Fighting Immediate-Disconnect Laws

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On Feb. 14, I argued before the 8th U.S. Circuit Court of Appeals, based in St. Louis, in a challenge to Arkansas' immediate-disconnect law by the National Federation of the Blind of Arkansas.


The Legislature enacted the law, titled An Act Concerning Residential Telephone Sales and Solicitations, in 1997. The law creates a "no-rebuttal" requirement applicable to most telephone solicitations by stating, "If the person receiving the telephone call indicates that he or she does not want to hear about the charity, goods or services, the caller shall not attempt to provide additional information during that conversation about the charity, goods or services."


Arkansas' law is unusual because it applies to charitable solicitations by telephone rather than solely to telemarketing by commercial entities that sell goods or services. At least a dozen states have laws that apply similar restrictions to commercial telemarketing. Arkansas, Idaho, Illinois, Kansas, Kentucky, Mississippi, North Carolina, Oregon, Pennsylvania, South Dakota, Utah and Washington have "permission-to-continue" or no-rebuttal laws.


If you have not incorporated these immediate-disconnect, permission-to-continue or no-rebuttal laws into your scripts, you risk becoming a test case for these laws.


You also face the daunting task of training your telemarketers to determine when an ambiguous statement is an indication that the consumer is not interested.


The distinction between Arkansas' law and many similar state laws is important because charitable solicitations have been held to be fully protected by the First Amendment guarantee of free speech, while commercial telemarketing is protected at a lesser level.


The state argued, however, that the law existed to protect residential privacy. The state made this argument despite the Telephone Consumer Protection Act, Telemarketing Sales Rule and Arkansas' own do-not-call lists, through which Arkansas residents can prevent calls in a way that does not force a solicitor to guess as to what the term "indicates" in this context might mean. Is a pause an indication of disinterest? What about a sigh? What about the statement, "I'm tired tonight"? Any of these, depending on context and intonation, can mean several different things.


Furthermore, the state made this argument even though the law does not prohibit someone from calling back immediately after the indication of disinterest.


The court may deliberate for some time on this matter, but a favorable ruling, depending on how it is written, could enable us to challenge the rest of the states' no-rebuttal laws.


However, most state legislatures are not considering bills similar to Arkansas' law. Many state legislatures are considering new laws creating do-not-call lists. At least a score of states are considering bills that would add to the group where a telemarketer must screen initial calls against a state list.


The constitutionality of state DNC laws, furthermore, is far from certain. In the Arkansas challenge, one case used in my argument was a challenge to a "do-not-solicit" law in Illinois that applied solely to real estate solicitations. The government argued that the law was intended to further two important goals: prevention of "blockbusting," a predatory real estate practice; and residential privacy.


The court did not find these two reasons persuasive, however, because residential privacy was not furthered by a ban applicable to one type of call and not others. Because the law was so underinclusive, affecting only one type of telemarketing call, it could not be justified by the argument that it furthered the interests of residential privacy.


Most state DNC laws also are underinclusive. They often contain exemptions from many types of calls based on which lobbying group was most effective when the law was being considered.


For this reason, a challenge to a state DNC law under the First Amendment may succeed. This argument should eventually be useful if a major enforcement action is brought.


Another bill that deserves your attention has been proposed in Arizona. Senate Bill 1254 would broaden the types of businesses that are required to register, pay a fee and post a bond before telemarketing in or from the state.


Currently, Arizona requires registration only for organizations that offer prizes or gifts or certain other high-risk activities. If passed, the bill would require most telemarketers to post a $100,000 bond before soliciting in the state.


Finally, Rhode Island is considering a bill that would amend its telemarketing curfew hours to 9 a.m. to 5 p.m. on weekdays and from 10 a.m. to 5 p.m. on Saturdays, the most restrictive such law in the nation.


The curfew is somewhat deceptive, however, because it applies only if your business is required to register as a telemarketer in the state.


Rhode Island's registration law is similar to Arizona's current law in that it requires registration, and compliance with the curfew, only if a telemarketing solicitation involves a gift, prize or some other "high-risk" activity.


Nevertheless, House Bill 5232 should be tracked carefully. Because the Rhode Island curfew bill is riddled with exceptions, it may be unconstitutional.


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