F.T.C. v. Mainstream Marketing Services, Inc.

Decision Date07 October 2003
Docket NumberNo. 03-1429.,03-1429.
Citation345 F.3d 850
PartiesFEDERAL TRADE COMMISSION; Timothy J. Muris, Chairman of the Federal Trade Commission, in his official capacity; Sheila F. Anthony, Commissioner, Federal Trade Commission, in his official capacity; Mozelle W. Thompson, Commissioner, Federal Trade Commission, in his official capacity; Orson Swindle, Commissioner, Federal Trade Commission, in his official capacity; Thomas B. Leary, Commissioner, Federal Trade Commission, in his official capacity; and J. Howard Beales III, Director, Bureau of Consumer Protection, in his official capacity, Petitioners, v. MAINSTREAM MARKETING SERVICES, INC., a Colorado corporation; TMG Marketing, Inc., a Colorado corporation; American Teleservices Association, Respondents.
CourtU.S. Court of Appeals — Tenth Circuit

Sean R. Gallagher, Marianne N. Hallinan, HOgan & Hartson, Denver, CO, Robert Corn-Revere, Ronald G. London, Davis Wright Tremaine, Washington, DC, for plaintiffs-appellees.

John D. Graubert, Lawrence DeMille-Wagman. William E. Kovacic, John F. Daly, federal Trade Commission, Washington, DC, for defendants-appellants.

Mark B. Stern, Alisa B. Klein, U.S. Department of Justice, Civil Division, Appellate Staff, Washington, DC, for Intervenor.

Andrew Patrick McCallin, State of Colorado Department of Law, Denver, CO, for Amici Curiae.

Before SEYMOUR, EBEL, and HENRY, Circuit Judges.

ORDER

PER CURIAM.

The Federal Trade Commission (Petitioner) ("FTC") challenges an order of the United States District Court for the District of Colorado permanently enjoining the FTC from implementing provisions in its amended Telemarketing Sales Rule creating a national do-not-call list. The Rule created a federal registry of telephone numbers of consumers who have indicated that they do not wish to receive unsolicited telephone calls from commercial telemarketers, and it prohibits those telemarketers from making sales calls to consumers on the list.1 The Federal Communications Commission (FCC), in coordination with the FTC, has also ordered the establishment of a national do-not-call list. The only issue to be decided at this time is the FTC's request for a stay of the district court's order pending this Court's decision on the merits.

I. Standard for Granting Stay

The FTC's request for a stay is governed by Federal Rules of Appellate Procedure 8 and 18. To obtain a stay under these rules, the FTC must address the following factors: (1) the likelihood of success on appeal; (2) the threat of irreparable harm if the stay or injunction is not granted; (3) the absence of harm to opposing parties if the stay or injunction is granted; and (4) any risk of harm to the public interest. Homans v. City of Albuquerque, 264 F.3d 1240, 1243 (10th Cir.2001); 10th Cir. R. 8.1.

As an initial matter, the district court suggested that an additional inquiry overlays this Court's analysis of whether to grant a stay of the district court's order pending appeal. Specifically, it cited decisions from this Court setting out the following types of preliminary injunctions as "disfavored": (1) one that disturbs the status quo; (2) one that affords the movant substantially all the relief the movant may recover at the conclusion of a full trial on the merits; and (3) one that is mandatory as opposed to prohibitory. Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234, 1247 n. 4 (10th Cir.2001); SCFC ILC, Inc. v. Visa USA, Inc., 936 F.2d 1096, 1098-99 (10th Cir.1991). The concerns arising from the first two types of "disfavored" injunctions are relevant only in a merits review of a preliminary injunction issued by a district court, typically on an incomplete record. Those concerns do not, however, constrain our decision whether to stay a lower court's permanent injunction issued after consideration of a complete record.2 The concern about mandatory injunctions is not a factor in this case because a decision to stay the district court's permanent injunction does not constitute a judicial mandate requiring any of the litigants to take any action. Such a stay order would suspend an injunction, not impose one. Therefore, we do not apply the heightened scrutiny required for "disfavored" preliminary injunctions.

With respect to the four stay factors,3 where the moving party has established that the three "harm" factors tip decidedly in its favor, the "probability of success" requirement is somewhat relaxed. Prairie Band, 253 F.3d at 1246; Continental Oil Co. v. Frontier Ref. Co., 338 F.2d 780, 781-82 (10th Cir.1964). Under those circumstances, probability of success is demonstrated when the petitioner seeking the stay has raised "questions going to the merits so serious, substantial, difficult, and doubtful as to make the issue ripe for litigation and deserving of more deliberate investigation." Prairie Band, 253 F.3d at 1246-47 (internal quotations omitted).

