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Indiana robocall ban not preempted by federal law

By Jonathan Stempel

(Reuters) - An Indiana state law banning a variety of automated telephone calls was given new life as a federal appeals court concluded that the law was not preempted by federal law.

In a decision released late on Thursday, the 7th U.S. Circuit Court of Appeals in Chicago said a lower court judge erred in concluding that the federal Telephone Consumer Protection Act supplanted Indiana's law regulating the calls.

It directed the lower court to consider whether the Indiana law violates callers' free speech rights under the 1st Amendment of the U.S. Constitution.

Automated calling often prompts complaints because they are considered annoying or raise privacy concerns.

According to the 7th Circuit, the Federal Trade Commission fields more than 200,000 complaints a month about automated marketing, or "autodialer," calls.

The Indiana law had been challenged by Patriotic Veterans Inc, an Illinois-based nonprofit political advocacy group that sought to tell voters about politicians' positions on issues that matter to veterans.

Employing people like the singer Pat Boone to deliver its messages, the group used a service capable of delivering as many as 100,000 messages in three hours, court papers show.

The group sought a court ruling that the Indiana law was invalid as it applied to political messages.

In September 2011, U.S. District Judge William Lawrence in Indiana said the Telephone Consumer Protection Act preempted the state law as it applied to the interstate use of automatic telephone dialing systems.

Writing for a three-judge 7th Circuit panel, Circuit Judge Ilana Rovner acknowledged that "havoc" could result if autodialers were forced to comply with 50 different state regulatory systems as to when and how they might place calls.

But she said the TCPA said nothing about preempting laws regulating the interstate use of automatic dialing systems, and that Patriotic Veterans did not show it would be impossible to comply with both the federal law and Indiana's law.

"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," Rovner wrote. "That the legislature attempted to do so without violating the free speech rights protected by the First Amendment does not turn the legislation into one with the purpose and objective of protecting non‐commercial robocalls."

Mark Crandley, a partner at Barnes & Thornburg representing Patriotic Veterans, did not immediately respond to a request for comment.

Bryan Corbin, a spokesman for Indiana Attorney General Greg Zoeller, said the state will review the decision, which was issued 22 months after oral arguments.

The case is Patriotic Veterans Inc v. Indiana et al, 7th U.S. Circuit Court of Appeals, No. 11-3265.

(Reporting by Jonathan Stempel in New York; Editing by John Wallace)

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