NOTE: This text was converted to HTML/Web format from a copy of the electronic file used to print the official document that was submitted to the court. This text was not derived from the official printed document itself, and may not be considered a legal copy of the official document. Although the text itself is believed to be identical to that of the originating electronic file, the nature of HTML format makes the exact layout of the text on the page somewhat unpredictable. As a result, this text will not exactly duplicate the appearance of the official printed document, and page numbers in particular should be discounted.
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
|AMERICAN CHARITIES FOR REASONABLE
FUNDRAISING REGULATION, INC., et. al.
|v.||Case No. 97-2058
|Judge Elizabeth A. Kovachevich
PINELLAS COUNTY, et. al.,
BRIEF IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT
Plaintiffs hereby submit their Brief in support of their Motion for Summary Judgment in the above captioned matter. There is no substantive factual dispute and the facts as already admitted by Defendants are sufficient to award Summary Judgment to the Plaintiffs. For a summary of non-disputed facts, see the Statement of Facts in Plaintiffs’ Motion for Summary Judgment. There are three independent grounds upon which Summary Judgment can and should be awarded: the Pinellas County ordinance violates the Commerce Clause, it violates the Due Process Clause of the Fourteenth Amendment, and it violates the First Amendment. This brief examines each of these in turn.
THE ORDINANCE VIOLATES THE COMMERCE CLAUSE
Congress alone has plenary power to regulate commerce among the several states.1 The Supreme Court has consistently held that the Commerce Clause is more than an affirmative grant of power: it has a negative sweep as well.2 This negative sweep bars state regulation of interstate commerce unless the regulation has only a predominantly local effect on interstate commerce.3 States may not circumvent this limitation by delegation to their political subdivisions.4
The state of Florida has delegated to its political subdivisions the power to enact laws regulating inter alia, the conduct of Professional Fundraising Consultants ("PFCs").5 Pinellas County's ordinance passed pursuant to that delegation6 impermissibly burdens interstate commerce and should be struck down as unconstitutional under the Commerce Clause.
A. The Pinellas County Ordinance attempts to regulate out of state activity
A state statute regulating interstate commerce will only be upheld if it operates evenhandedly to effectuate a legitimate public interest, and its effects on interstate commerce are only incidental.7 State statutes that only incidentally burden commerce are still invalid if the burdens they impose are clearly excessive in relation to the putative local benefits.8 While incidental regulation of interstate commerce may in some instances be permissible, direct regulation of interstate commerce is strictly prohibited absent authorization from Congress.9 State statutes that directly regulate or discriminate against interstate commerce are generally struck down without further inquiry.10
States are precluded from regulating commerce that takes place wholly outside of their borders, regardless of whether the commerce has effects within the state.11 A state statute that directly controls commerce occurring wholly outside the boundaries of that state clearly exceeds the inherent limits of the enacting state's authority, regardless of whether the statute's extraterritorial reach was intended by the legislature.12
In Edgar v. MITE the Supreme Court noted that an Illinois statute directly regulated transactions which took place across state lines, including those occurring wholly outside the state.13 In striking down the statute, the Court held that the projection of such extraterritorial effects exceeded the inherent limits of the state's power under the Commerce Clause, regardless of the statute's purported intended reach.14
In this case, all of the Plaintiffs are located outside of Pinellas County. None of them has an office in Pinellas County, none enters into any contracts in Pinellas County, and none does any business in Pinellas County.15 The role of a PFC is to assist charitable organizations in the design and implementation of charitable appeals.16 Their work does not require them to conduct any business in any area in which the charity decides to solicit, and indeed it is the charity and not the PFC that ultimately decides where its messages are ultimately directed.17 Most PFCs work out of a single office on behalf of all of their charitable clients, and their contacts are normally limited to their "home" jurisdiction or perhaps that of their client, but not everywhere their clients may direct their messages.
ACFRFR has been assigned the claim of one PFC incorporated in the state of Maryland, whose only offices are located in Maryland. All of its contracts are entered into in Maryland, and the services that the PFC performs for its charitable clients are performed in the state of Maryland. Clearly, application of the Pinellas County Ordinance to this PFC's activities would be "an application of a state statute to commerce taking place wholly outside of the [county]'s borders" in direct contravention to the proscription set forth in Healy.18 Whether or not that PFC's conduct has indirect effects within Pinellas County is entirely irrelevant to the analysis, since none of that PFC's conduct takes place within Pinellas County.19 Consequently, any argument that Pinellas County puts forth that its Ordinance regulates fraud within its borders (based on the dubious proposition that the act of registration leads to the detection or prevention of fraud) must be dismissed as beside the point.
B. Pinellas requires out-of-state PFCs to seek approval before engaging in interstate commerce
The Commerce Clause dictates that no state may force an out-of-state merchant to seek regulatory approval in one state before undertaking a transaction in another.20 It is equally well established that state laws which require a party to obtain a license as a prerequisite to engaging in interstate commerce violate the Commerce Clause.21 Carrying on interstate commerce is not a franchise or privilege granted by the state, it is a right of every citizen of the United States.22 Only Congress is permitted to require actors in interstate commerce to obtain special permission before so acting and even Congress cannot do so if it involves a prior restraint on free speech.23
The state may not, either directly or through its municipalities, require a party to take out a license before carrying on interstate business.24
PFCs do not have control over where or how their charitable clients ultimately disseminate their messages.25 Charities engage PFCs for their consulting services, but they retain the right to determine whether and how best to utilize the advice given.26
Once a PFC renders advice to its charitable client, that client may or may not use that advice to solicit contributions anywhere. When Plaintiff TCA performs its consulting services for a charitable client located in California, TCA has no notice of where that charitable client will ultimately decide to solicit, including Pinellas County. Thus, in order to sell its consulting services from its Virginia offices to a California charity, TCA27 would have to register with Pinellas County (and each and every local jurisdiction with a similar registration requirement) in order to avoid prosecution. Imposing such a condition on interstate commerce clearly violates the Commerce Clause.28
C. If many other jurisdictions enacted similar laws, the use of fundraising consultants in interstate commerce would be significantly and possibly fatally burdened
Under the Commerce Clause, no state may enact a law that, if enacted by all other similarly situated jurisdictions, would stifle the free flow of commerce.29
The Supreme Court has held that a proliferation of state laws that greatly multiplies the likelihood that sellers will be subject to inconsistent obligations violates the Commerce Clause.30
The practical effect of the statute must be evaluated not only by considering the statute itself, but also by considering how the challenged statute may interact with the legitimate regulatory regimes of other States and what effect would arise if not one, but many or every, State adopted similar legislation.31
The Commerce Clause proscribes the imposition of such regulations that, if enacted by sister states, would "thoroughly stifl[e] interstate commerce."32
In Bellas Hess33 Illinois had attempted to force an out-of-state mail order firm to collect use taxes on its shipments into Illinois via common carrier.34 However, since Bellas Hess had no office, agents, property or telephone listing in Illinois, the Supreme Court held that imposition of such a burden would violate the Commerce Clause. The court held that:
if the power of Illinois to impose [the tax at issue] were upheld, the resulting impediments upon the free conduct of interstate business would be neither imaginary nor remote. For if Illinois can impose such burdens, so can every other state, and so indeed, can every other municipality, every school district, and every other political subdivision throughout the nation with the power to impose [such taxes]. The many variations in rates of tax, in allowable exemptions, and in administrative and record keeping requirements could entangle . . . interstate business in a virtual welter of complicated obligations to local jurisdictions with no legitimate claim to impose 'a fair share of the cost of the local government.' The very purpose of the Commerce Clause was to ensure a national economy free from such unjustifiable local entanglements.35
Pinellas County, a local political subdivision, is attempting to directly regulate PFCs which advise charities on the posting of their charitable solicitations which are sent by those charities through the U.S. mail in interstate commerce. Complying with thousands of local filing fees, administrative and record keeping requirements, and other bureaucratic demands of every possible governmental entity where such mail is received would entangle PFCs in precisely the "welter of complicated obligations to local jurisdictions" struck down in Bellas Hess. The Commerce Clause forbids Pinellas County from regulating interstate commerce in this manner.
