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Patriotic Veterans, Inc. v. State

United States Court of Appeals, Seventh Circuit

November 21, 2013

PATRIOTIC VETERANS, INC., Plaintiff-Appellee,
State of INDIANA, et al., Defendants-Appellants.

Argued Jan. 20, 2012.

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[Copyrighted Material Omitted]

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Mark J. Crandley, Barnes & Thornburg LLP, Indianapolis, IN, Allison R. Hayward, Alexandria, VA, for Plaintiff-Appellee.

Thomas M. Fisher, Office of the Attorney General, Indianapolis, IN, for Defendants-Appellants.

Before FLAUM, and ROVNER, Circuit Judges and CASTILLO, District Judge.[*]

ROVNER, Circuit Judge.

Legislators in the State of Indiana believe that the bulk of its citizens find automated telephone messages to be an annoyance, and one worthy of government protection. These types of telephone calls are made by an automatic dialing-announcing device that (according to Indiana's definition) selects and dials telephone numbers and disseminates a prerecorded or synthesized voice message to the telephone number called. See Ind.Code § 24-5-14-1. In common parlance these calls are often referred to as " robocalls."

This hunch about robocalls is backed by empirical data. From January 1, 2002, until September 30, 2010, the Attorney General of Indiana fielded 27,577 valid complaints under the State's Telephone and Privacy Act and Autodialer Law. [1] Between

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January 1, 2009 and September 30, 2010, more than half of the 8,799 valid Telephone Privacy Act complaints made to the Attorney General of Indiana reported the use of autodialers. Id. Similarly, the Federal Trade Commission fields over 200,000 complaints about automated marketing or " autodialer" calls every month.[2] In 2012, the Federal Trade Commission offered a $50,000 reward to any person who could come up with a solution to stopping these unwanted calls. Robocall Challenge, 77 Fed.Reg. 64802-01 (Oct. 23, 2012).

Indiana's attempt to protect its citizens from these phone calls resulted in the enactment of the state's Automated Dialing Machine Statute, which bans these autodialed calls unless the receiver has consented to the calls in some manner before the automated message is delivered. Ind.Code § 24-5-14-1 through § 24-5-14-13. There are some very limited exemptions— for example, school districts may send messages to students and parents, and employers may send messages to employees— but there is no exception for political calls. Ind.Code § 24-5-14-5(a). The Attorney General of Indiana may enforce the Autodialer Law by imposing various penalties including, among others, injunctions against future violations, suspension of business certificates, the voiding of contracts, and fines. Ind.Code §§ 24-5-0.5-4(c), 24-5-0.5-4(g).

The heart of Indiana's statute reads as follows:

(b) 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.

Ind.Code § 24-5-14-5.

But for the Indiana statute, the appellant, Patriotic Veterans, Inc., would make calls in Indiana.[3] Patriotic Veterans, Inc. is a not-for-profit Illinois corporation whose purpose is to inform voters of the positions taken by the candidates and office holders on issues of interest to veterans. In disseminating this information, Patriotic Veterans uses automatically dialed phone calls that deliver a political message related to a particular candidate or issue. For example, Patriotic Veterans' website states that " in 2010, Patriotic Veterans, in partnership with singing idol Pat Boone sponsored nearly 1.9 million calls to veterans and seniors across the U.S. about cuts in Medicare as a result of the passage of Obamacare." http:// www. gravideo. com/ patriotic veterans/ what. html (last visited June 1, 2013). The service Patriotic Veterans uses to disseminate its message is capable of delivering as many as 100,000 messages in a three hour period. Patriotic Veterans maintains that it cannot afford to hire operators to make the phone calls

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without the use of an automatic dialer and a recorded message, as the cost of doing so is eight times higher than using an automatic dialing service. The group also maintains that live operators cannot make calls fast enough when time is of the essence— such as on the eve of an election.

Consequently, Patriotic Veterans filed a complaint against the State of Indiana and Attorney General Greg Zoeller seeking a declaration that the Indiana law is invalid as it violates the First Amendment, at least as it applies to political messages, and is also preempted by the Federal Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227.

That federal law, the TCPA, represents Congress's attempts to address similar concerns about the deleterious effects of telemarketing and telephone solicitations, particularly automated calls. See S.Rep. No. 102-178, reprinted in 1991 U.S.C.C.A.N.1968. The TCPA regulates various telemarketing behaviors and includes, among other things, regulations on the uses of autodialers. It prohibits calls to a residential telephone line using an artificial or prerecorded voice without the recipient's prior express consent, " unless the call is initiated for emergency purposes or is exempted by rule or order by the [Federal Communications] Commission under paragraph 2(B)." 47 U.S.C. § 227(b)(1)(B). Under paragraph 2(B), the FCC is authorized to exempt calls that are not made for a commercial purpose, 47 U.S.C. § 227(b)(2)(B)(i), and the FCC has used its authority to exempt non-commercial calls in the following manner:

(a) No person or entity may ...
(3) Initiate any telephone call to any residential line using an artificial or prerecorded voice to deliver a message without the prior express written consent of the called party, unless the ...

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