7th Circuit OKs Law Barring Charities' Use of Telemarketers

By Linda Coady, Esq., 

The 7th Circuit has ruled that Indiana's Telephone Privacy Act, which prohibits charities from using professional telemarketers for fund raising, does not violate the First Amendment because the law furthers the state's legitimate interest in protecting residential privacy.

The U.S. Court of Appeals for the 7th Circuit also found that the tax-exempt charity plaintiffs have standing to challenge only those parts of the TPA that apply to them. Click here to find out more!

The Telephone Privacy Act was enacted in May 2001. It created a statewide do-not-call list, but allows calls made on behalf of tax-exempt charities, so long as the calls are made by a charity volunteer or employee.

The law also allows calls for political contributions, calls soliciting newspaper sales if made by an employee or volunteer of the newspaper company, and, under certain circumstances, calls by real estate or insurance agents.

The plaintiff charities filed suit against the state in the U.S. District Court for the Southern District of Indiana, arguing that the TPA violates their First Amendment right to freedom of speech.

The trial court granted summary judgment to the state, and the charities appealed. A three-judge panel of the 7th Circuit affirmed.

The panel noted first that the U.S. Supreme Court has said "citizens in their own homes have a stronger interest in being free from unwanted communication than a speaker has in speaking in a manner that invades residential privacy."

The appeals court found that the TPA's restrictions on the use of professional telemarketers was in keeping with the important governmental purpose of protecting residential privacy, as telemarketers are capable of placing 16,000 calls during a single four-hour shift over the course of a month.

Allowing charities to place calls using only volunteers or employees reflects the Legislature's purpose of limiting intrusion on residential privacy, the panel explained.

Concluding that the TPA is not overbroad, the panel said it sharply cuts telemarketing speech that violates residential privacy, such as calls made by professional solicitors, while not restricting speech that historically enjoys greater First Amendment protection.

This careful tailoring serves the state's interest in protecting residents' right not to be disturbed by unwanted speech in their homes. Therefore, this interest outweighs any First Amendment rights the charities may have, the panel said.

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