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
|AMERICAN CHARITIES FOR REASONABLE
FUNDRAISING REGULATION, INC.,
THE CREATIVE ADVANTAGE, INC., and
NORMAN W. LEAHY,
|vs.||CASE NO. 97-2058-CIV-T-17B|
|PINELLAS COUNTY, a political
subdivision of the State of Florida,
NUGENT WALSH, as chairperson of the
Charitable Solicitations Board of
Pinellas County, and SHERYL LORD,
as Director of Consumer Protection
of Pinellas County,
DEFENDANTS' MEMORANDUM OF LAW IN SUPPORT OF
ITS MOTION FOR SUMMARY JUDGMENT
I. FACTUAL BASIS
Since 1971, Pinellas County has required registration for those interested in soliciting for charitable contributions for the purpose of oversight, requiring public accountability, and protecting against fraudulent activity. See Exhibits "1"-"3". The need for this protection has continued. See Exhibits "4"-"6".
The Plaintiffs in this case, and those practicing in their trade, live off the life blood of contributions provided by individual citizens for the purpose of supporting charitable purposes. Indeed. 86.5% of all charitable solicitations given come from individual citizens. Memorandum of Amici Curiae, American Target Advertising v. Giani, Civil Case No. 2:97-CV-610B (1998) (this case is currently being litigated in Utah federal court, involving similar issues to the case at bar). Where individual citizens give away their hard-earned money for such benevolent purposes, they expect that their contribution is going to directly benefit the cause that they are solicited for, but as investigations performed by several states have illustrated, this is not the case. Indeed, there is a vast variance as to the amount of money actually going to the charity. Id. at 4-6. It is important for citizens who contribute to charities to have direct access to a receptacle with information concerning the efficiency of their contribution. See Exhibit "7". Therefore, in order to provide this information and to assist the charities collaterally, Pinellas County has promulgated a narrowly tailored ordinance which has currently registered fifteen (15) professional solicitors or consultants and six hundred seventeen (617) charities. See Exhibits "8" and "9". See also Memorandum of Amici Curiae, at 10-11 (concerning the many charitable solicitation statutes which have been upheld).
As can be seen, there is clearly a need for Pinellas County to regulate solicitations within the County. This need has long been satisfied by Pinellas County and the County has consistently provided support for this need. Therefore, in reviewing the legal issues involved in this case the Court should keep in mind the real and practical need for the challenged ordinance.
II. LEGAL STANDARD
This is a facial challenge to the Pinellas County ordinance and, as such, as regards the overbreadth and vagueness challenges, Plaintiffs must prove no conceivable basis by which the ordinance may be upheld. Hoffman Estates v. Flipside, Hoffman Estates, 455 U.S. 489, 495 (1982); United States v. Salerno, 481 U.S. 739, 745 (1987); Parker v. Levy, 417 U.S. 733, 760 (1974) (the Court has repeatedly expressed a reluctance to strike down a statute on its face where there were a substantial number of situations to which it might be validly applied).
The Court further requires that the challenger show that "no set of circumstances exists under which the Act would be valid." Ohio v. Akron Center, 497 U.S. 502, 514 (1990), citing Webster v. Reproductive Health Services, 492 U.S. 490, 524 (1989) (O'Connor, J. concurring). In Akron Center, the Court reversed a Court of Appeals' ruling holding an Ohio prenatal notice and consent statute unconstitutional. 497 U.S at 506. As the Court explained, it is improper for a court to invalidate a statute based on a worst-case scenario basis. Id. at 514.
In the case at bar, this analysis supports upholding the challenged ordinance because there are a myriad of fact situations in which each provision of the ordinance may be validly applied to Plaintiffs.
III. FIRST AMENDMENT CHALLENGE
A. Local Governmental Authority
The United States Supreme Court has recognized a municipality's power to protect its citizens from crime and undue annoyance by regulating solicitations. Gospel Missions of America v. Bennett, 951 F.Supp. 1429, 1440 (C.D.Cal.1997) citing Cantwell v. Connecticut, 310 U.S. 296, 306 (1940). See also National Foundation v. City of Fort Worth, 415 F.2d 41 (5th Cir. 1969), cert. den. 396 U.S. 1040 (1970).
Where other local ordinances have been challenged, the Court hasn't determined this issue is in question. See Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620 (1980); Hynes v. Mayor of Oradell, 425 U.S. 610 (1976) (in none of these cases did the challengers question a locality's authority to promulgate such regulation, and the courts have retracted sua sponte concerning this issue). See also Church of Scientology Flag Services Org., Inc. V. Clearwater, 756 F.Supp. 1498 at 1515 (M.D.Fla.1991); Church of Scientology v. Clearwater, 2 F.2d 1514, 1539 (11th Cir. 1993).