We conclude that, on balance, the three "harm" factors alone do not support a relaxed review of the probability of success factor. With respect to the second and fourth factors — which are necessarily conflated because the FTC's asserted injury is exclusively one involving the public interest — we conclude that the public does have strong privacy and expectation interests that weigh in favor of granting this stay pending review of the merits. Yet the third factor — injury to opposing parties if the stay is granted — weighs against granting the stay because Respondents will likely suffer harm if the FTC's do-not-call regulation comes into effect and is later determined to be unconstitutional, even though their injury would be tempered by our granting expedited review of this case on the merits.4 Although we conclude that on balance the harm factors tip in the FTC's favor, those factors do not weigh so heavily towards the FTC as to justify a relaxed review of the final factor, likelihood of success on the merits. Therefore, we will grant a stay only if the FTC shows a substantial likelihood of success on the merits of its appeal. We turn then to that analysis.

II. Likelihood of Success on the Merits

The Supreme Court has identified a 3-step test to analyze First Amendment challenges to restrictions applied to lawful and non-misleading commercial speech. Regulation of such commercial speech passes constitutional muster if (1) the government asserts a substantial interest to be achieved by the restrictions; (2) the restriction directly advances that governmental interest; and (3) the restriction is narrowly tailored to meet that interest. Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y., 447 U.S. 557, 566, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980). Together, the final two factors in the Central Hudson analysis require that there be a "fit between the legislature's ends and the means chosen to accomplish those ends." United States v. Edge Broad. Co., 509 U.S. 418, 427-28, 113 S.Ct. 2696, 125 L.Ed.2d 345 (1993). The government bears the burden of demonstrating both a substantial interest and the fit between that interest and the challenged restriction. Utah Licensed Beverage Ass'n v. Leavitt, 256 F.3d 1061, 1069 (10th Cir.2001). The Central Hudson test does not require that the regulation be the least restrictive means of achieving the interest asserted, but only that it be narrowly tailored to meet the desired objective. Board of Trs. of the State Univ. of N.Y. v. Fox, 492 U.S. 469, 480, 109 S.Ct. 3028, 106 L.Ed.2d 388 (1989).

For purposes of First Amendment analysis, to show a reasonable fit the government must "demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree." Rubin v. Coors Brewing Co., 514 U.S. 476, 486-87, 115 S.Ct. 1585, 131 L.Ed.2d 532 (1995). However, in response to a First Amendment challenge to a regulation, the government is not limited in the evidence it may use to support the asserted harms; it may demonstrate its justification with anecdotes, history, consensus, and simple common sense. Florida Bar v. Went For It, Inc., 515 U.S. 618, 628, 115 S.Ct. 2371, 132 L.Ed.2d 541 (1995). Moreover, while the fit must be reasonable and in proportion to the interest served, it need not be a perfect fit or the best fit. Fox, 492 U.S. at 480, 109 S.Ct. 3028. "Within the bounds of the general protection provided by the Constitution to commercial speech, we allow room for legislative judgments." Edge Broad. Co., 509 U.S. at 434, 113 S.Ct. 2696. We do not require "that the Government make progress on every front before it can make progress on any front." Id.

A. Substantial Governmental Interest

The FTC's do-not-call list includes commercial telemarketers but specifically excludes calls from charitable organizations. The FTC has asserted that this distinction between commercial and non-commercial speech is justified by (1) a greater risk of abusive practices associated with commercial calls, and (2) commercial solicitation's greater impact on consumer privacy, based both on the greater number of commercial calls and upon the less welcome nature of commercial calls.5 The district court found, and Mainstream Marketing Services does not dispute, that these asserted interests in preventing abusive practices and protecting residential privacy are substantial under the first prong of Central Hudson.

The Supreme Court has held that there is undoubtedly a substantial governmental interest in the prevention of abusive and coercive sales practices. See Edenfield v. Fane, 507 U.S. 761, 768-69, 113 S.Ct. 1792, 123 L.Ed.2d 543 (1993). The prevention of intrusions upon privacy in the home is another paradigmatic substantial governmental interest. In Rowan v. United States Post Office Department, the Supreme Court held that protecting individual privacy is an important governmental interest, especially in the context of the home. 397 U.S. 728, 90 S.Ct. 1484, 25 L.Ed.2d 736 (1970). The Court recognized "the right of a householder...