D. The Plaintiffs do not have sufficient nexus with Pinellas County to be subject to its laws
The Commerce Clause requires that before a state may lay burdens on an actor in interstate commerce, it must first establish that the actor has a sufficient nexus with that jurisdiction.36 There must be a connection between a state and the person, property, or transaction it seeks to regulate before the state can place burdens on interstate commerce.37
It is indisputable, with regard to a state seeking to impose a tax, that a vendor whose only contacts are by mail or common carrier lacks the substantial nexus required by the Commerce Clause.38 The Pinellas County Ordinance cannot survive scrutiny under this test.
First, none of the Plaintiffs in this case has any nexus, much less a substantial nexus with Pinellas County. None of them conducts any business in Pinellas County, none has any physical presence in Pinellas County, and none has any contacts whatsoever with Pinellas County.39 Even though PFCs assist in designing the means by which charities may ultimately choose to disseminate their messages in Pinellas County, the PFCs do not themselves promulgate that message on behalf of their charitable clients.40
Second, since none of the Plaintiffs has any contact whatsoever with Pinellas County, it follows that Pinellas County provides no services to them. Consequently, the burden of compliance with the regulations (including filing the various forms, paying all applicable fees, and maintaining all necessary records) cannot be fairly related to the services provided by Pinellas County.41
E. The Ordinance places an undue burden on interstate commerce
Even if the Ordinance only indirectly regulates interstate commerce, it may not impose an "undue burden" on interstate commerce.42 When local regulations evenhandedly regulate interstate commerce, a balancing test is used to determine whether or not the regulation creates an undue burden on interstate commerce.43
The Supreme Court described the test for incidental state regulation of interstate commerce:
where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, [the regulation] will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits [citations omitted]. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate commerce.44
The state's rationale for the regulation in Pike was similar to the one proffered by Pinellas County: to prevent any "material misrepresentations."45 Although the Court found an important state interest, it invalidated the regulation on the ground that it constituted an undue burden on interstate commerce.46
Pinellas County's purported interest in promulgating this regulatory structure is to prevent deception, fraud, or misrepresentation in the solicitation, use, and reporting of charitable contributions.47 Undoubtedly, the prevention of fraud is a legitimate state interest for purposes of the Pike balancing test. However, as the Supreme Court noted in Kassel,48 that is not the end of the analysis. The Ordinance is not even rationally related to the prevention of fraud.49 There is no evidence whatsoever that such purpose is achieved through registration. It defies common sense to believe that a person willing to defraud potential donors would register with government authorities responsible for prosecuting fraud as to his whereabouts and intentions, and pay all applicable fees to boot.
On the other side of the scale, however, the burden placed on the PFCs required to register is great indeed. As set forth above, if Pinellas County's authority to enact such a regulatory structure is legitimate, then PFCs must contend with the registration requirements in literally thousands of local political subdivisions that might enact this type of regulation. They will be subject to fees as well as to the different record keeping requirements of each jurisdiction. Of course, this says nothing about the cost of retaining competent legal counsel in order to advise them of the laws in all of those various jurisdictions, and to ensure compliance with them all. Indeed, this is precisely why Plaintiff Leahy has refrained from starting his direct mail fundraising and copywriting practice.50
Even where Congress has regulated interstate commerce and has purposely not pre-empted further regulation by states the Court has invalidated a burdensome state statute because it imposed an undue burden on interstate commerce.51
Consequently, even under the Supreme Court's balancing test, the Pinellas County Ordinance violates the Commerce Clause. To the extent that there is any local benefit at all (which is expressly denied by the Plaintiffs), the Ordinance's effects on interstate commerce are not incidental, and furthermore are clearly excessive in relation to those putative local benefits. Accordingly, this Court should hold that the Pinellas County Ordinance violates the Commerce Clause, and grant the Plaintiffs' requested declaratory and injunctive relief.
THE ORDINANCE VIOLATES THE DUE PROCESS CLAUSE
The Due Process Clause limits the reach both of legislatures to pass laws that affect nonresidents, and of courts to render in personam judgments against nonresident defendants.52 Unless a person has certain requisite "minimum contacts" with a jurisdiction, s/he is not subject to legislative and judicial pronouncements there.53 The concept of minimum contacts, in turn, performs two related, but distinguishable functions: it protects nonresidents from having to litigate in distant or inconvenient forums, and it also acts to ensure that the States do not reach out through their courts beyond the limits imposed upon them by their status as co-equal sovereigns in a federal system.54 At its core, minimum contacts requires some degree of reciprocity, and jurisdiction may not be based on random, fortuitous, or attenuated contacts that do not permit a nonresident to reasonably anticipate being haled into court in another jurisdiction.55 Rather, a minimum contacts analysis requires that nonresidents purposefully direct activities into a jurisdiction before they can be subject to jurisdiction there.56 The Due Process Clause prohibits Pinellas County from regulating the conduct of these Plaintiffs, since they have absolutely no contacts whatsoever with Pinellas County nor have they purposefully directed any activities specifically at the citizens of Pinellas County.
Even the fact that it may be foreseeable that the fundraising advice sold by the Plaintiffs in interstate commerce might be used in solicitations mailed into Pinellas County is insufficient to confer jurisdiction on Pinellas County to regulate the conduct of the Plaintiffs in this case.57 The Supreme Court has held that "the sovereignty of each state implies a limitation on the sovereignty of all sister states that is embodied in both the original scheme of the Constitution and the Fourteenth Amendment."58
The fact that the Plaintiffs may know that some of the charities they advise may use the consulting services to solicit in Pinellas County is an insufficient basis to make them subject to Pinellas County's laws.59 A customer's foreseeable but unilateral act of bringing a seller's product into a foreign jurisdiction cannot make the seller subject to the laws of that jurisdiction or make it amenable to suit in its courts.60
Even though the Plaintiffs derive financial benefits from their contracts with charities that solicit citizens of Pinellas County, such benefits cannot support jurisdiction unless they stem from a constitutionally cognizable contact with the county.61 That the Plaintiffs herein may receive a benefit (in the form of payment for services) from charities located wholly outside Pinellas County is not a constitutionally cognizable contact with Pinellas County. Plaintiffs have manifested no intent to obtain nor any expectancy of receiving any benefits from Pinellas County that would allow assertion of jurisdiction by the County over them.62
Even if Pinellas County had a strong governmental interest in applying its laws to the Plaintiffs, and even if the Plaintiffs would suffer only minimal or no inconvenience from being subject to the jurisdiction of Pinellas County, the Due Process Clause still prevents the County from having the power to obtain a valid judgment against them in the courts of its jurisdiction.63
Thus, it is clear that Pinellas County cannot regulate the Plaintiff's activities on the basis that it is foreseeable that their charitable clients will use their fundraising advice within Pinellas County nor on the theory that such advice is purposefully directed at Pinellas County.64 Nor does a state "acquire . . . jurisdiction by being the 'center of gravity' of the controversy, or the most convenient location for the litigation. The issue is personal jurisdiction, not choice of law. It is resolved in this case by considering the acts of the [appellants.]"65
In International Shoe66 the Supreme Court set forth the minimum contacts test:
due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." . . . Those demands may be met by such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there. . . . Whether Due Process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the Due Process Clause to insure. That clause does not contemplate that a state may make a binding judgment against an individual or corporate defendant with which the state has no contacts, ties, or relations.67
The burden is on Pinellas County to show that the Plaintiffs have sufficient "contacts, ties, or relations" to subject them to its laws.68
Even if the Plaintiffs had the requisite minimum contacts, any exercise of jurisdiction by Pinellas County would also have to comport with traditional notions of fair play and substantial justice.69 The Plaintiffs' burden in having to comply with laws to which they have no way of knowing they are subject when they have never purposefully directed any activities specifically toward Pinellas County does not comport with fair play or substantial justice.70
The Plaintiffs do not have any contacts with Pinellas County whatsoever, purposeful or otherwise. They do not have any offices, employees, or property in Pinellas County, do not perform any services for any client based in Pinellas County, do not market their services there, and do not solicit business there or otherwise enter or perform any contracts in Pinellas County. Accordingly, there is absolutely no reciprocity, as the Plaintiffs do not derive any of the benefits and protections of the laws of Pinellas County.
The Due Process Clause, by ensuring an orderly administration of the laws, gives a degree of predictability to the legal system that allows the Plaintiffs to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.71 Jurisdiction cannot be had over them based on the "random," "fortuitous," and "attenuated" contact associated with their charitable clients soliciting in Pinellas County.72 Any assertion of jurisdiction, be it legislative or judicial, over these Plaintiffs by Pinellas County certainly would be inconsistent with traditional notions of fair play and substantial justice under International Shoe and its progeny. Accordingly, the Plaintiffs are entitled to a declaratory judgment that Pinellas County's assertion of jurisdiction over them violates the Due Process Clause of the Fourteenth Amendment, and an injunction barring the Defendants from enforcing the Pinellas County Ordinance against them.
