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Supreme Court to Consider Robocall Statute

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Lesley Stedman Weidenbener reports that the Indiana Supreme Court will consider the robo-call statute. At issue is whether the ban on robocalls should apply to political messages.

I’ve actually written quite a bit about this issue as it turns out. With respect to the decision on appeal, I posted this back in February:

I haven’t read the judge’s opinion, but as described, I don’t think it holds water. The statute does a few things — it specifies types of messages to which the statute does not apply — e.g. messages from schools to students or parents. Significantly, political messages are not in this list of exempt messages. Secondly, it defines commercial telephone solicitations and imposes restrictions on commercial telephone solicitations above and beyond the restrictions it places on solicitations via robocall generally. There is nothing in the text of the law itself that strongly suggests an allowance for robocalls to be used to spread political messages. There are at least two provisions that suggest that the regulation extends beyond commercial messages. So, unless there is something a bit more nuanced than reported about the judge’s decision, I’m going to predict this one gets overturned on appeal.

The State Republican and Democratic Parties are urging an interpretation that allows the automated phone calls. The Attorney General is trying to make sure a live person is involved when any of these calls are made to citizens. A recorded message is actually permitted under the statute, but it must be preceded by a live phone call and agreement by the recipient to receive the recorded message. (Or a recipient must have previously “opted-in” to receive such phone calls.)

Robocalls permitted in Harrison County

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Orange County Circuit Court Judge Blanton, sitting as a special judge in Harrison County, has apparently held that Indiana’s prohibition on robocalls does not apply to those with a political message.

Specifically, (according to Inside Indiana Business):

Blanton has ruled that Indiana’s autodialer law does not apply to political messages. Judge Blanton says a political message delivered during a political campaign is not the selling of a tangible product, and therefore, the law does not apply.

I haven’t read the judge’s opinion, but as described, I don’t think it holds water. The statute does a few things — it specifies types of messages to which the statute does not apply — e.g. messages from schools to students or parents. Significantly, political messages are not in this list of exempt messages. Secondly, it defines commercial telephone solicitations and imposes restrictions on commercial telephone solicitations above and beyond the restrictions it places on solicitations via robocall generally. There is nothing in the text of the law itself that strongly suggests an allowance for robocalls to be used to spread political messages. There are at least two provisions that suggest that the regulation extends beyond commercial messages. So, unless there is something a bit more nuanced than reported about the judge’s decision, I’m going to predict this one gets overturned on appeal.

Swiftboat Robocaller loses another round

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Swiftboat mastermind, Bob Perry, loses another round in his effort to robocall Hoosiers with his campaign propaganda. Perry funded something called the “Economic Freedom Fund.” The Economic Freedom Fund hired FreeEats.com to robocall Hoosiers with pre-recorded messages attacking Mike Sodrel’s challenger (at the time), Baron Hill in Indiana’s 9th Congressional District.

This was a violation of IC 24-5-14. Indiana’s attorney general — a Republican, incidentally — filed suit in a state court to stop the violation by various “John Does” and, eventually, FreeEats specifically. FreeEats went running to the federal courts trying to get a ruling that Indiana’s state law was preempted by federal law, was a violation of the Commerce Clause, and was a violation of the First Amendment. The state asked the District Court to abstain from exercising jurisdiction under the Younger abstention doctrine — basically a doctrine telling federal courts to abstain from reviewing matters already under way in the state courts unless justice simply can’t or won’t be done in the state courts. The District Court declined to abstain because, due to various procedural factors, the state court would not render a decision prior to the (at the time) imminent 2006 elections. After exercising jurisdiction, the District Court declined to enter a preliminary injunction, finding that FreeEats was not likely to prevail on the merits — statutory and case law both suggested that states were allowed to act on robocalls if their actions were more restrictive than federal law.

