Telemarketing Companies, Dish Network Still Await FCC Interpretation of TCPA

The FCC issued a public notice last year seeking comment on separate petitions filed by Dish, the Justice Department and other entities to provide clarification on liability (http://xrl.us/bnmxhj). It’s a critical decision, said Gerald Silver, a Sullivan & Worcester litigation and business attorney. “If, for whatever reason, the FCC comes out and interprets the statute differently than the FTC has and the courts have and decides that ‘on behalf of’ is narrower and really means you're acting on behalf of somebody who has control over you, then that might be a way for Dish and other companies to avoid liability."

In 2009, the Justice Department sued Dish for alleged do-not-call violations, which included “robocalls” used to deliver pre-recorded messages (CD March 26/09 p13). An FCC decision is more critical in the current case, Silver said. The newer case focuses “on a situation where the telemarketer makes a call and then the call recipient states they don’t want to receive that call, which is specific to Dish,” he said. This case is unique to what the telemarketer is told during the call, he said.

An FCC decision will “greatly impact the way the whole industry has to operate,” said Judith Harris, a Reed Smith attorney. However, it’s been clear that telemarketers or agents acting on behalf of sellers “need to comply with the TCPA and the Telemarketing Sales Rule, and if they don’t, the seller who hired them can be responsible, at least in a regulatory enforcement action,” she said. Companies attempt in their contracts to get rid of that liability, she said: “But that is contractual only and it’s not a defense if one of the regulatory agencies bring an action against you.” If the FCC says it’s more of an agency theory, “then companies are going to continue to outsource to an independent contractor because it’s a way to avoid liability,” Silver said. If the seller is found to be liable for anything the telemarketer does, “they might be more reluctant to go to telemarketers in the future,” he added.

The absence of FCC instruction “has plagued the telemarketing that’s servicing businesses throughout the country,” said attorney Dana Frix of Chadbourne & Parke. Frix has represented the telemarketing community, including consultants who advise telemarketing companies. The problem is that “all levels in that service provider ecology are concerned that they independently have liability,” he said. This concern “chills valuable and efficient market activities,” he said.

A decision in Dish’s favor would make for a greater effect, Harris said. Such a decision “really would change the way products were being sold,” she said. “If that were to become the law of the land with respect to all telemarketing, consumers would consider that an enormous step backward because you'd see a lot of sellers fluffing off all of their marketing efforts to third parties and wouldn’t put any effort into seeing how they're doing their job.” The recourse to the consumer would be much more difficult, she added.

Harris said it would be surprising if the FCC doesn’t decide that Dish is responsible for its vendors acting on its behalf. “Otherwise it’s too difficult from a practical perspective,” she said. “It’s too difficult to go after all these agents and telemarketers” who could be located anywhere in the world, she said. It’s also difficult jurisdictionally in some instances, “where the relevant agency just doesn’t have jurisdiction over a particular telemarketer,” she added.

Clear, sensible regulation frees businesses “and helps them move quickly and effectively in the marketplace,” said Frix. This is an instance where “if the FCC were to come out with clear instructions about the liability standard, the different market participants would act more vigorously,” he said. Instead, “there’s a great deal of censorship going on in the marketing community,” Frix added. The Consumer & Governmental Affairs Bureau didn’t return a request for comment.