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
FOR THE DISTRICT OF CONNECTICUT
AMERICAN CHARITIES FOR
|-against-||CIVIL ACTION No.
MARK SHIFFRIN, in his capacity as
The Defendants’ arguments amount to the following: their regulations of the Plaintiffs’ core speech activities need not be subjected to strict scrutiny, so long as those regulations are drafted broadly enough to also include activities subject to regulation under the state’s traditional police powers. That position simply cannot be reconciled with the pronouncements of the Supreme Court.
A. The Plaintiffs have demonstrated irreparable harm
The Supreme Court has held that the loss of First Amendment freedoms, even for minimal amounts of time, unquestionably constitutes irreparable harm. Elrod v. Burns, 427 U.S. 347, 373 (1976). The Defendants cite two cases they claim mandate a balancing test to determine whether or not they have suppressed so much speech that a preliminary injunction is warranted. International Dairy Foods Ass’n. v. Amestoy, 92 F.2d 67 (2d Cir. 1996); and Time Warner Cable of New York City v. Bloomberg, 118 F.3d 917 (2d Cir. 1997). Nothing in those cases supports the Defendants’ contention. The Amestoy Court followed Elrod v. Burns and held that the sin qua non of irreparable harm is “injury for which a monetary award cannot be adequate compensation.” Similarly, there is nothing in Time Warner, 118 F.3d 917 (2d Cir. 1997) which suggests that the Court must weigh the number of First Amendment violations committed by the Defendants before determining whether preliminary injunctive relief is appropriate. The Time Warner Court “weighed the facts” only in the sense that rules of judicial decision making require judges to rule on non-constitutional grounds before considering constitutional grounds for their decisions.
This argument is essentially a reassertion of the Defendants’ “no standing” claim which the Plaintiffs met and disposed of in their opposition to the Defendants’ Motion to Dismiss. It hinges on the Defendants’ claim that they are entitled to know the names of ACFRFR’s members whose speech has been chilled. See, e.g., Defendants’ Memorandum In Opposition to Application for Preliminary Injunction (“Defendants’ Opposition”) at page 5.1 However, the Defendants do not challenge the allegation that they have widely wielded CUTPA against charitable speech, and indeed they concede as much on page 8 of their brief when they assert that:
“CUTPA is a vitally important tool, both to prosecute persons and entities that have engaged in unfair or deceptive acts in the course of charitable solicitations and to prospectively protect Connecticut citizens from such conduct. Indeed, the Plaintiff concedes that the defendants frequently employ CUTPA.”
Plaintiffs’ injuries are real, substantial and sufficient as a matter of law. Their submission includes sworn statements showing that because of CUTPA, ACFRFR’s members (including BRF) are not engaging in fully protected activity in Connecticut, and that but for CUTPA they would immediately engage in such activity. That is enough to show that their First Amendment rights have been threatened, and that the threat has been effective.2
B. The Plaintiffs have demonstrated a likelihood of success on the merits
The Defendants do not contest the Plaintiffs’ assertion that CUTPA has been broadly wielded against charitable speech. Defendants’ Opposition, at page 8. Nor do they contest the fact that the Supreme Court has unequivocally held that charitable speech constitutes core speech whose regulation by government is entitled to the most exacting level of judicial scrutiny. Schaumburg v. Citizens for a Better Environment, 444 U.S. 620 (1980), Secretary of State of Maryland v. Joseph H. Munson Co., 467 U.S. 947 (1984) and Riley v. National Federation of the Blind of North Carolina, 487 U.S. 781 (1988). When government restrictions reach core speech as opposed to commercial speech, First Amendment protection is at its zenith, and the burden on the government in justifying such a restriction is “well nigh insurmountable.” Meyer v. Grant, 486 U.S. 414, 425 (1988).