Both parties appealed – FreeEats arguing that the preliminary injunction should have been issued and Indiana arguing that the federal court should have abstained. Today, the Seventh Circuit sided with the State, reasoning that the District Court should have abstained. Essentially, the compelling circumstances cited by FreeEats for exercise of federal jurisdiction were self-inflicted. First, the state court had been procedurally delayed by actions of FreeEats itself. Second, elections are regular, the anti-robocalling legislation had been on Indiana’s books since 1988, and FreeEats had suffered adverse rulings in North Dakota under a similar law 5 months prior to initiation of its federal action in this case. (The North Dakota case had been commenced in 2004.) Because the District Court shouldn’t have exercised jurisdiction, the Seventh Circuit Court of Appeals has vacated the ruling of the District Court with respect to the preliminary injunction.

The State’s enforcement action in the state court remains pending and, according to the Seventh Circuit opinion, a hearing was to be conducted on September 7, 2007.

Robocalls

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Indiana’s law prohibiting automated telephone solicitations, robocalls, is the law that keeps on giving this campaign season. The first splash was made during a pro-Sodrel call that the State Attorney General deemed illegal — because it clearly was. Indiana’s law states that:

A caller may not use or connect to a telephone line an automatic dialing-announcing device unless:
(1) the subscriber has knowingly or voluntarily requested, consented to, permitted, or authorized receipt of the message; or
(2) the message is immediately preceded by a live operator who obtains the subscriber’s consent before the message is delivered.

(The Souder campaign had to use cut rate telemarketers who ended up having such heavy accents recipients couldn’t understand them when they delivered their anti-Hayhurst, anti-immigrant messages.)

Now it looks like a pro-Brizzi series of robocalls has also run afoul of the law in the Marion County Prosecutor’s race. The Indiana Republican Party subsequently fired Conquest Communications, a Virginia company hired to make the calls. They claim that the company used a live person to make the call and obtain consent prior to playing the message but the party fired the company because they wanted the calls to be 100% live. But telephone recordings of the calls have no live introduction, casting doubt on those claims.

TPMmuckraker has coverage of annoying and harassing Republican robocall efforts all across the country on election eve, including calls that attempt to disguise the source of the call.

IN-09: Free Eats lawsuit seeking permission to robocall Hoosiers

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As readers will no doubt be aware, Swiftboat mastermind Bob Perry funded the “Economic Freedom Fund.” In an effort to aid Mike Sodrel’s campaign in Indiana’s 9th District, that organization went out and hired a company by the name of FreeEats.com Inc. to have its computers make robocalls playing pre-recorded messages attacking Sodrel’s challenger, Baron Hill.

Trouble is, this violates Indiana law. IC 24-5-14 prohibits use of an “automatic dialing-announcing device” unless the recorded message to be played is immediately preceded by a live operator who obtains the phone customer’s consent before the message is delivered. This, of course, defeats the purpose of robocalls – they want to be able to push a button and have their computers bombard as many Hoosiers as possible with their recordings, not have to pay an actual live person to make the calls, and certainly they don’t want to give the target an opportunity to say “no.”

Enter Attorney General Steve Carter. To his credit, Carter has been extremely active in trying to protect Hoosiers from intrusions via their telephones. He understands that few things get citizens angrier than having their phone ring, particularly at inconvenient times, only to have it be a telemarketer or, in this case even worse, a *$#@ computer droning on about how bad Baron Hill is or how great Mike Sodrel is. So, seeking to enforce the state ban on robocalls, on September 18, 2006, the AG’s office filed a civil enforcement action against Perry’s “Electronic Freedom Fund” and John Does 1-10 in the Circuit Court of Brown County under Cause Number 07C01-0609-MI-425.

Recognizing that, sooner or later, it would fill one of those “John Doe” slots, Free Eats.com d/b/a ccAdvertising filed a Complaint (pdf) in the Southern District of Indiana seeking a declaration that the state law prohibiting robocalls is pre-empted by federal law (specifically 47 USC 227) and/or unconstitutional and also seeking an injunction against the Attorney General attempting to enforce the act. The Attorney General filed its motion seeking to dismiss the federal action on the grounds of an ongoing state action involving the same matter in which Free Eats is free to seek the same relief.