It is clear that the County's interest in protecting charities and the public from fraud is sufficiently substantial to justify a narrowly tailored regulation of speech. Riley V. Nation Federation of the Blind, North Carolina, 487 U.S. 781, 792 (1988); Schaumburg, 444 U.S.at 637 (involves the authority of a municipality); Special Program, Inc. v. Courter, 923 F.Supp. 851, 860 (E.D.Vir.1996).
The allegation raised as to this assertion is therefore misplaced because Florida law specifically provides and intends for the County to take action above and beyond that of the state. Section 496.421, Florida Statutes (1997).
Therefore, the real issue comes down to a determination of whether the County ordinance is narrowly tailored.
B. Adequate Administrative Review
Section 42-278 of the Pinellas County Code provides that Plaintiffs will have a right to appeal a final decision by the Charitable Solicitations Board. This provision must refer back to the need for it - a determination has been made that the organization should be suspended or revoked for violating a provision of the ordinance, or the permit denied. At present this issue is non-adjudicable. Telco Communications v. Carbaugh, 885 F.2d 1225, 1234-1235 (4th Cir. 1989).
After a violation of Section 42-293 or sections encompassed within Divisions 3 or 4 are committed, the Director of the Department of Consumer Protection has the authority to suspend or revoke the license of the organization if the violation is not remedied within 15 days. Section 42-296(b), Pinellas County Code (1997). It is at this level that the organization receives the benefit of the doubt and the burden of review is on the department. Therefore, the constitutional requirements for review are satisfied. See FW/PBS, Inc. v. Dallas, 493 U.S. 215 (1970); Heritage Publishing Co. V. Fishman, 634 F.Supp. 1489 (D.Minn.1986).
C. Adequate Judicial Review
As to the question of adequate judicial review, the courts are split as to the requirements for a legislative scheme to satisfy the Constitution. See Franken Equities L.L.C. v. City of Evanston, 967 F.Supp. 1233, 1238 (D.Wyo.1997). Specifically, the courts split on whether the provision for prompt access is sufficient.
1. Prior Restraint Generally - Director's Authority
Concerning Plaintiffs' argument that the County ordinance is a prior restraint, this is not true. A review of this ordinance survives the Supreme Court analysis. In FW/PBS, the Court explained that there are two evils that won't be tolerated in prior restraint situation: 1) Ordinance may not place unbridled discretion in the hands of government officials in deciding whether to grant or deny a permit, and 2) A prior restraint that fails to place time limits on time within which decision maker must issue license is wrong. 493 U.S. at 225-226.
In neither case does Pinellas County violate these rules because it provides specific criteria for denial, Section 42-293(a)(b)(c), Pinellas County Code, and it provides a specific time frame for making the decision (Section 42-293(e), Pinellas County Code).
2. Prompt Judicial Review - for - Suspension and Revocation
In Redner v. Dean, 29 F.3d 1495, 1502, n.9 (11th Cir. 1994), the Court seems to follow the "prompt adjudication" analysis, (dicta), but this may not be applicable because Pinellas County enforces this provision as to out-of-state activities through an injunction process - prior to the injunction there is no way to stop the organization from soliciting. Therefore, charities could continue their activities until an injunction is issued.
D. The Pinellas County Charitable Solicitations Ordinance
1. Applicable Standard
The general standard is clear:
Solicitation of charitable contributions is protected speech and therefore any regulation of this speech must be narrowly tailored, Schamburg, 444 U.S. at 637, and achieve a compelling or substantial governmental interest. Special Program, 923 F.Supp. 851, 857. Therefore, the County acknowledges that the proper review of its ordinance is under the strict scrutiny standard.
The County in response asserts its right to regulate such protected First Amendment activity through an ordinance that is narrowly tailored to achieve a legitimate governmental purpose, is content neutral, and does not unduly burden speech. Cox v. New Hampshire, 312 U.S. 569 (1941). The first two factors in this analysis are most critical.
As to the requirement that the government have a substantial interest in the law, it is clear that the interest of preventing deception, fraud or misrepresentation in charitable solicitations is sufficient. Riley, 482 U.S. at 792; Larson v. Valente, 456 U.S. 228, 248 (State of Minnesota has significant interest in protecting its citizens from abusive practices); Scientology, 756 F.Supp. at 1515. Furthermore, the regulation of charitable solicitation is within the County's police power authority. National Foundation v. City of Fort Worth, 415 F.2d 41, 45 (5th Cir. 1969), cert. den. 396 U.S. 1040 (1970). The Pinellas County Code as drafted provides that the purpose and intent of the ordinance is for the specifically valid purpose of protecting the public from deception. Section 42-270, Pinellas County Code. Furthermore, as outlined in the introduction of this Memorandum and the adopted Memorandum, there is extensive factual predicate supporting this ordinance. Supra at 1-3. Therefore, the County's substantive interest requirement is satisfied.
