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Federal Appeals Court Upholds National Do-Not-Call Registry; FTC Considers Amending Rule to Require Monthly Updates to Do-Not-Call List

02.20.04
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Earlier this week, a unanimous three-judge panel of the Tenth U.S. Circuit Court of Appeals upheld the constitutionality of the federal do-not-call registry and related rules. The appeals court overturned the earlier ruling of U.S. District Court Judge Edward Nottingham, who ruled that the federal government’s do-not-call program violated the First Amendment rights of telemarketers because the do-not-call rules prohibit calls from commercial sales entities to consumers who sign up for the do-not-call list, but not calls from non-profit and political organizations. In challenging the do-not-call registry, telemarketers had argued that this distinction between commercial and other types of speech was discriminatory and unconstitutional. The appeals court disagreed. “We hold that the do-not-call registry is a valid commercial speech regulation because it directly advances the government’s important interests in safeguarding personal privacy and reducing the danger of telemarketing abuse without burdening an excessive amount of speech".

In a consolidated appeal, the court also ruled that: the FTC possessed statutory authority to enact the registry; the FCC was not arbitrary and capricious in enacting an established business relationship exception to the registry; and the fees telemarketers must pay to access the do-not-call list are permissible as they are designed to defray the cost of legitimate government regulation. The various telemarketing trade associations that had brought the original court actions have not yet determined whether they will appeal the Tenth Circuit’s decision to the U.S. Supreme Court.

In a related development, late last week the FTC issued a Notice of Proposed Rulemaking seeking to amend its rule requiring telemarketers to access the FTC’s national do-not-call list and to purge new phone numbers added to the registry from their call lists, every 30 days. Current FTC rules require telemarketers to review the registry and purge new number from their call lists every three months. The FTC issued this rulemaking in response to recently enacted federal legislation (the Consolidated Appropriations Act of 2004) requiring the FTC to amend the relevant rule by Tuesday, March 23, 2004, “to require telemarketers…to obtain…the list of telephone numbers on the ‘do-not-call’ registry once a month.” Because the FTC has no discretion under the statute as to whether to amend the rule as described, the FTC is merely seeking comment on whether to use the term “30 days” in place of “monthly” as used in the statute, and on the effective date of this rule change. Interested parties may file comments by next Thursday, Feb. 26, 2004.

If you have any questions about the decision or the FTC’s rulemaking, please do not hesitate to call us.

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