THE PINELLAS COUNTY ORDINANCE VIOLATES THE FIRST AMENDMENT
[T]he State's asserted power to license professional fundraisers carries with it (unless properly constrained) the power directly and substantially to affect the speech they utter. Consequently, the statute is subject to First Amendment scrutiny. . . .
[W]hen a State enacts a statute requiring periodic licensing of speakers, at least when the law is directly aimed at speech, it is subject to First Amendment scrutiny to ensure that the licensor's discretion is suitably confined.73
The Pinellas County ordinance is directly aimed at speech.74 In fact charitable solicitation communications are regulated by Pinellas County solely because they involve fundraising by non-profits, despite the fact that such communications enjoy the full protection of the First Amendment.75 The Pinellas County Ordinance violates the First Amendment freedom of speech rights of plaintiffs' clients' and of the citizens of Pinellas County who have a right to receive plaintiffs' clients' communications.76
The Plaintiffs in this case have both the right and the obligation to challenge such an abridgment of First Amendment rights.77
The Pinellas County ordinance (A) is overly broad, (B) is void for vagueness, (C) is unconstitutionally burdensome, (D) involves a prior restraint on speech, (E) vests too much discretion in the Pinellas County Charitable Solicitations Board, (F) is an unconstitutional "content-based" regulation of speech, (G) does not serve a compelling government interest because it has no rational relationship to the prevention, detection or prosecution of charitable fraud, and (H) is not applied in a narrowly tailored regulatory scheme.
It is up to the Defendants to justify any inhibition of First Amendment rights.78 "Where the transcendent value of speech is involved, due process certainly requires . . . that the State bear the burden of persuasion. . . ."79
A. Overly Broad
Pinellas County must demonstrate under the most exacting judicial scrutiny that its ordinance and the regulations pursuant thereto are the least restrictive methods available to advance a compelling governmental interest.80 The ordinance cannot bring into its ambit protected activities unless the government interests are stronger when balanced against the individual interests in personal liberties, and the methods used by the government are the least restrictive available consistent with promoting the government's compelling interest.81
The Pinellas Ordinance, by admission of the defendants, regulates fully protected free speech.82 Any regulatory scheme that is designed to burden or punish activities which are not constitutionally protected (e.g. fraud), but which includes within its ambit substantial activities which are fully protected by the First Amendment is overly broad.83 Overly broad regulation of core First Amendment activities is inherently suspect and presumptively invalid because of the chilling effect such regulation has on speech.84
The government "may serve its legitimate interests, but it must do so by narrowly drawn regulations designed to serve those interests without unnecessarily interfering with First Amendment freedoms."85 Given the availability of Florida's fraud statutes, the United States' Postal Service fraud statute, and the powers of the Internal Revenue service regarding nonprofit organizations, it is clear that the Pinellas County ordinance interferes with Plaintiffs' First Amendment rights without being necessary to or perhaps even useful in achieving the government's avowed purpose of preventing deception, fraud, or misrepresentation in the solicitation, use and reporting of contributions.86
B. Void for Vagueness
The Pinellas ordinance suffers from vagueness. The ordinance is susceptible to sweeping and improper application.87 Vague laws that do not have clear guidelines vest their enforcers with the discretion to arbitrarily restrict First Amendment freedoms and do not allow those against whom the enforcement is sought to have knowledge of what conduct is protected and what is prohibited.88 The ordinance must be struck down if "[M]en of common intelligence must necessarily guess at its meaning."89
The Pinellas County ordinance is so poorly drafted it is impossible to fully understand its ambit from reading the text.90 The plaintiffs in this case had to request an interpretation by the officials of Pinellas County in order to determine whether the ordinance applied to them.91 It is clear from Defendants' responses that the interpretation of the ordinance by the officials of Pinellas County (in other words, the ordinance "as applied") is nearly all encompassing and certainly unclear.92
The definition of Professional Fundraising Consultant and Professional Solicitor are so ambiguous as to defy distinction. The text of Pinellas County Code § 42-321(c) does not require a PFC (as opposed to a Professional Solicitor) to register with the County before entering into contracts with client charities. Nevertheless, the County has sought to and has enforced its ordinance against those who do not solicit directly, do not handle charitable funds, and who merely provide consulting advice to charities.93 The only way the ordinance might avoid vagueness is by being applied in an unconstitutionally overly broad manner.94 Such a construction obviously cannot immunize Pinellas County's ordinance from constitutional infirmities.
C. Unconstitutionally Burdensome
The ordinance fails to pass strict scrutiny because it burdens the fundamental right of free speech. Not only is it burdensome in its own right, but it is especially burdensome because it duplicates the State of Florida's registration requirement.95 Yet Pinellas County admits that such duplication is required.96
There are more than three thousand counties in the United States (sixty-seven in Florida alone) and innumerable cities, towns, villages, parishes, and municipalities with some form of home rule authority. If each one of those jurisdictions had an ordinance similar to Pinellas County, all national charitable speech would halt.97 The costs of compliance, of paying fees, filling out forms, even just identifying the requirements of the various jurisdictions is staggering. It is difficult enough to register in the states where such registration is required; duplicate registration at the local governmental level is redundant and clearly burdensome.98
Requiring duplicative registration and provision of information which could easily be made available to Pinellas County residents by the County from the files of the State of Florida serves no compelling governmental interest and significantly interferes with the fully protected speech of charities.99
D. Prior Restraint on Speech
The ordinance states:
It shall be a violation of this article for any charity to contract with any professional solicitor, commercial co-venturer, federated fundraising agency or sponsor for the purpose of raising or soliciting funds for the charity or sponsor before the professional solicitor, commercial co-venturer, federated fundraising agency or sponsor has been issued a charitable solicitations permit by the department as required by this article."100
In addition, not only is it a violation for the charity to contract with an unregistered advisor, it is a direct violation for the advisor to provide advice prior to registering.101
All of these requirements are imposed upon the charity prior to its issuance of any communication to residents of Pinellas County. These requirements are prior restraints on such communications and limit a charity's ability to communicate its message.102
For a system of prior restraints to comport with constitutional requirements, it must provide rigid due process safeguards: (1) the government must have the burden of proving the speech it wishes to restrain is unprotected by the Constitution; (2) any restraint issued prior to a judicial determination must be limited to the preservation of the status quo for the shortest period of time possible; and (3) the burden must be on the government to go to the courts to restrain the speech it wishes to prevent.103
Pinellas County fails all three of these tests. It cannot show that charitable speech is unprotected by the Constitution.104 The ordinance fails to limit the period of time during which the prior restraint is in effect.105 The ordinance provides for an applicant to be provided a Notice of Intent to Deny a license but it is the speaker, not the government, who must request a hearing (twice) and if the license is denied it is the speaker who must appeal to the courts for review.106 In addition the license can be revoked simply by sending a notice to the licensee.107 The absence of explicit standards, strict and short time limits to grant or deny a license, and the shifting of the burden of review to the speaker cause the ordinance to be facially unconstitutional.108
As an example of this unbridled discretion as it was actually applied, a PFC was consulting with a religious charity which had refused on various constitutional grounds to register.109 That same PFC was also consulting with other charities which did attempt to register.110 Defendants revoked the registrations of the latter (registered) charities the same day they refused the registration of the PFC on the grounds that the PFC was advising one unregistered (religious) charity.111 Thus the lawful speech of the latter charities was subject to a prior restraint due to the actions of an unrelated third party (the religious charity).112 These actions were beyond the control of both the latter charities and the PFC.113 It could not be clearer that this is an unconstitutional prior restraint on the free speech rights of ACFRFR's members, of charities everywhere,114 and of the residents of Pinellas County.115
E. Vests too much discretion in the Pinellas County Charitable Solicitations Board
The danger in granting broad latitude to a government functionary in permitting or restricting speech is that such discretion will be exercised in a discriminatory manner.116 Such a danger is, by the defendants' own admissions,117 present in the Pinellas County regulatory scheme.