This brings us to the second prong of the strict scrutiny test which requires that the ordinance be narrowly tailored. To adequately address this issue, an examination of the specific regulatory provisions of the ordinance must be undertaken.
(1) Application process. (Section 42-293, 291, Pinellas County Code).
(2) Content of application. (Section 42-292, Pinellas County Code).
(3) Reporting regulations. (Section 42-295, Pinellas County Code).
(4) Suspension/revocation. (Section 42-296, Pinellas County Code).
2. Application Process
Initially, a charity and its solicitors and consultants must file an application with the County. Section 42-291, Pinellas County Code (hereinafter "P.C.C."). The Code specifically provides time limits within which a decision by the Director of the Department of Consumer Protection must be made, Section 42-293(a), P.C.C., otherwise the application is automatically accepted. Section 42-293(a)(1), P.C.C. The authority of the department to deny an application is severely limited by the five protected fact situations which cause a denial. Section 42-293(c), P.C.C. Only in these very limited circumstances may the department deny a license. Section 42-293(b), P.C.C.
The expressed concern with licensing schemes such as the Pinellas County Charitable Solicitations Ordinance, is that it will act as an unlawful prior constraint on speech. Freedman v. State of Maryland, 380 U.S. 51 (1965). A violation may be avoided though where the licensing rules avoid: 1) placing "unbridled discretion" in the hands of governmental officials which may result in censorship, or 2) fail to place limits on the time within which the decision maker must issue the license. FW/PBS, 493 U.S. at 226-227.
Provisions of the challenged ordinance were drafted in a manner which specifically averts those two dangers. As previously noted, the ordinance: 1) defines the basis for denying an application, 42-293(c), and 2) requires the decision maker to rule within 30 days. This type of application procedure has been upheld as constitutional by the court. In Heritage Publishing, 634 F.Supp. 1489 (D.Minn.1986), the Court held that a state statute paralleling the ordinance at issue today with respect to its application procedures was valid. Id. at 1500.
The statute in Heritage Publishing allowed the Commissioner of Commerce to deny, suspend or revoke a charitable solicitation license under the same authority and limitations on the present ordinance. Id. Specifically, the Court found that the statutory criteria were speech neutral, narrowly drawn, and furthered the state interest of protecting the public from fraud and misrepresentation in charitable solicitations. Id. Furthermore, the Court explained that regulations which require licensure of the purveyors of speech are not licensing speech directly and therefore the more stringent Freedman test is inapplicable. Id. at 1501. Similarly, in Holy Spirit Association for Unification of World Christianity v. Hodge, 582 F.Supp. 592 (N.D.Tex.1984), the Court, while finding most provisions of a City of Amarillo charitable solicitations ordinance unconstitutional, did in fact uphold those provisions employed by Pinellas County. Specifically, the Court upheld the provision allowing denial of a permit where: 1) statements made on the application were untrue, Id. at 597, or 2) applicant made false statements in the application, Id. at 598.
These regulations are therefore narrowly tailored and within the ambit of constitutional regulations.
The charitable solicitors and consultants, through their actions of assisting in the collection of funds, allow the County to require reasonable registration and identification. This is the nature of the Pinellas County ordinance. Thomas v. Collins, 323 U.S. 516, 540 (1945). See also Cantwell, 310 U.S. 296, 306 (1940).
3. Contents of the Application
The contents of the charitable solicitations application provide the department with information necessary to adequately protect the citizens of Pinellas County by: 1) assuring that those soliciting are doing so for a legitimate charitable purpose; 2) assisting the department in its responsibility to serve as a clearing house for the citizens of Pinellas County interested in verifying that the funds that they are donating are being used for their alleged purpose; and 3) to protect charities.
The information required to be disclosed in an application has been the subject of several varying determinations by the courts nationally, but this Court and the Eleventh Circuit have clearly supported the type of disclosure encompassed within Section 42-292 of the Pinellas County Code.
