Within days of each other, two federal courts issued rulings striking down the Federal Trade Commission's (FTC) new do-not-call rules which created the hugely popular federal Do-Not-Call registry. On September 23, 2003, an Oklahoma federal court ruled that Congress had not given the FTC authority to establish the registry. On September 25, 2003, a federal judge in Denver, Colorado ruled that the registry was unconstitutional. The decisions would appear to temporarily block the Do-Not-Call program, under which over 50 million consumers have elected not to receive unsolicited telemarketing calls, scheduled to go into effect on October 1, 2003. Responding to the first decision out of the Oklahoma court, Senator Charles Schumer (D-NY) agreed: "This is the goofiest decision I've seen in a long time," he said. "There's no question that Congress is going to correct this." On this issue, he said, "Everyone has come together." "What we can do is change the law," said Senate Commerce Committee Chairman John McCain (R-AZ) in a statement. If the FTC needs more authority, "I will work with my colleagues to provide this." Before the week was up, both houses of Congress had a bill on the way to the President for signing. Rep. W.J. "Billy" Tauzin (R-LA), chairman of the House Energy and Commerce Committee, told a radio station: "When it comes to passing legislation, Congress can be a real slow beast, but when 50 million Americans are mad, it can be a real fast rabbit." The Senate voted 95 to 0 to overturn the Oklahoma decision, and the House vote was 412 to 8, just before the news arrived of the Colorado decision.
In the Oklahoma federal court decision [pdf format], U.S. District Court Judge Lee R. West wrote that the FTC is not authorized under current law to establish the registry. He wrote: "Admittedly, the elimination of telemarketing fraud and the prohibition of deceptive and abusive telemarketing acts or practices are significant public concerns." Nonetheless, he reasoned, the power to regulate in this area must be based in a grant of authority from Congress. "Absent such a grant of authority in this case, the court finds the do-not-call provision to be invalid." The lawsuit was filed by the Direct Marketing Association , the U.S. Security, Chartered Benefit Services, Global Contact Services, and InfoCision Management Corp. The FTC filed a motion for a stay of the court's decision pending appeal. FTC chairman Timothy Muris said in a statement: "This decision is clearly incorrect. We will seek every recourse to give American consumers a choice to stop unwanted telemarketing calls.
Within a matter of days, Congress had acted. But U.S. District Court Judge Edward Nottingham found the do-not-call plan unconstitutional because it would have allowed telemarketers for charitable organizations to continue to call numbers on the list, even though commercial firms would be barred from doing so. The complaint was filed in January 2003 by the American Teleservices Association .
Why This Matters: It is a measure of the popularity of the federal Do-Not-Call Registry that Congress acted so quickly to pass legislation to overturn the Oklahoma ruling. However, the Colorado ruling, which raises a First Amendment objection, will not be so easily remedied by Congress unless it votes to change the relative treatment of charitable and commercial telemarketers…which will give the telemarketing industry lobbyists another bite at the apple.