The fact that these defendants (as previously indicated) denied the registration of some charities working with a single PFC because another of that PFC's client charities refused to register demonstrates the extent of this unbridled discretion.118
F. Involves "content-based" regulation of speech
The Pinellas County ordinance does not require the registration of consultants to all solicitors of the general public, only those proposing charitable activities. For example, ad agencies working with commercial marketing departments are not required to register at all. Only consultants to clients involved in charitable solicitation must register.119 When the government regulates the solicitation of funds by non-profit organizations such as those which are clients of the Plaintiffs, it is regulating core speech based on its content.120
Where regulation is content based, the standard of review is "strict scrutiny."121 The Pinellas County ordinance unconstitutionally singles out certain speech because of its content - material concerning charitable solicitations.122 And, although the government is not attempting to ban all such solicitations, it may not place limitations upon speech that it could not otherwise regulate directly.123 Moreover, when government regulates speech, it is not permitted to afford more protection to commercial speech of the same kind or character than that afforded to non-commercial speech.124
To survive constitutional attack, such content based regulations of speech must pass strict scrutiny - they must be justified by a compelling state interest and the means chosen to effectuate that compelling interest must be the least restrictive of First Amendment freedoms.125 However, as has been pointed out herein,126 these regulations neither promote the alleged purpose of protecting the public from fraud, nor are they the least restrictive means available.127
G. Does not serve a compelling government interest
To justify the burden this ordinance places on Plaintiffs' clients' speech the governments' interests must be compelling.128 Compelling state interests must be "paramount . . . of vital importance."129 When a statute or regulation restricts the flow of ideas, the court must weigh the extent to which communication is limited against the values served by enforcing the statute.130
The only interests cited have been to protect the public from deception, fraud, or misrepresentation in the solicitation, use, and reporting of contributions.131 It is settled law that restraining charitable speech on the basis of percentage costs of fundraising is too imprecise and insufficiently compelling to be used as a tool to justify intrusions onto First Amendment freedoms.132 The Pinellas County regulation is similarly insufficiently compelling, is imprecise and is not any less restrictive than those regulations previously struck down.
The importance and national scope of Plaintiffs' clients' public education and "charitable fundraising" speech is strong, if not overwhelming. Such speech is at the very core of the First Amendment. Compared to the government's generalized need to protect its citizens against fraud, (a laudable goal but one which can be more efficiently and precisely achieved through direct prosecution of those engaged in fraud), Plaintiffs' clients' speech clearly triumphs, particularly since the County has available to it the alternative of using Florida's fraud statutes.133
Pinellas County must meet its strict scrutiny burden of proving that the registration of PFCs (who merely advise charities on their public education and fundraising campaigns) is directly and rationally related to preventing fraud. This is a burden Pinellas simply cannot meet because there is no evidence that supports such a finding.134
H. Is not applied in a narrowly tailored regulatory scheme
Even if Pinellas County could cite a valid compelling governmental interest to justify its position, it would still fail strict scrutiny analysis because the regulations are not applied using the least restrictive means. To meet this test, the regulations should advance only the compelling governmental interest (protection of the public from fraud). Pinellas County, which has the burden of proof, has no evidence that its regulatory scheme, as applied, protects the public from fraud. Its regulatory scheme is therefore unconstitutional.135
If more "benign and narrowly tailored options" are available, a less benign and less narrowly tailored option will not withstand scrutiny.136 Here, the option of prosecution of fraud using Florida's fraud statutes is clearly a more narrowly tailored means of achieving Pinellas County's asserted interest that does not include within its sweep non-fraudulent speech.
The Pinellas County ordinance violates the Commerce Clause, the Due Process Clause and the Free Speech clause of the First Amendment. It is facially unconstitutional and requires no finding of fact, whether uncontroverted or not, for this Court to invalidate it. The ordinance is also unconstitutional as applied to these Plaintiffs and those they represent. The ordinance also violates the First Amendment rights of charities and of the residents of Pinellas County who are restricted from receiving the communications of those who chose not to solicit in Pinellas County due to this unconstitutional regulatory scheme.
Defendants were given the opportunity either to admit various factual allegations or to turn over to Plaintiffs any "information or evidence relevant to the . . . denial or failure to admit . . . the information in the . . . requests to admit."137 Defendants failed to turn over a single scintilla of evidence to contravene Plaintiff's allegations and sworn affidavits. Defendants clearly cannot meet their burden138 of showing that the ordinance meets constitutional standards under the Commerce Clause, the Due Process Clause, and the Free Speech Clause. "[W]hen a properly supported motion for summary judgment is made, the adverse party 'must set forth specific facts showing that there is a genuine issue for trial.'"139 "If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party."140
The Defendant's have failed to submit any evidence, much less probative evidence that: (1) Plaintiffs had the requisite nexus with Pinellas County to meet the requirements of the Commerce Clause, and (2) Plaintiffs had the requisite minimum contacts with Pinellas County to meet the requirements of the Due Process Clause of the Fourteenth Amendment, and (3) that registration and licensing of PFCs (a) serves a substantial governmental interest, that is (b) narrowly tailored and (c) does not unduly interfere with core free speech protected by the First Amendment.
The only link between the Plaintiffs and Pinellas County is the very literature and solicitations distributed by charities with which PFCs have consulted. Pinellas County requires a license and a fee from these PFCs solely based on the distribution of such literature and not on the basis of these PFCs engaging in any business activities within the County, not on the basis of involvement in proven fraud, and not based on the time, place or manner of the distribution of the literature. But for the literature entering Pinellas County by the U.S. Mail, Pinellas would have absolutely no claim to be able to regulate these PFCs. It is therefore clear that what the ordinance regulates by way of prior restraint is the act of the charities distributing literature, not on the basis of time, place or manner but solely because the content contains solicitations which are fully protected core speech. This, Pinellas County cannot do.
Defendants have the burden of bringing forth evidence to contravene Plaintiffs' uncontroverted allegations and sworn statements. Defendants also have the ultimate burden of proof. It is a burden Defendants have not met because they cannot meet it. Defendants have no evidence of a nexus or minimum contacts between Plaintiffs and Pinellas County because there is none. The ordinance blatantly interferes with First Amendment rights both facially and as applied.
The law is so unambiguous on the various points cited previously that one wonders why Pinellas County has persisted in its defense of a clearly unconstitutional ordinance. Such intransigence has forced Plaintiffs to go to great expense and inconvenience to challenge Defendant's conduct which has unconstitutionally restricted the rights of literally hundreds and hundreds of charities long after Defendants received notice of their unconstitutional behavior.141
The Defendants have failed to show that their ordinance passes constitutional muster both facially and as applied. Therefore the case is appropriate for and the Court should award Summary Judgment to the Plaintiffs as requested in their motion and grant their request for declaratory and injunctive relief and for costs and attorneys fees.
|Pro Hac Vice
Geoffrey W. Peters, Esq.
Geoffrey W. Peters, P.C.
9024 Trailridge Court
Vienna, VA 22182
|Pro Hac Vice
Ed Mazlish, Esq.
Perlman & Perlman
220 Fifth Avenue - 7th Floor
New York, New York 10001-7708
1 U.S. Const. art. I, § 8, cl. 3. See also, Gibbons v. Ogden, 9 Wheat. 1, 231-2, 239 (1824).
2 Quill Corp. v. North Dakota, 504 U.S. 298 (1992)(hereinafter Quill).
3 Morgan v. Virginia, 328 U.S. 373 (1946).
4 Associated Indus. of Missouri v. Lohman, 511 U.S. 641, 650-52 (1994); Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dep’t of Natural Resources, 504 U.S. 353 (1992); see also Waste Recycling, Inc. v. Southeast Alabama Solid Waste Disposal Authority, 814 F.Supp. 1566 (M.D.Ala. 1993), aff'd sub nom Waste Recycling v. SEAR Solid 29 F. 3d 641 (11th Cir 1994).
5 Florida Stat. ch. 496.421 (1997).
6 Pinellas County Code §42-266 et. seq. (1985).
7 Edgar v. Mite Corp., 457 U.S. 624, 640 (1982)(hereinafter Edgar).
8 Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970)(hereinafter Pike).
9 Shafer v. Farmers Grain Co., 268 U.S. 189, 199 (1925).
10 Brown-Forman Distilleries v. N.Y. State, 476 U.S. 573, 579 (1986)(hereinafter Brown-Forman); City of Philadelphia v. New Jersey, 437 U.S. 617 (1978).
11 Healy v. The Beer Institute, 491 U.S. 324, 336 (1989) (hereinafter Healy). See also Brown-Forman, 476 U.S. at 579; Baldwin v. G.A.F. Seelig, 294 U.S. 511 (1935).
