Supreme Court Declines to Hear Telemarketers' Do-Not-Call Case

Separately, Court Won't Hear Appeals From Visa, Mastercard 

Wall Street Journal 4oct04

[National Do Not Call Registry   https://www.donotcall.gov ]

WASHINGTON — The Supreme Court turned away a challenge Monday to the federal do-not-call registry, ending telemarketers' bid to invoke free-speech arguments to get the popular ban on unwanted phone solicitations thrown out.

Separately, MasterCard International Inc. and Visa USA Inc. no longer can block banks from issuing credit cards from competitors after the Supreme Court declined to hear their appeal.

In the do-not-call case, the court, without comment, let stand a 10th U.S. Circuit Court of Appeals decision that upheld the registry of more than 57 million phone numbers as a reasonable government attempt to safeguard personal privacy and reduce telemarketing abuse.

Under the 2003 federal law, businesses face fines of up to $11,000 if they call people who sign up for the registry — unless they have recently done business with them. Charities, pollsters and callers on behalf of politicians, however, are exempt.

Telemarketing groups had filed the appeal, arguing in filings that the registry violated First Amendment rights because it singled businesses out while exempting other groups. They also said two million of their 6.5 million workers will lose their jobs within two years if the do-not-call rules stand. (American Teleservices Association v. FTC)

Visa, MasterCard Appeals Are Rejected

Visa USA and Mastercard failed to overturn a government lawsuit forcing the companies to drop a loyalty rule that blocks banks from issuing rival credit cards. The U.S. Supreme Court rejected appeals from the two giant credit-card organizations without comment.

Banks that issued MasterCard and Visa credit cards had been barred from also offering credit cards from other companies, such as Discover Financial Services Inc. and American Express Co.

The Bush administration argued in court filings that removing the restriction would encourage competition and lead to more choices and, possibly, lower interest rates for consumers. The administration had won in district court and the New York-based 2nd U.S. Circuit Court of Appeals, which found the restriction was anticompetitive.

About 20,000 banks issue cards only through Visa and MasterCard.

American Express has been trying to persuade banks to issue its cards. Under the contested rules, banks would have to give up Visa and MasterCard cards to do that, and no U.S. bank has agreed, the court was told. American Express and Discover have been issuing cards directly to individuals, although some foreign banks issue American Express cards.

After the court's announcement, MBNA Corp. said that it would begin issuing American Express-branded credit cards. "Today's news marks a fundamental change in the U.S. credit card industry and we believe it will lead to better value and greater choice for consumers," said Ken Chenault, chairman and CEO of American Express.

Roy Englert, one of the attorneys for MasterCard, wrote in a Supreme Court filing said that consumers have gotten better quality, prices and choices with the regulations in place. He said that Visa and MasterCard, like competitors in other industries, have a joint venture to help customers. He compared it to small businesses setting up cooperatives to get supplies at the best rate.

Bush administration lawyer Paul Clement told justices in a filing that Visa and MasterCard account for 73% of general credit-card charges. He said the two dominant card networks block "every competitively significant bank in the country from dealing with networks they do not control."

Walter Dellinger, one of Visa's lawyers, said the court should clarify the boundaries for acceptable competition between rivals. (Visa USA v. U.S., and Mastercard International v. U.S.)

Punitive-Damages Case

In another case, State Farm Mutual Automobile Insurance Co. failed to convince the court that it should revisit punitive damages only two years after last ruling on the issue.

State Farm and business groups had been pressing hard to get the high court to take up the issue again. In numerous legal briefs, business groups argued a State Farm lawsuit used to restrict punitive damages awards two years ago was the right vehicle for further clarifications.

Additional punitive damages cases are pending before the high court asking for a fresh look at the issue, including a damages award against a Union Pacific Corp. unit which the court will review next week. However, it is now less likely the court will take up punitive damages this year because the justices would likely have held the State Farm case if they planned to grant another appeal.

The case of State Farm Mutual Automobile Insurance Co. v. Campbell returned to the high court for the second time this summer. The Bloomington, Ill., insurance company appealed a ruling by the Utah Supreme Court that reduced a $145 million punitive damages award to $9 million. The jury awarded $1 million in actual damages in the case.

As dramatic as the reduction was, State Farm said the new damages figure was out of line with guidance given by the Supreme Court in the earlier ruling.

Two years ago, the Supreme Court called the $145 million figure "excessive" and suggested that single-digit ratios between real and punitive damages were appropriate. The court even suggested that some punitive damages awards shouldn't exceed the compensatory damages figure.

"The Utah Supreme Court's decision to award $9 million in punitive damages against State Farm contradicts this court's opinion in this case and is inconsistent with the fundamental due process principles that limit punitive damages," State Farm argued.

In other actions Monday:

• The justices said they won't decide whether random drug testing of firefighters is constitutionally justified by a city's interest in promoting public safety. Without comment, they let stand an Arizona Supreme Court ruling that the drug tests violated Mesa, Ariz., firefighter Craig Petersen's privacy rights under the Fourth Amendment. The Arizona court said the city didn't provide enough evidence that substance abuse was a widespread problem among the firefighters to warrant testing. (Mesa v. Petersen)
  
  
• The Court declined to consider another issue related to the rights of terrorism suspects — rejecting without comment an appeal by Ali Saleh Kahlab al-Marri, one of three people who have been held in America as enemy combatants without traditional legal rights. The Supreme Court last spring considered the cases of the other two — Jose Padilla and Yaser Hamdi — as well as an appeal involving similar detentions of people held at the U.S. naval base in Guantanamo Bay, Cuba. The Bush administration maintains that Mr. al-Marri is an al Qaeda sleeper agent. At issue in Monday's case was whether Mr. al-Marri's lawyers should have challenged his detention in a court in South Carolina, where he is being held. The attorneys filed the case in Illinois, where Mr. al-Marri lived before his arrest. With the high court's announcement, they can refile his challenge. (al-Marri v. Rumsfeld)
  
  
• The court rejected an appeal from ousted Alabama Chief Justice Roy Moore, who lost his job after defying a federal order to dismantle a Ten Commandments monument. Mr. Moore has become a high-profile crusader for Ten Commandment monuments as a result of the dispute over his own 2 1/2-ton granite display in the state courthouse. A federal judge ruled that Mr. Moore violated the Constitution's ban on government promotion of religion when he placed the monument in the rotunda of the judicial building in the middle of the night in 2001. The display was moved last year over Mr. Moore's objections, and a state court removed him from office. (Moore v. Judicial Inquiry Commission of the State of Alabama)
  
  
• The court turned away an appeal by a media company claiming it has a right to publish and sell real-time golf scores from PGA tournaments that its reporters cover. Without comment, the court let stand a lower court ruling allowing the PGA to restrict media outlets from posting or selling the real-time scores to Web site publishers — unless media outlets purchase a licensing agreement from the PGA first. The case involves Morris Communication Co., which began distributing scores its reporters obtained from the tournament's media center. (Morris Communication Co. v. PGA Tour)