Case Title: Charvat v. Dispatch Consumer Serv., Inc.

Citation: 2002-Ohio-2838

Docket Number: 20001725

State: ohio

Court: Ohio Supreme Court

Date: 2002-06-26T00:00:00Z

Document:
[Cite as Charvat v. Dispatch Consumer Serv., Inc., 95 Ohio St.3d 505, 2002-Ohio-2838.] 
 
 
CHARVAT, APPELLANT, v. DISPATCH CONSUMER SERVICES, INC. ET AL., 
APPELLEES. 
[Cite as Charvat v. Dispatch Consumer Serv., Inc., 95 Ohio St.3d 505, 2002-
Ohio-2838.] 
Consumer protection — Telephone Consumer Protection Act — Existing 
customer can terminate an “established business relationship” by 
requesting to be placed on a “do not call” list. 
(No. 2000-1725 — Submitted October 3, 2001 — Decided June 26, 2002.) 
APPEAL from the Court of Appeals for Franklin County, No. 99AP-1368. 
__________________ 
SYLLABUS OF THE COURT 
An existing customer can effectively terminate an “established business 
relationship” for purposes of the Telephone Consumer Protection Act, 
Section 227, Title 47, U.S.Code, by requesting to be placed on a “do not 
call” list. 
__________________ 
PFEIFER, J. 
{¶1} 
The issue in this case is whether in establishing a limited 
relationship with a business, consumers waive their right to the protection of the 
Telephone Consumer Protection Act (“TCPA”), Section 27, Title 47, U.S.Code.  
We find that an existing customer can effectively terminate an “established 
business relationship” for purposes of the TCPA by requesting to be placed on a 
“do not call” list. 
Factual Background 
{¶2} 
Plaintiff-appellant Philip J. Charvat filed this action against 
defendants-appellees Dispatch Consumer Services, Inc., and the Dispatch Printing 
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Company, Inc. (collectively, “the Dispatch”), alleging that the Dispatch had 
engaged in improper telephone solicitations in violation of the Telephone 
Consumer Protection Act (“TCPA”), Section 227, Title 47, U.S.Code. 
{¶3} 
Charvat claims that the Dispatch made unsolicited phone calls to 
him asking him to purchase a weekday newspaper subscription.  On August 2, 
1996, Charvat requested that the Dispatch cease making telemarketing sales calls 
to his home.  At the time, Charvat was already a Dispatch subscriber on a Sunday 
only basis.  After Charvat’s “Do Not Call” (“DNC”) demand, the Dispatch made 
at least two additional calls in the next twelve months to Charvat’s household 
soliciting a subscription to the Dispatch’s weekday newspaper. 
{¶4} 
On August 4, 1998, Charvat filed suit against the Dispatch.  
Charvat alleged that the Dispatch had violated the TCPA by continuing to solicit 
him by telephone after his DNC request.  Charvat also alleged other violations of 
state consumer protection statutes. 
{¶5} 
On September 8, 1998, the Dispatch filed a motion to dismiss 
and/or for summary judgment seeking dismissal of all of Charvat’s claims.  In its 
September 15, 1999 decision, the trial court granted the Dispatch’s motion, 
finding that the Dispatch was exempted from the TCPA as to Charvat because it 
enjoyed an “established business relationship” with him.  The Act, designed to 
protect consumers from unwanted telephone solicitations, excludes from the 
definition of “telephone solicitation” calls made to someone with whom the caller 
has an “established business relationship.” Section 227(a)(3)(B), Title 47, 
U.S.Code.  The trial court also found in the Dispatch’s favor on Charvat’s state 
law claims. 
{¶6} 
Charvat appealed only the portion of the decision concerning his 
TCPA claim.  The court of appeals affirmed the judgment of the trial court. 
{¶7} 
The cause is before this court upon the allowance of a 
discretionary appeal. 
January Term, 2002 
3 
Law and Analysis 
{¶8} 
Telemarketing has become a garish billboard planted firmly in the 
center of the cultural landscape, and has become the target of professional and 
water-cooler social commentators throughout the nation: 
{¶9} 
“ ‘SEINFELD: (PHONE RINGING) Hello. 
{¶10} “ ‘(TELEMARKETER): Hi.  Would you be interested in switching 
over to TMI long-distance service? 
{¶11} “ ‘SEINFELD: Oh, gee, I can’t talk right now.  Why don’t you 
give me your home number and I’ll call you later? 
{¶12} “ ‘* * * 
{¶13} “ ‘(TELEMARKETER): Well, I’m sorry.  We’re not allowed to do 
that. 
{¶14} “ ‘SEINFELD:  I guess you don’t want people calling you at home. 
{¶15} “ ‘(TELEMARKETER): No. 
{¶16} “ ‘SEINFELD: Well, now you know how I feel.’ ” Shannon, 
Combating Unsolicited Sales Calls: The “Do-Not-Call” Approach to Solving the 
Telemarketing Problem (2001), 27 J. Legis. 381, fn. 1. 
{¶17} We are not called upon to judge the telemarketing industry.  We 
are not asked to balance its obvious failings against the employment it creates and 
