The federal do-not-call rules that went into effect as recently as October 2003 have just survived a major constitutional attack. In four cases that were consolidated on appeal by the United States Court of Appeal for the Tenth Circuit, telemarketers challenged the rules as imposing unconstitutional restrictions on free speech under the First Amendment. In a lengthy written decision dated February 17, the Tenth Circuit upheld the constitutionality of the do-not-call rules.

Background

The Federal Trade Commission and the Federal Communications Commission promulgated rules in 2003 that created the National Do-Not-Call Registry. As covered in more depth in one of my recent columns, the Registry is a list containing the telephone numbers of consumers who have expressed their desire not to receive unsolicited telephone calls from commercial telemarketers.

Generally speaking, commercial telemarketers are prohibited from placing calls to telephone numbers that have been placed on the Registry, absent express written consent or an established business relationship, and they must pay an annual fee to access the telephone numbers on the Registry in order to delete those numbers from their solicitation lists.

It has been reported that the Registry already contains in excess of 50 million telephone numbers.

Constitutionality

Not surprisingly, telemarketers are not happy with the restrictions placed on them by the do-not-call rules. Indeed, many of them believe that the restrictions place an unconstitutional restraint on their free speech rights under the First Amendment. As a result, in several federal lawsuits, they challenged the rules as being unconstitutional. The cases were consolidated on appeal before the Tenth Circuit under the title Mainstream Marketing Services, Inc. v. Federal Trade Commission. In its ruling dated February 17, the Tenth Circuit validated the constitutionality of the do-not-call rules. The court fashioned the issue on appeal as "whether the First Amendment prevents the government from establishing an opt-in telemarketing regulation that provides a mechanism for consumers to restrict commercial sales calls but does not provide a similar mechanism to limit charitable or political calls."

The court held that the Registry is a proper 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." As such, "there is a reasonable fit between the do-not-call regulations and the government's reasons for enacting them."

In coming to this conclusion, the court found that four aspects of the Registry show that it is consistent with First Amendment requirements. First, the Registry restricts "only core commercial speech – i.e., commercial sales calls." Second, the Registry "targets speech that invades the privacy of the home, a personal sanctuary that enjoys a unique status in our constitutional jurisprudence." Third, the Registry constitutes an "opt-in program that puts the choice of whether or not to restrict commercial calls entirely in the hands of consumers." And fourth, the Registry furthers the government's interest in "combating the danger of abusive telemarketing and preventing the invasion of consumer privacy, blocking a significant number of the calls that cause these problems."

The court also found that several other features of the Registry help demonstrate that it is consistent with principles of the First Amendment. For example, the do-not-call rules do not "hinder any business' ability to contact consumers by other means, such as through direct mailings or other forms of advertising." In addition, the rules "give consumers a number of different options to avoid calls they do not want to receive," as "consumers who wish to restrict some but not all commercial sales calls can do so by using company-specific do-not-call lists or by granting some businesses express permission to call."

At the end of the day, the court determined that the Registry "offers consumers a tool with which they can protect their homes against intrusions that Congress has determined to be particularly invasive." Indeed, "just as a consumer can avoid door-to-door peddlers by placing a 'No Solicitation' sign on his or her front yard, the do-not-call registry lets consumers avoid unwanted sales pitches that invade the home via telephone, if they choose to do so."

Follow the law

Given that the challenges to the do-not-call rules have been unsuccessful to date, telemarketers would be very smart to make sure that they are in compliance with the rules, as penalties for violations can be severe.

This article first appeared on Law.com.

Eric Sinrod is a partner in the San Francisco office of Duane Morris (www.duanemorris.com), where he focuses on litigation matters of various types, including information technology disputes. His Web site is www.sinrodlaw.com, and he can be reached at ejsinrod@duanemorris.com. To receive a weekly e-mail link to Mr. Sinrod's columns, please send an e-mail with the word Subscribe in the Subject line to ejsinrod@duanemorris.com.