FTC, Utah Film Companies Trade Suits over Do Not Call List
The Federal Trade Commission and three Utah film companies have each gone to federal courts over the companies’ marketing practices. Feature Films for Families, Corporations for Character, and Family Films of Utah filed a complaint in the federal district court for Utah last week, alleging that the FTC is trying to violate their free speech rights. On Monday, the FTC announced that it had filed a lawsuit against the three companies, alleging that they routinely violated the Do Not Call list rules and illegally signed a marketing agreement with a coalition of conservative family activists who try to identify and rate family-friendly films.
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All three companies are owned by Forrest S. Baker III, whose executive producer credits include The Buttercream Gang series and The Velveteen Rabbit. The FTC took its case to federal court in Tallahassee, Fla., alleging that Baker’s companies called people to offer free DVDs and asked “that the recipients give feedback on whether the movies should be included in a list of recommended movies.” Baker’s telemarketers “did not disclose during these initial calls that those who accepted their offer would receive a call soliciting them to purchase additional movies,” the FTC said in its suit. The telemarketers called more than 5 million people whose names were on the national Do Not Call list, the FTC said. The FTC is alleging deceptive practices, making false statements in connection with telemarketing, violating the Do Not Call list rules, ignoring specific do not call requests, failing to transmit information to Caller ID services, failing to make required oral disclosures and abandoning calls. The FTC does not list a specific request for monetary damages, but asks the court to file an injunction “and ancillary relief as may be necessary to avert the likelihood of consumer injury during the pendency of this action.”
The film companies filed their own suit in response, claiming that the FTC has shown “institutional zeal and hostility to those who use the telephone to reach citizens.” “This case is about protecting the rights of charities and non-profit advocacy organizations to spread their messages, identify like-minded citizens, and raise funds through the use of one of the most effective and ubiquitous communication devices ever invented: the telephone,” the companies said in their complaint. “It is also about the rights of consumers to consent to open their doors (or phone lines) to listen to such messages -- if they so choose.” Feature Films for Families is a for-profit company, but “it is also a mission-driven organization and has complementary goals to Kids First! in promoting value-based media,” the companies’ suit said.
The film companies’ lawyer, Matt Cooper, told us that the FTC took its case to Tallahassee because it knows it would lose in front of a Utah jury. “This is big government beating up a small business … and they don’t want to fight it in Utah,” Cooper said. But this is not the first time the film companies’ marketing practices have been challenged. In 2009, Verizon Wireless sued Feature Films for Families over marketing for The Velveteen Rabbit. Feature Films settled within three months, agreeing to pay $25,000 and not to make any calls in the future (CD March 26/09 p10).