the economic efficiencies it can engender.  Instead, we are called upon simply to 
apply a statute, and in turn to determine what level of deference this court owes to 
the governmental agency that has created regulations based upon the statute. 
{¶18} In response to the burgeoning use of telephone solicitations to 
market goods and services in the United States, and the concomitant frustration of 
the American public, Congress passed the TCPA in 1991. P.L. No. 102-243, 105 
Stat. 2394.  At that time, Congress found that 18 million Americans each day 
received a telephone solicitation.  Not surprisingly, Congress also determined that 
“[m]any consumers are outraged over the proliferation of intrusive, nuisance calls 
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to their homes from telemarketers.” 137 Cong.Rec. 518781-02; 137 Cong.Rec. 
H11307-01.  The federal government stepped in to address the problem because 
individual states were unable to regulate telemarketers’ interstate operations. P.L. 
No. 102-243 Section 2, 105 Stat. 2394. 
{¶19} The TCPA was the result of Congress’s effort to balance individual 
privacy with freedom of speech and trade.  The teeth of the Act, which allows 
consumers to sue overzealous telemarketers, is at issue in this case.  Section 
227(c)(5), Title 47, U.S.Code provides a private right of action to “[a] person who 
has received more than one telephone call within any 12-month period by or on 
behalf of the same entity in violation of the regulations prescribed under this 
subsection.”  The regulations prescribed under the statute include Section 
64.1200(e)(vi), Title 47 C.F.R, which forbids telemarketers from soliciting by 
telephone anyone who has previously requested to be put on a DNC list.  In this 
case, Charvat alleges that the Dispatch made telephone solicitations at least twice 
after his DNC request. 
{¶20} Congress created an exception to the purview of the Act as a part 
of its balancing of commerce and privacy.  Section 227(a)(3)(B), Title 47, 
U.S.Code excludes from the definition of “telephone solicitation” a call made “to 
any person with whom the caller has an established business relationship.”  Thus, 
a consumer has no right of action under Section 227(c)(5) against a caller with 
whom he has an “established business relationship” (“EBR”).  The trial and 
appellate courts in this case found that an EBR existed between Charvat and the 
Dispatch because Charvat subscribed to the Sunday Dispatch at the time of the 
telephone calls at issue. 
{¶21} The TCPA itself does not define what constitutes an EBR.  That 
question is central to this case, as well as the issue of how an EBR can be 
terminated.  The Federal Communications Commission (“FCC”) has undertaken 
January Term, 2002 
5 
to resolve both of those issues pursuant to its rulemaking authority delegated by 
Congress.  But is this court bound by how the FCC has resolved these issues? 
{¶22} The United States Supreme Court instructs us that courts do owe 
deference to an agency’s rulemaking authority.  In Chevron U.S.A., Inc. v. 
Natural Resources Defense Council, Inc. (1984), 467 U.S. 837, 843-844, 104 
S.Ct. 2778, 81 L.Ed.2d 694, the court held: 
{¶23} “ ‘The power of an administrative agency to administer a 
congressionally created * * * program necessarily requires the formulation of 
policy and the making of rules to fill any gap left, implicitly or explicitly, by 
Congress.’ Morton v. Ruiz, 415 U.S. 199, 231 [94 S.Ct. 1055, 39 L.Ed.2d 270] 
(1974).  If Congress has explicitly left a gap for the agency to fill, there is an 
express delegation of authority to the agency to elucidate a specific provision of 
the statute by regulation.  Such legislative regulations are given controlling weight 
unless they are arbitrary, capricious, or manifestly contrary to the statute.  
Sometimes the legislative delegation to an agency on a particular question is 
implicit rather than explicit.  In such a case, a court may not substitute its own 
construction of a statutory provision for a reasonable interpretation made by the 
administrator of an agency.” (Footnote omitted; ellipses sic.) 
{¶24} Here, the TCPA is the skeleton of a system designed to rein in the 
proliferation of telemarketing calls.  Much of the detail was left to the FCC.  
Congress’s delegation was both explicit and implicit.  In Section 227(c), Congress 
explicitly set forth the FCC’s role in implementing the overarching aim of the 
Act: 
{¶25} “[T]he Commission shall initiate a rulemaking proceeding 
concerning the need to protect residential telephone subscribers’ privacy rights to 