The Eleventh Circuit in Scientology, 2 F.2d 1514 (11th Cir. 1993), upheld several provisions of the challenged City of Clearwater ordinance based on the fact that these provisions were "purely ministerial" in nature. Id. at 1548. Specifically, the Court upheld the following required disclosures which correspond with the Pinellas County ordinance:
a) The name of the person registering and the nature of its commercial status was upheld. Id. at 1548, citing Clearwater Code Section 100.03(1)(a) and (b). This Clearwater ordinance requirement corresponds directly with Section 42-292(b)(1), et. seq. and (5) of the Pinellas County Code.
b) A reference to any determination of tax exempt status, Id. at 1548, citing Clearwater Code Section 100.01(1)(c). This corresponds with Section 42-292(b)(8) and (9) of the Pinellas County Code as concerns the disclosure of exempt status.
c) The other cities where the applicant has collected funds for its charitable purpose. Id. at 1548, citing Clearwater Code Section 100.03(1)(j). This corresponds directly with Section 42-292(b)(2) of the Pinellas County Code.
d) Though not clearly elucidated as to the specific section, the Court also upheld the required disclosure of the detailed criminal histories of an applicant's officers and solicitors. Id. at 1522 and 1548. This corresponds with Section 42-292(b)(3) and (4) of the Pinellas County Code.
Similarly, the Fourth Circuit in Famine Relief Fund v. West Virginia, 905 F.2d 747 (4th Cir. 1990) upheld several other provisions of the West Virginia charities ordinance which correspond with the Pinellas County Code.
e) The requirement that the charity accurately describe their mission was upheld. Id. at 752. This corresponds with Section 42-292(b)(11) of the Pinellas County Code.
f) How donations are to be used and general oversight over fundraising activities was held to be acceptable. Id. at 752. This corresponds with Section 42-292(12), et. seq. of the Pinellas County Code.
g) Prohibition against undisclosed conflicts was also upheld. Id. at 752. This generally corresponds with Section 42-292(7) of the Pinellas County Code which addresses this issue with a prophylactic measure.
The required disclosure in Section 42-292(6) of the Pinellas County Code does not apply to charitable solicitors or consultants and Section 42-292(10) of the Pinellas County Code simply requires an attestation to the veracity of the application. As to the subsection (6) disclosure, such a provision has been upheld. Indiana v. Pearson, 700 F.Supp. 421, 441 (S.D.Ind.1988).
Recently the District Court from California addressed similar issues and found some provisions of the challenged codes to be unconstitutional. Gospel Missions of America v. Bennett, 951 F.Supp. 1429 (C.D.Cal.1997). This case involved a city and county code which imposed much broader restrictions and required disclosures on charitable organizations and their contractors and therefore the Court found several of the challenged provisions over broad and void for vagueness. These problems do not exist with the ordinance before the Court today and, furthermore, as compared to the Eleventh and Fourth Circuit Court of Appeals decisions, to the contrary, that case is not persuasive authority. As to its understanding of the proper scope of laws regulating charitable solicitations, the acknowledgments of the Court are instructive. Specifically, the Gospel Mission Court explained that, "disclosure requirements that specifically relate to the planned charitable solicitations are constitutional." Id. at 1450, citing ISKCH v. City of Houston, 689 F.2d 541, 556 (5th Cir. 1982).
Overall, it is clear that the application requirements achieve the substantial governmental interest of protecting the citizens of Pinellas County and providing them with the information necessary to make an informed decision on their charitable giving in a narrowly tailored manner. Therefore, this section of the ordinance should be upheld.
The United States Supreme Court has been clear concerning the standard of review for facial challenges to statutes or legislative acts. The Court requires that the challenger show that "no set of circumstances exists under which the Act would be valid." Ohio v. Akron Center, 497 U.S. 502, 514 (1990), citing Webster v. Reproductive Health Services, 492 U.S. 490, 524 (O'Connor, J. concurring). See also U.S. v. Salerno, 481 U.S. 739, 745 (1987). In the case at bar, this analysis supports upholding these provisions because they may clearly be validly applied to Plaintiffs and others in their position.
4. Reporting Requirements
The reporting requirements of the Pinellas County Code were drafted to verify the accuracy of the assertions put forth in the application. Such a provision is clearly within the scope of a narrowly tailored law. Gospel Mission, 951 F.Supp. at 1444.
The validity of administrative and record keeping regulations is made even more clearly by a juxtaposition of the First Amendment free speech right within First Amendment or freedom of religion rights. Swaggart Ministries v. California Board of Equalization, 493 U.S. 378 (1990). The Court in Swaggart specifically upheld a sales tax of a church group holding that such tax, which required the church to collect and remit sales and use taxes, was not in violation of the Establishment Clause, Id. at 395, because it applied only to commercial activities undertaken with a business purpose and would not affect church activities. Id. Similarly, in the case at bar, disclosure through reporting requirements is intended to verify the accuracy of submitted information and it therefore correlates with the ordinance provisions upheld in Gospel Mission. 951 F.Supp. at 1444. Such disclosure assists in preventing fraud by allowing the public to verify that its contributions are being used in a manner they support. See Schamburg, 444 U.S. at 637-638 (supporting this rationale for the reporting requirements).
