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Popular Do-Not-Call Law Faces Months of Delays

September 27, 2003|Jube Shiver Jr. | Times Staff Writer

WASHINGTON — Stymied by two court rulings, federal officials conceded Friday that they would not enforce a popular "do-not-call" list next week, and emboldened telemarketers vowed to press litigation across the country to keep tighter regulation of the $275-billion industry at bay.

Two federal judges this week blocked the national registry that would have protected more than 50 million phone numbers from most dinnertime solicitations. Although congressional leaders and officials from the Federal Trade Commission predicted that the rulings would ultimately be overturned, they acknowledged that appeals could take months.

"You can still put your number on the national registry," the FTC told visitors to its Web site, "but for now, telemarketers are not required to comply with it."

Friday's resignation contrasted sharply with the optimism that pervaded Capitol Hill the day before as a nearly unanimous Congress pushed through emergency legislation supporting the registry, which is scheduled to take effect Wednesday.

The list's fate was first cast in doubt Tuesday, when U.S. District Judge Lee R. West in Oklahoma City ruled that the FTC exceeded its authority in setting up the registry.

On Thursday, U.S. District Judge Edward W. Nottingham in Denver issued an even broader decision, saying the list violated the free-speech rights of telemarketers.

Nottingham concluded the list had 1st Amendment problems because it barred calls from commercial telemarketers but permitted them from politicians, charities and pollsters. Some legal experts said Friday that if Nottingham's reasoning was applied broadly, it could imperil similar registries in 39 states -- including California.

"We are discussing with the governor as to what is the next appropriate step," said Halley Jordan, spokeswoman for California Atty. Gen. Bill Lockyer. "We will join with the FTC and defend the federal law in court. If we have problems there, we will push ahead with our own state law."

Across the country, several lawsuits challenging state registries are pending. An Indiana case is scheduled for trial Oct. 10. Lawyers representing marketers said Nottingham's decision strengthened their cases.

"The suit in Denver could have a very persuasive impact because it raises many of the same constitutional issues we have raised in our lawsuits," said Errol Copilevitz, a Kansas City, Mo., lawyer who represents several nonprofit groups challenging do-not-call registries in Indiana and North Dakota.

"The Indiana law, for instance, is riddled with exemptions," Copilevitz said. "There are exemptions for newspapers and debt collectors. Anytime you have a regulation that limits speech for one group but allows it from another, you have a constitutional concern."

FTC Chairman Timothy Muris said his agency would ask Nottingham to reconsider his decision, arguing in a statement that the 1st Amendment should not automatically trump personal privacy rights. "Our constitution allows consumers to choose not to receive commercial telemarketing calls," Muris said.

Some legal experts agreed that the FTC would eventually prevail in court. The Supreme Court has upheld the right of consumers to block junk mail, and the court generally has given greater free speech protections to political speech than to commercial speech.

"Putting your name on the do-not-call list is no different than hanging a 'no solicitation' sign on your front door," Reps. W.J. "Billy" Tauzin (R-La.) and John Dingell (D-Mich.) said in a joint statement. "Rest assured, we will examine the judge's opinion closely and will take whatever steps we can."

Also on Friday, a federal appeals court rejected a request from the telemarketing industry to prevent the Federal Communications Commission, which is enforcing the registry with the FTC, from participating in the program.

Recognizing that few people sympathize with its cause, the nation's leading telemarketing trade group -- the Direct Marketing Assn. -- has called on its nearly 5,000 members not to solicit those who have put their numbers on the list.

But a rival group, the Indianapolis-based American Teleservices Assn., which was a plaintiff in the Denver case, has not similarly advised its members.

Some analysts believe the highly competitive industry -- which places 100 million unsolicited phone calls a day with the help of computers and other automated equipment -- won't lighten its call loads.

"Fifty million people have already said, 'Leave us alone,' but telemarketers have said, 'We are going to court and bother you anyway,' " said Walter Janowski, an analyst with Gartner Inc., a research and consulting firm in Stamford, Conn.

Janowski added that the strategy seemed self-defeating since it was generating widespread publicity about anti-telemarketing efforts. With the lawsuits, Janowski said, "telemarketers are drawing more public attention to the do-not-call list and getting more people who never heard of it to sign up. They've made telemarketing a real hot-button issue."

Gerald Bagg, chief executive of direct marketer Quigley-Simpson in Los Angeles, agreed, saying the bad publicity "is going to be bad for the industry....Unless telemarketing firms try [a different approach], it's going to get very hard."

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