avoid receiving telephone solicitations to which they object.” 
{¶26} This explicit delegation of the FCC’s role creates implicit powers 
where Congress fails to fill in the blanks.  Congress did not define “established 
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business relationship” within the TCPA, either in its definitional section, Section 
U.S.C. 227(a), or elsewhere.  The FCC stepped into that breach and defined what 
constitutes an EBR in Section 64.1200(f)(4), Title 47, C.F.R.: 
{¶27} “The term ‘established business relationship’ means a prior or 
existing relationship formed by a voluntary two-way communication between a 
person or entity and a residential subscriber with or without an exchange of 
consideration, on the basis of an inquiry, application, purchase or transaction by 
the residential subscriber regarding products or services offered by such person or 
entity, which relationship has not been previously terminated by either party.” 
{¶28} Chevron requires this court to defer to the agency regulation as to 
the definition of an EBR.  Certainly, the FCC’s definition is a reasonable one 
given the Act’s purpose of regulating telemarketing.  The definition is not an 
exhaustive one for use in all contexts, but it reflects Congress’s purpose.  It allows 
businesses to contact individuals who have previously invited or acquiesced to 
calls without violating the TCPA. 
{¶29} While establishing that the EBR exemption exists only if the 
“relationship has not been previously terminated by either party,” the FCC does 
not explain within its regulations what it takes to terminate a relationship.  
However, in interpreting its own rules, the FCC did undertake to set forth how an 
EBR can be severed. 
{¶30} The regulation defining an “established business relationship” first 
appeared in the FCC’s Report and Order (1992), 7 F.C.C.R. 8752, 1992 WL 
690928, Appendix B.  In its Report and Order, the FCC discussed public 
comments it had received on the proposed rule and its own interpretation of the 
rule as adopted.  As a part of that discussion and interpretation, the FCC directly 
addressed the issue present in this case. 
{¶31} “We emphasize, however, that a business may not make telephone 
solicitations to an existing or former customer who has asked to be placed on that 
January Term, 2002 
7 
company’s do-not-call list.  A customer’s request to be placed on the company’s 
do-not-call list terminates the business relationship between the company and that 
customer for the purpose of any future solicitation.” (Emphasis added.) Id. at fn. 
63. 
{¶32} The FCC makes clear that an existing customer who requests to be 
put on a do-not-call list retains the same rights as a noncustomer who makes a 
similar demand: 
{¶33} “The definition of ‘telephone solicitation’ in §227(a)(3) also 
excludes calls made to parties with whom the caller has an established business 
relationship and calls for which the calling party has received the called party’s 
prior express invitation or permission.  We emphasize, however, that subscribers 
may sever any business relationship, i.e., revoke consent to any future 
solicitations, by requesting that they not receive further calls from a telemarketer, 
thus subjecting that telemarketer to the requirements of § 64.1200(e).” Id. at fn. 
47. 
{¶34} Thus, the FCC, the agency entrusted with the development of rules 
for the interpretation of the TCPA, has set forth its opinion that a consumer can 
sever its EBR with a business such that the telemarketer loses its exemption from 
the TCPA.  The FCC firmly answers that current customers can gain the 
protection of the TCPA by requesting to be put on a DNC list. 
{¶35} But are an agency’s interpretations of its own regulations also 
subject to deference by courts?  In Stinson v. United States (1993), 508 U.S. 36, 
44-45, 113 S.Ct. 1913, 123 L.Ed.2d 598, the court held that an agency’s 
commentary regarding its own rules is due even greater deference than the court 
gives rules in Chevron: 
{¶36} “Commentary * * * has a function different from an agency’s 
legislative rule.  Commentary, unlike a legislative rule, is not the product of 
delegated authority for rulemaking, which of course must yield to the clear 
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meaning of a statute. * * * Rather, commentary explains the guidelines and 
provides concrete guidance as to how even unambiguous guidelines are to be 
applied in practice. 
{¶37} “The functional purpose of commentary * * * is to assist in the 
interpretation and application of those rules, which are within the [Sentencing] 
Commission’s particular area of concern and expertise and which the Commission 