12 Healy at 336. See also Edgar, 457 U.S. at 643 (a statute which directly regulated interstate commerce, including commerce occurring wholly outside the state's borders, must be held invalid).
13 Edgar at 641.
14 Id. at 642-3.
15 Plaintiffs’ Motion for Summary Judgment Statement of Facts at ¶¶ 1, 7, 8, 13, and 14.
16 See Pinellas Co. Code § 42-266 (1995). Defendants admit this is the role of a PFC. See Answers, ¶ 18.
17 This is implicit in the definition of PFCs in Pinellas Co. Code § 42-266 (1995). By definition, PFCs do not “manage, conduct, or carry on any fundraising activity, or solicit contributions” nor do they at any time “have custody or control over contributions.” Although not explicitly stated, it is clear from this definition that the PFC’s role involves no necessary contacts or nexus with Pinellas County itself, but rather contemplates a more detached role that can be accomplished without any contact with Pinellas County whatsoever. The Defendants have admitted as much in ¶ 18 of their Answers.
18 91 U.S. at 336.
19 Similarly, neither TCA nor Leahy conducts or proposes to conduct any activities within the borders of Pinellas County. Both of those Plaintiffs are located solely in Virginia. Any contracts those Plaintiffs negotiate and ultimately sign will be or have been entered in Virginia. Once again, for the reasons set forth above, the Pinellas County Ordinance cannot be constitutionally applied to Plaintiffs TCA and Leahy consistent with the inherent limitations of the Commerce Clause.
20 Healy at 337. See also Brown-Forman at 579-80, 582 (“When a state statute directly regulates interstate commerce . . . we have generally struck [it] down without further inquiry. . . . Forcing a merchant to seek regulatory approval in one state before undertaking a transaction in another directly regulates interstate commerce”).
21 Barret v. City of New York, 232 U.S. 14, 31 (1914) (hereinafter Barret) (citing Crutcher v. Kentucky, 141 U.S. 47, 58 (1891) (hereinafter Crutcher). In Barret, the Supreme Court held that local regulations incidental to the police power must be confined to matters of appropriately local concern, and that such regulations even when valid may never “treat [interstate commerce] as a local privilege and prohibit its exercise in the absence of a license.” Barret at 31.
22 Dennis v. Higgins, 498 U.S. 439 (1991). See also, Barret at 31 and Crutcher at 58. In Crutcher Kentucky had attempted to require an express company to pay a licensing fee and file certain other registration documents before it could engage in its interstate business. In holding that such requirements violated the Commerce Clause, the Court stated that “it would not be in the province of the state legislature...to require [actors in interstate commerce] to take out a license therefor. To carry on interstate business is not a franchise or a privilege granted by the state; it is a right which every citizen of the United States is entitled to exercise under the constitution. . . .” Id. at 57.
23 See Part III infra.
24 Barret at 31-2.
25 See the definition of PFCs in Pinellas Co. Code §42-266 (1995), providing that PFCs “plan, advise, consult, or prepare material for the solicitation of contributions” but do not “manage, conduct or carry on any fundraising activity, or solicit contributions, or employ, procure, or engage any compensated person to solicit contributions and who does not at any time have custody or control over contributions.” (emphasis added).
26 Indeed, if they do not reserve that right, their PFCs may become subject to regulation as Professional Solicitors. See Pinellas Co. Code §42-266 (1995).
27 The same analysis would hold for Plaintiff ACFRFR's PFC supporters and for Leahy.
28 In addition, the fact that the license is for activity that occurs wholly outside the borders of Pinellas County is an alternative reason to find that the Ordinance violates the Commerce Clause. See Healy, Edgar, and Brown-Forman. Moreover, the burdensome web of regulation that such a regulatory scheme creates is also a reason to find that the Ordinance violates the Commerce Clause. See infra. Section C.
29 Quill, 504 U.S. at 313 n.6. One of the primary purposes for which the Constitution was ratified was to create a national economic union unfettered by state imposed limitations on interstate commerce. Healy, 491 U.S. at 335-6. Indeed, the entire Constitution was framed upon the theory that the peoples of the several states must sink or swim together, and that in the long run prosperity and salvation are to be found in union and not division. Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 523 (1935).
30 Brown-Forman at 583-4.
31 Healy, 491 U.S. at 336.
32 Edgar, 457 U.S. at 642.
33 National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753 (1967)(hereinafter Bellas Hess).
34 Id. at 754-6.
35 Id. at 759-60.
36 Quill, 504 U.S. at 311. The substantial nexus requirement is a means for limiting state burdens on interstate commerce. Id. at 313.
37 Bellas Hess, 386 U.S. at 756 (citing Miller Bros. Co. v. Maryland, 347 U.S. 340, 344-5 (1954)). The Defendants admit as much. See Answer at ¶ 63.
38 See Quill, 504 U.S. at 311. See also Bellas Hess. Although Pinellas County does not label its registration requirements a “tax,” the requirements are the functional equivalent of a tax by virtue of the fees imposed. Unlike user fees, which are based on the amount that a “public” service is used, these registration fees are structured similarly to a progressive income tax in that they increase based on the total amount of contributions received by the charity. By contrast, a user fee would be based on the number of solicitations actually made (regardless of whether successful), or perhaps on the actual costs to the county of printing and maintaining the registration forms (in which case the cost would presumably be the same to all registrants).
39 See Statement of Facts in Plaintiffs Motion at ¶¶ 1, 7, 8, 13, and 14.
40 Furthermore, even if the PFCs did communicate the message on behalf of their charitable clients, those communications are always by means of a common carrier such as the Postal Service. It is clear under both Quill and Bellas Hess that if the only contact that a non-resident has with the forum state is via common carrier, there is insufficient nexus to support state regulation of that activity.
41 This argument is closely related to the argument that these regulations do not pass the Supreme Court's “balancing test” enunciated in Pike for testing whether state regulations that only incidentally impact interstate commerce present “undue burdens” on that activity. See infra Section E.
42 Edgar at 640.
43 Pike. See also, Kassel v. Consolidated Freightways Corp.
of Delaware, 450 U.S. 662 (1981).
In Kassel the Supreme Court applied the balancing test to a statute which had been defended as a necessary exercise of Iowa’s police power enacted to promote the health and safety of its citizens. In weighing the purported good the state attempted to promote with the burden imposed upon Consolidated, the Supreme Court held:
the incantation of a purpose to promote the public health or safety does not insulate a state law from Commerce Clause attack. Regulations designed for that salutary purpose nevertheless may further the purpose so marginally, and interfere with commerce so substantially, as to be invalid under the Commerce Clause. In the Court's recent decision in Raymond, we declined to 'accept the state's contention that the inquiry under the Commerce Clause is ended without a weighing of the asserted safety purpose with against the degree of interference with interstate commerce. This ‘weighing’ by a court requires--and indeed the constitutionality of the state regulation depends on—‘a sensitive consideration of the weight and nature of the state regulatory concern in light of the extent of the burden imposed on the course of interstate commerce.’ Id. at 670 (citations omitted).
The Kassel court found that the safety interest put forth by the state was so marginal in comparison with the burdens imposed on interstate commerce that the regulation could not survive scrutiny under the Commerce Clause. Id. at 671-79.
44 Pike, 397 U.S. at 142.
45 Id. at 142-3.
46 Id. at 145-6.
47 See Pinellas Co. Code § 42-270 (1995).
48 See supra note 43.
49 Of course, even if it were rationally related to the prevention of fraud in Pinellas County, the fact that local benefits exist would not save this regulation since it attempts to regulate conduct that takes place wholly outside Pinellas County's borders, regardless of how great those local benefits may be. See supra argument in Section A. Moreover, even if the regulations have the effect of preventing fraud outside Pinellas County, the County has no interest in protecting non-resident donors to charities. See Edgar, 457 U.S. at 644-6.
50 See Complaint Exhibit D at ¶7.
51 In Edgar the Supreme Court dealt with an Illinois Corporate Takeover statute that provided, inter alia, for greater disclosures to shareholder investors than the federal Williams Act of 1940 required (federal regulation of tender offers). Congress explicitly did not pre-empt the field of takeover regulation, which is analogous to the State of Florida explicitly not pre-empting the field of regulation of charitable solicitations, see Fla. Stat. ch. 496.421 (1997). In both cases, the political subdivision passed regulations that purportedly did not conflict with the sovereign's regulation, but instead merely passed more burdensome requirements. Edgar, 457 U.S. at 631-2. The Court found that the added disclosures did not materially enhance the shareholders' position, and that the potential benefits of those additional disclosures were “for the most part, speculative.” Id. at 644-5. Pinellas County’s assertions that their regulatory structure protects the public from fraud is similarly “speculative.”