1. The Defendants’ regulation of core speech activities must be subjected to strict scrutiny3
Regulatory measures, no matter how sophisticated, cannot be employed in purpose or in effect to stifle, penalize, or curb the exercise of First Amendment rights. Louisiana v. NAACP, 366 U.S. 293, 297. In its attempt to regulate commercial activities, CUTPA imposes a substantial burden on core speech activities. In addition, CUTPA constitutes a content based regulation of speech. Finally, even if CUTPA is content-neutral, its burden on speech is so great that it still must be subjected to strict scrutiny. As will be shown immediately below, each of these arguments sets forth an independent basis for subjecting CUTPA to strict scrutiny.
a. CUTPA substantially burdens core speech activities
The Defendants assert that the Supreme Court “has never held that an economic regulation with some impact on protected speech, no matter how small or indirect, must be subjected to strict scrutiny under the First Amendment.” Defendants’ Opposition at page 14 (quoting Riley, 487 U.S. at 807). The Defendants neglect to cite the majority opinion in Riley, which explicitly rejected this position.4 Riley, 487 U.S. at 789, fn 5.5 Indeed, the three statutes invalidated by the Supreme Court in Schaumburg, Munson and Riley all involved economic regulations designed to protect the public from “unfair” charitable speech.6 Since compliance with the amorphous “cigarette rule”7 imposes so substantial a burden on the Plaintiffs’ core speech activities that ACFRFR’s members and co-Plaintiff BRF have been chilled from speaking in the State of Connecticut, the Defendants must justify that regulation under the strict scrutiny standard in light of that self-censorship. Virginia v. American Booksellers Association, Inc., 484 U.S. 383 (1988).
The Defendants cannot evade the applicability of the strict scrutiny standard by labeling the Plaintiffs’ core speech activities “trade or commerce.” Bigelow v. Virginia, 421 U.S. 809 (1975). In holding that the existence of commercial activity, in itself, is no justification for narrowing the protection of expression secured by the First Amendment, the Bigelow Court noted that “a State cannot foreclose the exercise of constitutional rights by mere labels.” Bigelow, 421 U.S., at 818-26 (citing NAACP v. Button, 371 U.S. 415, 429 (1963)).
In Button, the Court invalidated an economic regulation of attorney solicitation practices which also curtailed associational and expressive activities. Although the statute was aimed at economic activities traditionally subject to state regulation, the Supreme Court held that
[b]road prophylactic rules in the area of free expression are suspect....Precision of regulation must be the touchstone in the area so closely touching our most precious freedoms....Thus it is no answer to the constitutional claims asserted by petitioner to say, as the Virginia Supreme Court of Appeals has said, that the purpose of these regulations was merely to insure high professional standards and not to curtail free expression. For a State may not, under the guise of prohibiting professional misconduct, ignore constitutional rights.
Button, 371 U.S. at 438-9 (citations omitted). The Court reached a similar conclusion in In re Primus, 436 U.S. 412 (1978). That case also involved an overbroad regulation of attorney solicitation practices. The Court held that:
[a]t bottom, the case [for the state] rests on the proposition that [it] may regulate in a prophylactic fashion all solicitation activities of lawyers because there may be some potential for overreaching, conflict of interest, or other substantive evils whenever a lawyer gives unsolicited advice and communicates an offer of representation to a layman. Under certain circumstances, that approach is appropriate in the case of speech that simply “propose[s] a commercial transaction.” In the context of political expression and association, however, a State must regulate with significantly greater precision.
Primus, 436 U.S. at 437-8 (emphasis added)(citations omitted).
In Board of Trustees of the State University of New York v. Fox, 492 U.S. 469 (1989), the Supreme Court held that, for the purposes of the plaintiff’s as-applied challenge to a regulation purportedly aimed at commercial activities, the activities to which the regulation was to be applied needed to be bifurcated into commercial and non-commercial parts, which neither party nor the lower courts had recognized. The Court ordered a remand for separate determinations as to whether the regulation could be applied in the commercial and non-commercial speech contexts. Fox, 492 U.S. at 485-6.
The Defendants attempt to walk away from the fact that they have cited no case from any court which allowed regulation of core speech activities with a rule as burdensome and imprecise as the “cigarette rule.” They do so by citing several cases which held that the State’s interest in regulating trade or commerce is sufficiently strong to overcome First Amendment challenges. See e.g., Donaldson v. Read Magazine, 333 U.S. 178 (1948); Regina Corp. v. FTC, 322 F.2d 765 (3d Cir. 1963); and Progress Tailoring Co. v. FTC, 153 F.2d 103 (7th Cir 1946). However, those cases were decided at a time when, under the holding in Valentine v. Chrestensen, 316 U.S. 52 (1942), speech relating to commercial matters received absolutely no constitutional protection and thus regulations of it did not even implicate the First Amendment.
