On August 11, 2016 the FCC issued its long-awaited ruling implementing the 2016 Bi-Partisan Balanced Budget Act (“BBA”) Amendment that carved out collection calls on government-backed debt from TCPA coverage. In re Rules & Regulations Implementing Telephone Consumer Protection Act of 1991 (August 11, 2016) FCC 16–99 (“2016 FCC BBA Order”). The 2016 FCC BBA Order can be found here. My analysis of the Top 10 things you NEED to know about the ruling can be found here.

The 2016 FCC BBA Order is baffling throughout, but the most mystifying element of the ruling is its sleight of hand with respect to the TCPA’s application to calls made by the Federal government. To be crystal clear—the federal government is not a “person” subject to the TCPA. To be even more crystal clear—yes it is. (If you can follow that logic, you just might have a future in government.) And to make matters even weirder, the government is now (again) subject to the TCPA by virtue of an amendment Congress enacted in order to exempt the government from the TCPA in the first place.

So here’s what is going on.   Paraphrasing Commissioner O’Reilly’s dissent, this is the politics of cowardice at work. When the FCC gave the federal government its Independence Day gift of “free TCPA violations for life” consumers were displeased. Phones rang incessantly—not due to calls by the government, but rather due to calls from reporters rushing to cover the story. So a turn-about was necessary. But how could the FCC regulate calls by the government under the TCPA after it just concluded that the TCPA does not apply to the government? Great question. Stay with me now.

First,  the Comission notes that Section 301(a)(2) of the Budget Act authorizes the FCC to “restrict or limit the number and duration of calls made to a cellular telephone number to collect a debt owed to or guaranteed by the United States.” FCC BBA Order ¶ 31. The Comission then notes that the “scope of this authority is broader than the scope of the exception from the prior-express-consent requirement, because—unlike the exception—it is not limited to calls made “solely” to collect a covered debt.” FCC BBA Order ¶ 31. So far so good.

“Thus” the FCC continues “the rules we promulgate under this authority apply to any autodialed, prerecorded-voice, and artificial-voice calls that reasonably relate to the collection of a covered debt and therefore apply even if the calls are not “calls made solely to collect a debt” under 227(b)(1): e.g., as noted above, if the calls also contain other content (such as advertising) or precede the specified time period for calls excepted from the consent requirement.”  Ibid. All right, this still mostly makes sense.

“Moreover, these number and duration rules apply to calls by the federal government (to the extent it is the owner or guarantor of the debt) and its contractors, as explained in the Jurisdiction section below.” Ibid.  Wait what? Non sequitur. Is the FCC really saying that because Congress forgot to use the phrase “solely to collect a debt” in the delegating provision of the amendment that the FCC is empowered to regulate the federal government using a statute that—by its own hand—has been determined not to apply to the federal government in the first place? We better read this jurisdiction section part to find out.

Here is paragraph 61 of the ruling, discussing Jurisdiction: “With this Order, we exercise these grants of authority by adopting regulations that limit both the number and duration of calls covered by subparagraph (b)(2)(H). These limitations apply irrespective of the identity of the caller and thus encompass wireless debt-collection calls placed by the owner of the debt or its contractors. We find that this approach—which focuses on the type of “calls made” to a cellular number and not the identity of the caller—is consistent both with the Budget Act and with the Broadnet Declaratory Ruling in which we recently found that the federal government and its agents are not “persons” covered by section 227(b)(1).”

This is barely in English, but what I think it says is that because the FCC’s restrictions turn on the type of calls being placed that a person who is not otherwise subject to the act may become subject to the TCPA if they place that type of call. But let’s re-read the TCPA together real fast: “(b) RESTRICTIONS ON THE USE OF AUTOMATED TELEPHONE EQUIPMENT.—(1) PROHIBITIONS.—It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States—“ Stop. We’re done. No need to go further. The prohibitions of the TCPA only apply to “person[s].”  So it does not matter in the slightest what type of call is being placed. Only a “person” subject to the act can violate the TCPA’s prohibitions to begin with.

Well, maybe there’s something here we’re missing. Let’s read on in the Order.

On to paragraph 62: “Given that the same section of the Budget Act both excepts these calls from the prior-express-consent requirement and authorizes the FCC to regulate their frequency and duration, it seems clear that Congress’s goal in adding section 227(b)(2)(H) was to protect consumers by ensuring that calls that are excepted from the consent requirement are nonetheless regulated in other respects. Moreover, whereas the prior-express-consent requirement applies only to ‘persons’—which the Commission has interpreted to exclude the federal government and its agents— section 227(b)(2)(H) contains no such limitation on the Commission’s authority to regulate the frequency and duration of government-debt-collection ‘calls.’”

So the FCC interprets section 227(b)(1)—the only section of the TCPA that includes the prohibition against calls to cell phones AND the very section of the TCPA that Congress amended to allow calls to cell phones—to pertain only to “express consent” requirements. But the TCPA contains no other relevant prohibitions respecting calls to cell phones at all. Either a “person” violates the “express consent” provision or it has not violated the TCPA. Until now. So the FCC interprets the Congressional delegation of authority to implement an exemption to the “express consent” requirement as a grant of authority to CREATE A NEW A PROHIBITION THAT THE STATUTE DOES NOT CONTAIN AND THEN APPLY IT TO A “PERSON” THAT IS NOT OTHERWISE SUBJECT TO THE ACT.  This just happened. The FCC re-wrote the TCPA (again) to now include a content-specific call limitation applicable to non-“persons” that were not previously subject to the TCPA’s restrictions at all. It’s enough to give you a nose bleed.

The FCC bolsters it’s *ahem* reasoning, by noting  “[w]e find no support for the claim in one dissent that ‘[t]he Budget Act exemption was designed to protect federal agencies and their contractors from liability when they make calls without consent of the called party,’ or that the ‘intent of the law . . . was to enable lenders to use modern dialing equipment as part of their efforts to collect debt.’” FCC BBA Order, FN 178.  Here I will turn it over to Commissioner O’Reilly for the final word:

“The Budget Act exemption was designed to protect federal agencies and their contractors from liability when they make calls without consent of the called party. The revised order counters that there is ‘no support’ for this statement as there is no legislative history. Wow. If only the Commission would read the text of the law itself, it would understand the purpose.” O’Reilly Dissent to 2016 FCC BBA Order, p. 56.  Indeed.

And that friends, is the O’Henry-esque tale of how the FCC took a Congressional amendment designed to allow a certain category of calls under the TCPA and used it to prevent that exact category of calls under the TCPA. The irony, of course, is that if Congress had not passed the BBA amendment exempting federal debt collection calls from the TCPA, the TCPA would never have applied to them in the first place.

It’s like one of those time-travelling paradox movies. Could have used a dinosaur though.