itself has the first responsibility to formulate and announce. * * * As we have 
often stated, provided an agency’s interpretation of its own regulations does not 
violate the Constitution or a federal statute, it must be given ‘controlling weight 
unless it is plainly erroneous or inconsistent with the regulation.’ ”   
{¶38} Pursuant to Stinson, we must follow the FCC’s commentary unless 
it is at odds with the regulation it explains.  We find the agency’s interpretation to 
be perfectly in line with the regulation.  Section 64.1200(f)(4), Title 47, C.F.R. 
defines an EBR, but also states that the privileges associated with an EBR exist 
only until the relationship terminates.  The agency commentary explains how that 
relationship ends. 
{¶39} The FCC opines that a person can sever an established business 
relationship simply by asking to be put on a DNC list.  The DNC does not destroy 
every aspect of a relationship; instead, it “terminates the business relationship * * 
* for the purpose of any future solicitation.” 7 F.C.C.R. 8752, fn. 63, 1992 WL 
690928.  The FCC does not require that the subscriber stop purchasing from a 
company associated with the telemarketer.  It requires only that the consumer 
seek to cease the “voluntary two-way communication” that is the definitional 
heart of the “established business relationship.” Section 64.1200(f)(4), Title 47, 
C.F.R.  That is enough to overcome the assumed acquiescence to receiving 
telemarketing calls. 
{¶40} Appellees argue that giving established customers the benefit of 
the Act after a DNC request list renders the EBR exception a nullity.  They argue 
January Term, 2002 
9 
that there is no distinction then between how telemarketers must treat established 
customers and other people receiving telephone calls.  It is true that after a DNC 
request an established customer and a noncustomer enjoy the same protections 
under the TCPA.  However, as the FCC report points out, it is not until a person 
who has an EBR with a telemarketer requests to be placed on a DNC list that a 
company must comply with the dictates of Section 64.1200. 
{¶41} Without an EBR, telemarketers may not call before 8:00 a.m. or 
after 9:00 p.m. [Section 64.1200(e)(1), Title 47, C.F.R.], must provide the name 
and the address or phone number of the caller [Section 64.1200(e)(2)(iv)], may 
not make an unrequested prerecorded solicitation call [Section 64.1200(a)(2)], 
and may not send an unsolicited advertisement to a telephone facsimile machine 
[Section 64.1200(a)(3)]. 
{¶42} By contrast, an entity making calls only to persons with whom it 
already has an EBR does not have to comply with the DNC list requirements of 
Section 64.1200(e)(2).  A company that called only existing customers would not 
have to have a written policy for maintaining a DNC list [64.1200(e)(2)(i)], would 
not be required to train personnel regarding those lists [64.1200(e)(2)(ii)], and 
would not have to maintain a DNC list [64.1200(e)(2)(vi)]. 
{¶43} Thus, an EBR does provide a business with tangible benefits that it 
can enjoy prior to an existing customer’s DNC request.  Only after an existing 
customer ends the EBR do the requirements and restrictions of Section 64.1200, 
Title 47, C.F.R. come into play as to that customer. 
{¶44} The regulation and the commentary are both consistent with the 
statute at issue.  The purpose of the Act is to reduce the nuisance aspect of 
telemarketing.  Maintaining some limited commercial tie to a business should not 
leave consumers at the mercy of unbridled telemarketing efforts.  An EBR gives a 
business the benefit of the doubt, not an unlimited license to call.  It is not 
consistent with the Act that a person who subscribes to the daily newspaper in a 
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one-newspaper town must be prisoner to telephone pitches for a publisher’s 
panoply of products. 
{¶45} We defer to and agree with the positions of the FCC on these 
matters.  We accept its definition of an EBR as a relationship formed by a 
voluntary two-way communication.  We agree that when that relationship 
becomes involuntary and one-sided, the consumer can put an end to telephone 
solicitation calls.  Accordingly, we reverse the judgment of the court of appeals 
and remand the case to the trial court. 
Judgment reversed 
and cause remanded. 
 
MOYER, C.J., RESNICK, F.E. SWEENEY, COOK and LUNDBERG STRATTON, 
JJ., concur. 
 
DOUGLAS, J., dissents. 
__________________ 
 
Philip J. Charvat, pro se. 
 
Zeiger & Carpenter, John W. Zeiger and Marion H. Little, for appellees. 
 
Robert Biggerstaff, pro se, urging reversal as amicus curiae. 
__________________