DENVER A federal appeals court upheld the government's do-not-call registry today, dismissing telemarketers' claims that it violates free-speech rights and is unfair because it doesn't apply to charitable or political solicitations.
In an anxiously awaited opinion in Mainstream Marketing Services v. FTC, a unanimous three-judge panel of the 10th U.S. Circuit Court of Appeals called the registry "a reasonable fit."
"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," the court said.
The do-not-call registry, which took effect in October, contains more than 56 million phone numbers.
"The 10th Circuit's ruling represents a major victory for American consumers," said Timothy Muris, chairman of the Federal Trade Commission. "We are pleased that this popular program, like America's dinner hour, will not be interrupted."
Tim Searcy, executive director of the American Teleservices Association trade group, said he was disappointed by not surprised. "It's a complicated issue," he said. "This might ultimately have to be resolved by the United States Supreme Court."
The Direct Marketing Association said the industry would follow the law while it considers whether to appeal. "Our industry will respect the wishes of consumers who have placed their household telephone numbers on the do-not-call list," association president H. Robert Wientzen said.
The appeals court overturned U.S. District Judge Edward Nottingham of Denver, who said the list violated the telemarketing industry's free-speech rights by barring calls from businesses but not charities.
"As a general rule, the First Amendment does not require that the government regulate all aspects of a problem before it can make progress on any front," the ruling said. The court also said there was no evidence suggesting charitable or political callers were nearly as troublesome as general telemarketing calls.
The registry "offers consumers a tool with which they can protect their homes against intrusions that Congress has determined to be particularly invasive," 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," the court said. "We are convinced that the First Amendment does not prevent the government from giving consumers this option," it added.
"For those concerned about any government intrusion into free speech – commercial or otherwise – there’s some encouraging language from the appellate court," said Ken Paulson, First Amendment Center executive director. "The court says that there would be no justification for more direct government regulation of telemarketing because this system of allowing consumers to opt in is an effective alternative. That means that other areas in which there are calls for greater government intervention – including the Internet and cable television – are best addressed in both practical and constitutional terms through a system where consumers make the choices."
The court consolidated the appeal of Nottingham's decision with two related challenges a case brought against the Federal Communications Commission by Denver telemarketers and the FTC's appeal of a ruling in Oklahoma that said the agency had no authority to create and enforce the list.
It was Nottingham's ruling that had been closely watched because of the constitutional issues involved. His decision had threatened to cripple the FTC's ability to fully punish telemarketers and keep it from sharing information about the list, hindering the FCC from enforcing it.
The FTC also had to stop providing the list to telemarketers, meaning they were free to call listed numbers without fear of reprisal. The appeals court had put Nottingham's ruling on hold pending its decision.
Earlier this month, the FTC said it wanted to shorten the time it takes for consumers who sign up for the do-not-call list to start seeing a drop-off in telemarketing calls. The plan would require telemarketers to obtain updated lists of phone numbers every 30 days, rather than every three months.
The FTC said it has received about 150,000 complaints. It has not taken any action against a firm, though the FCC in December issued a complaint against California-based CPM Funding Inc./California Pacific Mortgage.