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Moser v. Federal Communications Commission

filed: February 6, 1995.

KATHRYN MOSER; NATIONAL ASSOCIATION OF TELECOMPUTER OPERATORS, PLAINTIFFS-APPELLEES,
v.
FEDERAL COMMUNICATIONS COMMISSION, A FEDERAL AGENCY; JAMES H. QUELLO, IN HIS CAPACITY AS INTERIM CHAIRMAN OF THE FEDERAL COMMUNICATIONS COMMISSION, DEFENDANTS-APPELLANTS.



Appeal from the United States District Court for the District of Oregon. D.C. No. CV-92-01408-JAR. James A. Redden, District Judge, Presiding.

Before: Betty B. Fletcher, Dorothy W. Nelson, and Pamela Ann Rymer, Circuit Judges. Opinion by Judge Fletcher.

Author: Fletcher

FLETCHER, Circuit Judge:

The Federal Communications Commission ("FCC") appeals the district court's ruling on summary judgment that a provision of the Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227, banning prerecorded telemarketing calls violates the First Amendment. The FCC argues as a threshold matter that the district court lacked jurisdiction and, on the merits, that the district court erred in finding that the statute did not constitute a "reasonable fit" with the government's legitimate interest in protecting residential privacy. We hold that the district court had jurisdiction. We reverse on the merits.

I

Congress held extensive hearings on telemarketing in 1991. Based upon these hearings, it concluded that telemarketing calls to homes constituted an unwarranted intrusion upon privacy. The volume of such calls increased substantially with the advent of automated devices that dial up to 1,000 phone numbers an hour and play prerecorded sales pitches. S. Rep. No. 102-178, 102d Cong., 1st Sess. (1991), reprinted in 1991 U.S.C.C.A.N. at 1970. By the fall of 1991, more than 180,000 solicitors were using automated machines to telephone 7 million people each day. Id.

In addition to the sheer volume of automated calls, Congress determined that such calls were "more of a nuisance and a greater invasion of privacy than calls placed by 'live' persons" because such calls "cannot interact with the customer except in preprogrammed ways" and "do not allow the caller to feel the frustration of the called party . . . ." Id. at 1972. Customers who wanted to remove their names from calling lists were forced to wait until the end of taped messages to hear the callers' identifying information. Prerecorded messages cluttered answering machines, and automated devices did not disconnect immediately after a hang up. Id. at 1972.*fn1 In a survey conducted for a phone company, 75 percent of respondents favored regulation of automated calls, and half that number favored a ban on all phone solicitation. Id. at 1970. Although 41 states and the District of Columbia have restricted or banned intrastate automated commercial calls,*fn2 many states asked for federal legislation because states may not regulate interstate calls. Id.

The Telephone Consumer Protection Act, Pub. L. No. 102-243, 105 Stat. 2394-2402 (1991), an amendment to the Communications Act of 1934, was passed on December 20, 1991, to take effect a year later. It provides in part:

It shall be unlawful for any person within the United States

47 U.S.C. § 227(b)(1).

Under the statute, prerecorded messages may be used only if a live operator introduces the message or if the consumer consents. All live solicitation calls, as well as automated calls to most businesses, are permitted. The statute authorizes the FCC to enact limited exemptions from the ban, including an exemption for calls not made "for a commercial purpose."*fn3 The FCC adopted regulations on September 17, 1992, that exempted calls by tax-exempt, nonprofit organizations. 47 C.F.R. § 64.1200(c)(4).

II

The nonprofit National Association of Telecomputer Operators ("NATO") and its president, Kathryn Moser, filed suit on November 12, 1992, seeking injunctive relief and a declaratory judgment. NATO alleged that the law created a content-based restriction not narrowly tailored to further a substantial government interest, in violation of the First Amendment. It also claimed that the statute violated the Equal Protection Clause of the Fifth Amendment.

The district court granted a preliminary injunction on December 18, 1992. Moser v. FCC, 826 F. Supp. 360, 361 (D.Or. 1993). On May 21, 1993, the court granted summary judgment for the plaintiffs, declaring that the statute violated the First ...


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