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Another Hang-Up for 'Do Not Call'

A Denver judge, ruling that the phone registry violates telemarketers' free-speech rights, hands the industry its second legal victory this week.

September 26, 2003|Jube Shiver Jr. | Times Staff Writer

WASHINGTON — Minutes after both houses of Congress concluded a remarkable scramble Thursday to make a popular "do-not-call" registry pass muster with a federal judge, a second jurist ruled that the program had deeper problems: It violated telemarketers' 1st Amendment rights.

The ruling by U.S. District Judge Edward W. Nottingham in Denver handed the telemarketing industry its second legal victory this week and put in doubt the future of the Federal Trade Commission's national registry.

Although Nottingham's ruling is certain to be appealed, legal experts said that at the very least it would delay implementation of the program, which was scheduled to start Wednesday. The judge ruled that the registry violated the free-speech rights of telemarketers because it barred them but not charities, pollsters or political campaigns from making unsolicited calls.

More than 50 million phone numbers have been registered on the list to be off-limits to most telemarketers. Noting that popularity, the head of the nation's largest direct marketing group asked its 5,000 members not to call people on the list, regardless of its legal fate.

"We are not looking to ignore the wishes of consumers," said Direct Marketing Assn. President H. Robert Wientzen.

Nottingham's 34-page ruling came shortly after the House and Senate voted overwhelmingly for a bill that made clear that the FTC had the power to establish and maintain its do-not-call list. The legislation, introduced and passed within a few hours Thursday afternoon, was in reaction to a decision by U.S. District Judge Lee R. West in Oklahoma City, who ruled Tuesday that the FTC exceeded its authority in setting up the registry.

The House voted 412 to 8 and the Senate 95 to 0 for a terse, one-page bill authorizing the FTC's do-not-call list. In a statement, President Bush said he looked forward to signing it. "Unwanted telemarketing calls are intrusive, annoying and all too common," he said.

Under the FTC rules, telemarketers risk a fine of $11,000 each time they call a number on the list.

Frustration with the legal delays was evident across the country. Late-night TV talk show host Jay Leno joked about the Oklahoma ruling during his monologue Wednesday. "The judge says the telemarketers can call you whenever they want," Leno said. "You know what we should do? Let's all call this judge tonight at home during dinner."

Egged on by radio hosts, thousands of people took Leno's gag seriously and flooded the Oklahoma City federal courthouse with calls.

"We've probably received thousands of phone calls," court clerk Robert Dennis said. "We've tried to conduct business as normal. But our phones have been pretty tied up at times.... Most of the calls were people who wanted to express their dissatisfaction with the ruling."

Lawmakers had hoped their rapid response to the Oklahoma ruling would quickly restore the FTC's power to implement a do-not-call list.

"We should probably call the bill the 'This Time We Really Mean It Act,' " said Rep. W.J. "Billy" Tauzin (R-La.). "This bill leaves no doubt as to the intent of Congress."

Nonetheless, West denied a request from the FTC to stay his order, pending appeal. But the judge said his order would not block any existing state do-not-call registries or "company-specific do-not-call" lists.

Gov. Gray Davis said this week that California would press ahead with its own do-not-call list, approved by lawmakers two years ago.

Legal experts said the FTC would have to win its appeal to reverse West's decision or get West to vacate his original ruling on the grounds that the legislation makes it moot. They were divided over whether the agency could overcome Nottingham's broader, 1st Amendment objections, which they said presented a tougher obstacle.

Nottingham had no legal qualms about the FTC's authority to implement a do-not-call list but said the list -- which bars calls from credit card companies, retailers and other commercial concerns but not from politicians and nonprofit groups -- violated telemarketers' 1st Amendment rights.

"The Federal Trade Commission has chosen to entangle itself too much in the consumers' decision by manipulating consumer choice and favoring speech by charitable [organizations] over commercial speech," Nottingham wrote.

Rex Heinke, a Los Angeles lawyer who is an expert on 1st Amendment law, said Nottingham had "an interesting point.... If you are going to distinguish between charitable and commercial speech, then you are saying the charitable speech is more valuable than the people who are going to sell you something. But what people are complaining about has nothing to do with the nature of speech involved. People are mad about the phone ringing at dinnertime," so both forms of solicitation would have to be barred to pass constitutional scrutiny.

But Scott Blake Harris, a former Federal Communications Commission official now in private legal practice, disagreed, saying that the courts have ruled that commercial speech is not entitled to the strongest 1st Amendment protections. "So I think Congress and the FTC are on sound grounds and [Nottingham's] decision will ultimately be overruled."

Harris' view was echoed Thursday by FTC Chairman Timothy J. Muris, who said: "I always have believed that the FTC had clear authority to establish the National Do Not Call Registry, and I applaud the Congress for acting so quickly to ensure that American consumers have the choice to stop unwanted telemarketing calls."

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