Virginia Pharmacy Board v. Virginia Consumer Counsel, 425 U.S. 748 (1976) overruled Chrestensen, and extended First Amendment protections to commercial speech activities. The cases cited by the Defendants decided after Virginia Pharmacy only uphold application of unfair trade practice statutes to commercial speech activities, not core speech activities. The Supreme Court has made clear that although certain features of commercial speech make less precise regulations of it more tolerable than in other speech contexts, such imprecision will not be acceptable when core speech activities are at issue. See e.g., Virginia Pharmacy, supra 425 U.S. 748, 771 fn. 24 (1976)(holding that with regulations of commercial speech it is less necessary to tolerate inaccurate statements for fear of silencing the speaker); Bates v. State Bar of Arizona, 433 U.S. 350 (1977)(holding that overbreadth principles do not apply in the purely commercial speech context, since the profit motive will overcome any possible chilling effect); Ohralik v. Ohio State Bar Association, 436 U.S. 447, 456 (1978)(holding that courts allow modes of commercial speech regulation that might be impermissible in the realm of non- communicative expression).
The “cigarette rule” directly regulates what a charitable speaker may say and how he may say it, since it empowers the Defendants to punish speech which they deem inter alia “unfair.” As such, the “cigarette rule” operates as a direct restriction on core speech activities, because speakers must conform their speech to the Defendants’ notions of fairness. That direct restriction imposes a substantial burden on the exercise of First Amendment freedoms, and thus must be subjected to strict scrutiny.
b. CUTPA and the Sweepstakes Law8 constitute content-based regulations
It cannot be argued, nor have the Defendants asserted, that either CUTPA or the Sweepstakes Law represent mere time, place or manner regulations. The “cigarette rule” cannot be applied without reference to the content of the public education messages the Defendants seek to regulate. Whether such public education messages fit within some penumbra of unfairness, whether they are immoral, unethical, oppressive or unscrupulous, or whether they cause substantial injury to consumers, cannot be determined without reference to the content of what has been said to the prospective donor.9
Since CUTPA regulates speech based on whether the content of that speech fits within the government’s “penumbra” of unfairness, the fact that the government neither endorses nor rejects the underlying message communicated by a charitable speaker cannot make the intermediate scrutiny test applicable. Consolidated Edison Co. v. Public Service Commission 447 U.S. 530 (1980). That case involved suppressed speech deemed “harmful to consumers.” Just like the Defendants in this case, the Commission argued that its broad regulatory authority should be judged under the intermediate scrutiny standard articulated in United States v. O’Brien, 391 U.S. 367 (1968). However, the Court rejected the argument and held that the strict scrutiny test applied, notwithstanding the fact that the Commission’s regulation was unrelated to the views of any particular speaker. Consolidated Edison, 447 U.S. at 540 fn. 9.
Additionally, the mandatory disclosure requirements contained in the Sweepstakes Law are content-based regulations per se. Riley, 487 U.S. at 797-8. Even if they compel charitable speakers to convey factual information which might be relevant to the listener, and which could encourage or discourage the listener from making a contribution, such mandatory disclosures “clearly and substantially burden the protected speech.” Riley, 487 U.S. at 798. As the Supreme Court held in Miami Herald Co. v. Tornillo, 418 U.S. 241, 257 (1974), compelled printed speech involves added printing costs (in terms of the extra ink and paper needed) and in addition takes up space which distracts the reader from information the speaker would otherwise prefer to communicate.10 Such compelled speech constitutes a content-based regulation of speech which may only be justified if it passes strict scrutiny.
