MISCONCEPTIONS REGARDING FEDERAL
AND STATE DO-NOT-CALL LISTS
By William E. Raney, Esq.

Copilevitz and Canter, LLC

The federal do-not-call list has now been in place for nearly two years. The FTC's efforts to enforce the list are now well on their way to reaching settlements with several alleged offenders. This article will attempt to dispel some misconceptions about the list and its enforcement, as well as enforcement of the various state do-not-call lists.

As you may know, the federal do-not-call list can be enforced by three different types of entities, each with differing motivations. First, the two federal agencies charged with administering the list can enforce its terms. These are the Federal Trade Commission and the Federal Communications Commission. The FTC and the FCC have an agreement to attempt to avoid overlapping actions against the same defendants. Generally, these federal agencies' motivation is to investigate complaints and reduce their frequency. Both agencies want to get "tough" with alleged violators, sometimes to the point of twisting the law.

Both the FTC and FCC rules allow for a good faith defense for calls made to persons on the list by a good faith error. It is a misconception that this good faith defense only applies to the first complaint, or is not available after a certain number of complaints. Given the computerization of dialing, it is very possible a single good faith programming error could cause hundreds or more of illegal calls. Contrary to the position taken at times by the FTC, this is a paradigm "good faith" defense situation, and the calling company may not be liable at all for these calls.

Second, state attorneys general can enforce the federal do-not-call list. State attorneys general have no agreement with the FCC or FTC to avoid overlapping actions. State attorneys general are usually motivated to resolve complaints from their citizens, but also, at times, are motivated by the desire to protect their "turf" from the federal agencies.

Although state laws that differ from the federal standards (on the length of the established business relationship exemption, for example) likely do not apply to interstate calls, many state attorneys general will argue the opposite in an effort to protect their turf.

Third, private plaintiffs can file actions for alleged violations of the list or the federal telemarketing laws. Although some private plaintiffs are motivated by the desire to protect their privacy, most are motivated by the money damages available to them in these suits. The plaintiffs often hope for a quick settlement, and are not above adding various other "violations" to suits to increase the potential settlement. The good faith defense applies to these suits, too, usually, but the nuisance amount of money involved, and the fact that defending them often involves hiring local counsel and travel to remote jurisdictions, means that most of these suits settle. The plaintiffs then have new incentive to sue more businesses. I have clients that do not settle, ever, if they are in the right for this reason - a settlement of a "nuisance" often created more nuisances. Showing that you are a hard target can have some value.

One thing that is not a misconception: compliance efforts in advance of a state or federal inquiry are much more cost effective than litigation and settlement afterwards. There are several entities that can audit your compliance procedures. This audit serves two purposes: 1) it can point out deficient areas which can then be fixed, and 2) it can create an outside verifiable record of your efforts (which is a helpful element to proving a good faith defense, if needed).

My law firm can provide service like that, but an audit does not have to be done by an attorney (although maybe I should encourage that potential misconception). Please direct questions or comments regarding this article to me by email at braney@cckc-law.com or telephone at 816-277-0856.