[co-author: Njeri Chasseau]

Last week, a D.C. District Court declined to find the Federal Trade Commission’s decision to extend robocalling restrictions to telemarketing calls that use “soundboard” technology unconstitutional or in violation of any procedural rules. The Soundboard Association, a telecommunications interest group, argued that the FTC rule was unconstitutional because the FTC bypassed the notice-and-comment requirements typically necessitated by such a rule change.  The court instead considered the decision to be a final agency action that is subject to review but also noted that the extension is an interpretative rule not subject to the notice-and-comment requirements.  Additionally, the court found the FTC letter constitutional, amounting to no more than a valid time, place and manner restriction on soundboard calls.

The FTC’s extension of the robocalling restrictions would apply to calls in which telemarketers play pre-recorded sound files that respond to consumer statements made during a phone call. The rule change went into effect on May 12 of last year and marks a notably different position than that taken by the FTC in a 2009 informal opinion letter that exempted calls using soundboard technology from regulations requiring consumers’ written consent.

TAKEAWAY: Marketers who use soundboard technology in their telemarketing campaigns are advised to take notice of this decision and FTC rule change, as they broaden the scope of the potential liability associated with such campaigns.