OKLAHOMA CITY — A federal judge has ruled that the Federal Trade Commission overstepped its authority in creating the national "do-not-call" list against telemarketers.
The ruling came in a lawsuit brought by telemarketers who challenged the list of 50.6 million numbers submitted by people who do not want to receive business solicitation calls.
The immediate impact of Tuesday's ruling by U.S. District Judge Lee R. West was not clear. He did not issue an order directing an action by the FTC.
The list was to go into effect Oct. 1.
The judge said the main issue in the case was "whether the FTC had the authority to promulgate a national do-not-call registry. The court finds it did not."
In 1994, Congress enacted the Telemarketing and Consumer Fraud and Abuse Prevention Act that directed the FTC to "prescribe rules prohibiting deceptive ... and other abusive telemarketing acts."
But the judge said Congress gave the Federal Communications Commission, not the FTC, the authority to operate "a single national database to compile a list of telephone numbers of residential subscribers who object to receiving telephone solicitations."
House Energy and Commerce Committee Chairman Billy Tauzin, R-La., and Rep. John Dingell, D-Mich., said today they were confident the ruling would be overturned and believe Congress did give the FTC the necessary authority.
"We will continue to monitor the situation and will take whatever legislative action is necessary to ensure consumers can stop intrusive calls from unwanted telemarketers," they said in a joint statement.
An FTC spokeswoman said she was reviewing the decision before commenting.
Direct Marketing Association, one of the plaintiffs, said it was happy with the ruling, even though it "acknowledges the wishes of millions of U.S. consumers who have expressed their preferences not to receive telephone-marketing solicitations — as evidenced by the millions of phone numbers registered on the FTC list."
The DMA, a nonprofit trade organization representing 5,000 U.S. companies, said it will work with its attorneys, the FTC and the FCC during the next few days to evaluate what the ruling will mean for consumers and businesses.
The telemarketing industry estimates the do-not-call list could cut its business in half, costing it up to $50 billion in sales each year. Telemarketers would have to check the list every three months to see who doesn't want to be called. Those who call listed people could be fined up to $11,000 for each violation.
The lawsuit was filed by U.S. Security, Chartered Benefit Services Inc., Global Contact Services Inc., InfoCision Management Corp. and Direct Marketing Association Inc.
A similar lawsuit is pending in U.S. District Court in Denver, where the trade group American Teleservices Association and two telemarketing companies sued in January to keep the FTC from starting the do-not-call program.
In the Denver case, the plaintiffs said the list would violate telemarketers' constitutional rights and exceed the FTC's authority. The FTC argued that the list presented no serious constitutional problems and was created under congressional authority in response to concerns about intrusions into consumers' privacy.
Plaintiffs in the Denver case are Mainstream Marketing Services Inc. of Boulder, Colo., and TMG Marketing Inc., a Nebraska company that operates from Denver.