Judge's ruling strikes down national do-not-call registry

Published September 24, 2003

WASHINGTON (AP) - Hold the phone! Consumers who thought they would get a reprieve from telemarketing calls starting next week may have to wait for some peace and quiet.

A federal judge in Oklahoma City sided yesterday with telemarketers who sued to block the Federal Trade Commission's "do-not-call" list. The FTC asked the court for a stay to block the ruling and filed for an appeal.

More than 50 million phone numbers have been submitted to the registry by people who don't want business solicitation calls. The list was to take effect Oct. 1, and regulators and telemarketers said they weren't sure whether the judge's order would stop that from happening.

The FTC said that despite the ruling, consumers can continue signing up for the free service. "It's business as usual," spokeswoman Cathy MacFarlane said.

Lawmakers from both political parties quickly condemned the judge's decision and pledged to pass legislation to clarify any questions about FTC authority.

"This is the goofiest decision that I've seen in a long time," said Sen. Charles Schumer (D-N.Y). "There is no question that Congress intended for the FTC to have this authority and will quickly make any correction that the court, in its arcane logic, deems necessary."

Rep. Billy Tauzin (R-La.), chairman of the House Energy and Commerce Committee, has already drafted legislation to give the FTC explicit authority to operate the do-not-call list and will try to push it through the House today, spokesman Ken Johnson said. "We're absolutely confident that we will solve this problem," he said.

Rep. Edward Markey (D-Mass.) added, "If this decision is not reversed quickly, 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."

Telemarketers who say the list would devastate their industry convinced U.S. District Judge Leex West that the FTC had overstepped its authority. West said the Federal Communications Commission, not the FTC, can operate a national do-not-call registry.

West said recently adopted rules that allowed the FTC to create such a list were invalid. However, he did not immediately issue an order directing the FTC to stop the list.

The Direct Marketing Association, one of the groups that challenged the registry, said it hadn't decided whether its members would stop calling people on the list after Oct. 1. The association has said its own do-not-call list is effective and a government registry is unnecessary.

"We will find some way to accommodate the wishes of those who don't want to be called," said association President Bob Wientzen. He said the association was pleased by the ruling but noted that Congress could intervene.

Since the FTC opened the do-not-call list for registration in June, people have submitted 31.1 million phone numbers at the Web site www.donotcall.gov and 10.9 million by calling toll-free at 1-888-382-1222. An additional 8.6 million numbers were transferred from existing state lists.

There are about 166 million residential phone numbers in the United States and an additional 150 million cell phone numbers.

The FTC's rules require telemarketers 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. Consumers would file complaints to an automated phone or online system.

While the FTC expects the list to block 80 percent of telemarketers, exemptions include calls from charities and pollsters and calls on behalf of politicians. A company also may call a person on the no-call list if that person has bought, leased or rented from the company within the past 18 months or has inquired about or applied for something during the past three months.

The telemarketing industry estimates the list could cut its business in half, costing it up to $50 billion in sales each year.

The American Teleservices Association, another industry group, has legal challenges pending against the FTC and the FCC. The FCC added its authority to the list to close regulatory loopholes and block calls from certain industries, including airlines, banks and telephone companies.

The Oklahoma City lawsuit was filed by the Direct Marketing Association, U.S. Security, Chartered Benefit Services Inc., Global Contact Services Inc. and InfoCision Management Corp.