Announced Actions for September 2, 2005

Ruling of the U.S. Court of Appeals for the Fourth Circuit: The United States Court of Appeals for the Fourth Circuit has issued a ruling in favor of the Commission in the matter of National Federation of the Blind; Special Olympics Maryland, Incorporated v. Federal Trade Commission (No. 04-1378). The case, which was on appeal from the U.S. District Court for the District of Maryland at Baltimore, challenged the FTC’s amended Telemarketing Sales Rule (TSR) restricting telemarketing practices as they apply to charitable fundraising. The plaintiffs in the case, two charities who contract with professional fundraisers who engage in telemarketing on their behalf, argued that the regulation is beyond the FTC’s authority and violates the First Amendment. The Appellate Court, affirming the District Court’s decision, ruled in favor of the FTC.

In its opinion, the Appellate Court wrote that Congress “clearly authorized the FTC to promulgate this new rule. [And] because we are further convinced that it constitutes ‘a reasonable regulation,’ that is ‘narrowly drawn’ to serve a ‘sufficiently strong subordinating interest that the [government] is entitled to protect,’ we find it to be constitutional.” The Court continued by stating, “The regulation preserves the important right of charities to make telephone solicitations. To strike down the rule, however, would disable the democratic branches from taking even the most modest steps necessary to protect the home environment from intrusive phone calls.”

The case was affirmed by published opinion, written by Judge Wilkinson and joined by Judge Traxler. Judge Duncan wrote a dissenting opinion. Both the published opinion and dissenting opinion can be found on the FTC’s Web site as a link to this press release. (Case Number: 04-1378; the staff contact is Michael D. Bergman, Office of the General Counsel, 202-326-3184.)

Commission approval Federal Register notice: The FTC has approved the publication of a Federal Register notice announcing the amendment of Rule 4.14 (“Conduct of Business”). According to the notice, which will be published shortly and is available now on the Commission’s Web site as a link to this press release, Rule 4.14(b) previously defined a quorum as a “majority of the members of the Commission.” The amendment changes the definition to a majority of the members of the Commission in office and not recused from participating in the matter (by virtue of 18 U.S.C. Sec. 208 or otherwise). Rule 4.14(c) continues to require, for the FTC to act, “the affirmative concurrence of a majority of the participating Commissioners, except where a greater majority is required by statute or rule or where the action is taken pursuant to a valid delegation of authority.”

The amendment will allow the agency to act in more matters where, due to vacancies, recusals, or a combination of the two, fewer than three commissioners can participate. It will become effective on the date the notice is published in the Federal Register.

The Commission vote approving the publication of the Federal Register notice was 4-0. (FTC File No. P052103; the staff contact is Marc Winerman, Office of General Counsel, 202-326-2451.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.