A high court in North Dakota ruled Friday that federal telemarketing laws don’t take precedence over state regulations.
The case involved a telemarketer based in Herndon VA, FreeEats.com, which used automatic dialers to send political survey calls to thousand of North Dakota residents in August 2004. The calls used a prerecorded message to ask questions about issues such as gun rights, abortion and tuition tax credits. Recipients were asked to respond by pushing buttons on their phone keypads.
North Dakota law bans most uses of prerecorded messages in telemarketing unless the message is introduced by a live operator, and the state’s attorney general sued the company, winning a verdict in a lower court, including a $10,000 fine against FreeEats and $10,000 in court costs.
FreeEats had appealed the judgment to the state’s Supreme Court, arguing that regulation of interstate commerce was reserved for Congress and the federal government and that the North Dakota ban on auto-dialers was therefore inapplicable.
But on Friday, the North Dakota Supreme Court ruled that federal laws do not prevent states from making laws regulating telemarketing and affirmed the $20,000 in fines against the company.
FreeEats has not yet announced whether it will take its case to the U.S. Supreme Court. The company has asked the Federal Communications Commission to support its position that federal telemarketing laws overrule state statutes. The FCC is now considering a ruling on that issue. Last year, it received a letter signed by attorneys general from 38 states supporting North Dakota’s position.
In November, the Utah Supreme Court reinstated a lawsuit by the state’s consumer protection agency against Florida telemarketer Flagship Capital for using autodialers to market to Utah residents.
