The case of Telemarketing business call and Federal Trade Commission

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"I'm calling," says a friendly voice, "on behalf of Shorebirds of America. Your contribution ..."

Or, in another scenario, the phone rings.

"Hullo? ... Hullo? ... Hullo!"

This time you have been subjected to what is known in the telemarketing business as an "abandoned call." If a telemarketer does not begin his pitch within two seconds after you pick up the receiver, the system triggers a disconnect. Imagination goes to work: Was the caller a burglar, checking household occupancy? A spiteful neighbor? Your daughter's clandestine hunk?

In a relevant case now pending in the Supreme Court on a petition for appeal, opposing constitutional rights meet in headlong collision. There is the First Amendment right of a charitable organization to engage in free speech — including unwanted, irksome, irritating speech. There is also a citizen's Fourth Amendment right — a right as old as Magna Carta — to be free from state-sanctioned violation of his home.

The pending appeal has been filed by the National Federation for the Blind, in tandem with Special Olympics Maryland. In the eleemosynary ocean, the two nonprofits are very small fry. Thus they rely upon hired professionals, as distinguished from staff and volunteers, to raise their operating funds. As such, they fall under the jurisdiction of the Federal Trade Commission. Remarkably, the FTC has no jurisdiction over the nonprofit whales, e.g., the Red Cross. A panel of the U.S. Court of Appeals for the 4th Circuit last October refused to enjoin the commission from enforcing its TSR (Telemarketing Sales Rule) against the little guys.

On the surface, the dichotomy seems both unfair and unconstitutional. Why pick on one supplicant and not another? The purpose of the rule presumably is to deter fraud in fund raising. It seems unlikely that paid fund-raisers are more inclined to flimflam than unpaid fund-raisers. Where's the evidence? Counsel for the petitioners plausibly argue that in this respect there is no legitimate distinction between little fish and big fish. In the universe of telemarketing, all fish are equally intrusive, and all such botherations are equally bothersome.

Writing for a 2-1 panel in the 4th Circuit, Judge J. Harvie Wilkinson found nothing amiss in the FTC's decision. "We think Congress clearly authorized the FTC to promulgate this new rule." It is a "reasonable regulation" that is "narrowly drawn." It preserves the right of charities to make telephone solicitations. To strike down the rule would disable the federal government "from taking even the most modest steps necessary to protect the home environment from intrusive phone calls."

Wilkinson is one of the ablest judges on the federal bench. His opinions are models of clarity and style. Here he cites to three Supreme Court precedents involving state regulation of charitable fund raising. In 1980 the court examined the ordinance of a Chicago suburb and found it an unconstitutional intrusion upon free speech. Four years later the court knocked down Maryland's effort to limit the fees charged by fund-raising professionals. In 1988 Justice William Brennan spoke for a 6-3 court in voiding a similar law in North Carolina. Brennan held that the solicitation of funds for a charitable cause is protected speech.

Wilkinson is made of sterner stuff. He found nothing unconstitutional in the FTC's regulations. One rule prohibits professional fund-raisers from making "abandoned calls." Such calls, by definition, involve no speech. "A perfectly reasonable person can find silence or repeated silences at the other end of a phone unnerving." Such silences "can stoke fears and be unsettling." The regulation is "modest at best and is surely tailored to protect the sanctity of the home."

The FTC's restrictions, Wilkinson concluded, are "modest, reasonable, and quite different from the laws invalidated" by the three cases from the 1980s. Joined by Judge William B. Traxler, he brushed aside a dissenting opinion from Judge Allyson Duncan, who found no relevant constitutional distinction between paid fund-raisers and unpaid fund-raisers.

The case presents a tough call for the high court. My vote would be first to affirm the 4th Circuit — and then to lobby Congress for a net that snares the big fish too.

(Letters to Mr. Kilpatrick should be sent by e-mail to kilpatjj@aol.com.)


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