52 Miller Bros. Co. v. Maryland, 347 U.S. 340 (1954); Kulko v. California Superior Court, 436 U.S. 84 (1978).
53 International Shoe Co. v. Washington, 326 U.S. 310 (1945).
54 World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291-2 (1980).
55 International Shoe, 326 U.S. at 319; Burger King v. Rudzewicz, 471 U.S. 462, 485-6 (1985).
56 Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102 (1987); McGee v. International Life Ins. Co., 355 U.S. 220 (1957); and Hanson v. Denkla, 357 U.S. 235 (1958).
57 World Wide Volkswagen Corporation v. Woodson, 444 U.S. 286, 295-8 (1980). In that case the Oklahoma courts had held that jurisdiction was proper over an automobile wholesaler and retailer that carried on no activities in that state and availed themselves to the benefits of no Oklahoma law. The Supreme Court described the Defendants’ paucity of contacts with the State of Oklahoma as follows:
[they] are fully independent corporations whose relations with each other and with Volkswagen and Audi are contractual only. Respondents adduced no evidence that either [defendant] does any business in Oklahoma, ships or sells any products to or in that state, has an agent to receive process there, or purchases advertisements in any media calculated to reach Oklahoma. Id. at 289.
That set of facts is similar to the situation of the Plaintiffs in the case at bar: they do not conduct any
business in Pinellas County, they do not ship or sell any fundraising consulting services there, they do not have
any agents who could receive process there, nor do they purchase advertisements in any media that are calculated
to reach Pinellas County.
Nevertheless, in the case at bar, Pinellas County is attempting to base jurisdiction over these Plaintiffs on a theory even more tenuous than the contacts listed in World Wide Volkswagen. Pinellas County seeks to assert jurisdiction over these Plaintiffs on the ground that the fundraising consulting services which they sell in the stream of interstate commerce ultimately may reach Pinellas County. The Supreme Court has explicitly found such a theory of jurisdiction unconstitutional. See Asahi Metal Industries Co. v. Superior Court of California, 480 U.S. 102 (1987).
58 World Wide Volkswagen Corporation v. Woodson, 444 U.S. 286, 293 (1980)(emphasis added).
59 Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102 (1987) (holding California could not exercise jurisdiction where the Defendant had no offices, property or agents in California, solicited no business in California, made no direct sales in California, and did not control or design the system of distribution that carried the Defendant’s products into California but where the defendant had intentionally placed its products into the stream of commerce and was aware that some of those products would ultimately wind up in California).
60 Id. at 109-110 (quoting World Wide). Such a unilateral act of the purchaser of a company's product is exactly analogous to the facts of the case at bar. PFCs merely sell advice to charities as to how to best raise funds. Whether that advice is taken, and more importantly for Due Process purposes, where it is used, is left entirely up to the charities themselves.
In Asahi the Supreme Court of the United States rejected the “stream of commerce” theory of jurisdiction holding that a finding of minimum contacts must come about as a result of purposeful action directed at the forum jurisdiction taken by the person over whom jurisdiction is sought. The Supreme Court held that the placement of a product into the stream of commerce, without more, is not an act purposefully directed toward the forum jurisdiction, and that an awareness that the stream of commerce may or will sweep the product into the forum jurisdiction does not convert the mere act of placing the product into the stream of commerce into an act purposefully directed at the forum.
Thus, any “stream” that may wash the Plaintiffs fundraising consulting services into Pinellas County is insufficient to make them subject to the county's laws, absent some other act that was purposefully directed toward the county. The Defendants’ own definition of Professional Fundraising Consultant (embodied in § 42-266 of the Pinellas County Code) makes clear that only the unilateral acts of the charitable clients can bring the PFCs fundraising consulting advice into Pinellas County. That definition states, inter alia, that a PFC “does not manage, conduct, or carry on any fundraising activity, or solicit contributions, or employ, procure, or engage any compensated person to solicit contributions and who does not at any time have custody or control over contributions.” See ¶ 18 of the Defendants’ Answers. Thus, it is clear from the pleadings that the PFCs do not purposefully direct any activities at the jurisdiction in which the solicitations take place, but rather it is the charitable clients who may direct solicitation activity at Pinellas County.
61 Kulko v. California Superior Court, 436 U.S. 84, 94-5 (1978) (holding that the mere act of sending a child subject to a New York separation agreement to live in California connotes no intent to obtain, nor any expectancy of receiving, any corresponding benefit from California that would make fair the assertion of that state's jurisdiction).
62 See 18 of the Defendants’ Answers.
63 Hanson v. Denkla, 357 U.S. 235, 251 (1958) (holding the presence in Florida at her demise of the settlor of a trust and the fact of her correspondence from Florida with a Delaware trustee was insufficient to confer jurisdiction on the Florida courts over a Delaware trustee which had no office in Florida, transacted no business there, never administered any of the trust assets there, nor solicited any business there.) In holding that the Due Process Clause is more than a guarantee of immunity from inconvenient or distant litigation, and that the Fourteenth Amendment imposes a “territorial limitation on the power of the respective states,” the Court held that:
[t]he unilateral activity of those who claim some relationship with the nonresident defendant cannot satisfy the requirement of contact with the forum state. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that the defendant purposefully avails itself of the privilege of conducting activities in the forum state, thus invoking the benefits and protections of its laws. Id. at 254 (emphasis added).
64 See Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102 (1987).
65 Shaffer v. Heitner, 433 U.S. 186, 215 (1977) (citations omitted).
66 International Shoe Co. v. Washington, 326 U.S. 310 (1945). In that case the state of Washington sued the International Shoe Company to collect contributions to the state's unemployment fund from International Shoe Company, a Delaware corporation with principal place of business in Missouri. International Shoe had contended that it did not have sufficient contacts with Washington for the state to subject it to in personam jurisdiction.
67 Id. at 316-19 (emphasis added and citations omitted).
68 Even the State of Florida, the parent jurisdiction of Pinellas County, admits that it cannot regulate the activities of a PFC that conducts all of its activities wholly outside the State of Florida, even if its charitable clients mail into the State of Florida as a result of the fundraising advice purchased from the PFC. See Op. Fla. Dep’t. of Agriculture 96-0382 (1996) a copy of which is attached hereto as Exhibit 1.
The Defendants are well aware of the existence of this opinion, but have nevertheless continued enforcing the ordinance against PFCs not doing business in Pinellas County. In American Target Advertising, Inc. v. Giani, Case No. 2:97-cv-610 (D.Utah 1997), Pinellas County filed an amicus curiae brief which averred that the state of Utah should be allowed to assert jurisdiction over American Target, an out of state PFC that had sold fundraising consulting advice to a charity that subsequently used that advice when it conducted a public education campaign in the State of Utah. A copy of the above cited opinion from the Department of Agriculture (which is responsible at the state level for administering the Charitable Solicitations Law, Fla. Stat. ch. 496.401 et seq.) was attached as an Exhibit to American Target’s response to Pinellas County’s amicus curiae brief in the Utah case.
69 Sun Bank, N.A. v. E.F. Hutton Company, Inc., 926 F.2d 1030, 1034 (11th Cir.1991); Hoechst Celanese Corp. v. Nylon Engineering Resins, Inc., 896 F.Supp. 1190, 1196 (M.D. Fla. 1995) (citing Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102 (1987)). Relevant factors that the court should consider include the burden on the nonresident Plaintiffs, the County’s interest in adjudicating the dispute, Pinellas County's interest in obtaining convenient relief, the interstate judicial system's interest in obtaining the most efficient resolution of the controversies, and the shared interest of the several states in furthering fundamental substantive social policies. Sun Bank, 926 F.2d at 1035 (quoting Burger King Corporation v. Rudzewicz, 471 U.S. 462 (1985)).
