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Three Utah companies are defending themselves before a federal court jury over allegations that they made as many at 84 million illegal telemarketing calls to numbers on the "Do Not Call Registry."
The 10 jurors are hearing the case that pits the Federal Trade Commission against the Corporation for Character, Feature Films for Family and Family Films of Utah, companies headquartered in Murray and owned directly or indirectly by Forrest Sandusky Baker III, who is also a defendant in the lawsuit.
In its complaint filed originally in Florida in 2011 and then transferred to Utah, the FTC alleged that the companies engaged in deceptive telemarketing to sell DVDs or tickets for family-friendly movies, or when they provided telemarketing services for others, including the Fraternal Order of Police and the Firefighters Charitable Foundation. The companies allegedly made a number of false statements, including about how much money they kept from the calls on behalf of nonprofit groups.
U.S. District Judge Robert Shelby tossed out several FTC claims before the trial began on Monday, including that the companies made certain misleading statements when calling to solicit donations for the Firefighters Charitable Foundation and the Fraternal Order of Police.
But Shelby also ruled that the companies had violated telemarketing laws in placing calls to numbers on the Do Not Call list on behalf of a group called Kids First or the Coalition for Quality in Children's Media and to sell tickets for the movie "Velveteen Rabbit," which was produced by Baker. He also found that they failed to provided identifying information for caller IDs and did not properly disclose that the actual purpose of some calls was to make sales and not just for charitable purposes.
Still before the jury are FTC allegations of making other misleading statements in calls to consumers for Kids First and to promote Velveteen Rabbit. Also at play are allegations that the companies knowingly placed a total of 84 million illegal calls to numbers on the National Do Not Call Registry.
During a court session on Wednesday, company attorney Russell Harris, who was called as a witness by the government, said Baker knew calls were being made to Do Not Call numbers.
But, he said, "Our understanding at the time was they were exempt from the Do Not Call Registry," though he also noted that Shelby had ruled otherwise.
And under cross-examination, Harris said it didn't make business sense to call people on the list.
"You're wasting money and you're upsetting someone," he said. "So it doesn't make any business sense. It doesn't make any moral sense. We're not in the business of upsetting people."
If the jury finds in favor of the government, the companies and Baker could face fines and other sanctions. The trial is expected to continue through next week.