Furthermore, the reporting requirements of Section 42-295 of the Pinellas County Code do not attempt to interfere in any way with the charity/professional solicitor/consultant relationship, unlike the Supreme Court cases overturning local charitable solicitations ordinances. Riley, Munson, Schamburg. To the contrary, similar to O.R.C. Section 1716.08(A), which was upheld by the Sixth Circuit, the County simply requires disclosure of information for the constitutionally valid purpose of informing the public. Dayton Area Visually Impaired Persons v. Fisher, 70 F.3d 1474, 1485 (6th Cir. 1995) (concerning solicitation disclosures).
Therefore, this provision should be upheld.
5. Fee Structure
The fee structure imposed by Pinellas County is valid because the fee is based on a "fair appropriation of the cost of benefits supplied." U. S. v. Sperry Corp., 493 U.S. 52, 60 (1989) (citing Massachusetts v. U.S., 435 U.S. 444, 463, n.19 (1978). The clear rule is that the First Amendment does not preclude a license or user fee intended to remunerate the government for the expense of maintaining a valid regulation scheme. See infra at Section V. This truth holds in various fact situations. For example, in Heritage Publishing, the Court upheld the Minnesota requirement that professional fundraisers provide a $20,000 bond to solicit in the state. 654 F.Supp. at 1502. The Court, in upholding the bond as being sufficiently narrowly tailored stated, "[i]t is well- established that a state may require a bond as a part of regulatory business." Id., citing 51 Am. Jur. 2d, License of Permits, §140. Similarly, the Second Circuit upheld a fee scheme based on both administrative and enforcement costs. National Awareness Foundation v. Abrams, 50 F.3d 1159, 1165 (2d Cir. 1995).
Most persuasive, though, is the Maryland solicitation fee scheme which provided for a sliding scale depending on the "level of public contribution." Center for Auto Safety v. Athey, 37 F.3d 139, 141, n.1 (4th Cir. 1994). This scale is the near equivalent to the fee scale being challenged. As the Center for Auto Safety Court explained, such a sliding sale fee structure is fair, in part because of the increased expense for monitoring charities relative to size. Id. at 143.
The Pinellas County fee structure correlates directly with this case because administering the ordinance and does not in fact provide either the County or the department with a profit. Therefore, the County fee structure should be upheld.
As can be seen, the regulatory provisions of the Pinellas County ordinance provide narrowly tailored requirements to be met, which advance the County's substantial interest in protecting its citizens. Also, these provisions do not distinguish between types of speech, therefore they are content neutral and because of the minimal fee requirements, speech is not unduly burdened. Therefore, the challenged ordinance does not violate the First Amendment.
IV. DUE PROCESS
The Pinellas County Charitable Solicitations Ordinance is enforced through Section 42-268 of the Pinellas County Code which refers to Section 1-8 of the Code. Pursuant to this latter provision the Board of County Commissioners is authorized to file for injunctive relief in state circuit court for violation of the County Code. Theoretically, this would be the procedure by which the challenged ordinance would be enforced against Plaintiffs for their refusal to register. As required by state law, though, any action taken by the County would provide the violator of the County ordinance with up to 30 days notice prior to taking any action. Section 125.69(2)(a) and Section 162.06, et. seq., Florida Statutes (1997) (provides the procedure which is followed for enforcement of code violations). The procedural basis for the County's enforcement of the Code is immaterial at this time, though, because no action has been taken against the Plaintiffs. Thus, the challenge presented to the Court is facial and as such Plaintiffs must survive a heightened standard of review.
A. Exercise of Jurisdiction
Generally, in order to determine whether the exercise of jurisdiction is proper, the test is clear: a party must have minimum contacts with the jurisdictional body and maintenance of a suit against that party must not offend traditional notions of fair play and substantial justice. International Shoe v. Washington, 326 U.S. 310 (1945). When applying this standard, the federal courts are directed to apply the law of the forum state. Omni Capital International v. Rudolf Wolff & Co., 484 U.S. 97, 109 (1987).
