Saturday, September 27, 2003

Re: Commercial solicitation -- 10th Circuit to the rescue!

The 10th Circuit has denied the telemarketer's request for a stay of the FCC's order establishing the national do-not-call registry in conjunction with the FTC. The 10th Circuit's ruling does not directly affect the district court's order because it is a different case (but involving the same plaintiffs), but it does hint to the FTC that they could probably obtain immediate relief from the district court's order (meaning the list would go into effect on time) assuming that the arguments are largely the same (and I suspect, because the same plaintiffs are involved in both cases, that would hold true). As to the Tenth Circuit's opinion, nine times out of ten, a failure to show a substantial likelihood of success in a motion for a stay means you're doomed when the full appeal gets decided. This means unless the Supreme Court grants certiori, the registry should be in the clear. Of course, another circuit could definitely muddy the waters by going the opposite way and the Supreme Court would feel compelled to review the issue.

As a point of clarification, I stated earlier that the FCC dropped the ball when it refused to create the do-not-call registry back in 1992. But it appears the current effort to create the registry was really a joint effort between the FTC and the FCC, which makes the Oklahoma decision especially flawed (the court did not discuss the FCC's change of position at all but used language from the FCC's 1992 decision). No matter--the Oklahoma decision will be dead once GWB signs the law that flew through Cognress.

Unfortunately, the 10th Circuit, in its per curiam opinion (meaining a unanimous opinion without a designated author), did not give any hints as to its reasoning. Interestingly, though, it did consider that millions of Americans have registered on the list as demonstrating that there was a "strong expectation interest" in allowing the DNC list to go forward.

Response to Joe's Points

I disagree that this case should be evaluated the same as Rowen (a copy of which may be found at Cornell's Legal Information Institute), but in the end we arrive at the same place. The DNC list does distinguish between commercial and noncommercial speech, and by doing so the government favors noncommercial speech by restricting commercial speech. This necessarily intertwines the government with the speech, as the district court correctly held (p. 18: "The mechanism purportedly created by the FTC to effectuate consumer choice instead influences consumer choice, thereby entangling the govenrment in deciding what speech consumers should hear).

I don't think what decides the issue is whether a lot of discretion is left in the hands of the government to determine what kind of speech survives and what does not. I agree that it would be more problematic if the government were given discretion, but the lack of discretion does not remove the constitutional concerns by itself. If the government passed a prohibition on receiving calls regarding abortion at home, it would not be difficult to decide which telephone calls fit within the restriction and which fell outside it, but there would be grave constitutional concerns all the same. But unlike this hypothetical, the courts have drawn a distinction between commercial and noncommercial speech by giving commercial speech less protection. The real inquiry, it seems to me, is just a question of how much or how little protection commercial speech is entitled to.

I think the court went wrong when it held that "any attempt to distinguish between commercial and noncommercial speech solely because of commercial speech's lesser protected status under the Constitution attaches more importance to the distinction ... than cases warrant and seriously underestimates the value of commercial speech." (p. 25.) The district court claimed this was the position the Supreme Court took in Cincinnati v. Discovery Network, but I disagree. In that case, the Court rejected the city's contention that its regulation accomplished its stated purpose because commercial use of newsracks in parks "had only a minimal impact on the overall number of newsracks on the city's sidewalks." (507 U.S. 410, 419 (1993).) The city's argument was premised on the idea that commercial speech had such low value that it had a very small burden to show that its regulation served some public good. But at the same time the Court refused to impose a tougher standard on the city just because its reason for regulating commercial speech was not "based on the content of the speech or the particular adverse effects stemming from that content." (507 U.S. at 417 n.11).

The district court's opinion seems to be doing just that--imposing a greater burden on the government to show why commercial telephone solicitation as commercial speech is somehow more harmful than noncommercial telephone solicitation. It seems entirely plausible that the privacy interest involved here justifies restricting commercial speech but the same privacy interest does not justify the same regulation on noncommercial speech--even though they both impose the same level of intrusion or harm.

To summarize, I think that the DNC list does involve government regulation of speech because it favors noncommercial speech over commercial speech. The government is therefore required to come forward with some substantial interest that is served by the regulation and demonstrate a reasonable fit between the regulation and its goal. In my opinion, the government has met this burden--a 40-60% reduction in unwanted calls seems to me to be a substantial fit with the government's stated goals (compared to 3% in Cincinnati).

On Telemarketing and the Environment

Honestly, I posted the comment for comic relief, not because I thought it had any real merit. If it had merit, the marketing association would undoubtedly have raised the point in its legal challenges, but it smartly chose not to. I have to give some credit to its authors for creativity, but that's all I will give them.

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