National No-Call List Upheld By Court
Judges See No Violation Of Telemarketers' Rights
By Caroline E. Mayer
Washington Post Staff Writer
Wednesday, February 18, 2004; Page E01
A federal appeals court yesterday upheld the government's do-not-call list, saying telemarketers have no First Amendment right to call homes with sales pitches.
Three judges in the U.S. Court of Appeals for the 10th Circuit ruled unanimously that the national anti-telemarketing registry was a valid restraint of commercial speech because it "targets speech that invades the privacy of the home, a personal sanctuary that enjoys a unique status in our constitutional jurisprudence."
More than 57.2 million telephone numbers have been posted to the do-not-call registry since it was launched in June, and government officials said yesterday that 200,000 to 300,000 new numbers are being added each week.
The telemarketing industry had challenged the list's legality, saying it was an unconstitutional limit on free speech and an improper use of power by the Federal Trade Commission, which implemented the lists.
The appeals court sided completely with the FTC, reversing a federal judge's decision that found the list unconstitutional because it barred sales calls from companies while permitting solicitations from politicians and charities.
The appeals court said such a distinction was valid because the FTC has found that commercial callers are more likely "to engage in deceptive and abusive practices." By contrast, the court added, "the FTC concluded that in charitable and political calls, a significant purpose of the call is to sell a cause, not merely to receive a donation." As a result, such callers do not have strong incentives to alienate the people they call by engaging in abusive or deceptive practices, the court said.
Telemarketing industry officials yesterday said they were disappointed by the decision and are considering an appeal to the Supreme Court.
"The battle over the do-not-call regulations does not end today," said Tim Searcy, executive director of the American Teleservices Association, which represents 650 firms, most of which run call centers and make sales calls, usually on behalf of other businesses.
H. Robert Wientzen, president of the Direct Marketing Association, a trade group of 4,700 marketers that sell their goods and services over the phone, said his organization will make a decision within the next 10 days. "No matter what we do in court, we are doing everything we can to assure compliance" from our members with the do-not-call list even while challenging it, Wientzen said.
The court decision was immediately hailed by the FTC and Federal Communications Commission, the two federal agencies that are enforcing the do-not-call list. "We are pleased that this popular program, like America's dinner hour, will not be interrupted," said FTC Chairman Timothy J. Muris.
Neil Richards, a professor at the Washington University law school in St. Louis, said the appeals court decision made clear that when it comes to privacy in the home, the First Amendment doesn't protect commercial speech. "The court concluded that the right of people to enjoy their homes outweighs the right of companies to intrude upon that privacy to try and sell them things," Richards said.
"This is not a government ban on commercial speech, but government empowerment of consumers to regulate the phone calls they receive," added Christopher Wolf, a Washington lawyer who specializes in free-speech issues.
In its opinion, the appeals court cited telemarketing industry estimates that an average consumer received 2.64 telemarketing calls a week, or more than 137 calls annually, before the do-not-call list went into effect in October. "Absent the do-not-call registry, telemarketers would call those consumers who have already signed up for the registry an estimated 6.85 billion times each year," the court said.
"Just as a consumer can avoid door-to-door peddlers by placing a 'No Solicitation' sign in his or her front yard, the do-not-call registry lets consumers avoid unwanted sales pitches that invade the home via telephone, if they choose to do so," it added.
However, in a footnote, the judges said it was not ruling on the constitutionality of the do-not-call list if it were to apply to politicians and charities.
In early October, telemarketers had to stop calling any numbers on that list or risk a fine of up to $11,000 for every number called. Since then, the FTC and FCC have received more than 160,000 complaints from consumers. So far the FCC has issued eight citations, the first step in the regulatory process, and the FTC has yet to file a single enforcement action.
Last week, the FTC said that "fewer than 45 companies" have received more than 100 complaints each. "You can rest assured there are a whole lot of cases in the pipeline," said Lois Greisman, an associate director at the FTC.
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