FCC’s opinion on two questions:

1. Under the TCPA, does a call placed by an entity that markets the seller’s goods or services qualify as a call made on behalf of, and initiated by, the seller, even if the seller does not physically place the call?
2. What should determine whether a telemarketing call is made “on behalf of” a seller, thus triggering liability for the seller under the TCPA?

In its lengthy response, the FCC clarified that while a seller does not generally “initiate” calls made through a third-party telemarketer within the meaning of the TCPA, it nonetheless may be held vicariously liable under federal common law principles of agency for violations of either provision that are committed by third-party telemarketers.