I haven’t read the opinion since my Westlaw subscription doesn’t extend that far, but it looks like the 8th Circuit considered and rejected the preemption argument. The preemption argument basically says that the federal government has acted in this area and, by doing so, is exercising exclusive control over the subject matter and has prevented the states from acting on their own. Under the Supremacy Clause of the U.S. Constitution, the federal law would govern. In Van Bergen v. State of Minnesota, 59 F3d 1541 (8th Cir. 1995), the court found that a Minnesota statute regulating use of telephone automatic dialing-announcing devices was not preempted by the federal Telephone Consumer Protection Act (TCPA) because 1) the Act did not expressly preempt statute; 2) the
Act carried no implication that Congress intended to preempt state law; 3) a Congressional finding suggested that Act was intended not to supplant state law but to provide interstitial law preventing evasion of state law by calling across state lines, and 4) the statute was not in actual conflict with the Act.

Legalities aside, this whole robo-calling  approach, particularly one receiving as much publicity as this one, is likely to hurt the candidates they’re designed to support — in this case Mike Sodrel. As a voter, would you be more or less likely to vote for a candidate using computers to call you during dinner or whatever just to play you a pre-recorded message; then running to a federal judge seeking to strike down state laws designed to protect you from such intrusion?

AG sues Electronic Freedom Fund for anti-Hill robocalls

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An article from Mary Beth Schneider indicates that Attorney General Steve Carter  has sued a California-based group called the “Electronic Freedom Fund” for automated phone calls attacking IN-09 Democratic Congressional candidate Baron Hill.

The group has apparently agreed to stop making the calls, but Carter has said that the State will continue to seek an injunction against the “Electronic Freedom Fund” in a Brown County Court. Carter says that the group said that their vendor said that the calls were “legal so long as they were placed from out of state.” Where they got that, I don’t know. The relevant statute is IC 24-5-14 which states:

A caller may not use or connect to a telephone line an automatic dialing-announcing device unless:
(1) the subscriber has knowingly or voluntarily requested, consented to, permitted, or authorized receipt of the message; or
(2) the message is immediately preceded by a live operator who obtains the subscriber’s consent before the message is delivered.

Violating the law constitutes a deceptive act under IC 24-5-0.5 which means that the attorney general can bring an action. An individual subjected to the violation may also bring suit personally and cash in a little bit. But, if the Attorney General decides to be hard core about this, he could really bring some cash into the State’s coffers under IC 24-5-0.5-8:

Sec. 8. A person who commits an incurable deceptive act is subject to a civil penalty of a fine of not more than five hundred dollars ($500) for each violation. The attorney general, acting in the name of the state, has the exclusive right to petition for recovery of such a fine, and this fine may be recovered only in an action brought under section 4(c) of this chapter.

In the definitions section, we find that “‘Incurable deceptive act’ means a deceptive act done by a supplier as part of a scheme, artifice, or device with intent to defraud or mislead.”

I’d say there is a pretty strong argument to be made that the calls were intended to mislead voters about Baron Hill’s voting record. For example, I’d be surprised if a court would agree that the “Electronic Freedom Fund” was accurately characterizing Hill’s voting record when they state that “Baron Hill voted to allow the sale of a broad range of violent and sexually explicit material to minors.”

I haven’t heard how many automated calls were made, but it wouldn’t take long before $500 per call started adding up to some real money, even for an organization bankrolled by Bob Perry, the Houston millionaire responsible for the “Swiftboat Veterans For Truth” lies about John Kerry’s military record that caused Kerry so much trouble when he was running against George Bush.

