'Do not call' list on hold
U.S. court rules FTC overstepped its authority when it set up the list to block telemarketing calls.
September 24, 2003: 2:36 PM EDT
NEW YORK (CNN/Money) - A federal court has blocked the national "do not call" list -- meant to allow consumers to stop unwanted telephone sales calls -- just days before it was scheduled to take effect.
The ruling Tuesday by the U.S. District Court in Oklahoma was a victory for the Direct Marketing Association and telemarketers who said the registry violated their rights under the First and Fifth Amendments to the Constitution.
Judge Lee West ruled that the Federal Trade Commission cannot enforce the do-not-call registry. The FTC has signed up some 50 million phone numbers for the list, which was due to become effective Oct. 1.
In a statement Wednesday, the DMA acknowledged that millions of American do not want to receive telephone marketing calls. The group said it supports the idea of a list for consumers to express their preference not to be solicited by telephone, and pointed out that for years it has offered its own no-call system for consumers.
The DMA is a trade group representing about 5,000 U.S. companies. Other plaintiffs, all telemarketers, were U.S. Security, Chartered Benefit Services Inc., Global Contact Services Inc. and InfoCision Management Corp.
FTC Chairman Timothy Muris called the decision "clearly incorrect," and vowed the agency will "seek every recourse to give American consumers a choice to stop unwanted telemarketing calls."
House Energy and Commerce Committee Chairman Billy Tauzin, R-La., and the committee's ranking member, John Dingell, D-Mich., said they were disappointed by the ruling but are confident it will be overturned.
"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," the lawmakers said in a statement.
The FTC's do-not-call list was created in early 2002 and implemented this year after Congress ordered the agency to make rules preventing abusive and deceptive telemarketing practices.
Plaintiffs challenged the creation of the list and its prohibition of "abandoned calls," defined as one in which the telemarketer does not get on the line within two seconds of calling a consumer. They wanted the court to prohibit the FTC from enforcing the registry and rules against abandoned calls.
West agreed regarding the registry, but disagreed regarding abandoned calls.
The judge held that it was "inappropriate" for Congress to have allowed the FTC to interpret the congressional orders on its own, saying it "raises serious constitutional questions."
West agreed with the plaintiffs' argument that Congress should have given an "unambiguous grant of authority" for the FTC to create the registry and other rules.
"Admittedly, the elimination of telemarketing fraud and the prohibition against deceptive and abusive telemarketing acts or practices are significant public concerns," the court wrote in its order. "However, an administrative agency's power to regulate in the public interest must always be grounded in a valid grant of authority from Congress."
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