70 As was pointed out above, it is the charitable clients and not the PFCs that ultimately determine where a solicitation will be directed. Even if a PFC advises a charity that Pinellas County is the perfect place for the charity to disseminate its message, the charity may for its own reasons decide not to solicit there. If the charity so decides, the PFC would in fact not be subject to the Ordinance even under Pinellas County's expansive view of its jurisdictional sweep (since no solicitations would have taken place there), yet the PFC might still think it has to register there if this court finds that Pinellas County could exercise jurisdiction over them. If jurisdiction can be obtained so easily, then the PFCs would have to register with every single political subdivision in the United States that has a law regulating charitable solicitations, on the off chance that a solicitation might be made there.
In any event, the point is that the PFCs would not know in advance which jurisdictions could properly exercise jurisdiction over them, and so consequently could be forced to defend suits in jurisdictions in which the PFC had made an affirmative decision not to do business. Clearly such a PFC could not reasonably anticipate being haled into such a jurisdiction's court, and to force it to do so (or alternatively to register in each and every regulating jurisdiction) would place an enormous burden on the PFC. Such a burden is clearly not consistent with traditional notions of “fair play and substantial justice.”
71 World Wide Volkswagen v. Woodson, 444 U.S. 286, 297 (1980).
72 See Burger King v. Rudzewicz, 471 U.S. 462, 475 (1985).
73 Riley v. National Fed’n of the Blind of North Carolina, 487 U.S. 781,
801 (1988)(hereinafter Riley)(citations omitted).
74 Non-profit fundraising has long been protected speech under the First Amendment, and its regulation subjected to strict scrutiny. Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620, 632 (1980)(hereinafter Schaumberg). Secretary of State of Maryland v. Joseph H. Munson Co., 467 U.S. 947 (1984)(hereinafter Munson); Riley, 487 U.S. at 800.
75 Regulation of solicitation activities must be undertaken with due regard for the fact that “solicitation is characteristically intertwined with informative and perhaps persuasive speech seeking support for particular causes or for particular views on economic, political, or social issues, and for the reality that without solicitation the flow of such information and advocacy would likely cease.” Schaumburg, 444 U.S. at 632.
76 Martin v. City of Struthers, 319 U.S. 141, 143 (1943).
77 “Given a case or controversy, a litigant whose own activities are unprotected may nevertheless challenge a statute by showing that it substantially abridges the First Amendment rights of other parties not before the court. (citations omitted).” Schaumburg, 444 U.S. at 634. See also Munson, 487 U.S. at 953-60. “The First Amendment protects appellees’ right not only to advocate their cause but also to select what they believe to be the most effective means of doing so.” Meyer v. Grant, 486 U.S. 414, 424 (1988).
78 Speiser v. Randall, 357 US 513, 526-29 (1958).
79 Id. at 528-29.
80 Elrod v. Burns, 427 U.S. 347, 362 (1975).
81 “Broad prophylactic rules in the area of free expression are suspect. . . . Precision of regulation must be the touchstone in an area so closely touching our most precious freedoms.” In re Primus, 436 U.S. 412, 432 (1978) (citing NAACP v. Button, 371 U.S. 415 (1963)).
82 Defendants’ Answers at ¶ 92.
83 City of Houston v. Hill, 482 U.S. 451 (1987). The law on this point is rich and clear. “This Court has repeatedly held that a governmental purpose to control or prevent activities constitutionally subject to state regulation may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms.” NAACP v. Alabama ex rel. Patterson, 357 U.S. 449, 463-64 (1958). “[T]he power to regulate must be so exercised as not, in attaining a permissible end, unduly to infringe the protected freedom.” Cantwell v. Connecticut, 310 U.S. 296, 304 (1940). “[E]ven though the governmental purpose be legitimate and substantial, that purpose cannot be pursued by means that broadly stifle fundamental personal liberties when the end can be more narrowly achieved.” Shelton v. Tucker, 364 U.S. 479, 488 (1960) (footnote omitted). See cases cited in NAACP v. Alabama, 377 U.S. 288, 308-09 (1964).
84 NAACP v. Button, 371 U.S. 415 (1963).
85 Schaumburg, 444 U.S. at 637(emphasis added).
86 Pinellas Co. Code § 42-270 (1995).
87 See text accompanying note 110 infra.
88 As the Supreme Court stated in Hynes v. Mayor of Oradell, 425 U.S. 610, 620 (1976):
As a matter of due process, “[n]o one may be required at peril of life, liberty or property to speculate as to the meaning of penal statutes. All are entitled to be informed as to what the State commands or forbids.” Lanzetta v. New Jersey, 306 U.S. 451, 453 (1939). Defendants admit these are penal statutes. Answers at ¶¶ 57 – 59. The general test of vagueness applies with particular force in review of laws dealing with speech. “[S]tricter standards of permissible statutory vagueness may be applied to a statute having a potentially inhibiting effect on speech; a man may the less be required to act at his peril here, because the free dissemination of ideas may be the loser.” Smith v. California, 361 U.S. 147, 151 (1959). See also Buckley v. Valeo, 424 U.S. 1, 76-82 (1976); Broadrick v. Oklahoma, 413 U.S. 601, 611-612 (1973).
89 Connally v. General Constr. Co., 269 U.S. 385, 391 (1926).
90 Are the campaign managers for Pinellas County politicians required to register if they advise their clients on campaign fundraising? Is the graphic artist located in Virginia who provides ideas and artwork for a Virginia headquartered national charity required to register when that charity posts mail nationally including into Pinellas County? A plain reading of the ordinance does not answer these questions.
91 Complaint Exhibits A and C.
92 See Complaint Exhibit B and Defendants’ Answers at ¶¶ 18, 19, 20, 25, 28, 41, 45, 46, 50, 53, 84, 85, 86, and 101.
93 Id. Even Defendants admit the two definitions are overlapping. See Answer ¶20. See also Defendants’ Response to Plaintiffs’ First Request for Admissions at ¶¶ 45-48.
94 See section A of this part supra.
95 See Answer ¶¶ 26, 84, 85, 86. For the class of professional fundraisers represented by ACFRFR and the plaintiffs herein, the State of Florida has conceded under the logic of the Commerce Clause and due to lack of jurisdiction that it cannot enforce its statute against out-of-state fundraisers not doing business in Florida. See note 68 supra. Nevertheless, Defendants’ interpretations of their regulatory reach is contrary to the position taken by the State of Florida.
As was pointed out in Parts I and II of this brief, supra, Pinellas County’s attempt to regulate the plaintiffs in this case violates the Due Process and Commerce Clauses. Since the defendants cannot constitutionally regulate the plaintiffs, any regulation of the plaintiffs’ charitable clients’ speech resulting from the plaintiffs non-compliance with Pinellas County’s regulations is per se overbroad. Yet that is the only way to construe the ordinance to avoid the problem of vagueness.
96 Answers of Defendants at ¶ 26. Multiple or periodic licensing requirements invite judicial scrutiny under the First Amendment. City of Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750, 760 (1988).
97 Bellas Hess, 386 U.S. at 759-60. Clearly if such multiplicity of regulation violates Plaintiffs’ economic rights under the Commerce Clause, the same multiplicity violates their First Amendment rights. See, e.g. U.S. v. Carolene Products, 304 U.S. 144, 152 n.4 (1938).
98 National Awareness Foundation v. Abrams, 50 F.3d 1159 (2d Cir. 1995).
99 Riley held the North Carolina statute unconstitutional because it was “prophylactic, imprecise, and unduly burdensome” 487 U.S. at 800 (emphasis added).
100 Pinellas Co. Code § 42 321 (c) (1995). Since the Defendants admit that this section applies to Plaintiffs and that Plaintiffs are subject to prosecution for failure to comply even though the Plaintiffs are Professional Fundraising Consultants (see Answers of Defendants at Paragraph 101), it is clear that this is a prior restraint.
101 Pinellas Co. Code § 42 321 (c) (1995). Under § 42 296, any violation of the act (including consulting with an unregistered PFC under § 42 321(c) is grounds for revocation of a charitable solicitation permit. Thus the mere act of consulting an unlicensed PFC (even if the reason for the PFC not having a license is constitutionally flawed and wholly unrelated to fraudulent conduct) is used by defendants to justify restraining charitable speech.
102 “Ordinarily, the State’s constitutionally permissible interests are adequately served by criminal penalties imposed after freedom to speak has been so grossly abused that its immunity is breached.” Carroll v. President and Commissioners of Princess Ann, 393 U.S. 175, 180-81 (1968). Any system of prior restraints carries with it “a heavy presumption against its constitutional validity.” Freedman v. Maryland, 380 U.S. 51, 59 (1965).
