The Do-not-call List Controversy: a Parable of Privacy and Speech

• Publication year: 2022

38 Creighton L. Rev. 743. THE DO-NOT-CALL LIST CONTROVERSY: A PARABLE OF PRIVACY AND SPEECH

Creighton Law Review

Vol. 38

RODNEY A. SMOLLA(fn*)

I. INTRODUCTION

The controversy surrounding the constitutional challenge to the federal telemarketing "Do-Not-Call List" is a revealing parable of modern American life. The questions of First Amendment policy and doctrine posed by the challenge to the list are interesting in their own right. The real interest lies, however, not in the doctrinal chess moves themselves, but in the patterns of the larger match those moves reveal.

The "Do-Not-Call List" is the popular nickname for a national Registry maintained by two federal agencies, the Federal Trade Commission ("FTC") and Federal Communications Commission ("FCC"), permitting consumers to opt-in to place their phone numbers on a national list of consumers who do not wish to be called on telephones by telemarketers.(fn1) Consumers can register their personal phone numbers for the list either by phone or online. Most commercial telemarketers are prohibited from phoning consumers on the list, and face severe penalties for violations. There is an exception provided for telemarketers who have an "established business relationship" with the consumer.(fn2) The purpose of the list is to protect privacy, sheltering consumers who opt-in from the hassle and intrusion of unwanted phone calls. The list does not apply, however, to political or charitable callers,(fn3) and thus discriminates in its operation based upon the message and the messenger, a discrimination that places the program in arguable tension with First Amendment principles.

When a federal district judge in Denver struck down the Do-Not-Call List,(fn4) finding that the discrimination it visited against commercial telemarketers was a violation of the First Amendment, the decision torched an enormous political firestorm.(fn5) One might have thought the judge had struck down Social Security, Medicaid, Medicare, the Oscars, the Super Bowl, and the World Series in one fell swoop. With exceptional speed, Congress geared up to fight the court's decision,(fn6) and the world of radio and television talk shows were ablaze with protest.(fn7) The fire was put out, however, when the United States Court of Appeals for the Tenth Circuit reversed the District court, upholding the Do-Not-Call List and rejecting the First Amendment challenge in Mainstream Marketing Services, Inc. v. Federal Trade Commission.(fn8) In October of 2004, the United States Supreme Court declined review.(fn9)

We are in the midst of a new struggle to find an appropriate place for the legal protection of privacy in American life. The quest for the recapture of privacy is the civil rights struggle of this new century. Balancing the protection of privacy against other compelling social interests, such as national security or freedom of speech, will be one of the profound challenges to our legal system in the coming decade. In recent times, privacy has not usually fared well in legal and political face-offs with other social values. In the "Do-Not-Call" list story, however, privacy won. The victory may be an important portent of a shift in national mood; a harbinger of future triumphs.(fn10)

II. THE BACKGROUND STORY: CONGRESS, TELEMARKETERS, THE FTC AND FCC

Congress passed the Telephone Consumer Protection Act ("TCPA") in 1991.(fn11) The law was enacted "to protect residential telephone subscribers' privacy rights to avoid telephone solicitations to which they object."(fn12) The FCC was directed to promulgate regulations that restricted the use of automatic telephone dialing systems.(fn13) In 1992, the FCC adopted rules pursuant to the TCPA, but declined to create a national "Do-Not-Call" list. Instead, the new rules required telemarketers to adopt company-specific Do-Not-Call lists. Under this system, a consumer who did not wish to receive telephone solicitations from a particular company could request that the telemarketer remove that consumer's telephone number from the telemarketer's list. By 2002, however, the FCC appeared to realize that its company-specific approach had failed to provide adequate privacy protection to consumers, and the Commission issued a Notice of Proposed Rulemaking requesting comment on whether the Commission should revisit its decision regarding the establishment of a national Do-Not-Call Registry.(fn14)

Three years after the enactment of the TCPA, Congress in 1994 enacted a second important piece of legislation, the Telemarketing and Consumer Fraud and Abuse Prevention Act ("TCFAP").(fn15) The law instructed the Commission to promulgate rules prohibiting deceptive and other abusive telemarketing acts or practices and to include in such rules a definition of deceptive telemarketing acts or practices.(fn16) The TCFAP, enforced by the FTC, did not apply to activities that were outside of the jurisdiction of the FTC, such as certain financial institutions, common carriers, air carriers and nonprofit organizations, or insurance companies. In 1995, the FTC adopted rules implementing this legislation, rules that did not contain any national Do-Not-Call Registry.