In Florida, for the exercise of jurisdiction over a non-resident to be proper, the state must show: 1) sufficient jurisdictional facts to come within the state's long-arm statute; and 2) minimum contents to satisfy the Fourteenth Amendment. Hoechst Celanese Corp. v. Nylon Engineering, 896 F.Supp. 1190, 1992 (M.D.Fla.1995). To determine whether the state's long-arm statute applies, the Court looks to whether the non-residents actions are sufficient enough to provide either general or specific jurisdiction. See Section 48.193(1) and (2), Florida Statutes (1997). Thereafter, a minimum contacts test is applied to determine whether the non-resident purposefully directed its efforts toward the state and whether imposition of jurisdiction over the actor would comport with "fair play and substantial justice." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985).
Applying the applicable law to the case at bar, it is clear that a facial challenge must fail because of the many potential fact situations which would confer jurisdiction on the Florida courts. For example, any claim of misrepresentation would provide a sufficient basis to apply the long-arm jurisdiction in Florida. Interfase Marketing v. Pioneer Technologies Group, 774 F.Supp. 1355, 1357 (M.D.Fla.1981). See also S.E.C. v. Carrillo, 115 F.3d 1540 (11th Cir. 1997). In both of those cases, out-of-state defendants were found to be subject to Florida jurisdiction based on contacts with Florida residents by mail or through advertising. Carrillo, 115 F.3d at 1545. As such, Plaintiffs in this matter would clearly be subject to Florida jurisdiction for any such similar acts through the mail.
In both cases the Courts also found that the out-of-state entities maintained sufficient minimum contacts with the state for the minimum contact standards to be satisfied. Furthermore, any determination that the Plaintiffs in this matter are doing business, causing injury to persons or property within the state because of their acts or breaching a contract in the County, will subject them to personal jurisdiction in the state. Section 48.193(1)(a)(f) and (g).
As can be seen, there are several factual bases by which Pinellas County may assert jurisdiction over Plaintiffs. Indeed, in the only case directly on point, the New York state court determined that due process was not denied where the state required registration of professional charitable fundraisers. State v. Richard A. Viguerie Co., Inc., 382 N.Y.S.2d 622, 665 (1976). These involved factual questions are not at issue today, though, because Plaintiffs' Complaint alleges that the Pinellas County ordinance is facially invalid. Therefore, any one of the above fact scenarios is sufficient to defeat Plaintiffs' due process challenge pursuant to the standard set out in Akron Center, Reproductive Health Services, and Salerno.
V. COMMERCE CLAUSE ANALYSIS
The regulation of professional solicitors and fundraisers is well within the legitimate authority of the County, supra at 4-5, citing Gospel Missions, 951 F.Supp. 1429, 1440 (D.C.Cal.1997), Cantwell v. Connecticut, 310 U.S. 296 (1940). Similarly, in the State of Florida, the courts have supported the argument that regulations related to the governments' valid police power do not violate the Commerce Clause. Retail Credit Co. v. Dade County, Florida, 393 F.Supp. 577, 585 (S.D.Fla.1975). Therefore, there can be no doubt that to the extent that it regulates charitable solicitations, the Pinellas County ordinance is generally valid. See National Foundation v. City of Fort Worth, 415 F.2d 41, 45 (5th Cir. 1969), cert. den. 396 U.S. 1040 (1970); Armstrong v. City of Tampa, 112 So.2d 293, 297 (Fla. 2d DCA 1959).
The regulation being challenged is a user fee and not a general revenue tax and, as such, the cases cited by Plaintiffs in their Complaint are not on point. User fees are governed under a different Commerce Clause analysis as compared to general revenue taxes. Ferndale Laboratories, Inc. v. Cavendish, 79 F.2d 488, 494 (6th Cir. 1996). General revenue taxes are taxes levied against interstate commerce to raise general revenue and, as such, provide a more problematic analysis for Commerce Clause review. Dean Milk Co. v. Madison, 340 U.S. 349, 356 (1951). Conversely, user fees are fees that are used to reimburse the state for the use of state owned or state provided facilities or services and therefore these fees do not receive the same exacting standard as general revenue taxes. Commonwealth Edison Co. v. Montana, 453 U.S. 609, 622 (1981). The fees charged by Pinellas County fall into the latter category because they are used only to reimburse the County for the cost of implementing the challenged ordinance. No revenue is raised through the fee.