103 Freedman v. Maryland, 380 U.S. 51, 58-59 (1965).
104 See note 75 supra.
105 There are no legislative provisions as to how quickly the Charitable Solicitations Board must act if an applicant is to be denied the right to speak.
106 Pinellas Co. Code §§ 42-293(a)(2) and (4), 42-277, and 42-278 (1995).
107 Pinellas Co. Code § 42-296 (a) (1995). Defendants admit that the powers granted in the ordinance are “without specific guidance” and that they create “in the charitable solicitations officer an unbridled discretion in the exercise of those powers.” Answer at ¶ 48.
108 City of Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750, 770 (1988).
109 Despite the fact that the Florida charitable registration statute exempts religious charities, Pinellas County does not. Recently several religious charities after consulting with one another, refused to register with Pinellas County and presumably continue to solicit residents of Pinellas County. See Letter from Father James Thoman, Passionist Monastery to John B. Wood, Pinellas County Department of Consumer Protection, with a copy to Assistant District Attorney Carl Brody dated March 23, 1998 attached as Exhibit 2.
110 See affidavit of Raymond J. Grace at Exhibit 3.
111 Pinellas Co. Code §§ 42-296 and 42-321(c) (1995).
112 Similarly, the ordinance restrains lawful speech disseminated through lawful means if the charity deals with any unlicensed persons. For example, a registered charity using a registered fundraiser consulting about direct mail solicitations might disseminate its message lawfully until it engages a second but unlicensed fundraiser consulting about telemarketing. Thereafter that same direct mail message becomes unlawful merely because of the second engagement. This is clearly an imprecise tool for protecting the public from fraud. A more precisely tailored ordinance would restrict the speech only through the unlicensed agent, although that too would be constitutionally flawed for other reasons pointed out herein.
113 Near v. Minnesota, 283 U.S. 697 (1931). This portion of the ordinance is also substantially overbroad. It does not merely prohibit a charity from dealing with an unregistered PFC, it also prohibits the charity from using a different, registered PFC or solicitor to communicate its message, as well as prohibiting the charity from using any other lawful means to disseminate its message. This is hardly the type of “precise regulation” mandated in the First Amendment context.
114 Justice Brennan recognized this in NAACP v. Button, 371 U.S. 415, 432-33 (1963): “For in appraising a statute’s inhibitory effect upon such [First Amendment] rights, this Court has not hesitated to take into account possible applications of the statute in other factual contexts besides that at bar. . . . These freedoms are delicate and vulnerable, as well as supremely precious in our society. The threat of sanctions may deter their exercise almost as potently as the actual application of sanctions.”
115 See note 76 supra.
116 “Government may not grant the use of a forum to people whose views it finds acceptable, but deny use to those wishing to express less favored or more controversial views.” Chicago Police Dept. v. Mosley, 408 U.S. 92, 96 (1972).
117 In Defendants’ answers the Defendants agree that the powers granted in the ordinance are “without specific guidance” and that they create “in the charitable solicitations officer an unbridled discretion in the exercise of those powers.” Answers of Defendants at ¶ 48.
118 See note 111 supra.
119 Fundraising communications, of the type engaged in by Plaintiff’s clients, are fully protected “core” or “traditional” as opposed to “commercial” First Amendment speech. As such they are entitled to the highest level of protection, despite the fact that such communications involve economic transactions. See, e.g., Riley, 487 U.S. at 796 (holding that charitable solicitations are not commercial speech – “[W]e do not believe that speech retains its commercial character when it is inextricably intertwined with otherwise fully protected speech.”); Telco Communications, Inc. v. Carbaugh, 885 F.2d 1225, 1230 (4th Cir. 1989) (holding that a professional fundraiser hired to publish, sell, and distribute a pamphlet, and to solicit advertisements for the publication, was engaged in “charitable solicitation” which is so intertwined in speech that it is entitled to full First Amendment protection); Auburn Police Union v. Carpenter, 798 F.Supp. 819, 823 (D. Maine 1992) (holding that solicitation by law enforcement personnel of funds which will be used to purchase bullet proof vests for the benefit of law enforcement personnel is “traditional” and not “commercial” speech).
120 By the defendants’ own admission, the Pinellas County ordinance regulates fully protected core speech. Defendants’ Answers ¶ 92.
121 Riley, 487 U.S. at 788-89. Chicago Police Dept. v. Mosley, 408 U.S. 92 (1972). The Plaintiffs’ clients’ speech cannot remotely be described as obscenity, fraudulent misrepresentation, advocacy of imminent lawless behavior, defamation, or “fighting words” so that speech does not therefore fall into any of the “unprotected categories” of speech that do not enjoy strict scrutiny protection.
122 “[G]overnment has no power to restrict expression because of its message, its ideas, its subject matter, or its content.” Mosley, 408 U.S. at 95-96.
123 Speiser, 357 U.S. at 518.
124 Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 512-16 (1991).
125 NAACP v. Button, 371 U.S. 415 (1963).
126 See sections A, B, G, and H of this Part III.
127 For example, a means that would be less offensive to First Amendment freedoms would be to punish specific instances of actual fraud. In the context of the least restrictive means test, it is of no avail that such a means may be less efficient in promoting the governments purported interest. Schneider v. New Jersey, 300 U.S. 147, 164 (1939). Regulations of speech must be measured in minimums, not maximums. Riley at 790.
128 The government has the burden of demonstrating a “substantial” interest to justify the regulation. That compelling interest cannot merely be administrative efficiency and fiscal economy – both disallowed as sufficient purposes in Spencer v. Herdesty, 571 F.Supp. 444, 452 (S.D. Ohio 1983).
129 Speiser, 357 U.S. at 518.
130 Wooley v. Maynard, 430 U.S. 705, 716 (1977). It is not sufficient for the government to say that alternatives to their regulatory scheme would be less efficient and convenient. Schneider v. New Jersey, 308 U.S. 147, 164 (1939).
Frauds may be denounced as offenses and punished by law. . . . If it is said that these means are less efficient and convenient . . . . the answer is that considerations of this sort do not empower a municipality to abridge freedom of speech and press. Id.
See also McIntyre v. Ohio Election Commission, 514 U.S. 334, 349-51 (1995) (invalidating
speech restrictions on dissemination of election materials on the grounds that, inter alia, the state
had other laws it could use to promote its asserted interest.
131 Defendants’ Answers ¶ 90.
132 Schaumburg stuck down a 75% limit on fundraising expenses justified on the grounds of “protecting the public from fraud, crime and undue annoyance” by stating that while such interests were substantial “they are only peripherally promoted by the 75-percent requirement, and could be sufficiently served by measures less destructive of First Amendment interests.” Schaumburg, 444 U.S. at 636. See also Riley, 487 U.S. at 789.
133 Prohibitions on speech may not be justified “by a mere possibility that the prohibited speech will be fraudulent.” Lowe v. Securities and Exchange Commission, 472 U.S. 181, 235 (1985)(Justice White concurring). There are “other ways to accomplish these legitimate aims without abridging freedom of speech and press. Frauds . . . could be denounced and punished as offences . . . .” Talley v. California, 362 U.S. 60, 63 (1960).
134 In discovery, Defendant produced a report concerning the previous Florida statute prepared by the Florida Division of Consumer Services which admits that “in many instances, the importance of the required paperwork [for registration] to law enforcement efforts appeared to be somewhat tenuous. In other words, legitimate charities devoted considerable time and expense to the development of numerous documents whose value was problematic.” State of Florida, Division of Consumer Services, Department of Agriculture and Consumer Services, Charitable Solicitation in Florida, Findings and Recommendations at 3-4 (1991).
135 Elrod v. Burns, 427 U.S. 347, 362 (1975). See also Widmar v. Vincent, 454 U.S. 263 (1981).
136 Riley, 487 U.S. at 800.
137 Plaintiffs First Set of Interrogatories, First Request to Produce and First Request to Admit directed to Defendants, Interrogatory ¶ 1 at 20.
138 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986).
139 Id. at 250 quoting Rule 56(e) Federal Rules of Civil Procedure.
140 Rule 56(e) Federal Rules of Civil Procedure.
141 Plaintiffs had requested that Defendants stay enforcement of their ordinance after they had been put on notice of this litigation. Such a step would have mitigated the violations of the constitutional rights of Plaintiffs, their clients, and citizens of Pinellas County. Defendants refused to cease their enforcement of the ordinance and instead increased the tempo of their enforcement activities.