Supreme Court on FreeEats & Autodialer law

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In a lengthy opinion, the Indiana Supreme Court decided another round in the seemingly endless FreeEats autodialer litigation. (The fees generated in that case have to be breath taking.) The case begins back in 2006 when Bob Perry, author of the Swiftboat attacks on John Kerry, created something called the Economic Freedom Fund. The Economic Freedom Fund hired a company called FreeEats to use its robocall technology to attack Baron Hill in support of Mike Sodrel. Both of those guys are out of the political picture, but the lawsuit continues. (Reminded me of the “Born in the USA” lyrics, “I had a brother at Khe Sahn; fighting off the Viet Cong; They’re still there, he’s all gone.”)

Indiana’s autodialer law has a requirement that someone wishing to disseminate a prerecorded message over the telephone has to first obtain the consent of the recipient by using a live operator. This increases the costs of the autodialer in disseminating its message. The argument of the autodialer, FreeEats in this case, is that this raises its costs and impermissibly burdens its freedom of speech under Article 1, section 9 of the Indiana Constitution. The Indiana Supreme Court disagreed, concluding:

The Autodialer Law prevents FreeEats from sending prerecorded political messages without obtaining the telephone subscriber’s consent. FreeEats can obtain this consent prior to the call or at the outset of the call by using a live operator. FreeEats is correct in noting that its costs will increase if it complies with the live-operator requirement, but FreeEats fails to intro-duce any convincing argument that the result of the requirement is that its right to engage in po-litical expression no longer serves the purpose for which it was designed. Any content-neutral statute that incidentally affects political expression could conceivably increase the economic costs of the speaker. A conclusion that a statute violates the state constitution when it increases the economic costs to engage in political expression, without any showing that the right to politi-cal expression no longer serves its purpose, would be unsound. FreeEats and its clients are still free to engage in political expression and are free to use the AIC system to do so. Although the Autodialer Law’s live-operator provision is a less-than-ideal requirement for FreeEats, it is not a material burden on its right to engage in political expression.

Indiana telemarketers refuse to read false anti-Obama ad

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One unanticipated result of robocalls being illegal in Indiana is the case reported by TPM Election Central where dozens of telemarketers in Hobart refused to read an anti-Obama call script even though, by refusing to do so, they sacrificed their pay. They refused to read the script that accused Obama of being “dangerously weak on crime,” of “coddling criminals,” and for voting against “protecting children from danger.”

Zoeller wins Republican AG nomination

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Greg Zoeller, Indiana Deputy Attorney General and heir apparent to outgoing attorney general Steve Carter, won the Republican nomination to run for the AG position. He defeated Gov. Daniels’ preferred candidate, Jon Costas, mayor of Valparaiso. Zoeller will be running in November against Linda Pence, the Democratic nominee.

I’m not privy to the inner workings of the political parties, but rumor has it that Daniels pushed too hard for Costas, prompting a backlash. I don’t know if that’s the case or if the Republican delegates just thought it made more sense to nominate someone already in the office. Speaking for myself, I think Carter has generated an enormous amount of good will for the office, and Republican stewardship of the office, through his prominent efforts with the Do Not Call List and, to a lesser extent, with his efforts against “robocalls” by the political parties. When an office is perceived to be running fairly well and an incumbent is stepping down, it probably makes sense to run a candidate from within the ranks of that office instead of bringing in an outsider.

It will be interesting to see how the contest in November shakes out. I’m sure Pence is happy to continue Carter’s policies (and, let’s not forget, the law) with respect to protecting Hoosiers against annoying telephone calls. It’s one of those happy intersections of the politically popular with reasonably good public policy. After that, there may be some more rough and tumble debates to be had about some of the Attorney General’s office’s other duties.

IN-09: More on pro-Sodrel robo-calls

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TPM Muckraker continues to investigate the company hired by Swiftboater Bob Perry that has barraged citizen’s phones with anti-Hill robo-calls in the 9th District race.

The company, called ccAdvertising and also doing business under the name FreeEats.com (and apparently thousands of other names) is also in the habit of hijacking other company’s identities on caller-IDs.

Mike Sodrel, the beneficiary of these anti-Hill robocalls better get on top of this. You sleep with dogs, you get fleas.