The exact same type of fee charged by Pinellas County was upheld by the Fourth Circuit Court of Appeals in Center for Auto Safety, Inc. v. Athey, 37 F.3d 139 (4th Cir. 1994). In Center for Auto Safety, the Court upheld the Maryland sliding scale fee for charitable organizations under a Commerce Clause analysis because the fee structure "represent[ed] a fair, if imperfect, approximation of the cost of using Maryland facilities and services for the charity's benefit." Id at 143. In evaluating whether a user fee contravenes the Commerce Clause, the Court determined that: 1) the fee must reflect a fair, if imperfect, approximation of the use of facilities for whose benefit they are imposed, and 2) the fee must not be excessive in relation to the costs incurred by the taxing authority. Evansville-Vanderburgh Airport Authority District v. Delta Airlines, 405 U.S. 707, 717 (1972). See also, Alamo Rent-A-Car, Inc. v. Sarasota-Manatee Airport Authority, 906 F.2d 516, 518 (11th Cir. 1990). Therefore, where the cost of monitoring charities is based on a fair approximation of the cost incurred, it will be upheld. Center for Auto Safety, 37 F.3d 139, 143 (4th Cir. 1994).
The actual fee charged by Pinellas County directly corresponds with the Maryland fee scale. Id. at 141. See Exhibit "10". Therefore, because as with the Maryland fee the Pinellas County fee does not differentiate between in- and out-of-state entities and because it is a fair approximation of the costs incurred by the County, there is sufficient support to uphold the Pinellas County fee. See, Id. at 143.
B. DISTINGUISHING BETWEEN LOCAL LAWS
The regulating provisions of the Pinellas County Ordinance satisfy Commerce Clause requirements because they do not discriminate against out-of-state entities and they survive the Pike analysis. Pike v. Bruce Church, Inc., 397 U.S. 137 (1970).
1. Discriminatory Purpose Regulations
The initial determination to be made when reviewing a Commerce Clause challenge to a law is to distinguish between those state laws that discriminate against out-of-state entities in favor of in-state entities and those laws which apply even-handedly without regard to the jurisdictional status of the entity. For example, in one of the cases cited by Plaintiffs in their Complaint, the Supreme Court invalidated a statute that applied only to brewers and shippers of alcoholic beverages engaged in interstate commerce and not to intrastate entities. Healy v. Beer Institute, 491 U.S. 324 (1989). Specifically, the Court explained that economic regulations which have extra-territorial effects on interstate commerce are disfavored where the regulation has the effect of controlling commercial activity occurring wholly outside of the state by having the practical effect of setting a scale of prices which must be used in other states. Id. at 336-338. The Pinellas County Ordinance does not have this defect because it does not attempt to set the fees to be charged by other jurisdictions.
The Healy Court also determined that the statute before it discriminated against interstate commerce. As the Court explained, the regulation established a substantial disincentive for companies doing business in Connecticut to engage in interstate commerce because they would be penalized by selling outside of the state. Id. at 341. Again, the Pinellas County Ordinance makes no distinction between in or out-of-state professional solicitors or consultants. Therefore, there is no incentive or disincentive for these entities to solicit in Pinellas County based on their state of origin. For these reasons, the Pinellas County Ordinance clearly does not "discriminate" against interstate commerce and regulates even-handedly because it requires all professional fundraising solicitors and consultants to register. See Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 471 (1981). As such the Pike analysis should apply.
2. Even-Handed Regulations
"Where a statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits." Pike, 397 U.S. 137, 142 (1970). This is the standard by which local laws regulating activity that affects interstate commerce are judged.
As to the initial factor in the Pike test, the Pinellas County Ordinance regulates even-handedly because, as explained previously in this Memorandum, the ordinance provides the same regulatory requirements for both in- and out-of-state entities. Therefore, the first factor is satisfied. See Pacific Northwest Venison Producers v. Smitch, 20 F.3d 1008, 1012 (9th Cir. 1994) (hereinafter "PNVP").
The second factor requires there to be a legitimate local public interest to be the subject of the regulation. As explained previously, this regulation of solicitors is within the police power authority of the County to protect the public's safety, health and welfare. Therefore, because there is a legitimate interest in asserting its police power for protection of its citizens, Ferndale Laboratories v. Cavendish, 79 F.2d 488, 494 (6th Cir. 1996), the second factor is satisfied.
The third factor requires that the effects on interstate commerce be only incidental. Incidental burdens are burdens on interstate commerce that exceed the burdens on intrastate commerce. New York State Trawlers Association v. Jorling, 16 F.3d 1303, 1308 (3d Cir. 1994). As discussed previously, the burden on interstate and intrastate commerce are identical. Therefore, there are no incidental burdens.
The final factor examines whether the burden imposed on commerce clearly exceeds the putative local benefits. In reaching this determination it should be noted that Supreme Court cases reveal that certain types of impacts on interstate commerce are of special importance in applying the above balancing test, and legitimate regulations that do not affect this category of commerce are arguably not subject to invalidation under the Commerce Clause. PNVP, 20 F.3d 1008, 1015. Therefore, the fact that the regulation of charitable solicitations does not affect either of these more highly protected forms of interstate commerce, and because there is no concern that "Balkanization" will occur in regard to solicitation, the challenged ordinance should survive this balancing test per se.
