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Distributel v. State (1/3/97), 933 P 2d 1137
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage, Alaska
99501, phone (907) 264-0607, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
DISTRIBUTEL, INC., )
) Supreme Court No. S-7157
) Superior Court No.
v. ) 3AN-94-7353 CI
STATE OF ALASKA, ) O P I N I O N
Appellee. ) [No. 4458 - January 3, 1997]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
John Reese, Judge.
Appearances: Carl J.D. Bauman, Hughes,
Thorsness, Gantz, Powell & Brundin, LLC,
Anchorage, for Appellant. Daveed A. Schwartz,
Assistant Attorney General, Anchorage, Bruce
M. Botelho, Attorney General, Juneau, for
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh, and Fabe, Justices.
Distributel, Inc., sells advertising products imprinted
with the name of businesses or political candidates. It makes
numerous sales by calling potential or former customers over the
This case was initiated when the State filed a complaint
charging that Distributel had made telephone sales in Alaska
without registering as a telephonic seller under AS 45.63.010,
(EN1) a provision of the Telephonic Solicitation Act (the Act).
After a temporary restraining order and preliminary injunction were
issued, the parties stipulated to the entry of a permanent
injunction which enjoined Distributel from selling by telephone in
Alaska without first registering in accordance with the terms of
the Act. The injunction also provided that permission of the court
would be required for Distributel to operate in Alaska through the
"mail order sales"exemption expressed in AS 45.63.080(14). (EN2)
Finally, the injunction provided that "all issues in the above-
titled litigation are hereby resolved."
Distributel then filed a motion seeking permission to
"operate as a mail order telephonic seller under the 'catalog
exemption' of AS 45.63.080(14)." The State opposed this motion.
In response, the superior court entered an order which provided, in
part, that Distributel could not initiate calls to Alaska customers
under the catalog exemption. Instead, Distributel was limited to
receiving calls from customers responding to Distributel's catalog.
Distributel appeals from this order, claiming that the
court erred in interpreting the mail order catalog exemption and,
alternatively, that the application of the statute to Distributel
is unconstitutional. We affirm the superior court's order.
"[A] sale or attempted sale . . . of property from a mail
order catalog that is published on a regular, periodic basis, and
that describes or pictures the items for sale and prominently
provides the specific price of each item"is exempt from the
registration requirement of the Act. AS 45.63.080(14). The
superior court interpreted this exemption as not encompassing sales
initiated by a telephone call from a seller following the seller's
delivery of a mail order catalog to consumers. In our view, this
is a reasonable interpretation of the statutory phrase "sale . . .
from a mail order catalog." The superior court's interpretation
tracks the normal course of mail order catalog sales. It also
comports with the manifest purpose of the Act, which is to prevent
unregistered telephone marketeers from making unsolicited sales
calls over the telephone. Moreover, it is consistent with the mail
order catalog exclusion in a federal act having a similar purpose.
(EN3) Finally, this interpretation is consonant with the
legislative history of the Act. (EN4)
Distributel argues that the superior court's order
governing mail order catalog sales violates numerous state and
federal constitutionally guaranteed rights. This argument has been
waived. Each of the constitutional questions posed by Distributel
was placed in issue by it in its answer to the original complaint.
They were resolved by the stipulated permanent injunction. See
Singh v. State Farm Mut. Auto. Ins. Co., 860 P.2d 1193, 1197
(Alaska 1993) (citing Harold's Trucking v. Kelsey, 584 P.2d 1128,
1129-30 & n.3 (Alaska 1978)). (EN5)
The order of the superior court is AFFIRMED.
1. AS 45.63.010 provides:
(a) A person may not sell or attempt to
sell property or services by telephonic means
if the person makes substantially the same
offer on substantially the same terms to two
or more persons, unless the telephonic seller
is registered with the Department of Law at
least 30 days before the solicitation
(b) To register under (a) of this section,
a person shall file with the department
(1) a notice of intent to engage in a
solicitation campaign; a separate notice of
intent shall be filed for each solicitation
(2) an irrevocable consent appointing the
department the person's agent for the receipt
of service of process in a court action or
other proceeding against the person, or the
successor in interest of the person, for a
violation of this chapter; and
(3) a signed statement that the person has
read and will comply with this chapter and the
regulations adopted under this chapter.
(c) Registration under (b) of this section
is not complete until the telephonic seller
receives an acknowledgement from the
department that the seller has complied with
(b) of this section.
(d) The notice of intent must be on a form
provided and established by the department by
regulation. The notice of intent must include
detailed information about the nature of the
solicitation campaign and the identity and
business practices of the telephonic seller,
including information on the employees,
agents, and officers affiliated with the
telephonic seller. The notice of intent must
disclose criminal convictions, civil
judgments, orders, consent decrees, or
administrative determinations involving
allegations of unfair or deceptive business
practices by the telephonic seller.
(e) A person may not provide false
information in a notice of intent.
2. AS 45.63.080(14) provides:
This chapter does not apply to a sale or
. . . .
(14) of property from a mail order catalog
that is published on a regular, periodic basis
and that describes or pictures the items for
sale and prominently provides the specific
price of each item[.]
3. The Federal Trade Commission has excluded from the definition
of "telemarketing"under the federal Telemarketing and Consumer
Fraud and Abuse Prevention Act, 15 U.S.C. sec. 6101-08, the
solicitation of sales through the mailing of a
catalog which: Contains a written description
or illustration of the goods or services
offered for sale; includes the business
address of the seller; includes multiple pages
of written material or illustrations; and has
been issued not less frequently than once a
year, when the person making the solicitation
does not solicit customers by telephone but
only receives calls initiated by customers in
response to the catalog and during those calls
only takes orders without further
16 CFR 310.2(u) (1996) (emphasis added).
4. The Assistant Attorney General who was credited by the sponsor of the Act as having
worked extensively to develop it, testified before a Senate committee that "the bill would not
apply to transactions where the customer initiates the telephone call, provided that it is not in
response to a specific request that the customer initiate the call."
5. Distributel makes several other arguments. They are without merit and need not be