United States: Colorado No-Call Telemarketing Law Goes Into Effect Following Unsuccessful Court Challenge

Colorado’s new No-Call telemarketing law went into effect on July 1, 2002 as scheduled, after a last-minute court challenge failed to achieve a postponement. To date, more than 700,000 Coloradans have registered with the state to be on the No-Call list.

The court challenge was brought in the federal court in Denver, before U.S. District Judge Robert E. Blackburn, by a business coalition called Colorado Citizens for Free Speech and individual businesses including the telemarketer for the Denver Post and Rocky Mountain News. They asked the court for a temporary restraining order (TRO) delaying implementation of the law, on the grounds that it violated their rights to free speech, damaged their finances, unfairly discriminated against telemarketers and that the state has no right to interfere with telemarketing calls. Judge Blackburn denied the TRO on June 26, 2002 holding, among other things, that the state has a clear interest in protecting the "tranquility of the home."

Consumers are invited to file No-Call complaints with the Colorado Public Utilities Commission, which will share complaint information with the Colorado Attorney General's Office or other law enforcement offices for possible enforcement action when there is a demonstrated pattern of statutory violations. No state enforcement action may be brought against commercial telemarketers for fewer than three violations in a month. However, private actions in small claims court can be filed upon a single violation of the No-Call Law, and consumers may recover a minimum of $500 per violation. State enforcement options for patterns of violations of the No-Call law will range anywhere from warning letters and cease-and-desist orders, to civil lawsuits for court-ordered injunctions and civil penalties of up to $2,000 per violation, or up to $10,000 per violation if the consumer victim is elderly.

Why This Matters: Increasingly, legislators are falling prey to vocal consumerists bent on putting an end to telemarketing, despite the benefits to both marketers and consumers when properly implemented. Colorado now joins the list of 17 states maintaining do-not-call lists. With the FTC pushing for a national do-not-call list, the future of telemarketing is in serious doubt. That is an alarming development since the legislative efforts to interfere with legitimate marketing by passing broad-based indiscriminate bans and regulations will not stop at telemarketing.

This article originally appeared in ADLAW By Request, a publication of Hall Dickler Kent Goldstein & Wood LLP.