The U.S. Supreme Court agreed yesterday to review a case that could affect charity fundraising telemarketers.
Illinois Attorney General Jim Ryan won the right to have the nation's highest court examine his appeal of a state court ruling of a case his office brought against Telemarketing Associates Inc. The Illinois Supreme Court previously threw out his complaint against Telemarketing Associates, which raised money for Vietnam veterans group VietNow.
Ryan's lawsuit claimed that Telemarketing Associates committed fraud when it told consumers that money donated to VietNow would be used to provide food and shelter for homeless veterans. Only 3 percent of money raised by Telemarketing Associates went to that purpose, and only 15 percent went to the charity at all, according to the lawsuit.
However, VietNow had agreed in advance to the arrangement, and the state court rejected Ryan's arguments on free speech grounds.
A representative with the Illinois attorney general's office was unavailable for comment yesterday. Michael Ficaro, Telemarketing Associates' Chicago attorney, also not did immediately return telephone calls for comment.
Errol Copilevitz, an attorney specializing in fundraising law with Kansas City law firm Copilevitz & Canter, said he was surprised that the Supreme Court agreed to review the case. Copilevitz said that the Illinois attorney general's position flies in the face of established precedent, notably a case Copilevitz argued in 1988, Riley v. National Federation of the Blind of North Carolina.
In that case, the court overturned a North Carolina law that forced fundraising telemarketers to tell consumers how much of the proceeds they collected went to charities on average. The law also made it illegal for the cost of a campaign to exceed 35 percent of the proceeds.
It's impossible to know in advance how much a telemarketing campaign will cost or what portion of the proceeds will go to pay for the cost of fundraising, Copilevitz said. A ruling in favor of the Illinois attorney general would open the possibility that telemarketers could be prosecuted simply for not getting good results.
“It's a chilling effect over an activity that has full First Amendment protection,” he said.
It will be at least 90 days before the Supreme Court reviews written briefings from Telemarketing Associates and the state attorney general, Copilevitz said. After that, the court could rule on the basis of the written briefings — which likely would result in a victory for Telemarketing Associates — or hear oral arguments, an event unlikely to occur before next winter.