To continue reading

Request your trial
77 cases
  • United States v. Dish Network LLC
    • United States
    • U.S. District Court — Central District of Illinois
    • June 5, 2017
    ...begin operations on October 1, 2003, but the start of operations was delayed to October 17, 2003. See F.T.C. v. Mainstream Marketing Services, Inc., 345 F.3d 850, 860–61 (10th Cir. 2003) ; see also Mainstream Marketing Services, Inc. v. F.T.C., 358 F.3d 1228, 1250–51 (10th Cir. 2004).The TS......
  • National Coalition of Prayer, Inc. v. Carter
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • July 28, 2006
    ...of private choice in an opt-in feature is relevant for purposes of analyzing `reasonable fit'". F.T.C. v. Mainstream Mktg. Serv's., Inc. (Mainstream Mktg. I), 345 F.3d 850, 856 (10th Cir.2003) (citing Anderson v. 294 F.3d 453, 462-63 (2d Cir.2002) and Pearson, 153 F.3d at 404). Thus, the au......
  • Mainstream Marketing Services, Inc. v. F.T.C.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • February 17, 2004
    ...at protecting the privacy rights of consumers and curbing the risk of telemarketing abuse. See generally FTC v. Mainstream Mktg. Servs., Inc., 345 F.3d 850, 857-58 (10th Cir.2003). In the Telephone Consumer Protection Act of 1991 ("TCPA") — under which the FCC enacted its do-not-call rules ......
  • A Subsidiary Of Wolters Kluwer Health Inc. v. Mills
    • United States
    • U.S. Court of Appeals — First Circuit
    • August 4, 2010
    ...served “the very basic right to be free from sights, sounds, and tangible matter we do not want”); see also FTC v. Mainstream Mktg. Servs., Inc., 345 F.3d 850, 854-55 (10th Cir.2003) (recognizing the government's “substantial interest” in protecting individual privacy through the federal “d......
  • Request a trial to view additional results
4 books & journal articles
  • The Do-not-call List Controversy: a Parable of Privacy and Speech
    • United States
    • Creighton University Creighton Law Review No. 38, 2004
    • Invalid date
    ...callers only under the less burdensome company-specific do-not-call rules. Id. Fed. Trade Comm'n v. Mainstream Mktg. Serv., Inc., 345 F.3d 850, 854 n.5 (10th Cir. 2003) (Order of October 7, 2003 staying preliminary injunction of the District Court). 60. See Missouri v. Am. Blast Fax, Inc., ......
  • The Do-not-call List Controversy: a Parable of Privacy and Speech
    • United States
    • University of Nebraska - Lincoln Nebraska Law Review No. 38, 2022
    • Invalid date
    ...callers only under the less burdensome company-specific do-not-call rules. Id. Fed. Trade Comm'n v. Mainstream Mktg. Serv., Inc., 345 F.3d 850, 854 n.5 (10th Cir. 2003) (Order of October 7, 2003 staying preliminary injunction of the District Court). 60. See Missouri v. Am. Blast Fax, Inc., ......
  • Staying Enforcement of a Judgment Pending Appeal
    • United States
    • Colorado Bar Association Colorado Lawyer No. 48-5, May 2019
    • Invalid date
    ...(c); Fed.R.Civ.P. 62(d). [33] See Romero v. City of Fountain, 307 P.3d 120, 122 (Colo.App. 2011); FTC v. Mainstream Mktg. Servs., Inc., 345 F.3d 850, 852 (10th Cir 2003); 10th Cir. R. 8.1. [34] FTC, 345 F.3d at 852 (citation omitted). [35] Romero, 307 P.3d at 123 (citation omitted) [36] Id.......
  • The CAN-SPAM Act of 2003: is congressional regulation of unsolicited commercial e-mail constitutional?
    • United States
    • The Journal of High Technology Law Vol. 4 No. 1, July 2004
    • July 1, 2004
    ...or left autonomy in the hands of the individual, it might be different matter). (123.) See FTC. v. Mainstream Marketing Services, Inc., 345 F.3d 850, 860 (10th Cir. 2003) (noting holding of (124.) 319 U.S. 141 (1943). (125.) 397 U.S. 728 (1970). (126.) See FTC. v. Mainstream Marketing Servi......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT