Consumer groups say Tuesday’s federal court ruling that blocks the Do Not Call Registry is just a temporary legal setback, and won’t ultimately stop government agencies from preventing most dinner-time telephone interruptions. A U.S. judge has ruled that the Federal Trade Commission overstepped its authority in creating the national do-not-call list against telemarketers. The FTC asked a court to stay its decision while it appeals the ruling.
IN A LAST-MINUTE reprieve for telemarketers, U.S. District Judge Lee R. West granted a motion for summary judgment requested by the telemarketing industry that — for now — stops implementation of the Federal Trade Commission’s do-not-call list. Some 50 million phone numbers are registered on the list, which was to take effect Oct. 1. The telemarketing industry claims the list would cost $50 billion in sales if member firms were prevented from calling all of the telephone numbers.
West’s ruling leaned on a technicality. He said the FTC did not have authority to regulate the telemarketing industry. Instead, that authority rests with the Federal Communications Commission, he said.
Late Wednesday, the FTC said it had asked the court to stay its decision blocking its list while it appeals the case.
The FTC said that it had asked the U.S. District Court in Oklahoma City to prevent its ruling from taking effect while a higher court hears its appeal.
“This decision is clearly incorrect,” FTC Chairman Timothy Muris said earlier in a written statement. “We will seek every recourse to give American consumers a choice to stop unwanted telemarketing calls.”
The ruling shocked frustrated consumers, who raced to online Web sites to register their grievances.
“What happened to ‘For the people by the people?’ ” wrote one, on the discussion board Slashdot.org. “Who cares what a judge thinks — 50 million people can’t be wrong. It’s our phone number. If we want it on a no-call list it should be our right to put it there.”
But consumer advocates say there’s no reason for alarm yet. Chris Hoofnagle, associate director of the Electronic Privacy Information Center, said he’s confident the judge’s ruling would be overturned by a higher court.
“Congress passed a law ... that specifically grants the FTC authority to collect money from telemarketers in order to create a do-not-call list,” Hoofnagle said. That implies the agency has authority to regulate telemarketrs, he said, calling the judge’s interpretation “weird.”
“Under precedent set by the Supreme Court, government agencies have deference (to regulate industries) unless they’ve acted arbitrarily,” Hoofnagle said. “And it’s hard to say the FTC acted arbitrarily here.”
The FTC has other options, too, said Ari Schwartz, associate director of the Center for Democracy and Technology. It could just switch the entire do-not-call operation over to the FCC. Or Congress could enact a new law with more specific language granting the FTC authority over telemarketers. An obviously popular campaign issue, Schwartz said such a law would be much tougher than the current do-not-call legislation.
“Congress is not going to stop something from happening that 99 percent of the people want,” Schwartz said.
House Energy and Commerce Committee Chairman Billy Tauzin, R-La., and Rep. John Dingell, D-Mich., said Wednesday they were confident the ruling would be overturned and believe Congress did give the FTC the necessary authority. “We will continue to monitor the situation and will take whatever legislative action is necessary to ensure consumers can stop intrusive calls from unwanted telemarketers,” they said in a joint statement. The House committee authorized the list.
“I suspect the courthouse in Oklahoma would want to add itself to the ‘do not call’ database in order to protect itself from the millions of consumers who feel deeply about the right to be left alone by telemarketers,” Rep. Ed Markey said.
Meanwhile, the ruling doesn’t affect the 30 states which are currently operating or creating their own do-not-call lists. In Pennsylvania, for example, 3.3 million residents have signed up with the attorney general’s office, which gives them the same protection from telemarketing calls as the FTC registry.
“This ruling has no impact on what happens in our do-not-call program,” said Barbara Petito, spokeswoman for the attorney general’s office.
The Direct Marketing Association Inc., one of the plaintiffs, said it was happy with the ruling, even though it “acknowledges the wishes of millions of U.S. consumers who have expressed their preferences not to receive telephone-marketing solicitations — as evidenced by the millions of phone numbers registered on the FTC list.”
The suit was filed by DMA, U.S. Security, Chartered Benefit Services Inc., Global Contact Services Inc. and InfoCision Management Corp.
Telemarketers would have to check the list every three months to see who doesn’t want to be called. Those who call listed people could be fined up to $11,000 for each violation.
The Associated Press and Reuters contributed to this report.