By 2002, however, the FCC appeared to realize that its company-specific approach had failed to provide adequate privacy protection to consumers, and the Commission issued a Notice of Proposed Rulemaking requesting comment on whether the Commission should revisit its decision regarding the establishment of a national do-not-call list. In January 2002, the FTC issued a Notice of Proposed Rulemaking that recommended the creation of a national Do-Not-Call Registry, to be maintained by the FTC, as well as rules that addressed the problem of "abandoned calls" resulting from the use of predictive dialers by telemarketers. In January 2003, the FTC promulgated final rules establishing a nationwide Do-Not-Call Registry and specified requirements for the use of "predictive dialers." The FTC decided that the previous company-specific Do-Not-Call rules, which permitted a consumer to request that his name be removed from a company's call list, were insufficient to protect consumers from unwanted calls. The FTC found that telemarketers interfered with consumers' attempts to be placed on company-specific lists by hanging up on them or ignoring their request. The FTC noted that the prior practice placed too much burden on consumers who had to repeat their Do-Not-Call request with every telemarketer who called, that the company-specific list continually exposed consumers to unwanted initial calls which had significantly increased in numbers since adoption of the original FTC rules, and that consumers had no method to verify that their name had been removed from the company's list. Congress strongly supported these efforts.(fn17)

The FTC exempted charitable organizations from the do-not-call requirements. The FTC made this exception partly in deference to the heightened First Amendment protection afforded charitable speech. The FTC also found that abusive telemarketing practices of the sort the Registry sought to combat were more likely to be undertaken by commercial telemarketers than those soliciting charitable and political contributions. The FCC followed suit, ultimately adopting rules that paralleled those of the FTC.

Congress strongly endorsed this movement in 2003, enacting the Do-Not-Call Implementation Act.(fn18) The Implementation Act provided, among other things, that the FTC could promulgate regulations establishing fees sufficient to implement and enforce the provisions of its national Do-Not-Call Registry.(fn19)

III. THE CONSTITUTIONAL CHALLENGE TO DO-NOT-CALL

A. THE PROTECTION OF PRIVACY

The Do-Not-Call Registry poses a conflict between two sacred American values, both of constitutional dimension, the right of privacy and freedom of speech. Privacy may be the most important emerging right of this new century. As new technologies make it increasingly difficult for Americans to maintain their privacy, evolution in administrative, statutory, and constitutional law is necessary to keep pace, preserving privacy as an essential element of human dignity. Just as we make adjustments for inflation in cost-of-living indexes, we may need to think of "escalation clauses" in our legal protection for privacy. As the ability of the outside world to impinge on individual privacy increases, legal principles must escalate to meet the challenge, preserving the power of the average person to fight back against unwelcome intrusions.(fn20)

How significant are the privacy interests implicated by telemarketing? One might dismiss the privacy interests as relatively trivial. The consumer, after all, may simply hang up. It is plain, however, that to a large number of Americans, the privacy intrusions posed by telemarketing were deemed substantial. Over 50 million Americans signed up with the Do-Not-Call list within the first few months of its existence - roughly the number of voters who vote in a typical American presidential election.(fn21) Uninvited telephone solicitations are highly intrusive, particularly when they come during family time such as dinner and early evenings in the home.

In turn, the privacy of the home has always been at the core of English and American conceptions of privacy. The sacredness of the home as a "castle," a fortress of privacy surrounded with moats of...