Even if the balancing test cannot be determined on a per se basis by comparing similar statutes which are promulgated for the advancement of public safety, health and welfare, it becomes clear that the Pinellas County Ordinance properly apportions the local benefit to the burden on commerce.
In Ferndale, the Court determined that information required to be disclosed by all wholesale drug distributors pursuant to Ohio statute, was not overly burdensome to registrants and therefore the scale tipped in favor of the state's strong public interest in requiring registration with the state by wholesale drug distributors. Ferndale, 79 F.2d at 495-96.
Similarly, in Clover Leaf Creamery, the Supreme Court found that the regulation prohibiting plastic bottles for milk products burdened out-of-state industry more heavily than in-state industry in that the in-state pulpwood industry would be benefitted. Clover Leaf Creamery, 449 U.S. at 473. This fact did not tip the sales in favor of out-of-state industry, though, because the substantial state interest in promoting conservation of energy and natural resources was deemed to be more weighty. Id. Therefore, the Minnesota statute was upheld as not being in violation of the Commerce Clause.
A similar result was found in Ray v. Atlantic Richfield Co., 435 U.S. 151 (1978), in which the Court determined that a local tugboat pilotage requirement for vessels entering the Puget Sound was valid and not violative of the Commerce Clause in part because the regulation did not impede on the free and efficient flow of commerce and because of the minimal cost incurred by the out-of- state entity. Id. at 179-180. Also, in Northwest Central Pipeline Corp. v. State Corporation Commission of Kansas, 489 U.S. 493 (1989), the Court held that Kansas's substantial interest in controlling production of its natural gas field to prevent waste and to protect correlative rights was not "clearly excessive in relation to the burden that this regulation placed on interstate commerce." Id. at 526.
In the instant case, it is clear that Pinellas County's legitimate government interest in protecting the safety, health and welfare of its citizens is a valid and weighty purpose. Furthermore, because there is no attempt to place the County in a position of economic isolation or protectionism for local entities, the County retains broad authority under the Commerce Clause to protect its citizens. Maine v. Taylor, 477 U.S. 131, 151 (1986). Also, because of the minimal user fee and the lack of a burden on out-of-state interests, the scale tips more heavily in favor of the County. Therefore, under the Pike analysis, the Pinellas County Ordinance does not violate the Commerce Clause. Also, please note that none of the cases cited herein involved a general revenue tax, but all involved regulations which imposed user fees. Therefore, in applying the proper Commerce Clause analysis, these are the cases that are directly on point.
Plaintiffs' challenge in this matter is misplaced. As can be seen from the foregoing examination of the Pinellas County Charitable Solicitations Ordinance, the provisions that regulate fundraising consultants and solicitors are constitutionally valid. All Plaintiffs in this matter are involved in some degree of mailing solicitation materials into Pinellas County. They attempt to claim a First Amendment protection for this activity even though they are themselves purely commercial entities. All this being said, and as acknowledged by Defendants, their services, at this time, are being considered to receive some First Amendment protection.
What is clear from the cases is the fact that a facial challenge to a law looks directly to the validity of that law not to worst case scenarios but to a more general view to determine whether valid support for the law can be enunciated. Defendants believe that because of the police power authority of the County and on the basis of past precedence relating to the specific provisions of the challenged ordinance, the ordinance before the Court today is valid.
Therefore, Defendants request that this Court grant its Motion for Summary Judgment as Plaintiffs claim sets forth no issues of material fact and the Plaintiffs fail to make a sufficient showing on the essential elements of its case with respect to its burden of proof as relates to the Pinellas County Charitable Solicitations Ordinance.
CARL E. BRODY, JR.
Assistant County Attorney
315 Court Street
Clearwater, FL 33756
FL Bar #0102229
Attorney for Defendants
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing has been furnished by U. S. Mail to ALISON M. STEELE, ESQ., Rahdert, Anderson, McGowan & Steele, P.A., 535 Central Avenue, St. Petersburg, FL 33701, CLIFFORD PERLMAN, ESQ., Perlman & Perlman, 220 Fifth Avenue, New York, NY 10001, SETH PERLMAN, ESQ., Perlman & Perlman, 220 Fifth Avenue, New York, NY 10001, and GEOFFREY W. PETERS, ESQ., Geoffrey W. Peters, P.C., 9024 Trailridge Court, Vienna, VA 22182, this 10th day of June, 1998.
CARL E. BRODY, JR.
Assistant County Attorney