The Commissioner’s power to issue cease and desist orders to purveyors of charitable speech also constitutes a content-based regulation of speech that by the Defendants’ own admission constitutes a prior restraint. The Defendants admit that if the Commissioner determines that a charitable speaker has engaged in “allegedly prohibited activity,” he may “state his findings as to the facts and shall forward by certified mail to such person an order to cease and desist....” Defendants’ Opposition at pages 37 and 39. The Commissioner need not have a court validate his judgment before issuing such a cease and desist order, and indeed the burden for seeking judicial review of the Commissioner’s judgment rests with the charitable speaker. Defendants’ Opposition at pages 36-7; see also, Conn. Gen. Stat. §§ 42-110(d), 42-110(e). Such a statutory scheme on its face violates the rules set forth in Freedman v. Maryland, 380 U.S. 51 (1965). Moreover, the Defendants’ admission that the Commissioner has the power to restrain future speech by issuance of a cease and desist order simply on the grounds that a charitable speaker has engaged in “allegedly prohibited activity”similarly violates the rule against prior restraints set forth in Near v. Minnesota, 283 U.S. 697 (1930). Under the rule in Near, the government cannot restrain future speech on the grounds that a speaker has engaged in “bad” activities in the past.11 This statutory scheme is a per se violation of the First Amendment which cannot be justified under strict scrutiny.
c. Even if CUTPA and the Sweepstakes Law constitute content-neutral restrictions on core speech, they still must be subjected to strict scrutiny
The Defendants argue that since neither CUTPA nor the Sweepstakes Law is aimed at any particular content or viewpoint of speech (an assertion which the Plaintiffs challenge), they represent content-neutral restrictions on speech which are subject only to intermediate scrutiny. However, the alleged “content-neutrality” of CUTPA and the Sweepstakes Law is no different than the content- neutrality of the laws at issue in Schaumburg, Munson and Riley.12 The Defendants’ content-neutrality argument suggests that a lower level of judicial scrutiny should be applied to broad regulations affecting all speech equally than should be applied to regulations affecting only particular types of speech. Such a position is not supported by Supreme Court precedent. See Airport Commissioners v. Jews for Jesus, Inc., 482 U.S. 569 (1987)(statute which banned all speech activities, irrespective of content, declared unconstitutional on traditional overbreadth grounds); see also City of Ladue v. Gilleo, 512 U.S. 43 (1994)(ordinance banning all residential signs on a content neutral basis invalidated because it suppressed too much speech).13
Accordingly, even if CUTPA and the Sweepstakes Law are content-neutral in the sense that they apply broadly to all charitable speakers, their burden on core speech activities is so great that strict scrutiny must be applied to them.
2. The Application of CUTPA cannot be justified even under intermediate scrutiny
The Defendants argue that CUTPA is a content-neutral speech restriction which need only pass intermediate level scrutiny in order to survive the Plaintiffs’ constitutional attack. The Defendants set forth the intermediate scrutiny test as follows: (1) the law must be within the constitutional power of the Government; (2) it must further an important or substantial Government interest; (3) the Governmental interest must be unrelated to the suppression of free expression; and (4) the incidental restriction of First Amendment freedoms must be no greater than is essential to the furtherance of that interest. United States v. O’Brien, 391 U.S. 367 (1968). As will be set forth immediately below, CUTPA cannot survive scrutiny even under this test. The purported Government interest proffered by the Defendants (protecting the public from fraud) is a sham, as demonstrated by the fact that the means chosen to promote that Governmental interest (CUTPA) is not reasonably related to achieving that purpose.
At the outset, it must be noted that the Defendants have no cognizable legal interest in suppressing First Amendment activities deemed unfair and coercive. In Organization for a Better Austin v. Keefe, 402 U.S. 415 (1971), a non-profit organization distributed leaflets which were allegedly “coercive” and “intimidating.” The person at whom the leaflets’ message was directed believed such leafleting was unfair, and sought to invoke the equitable powers of the Courts to enjoin the activity. The Supreme Court held that “the claim that the expressions were intended to exercise a coercive impact on the Respondent does not remove them from the reach of the First Amendment.” Keefe, 402 U.S. at 415-9. At bar, the Defendants similarly may not restrict the public education messages disseminated by charitable organizations, even if those messages contain coercive appeals that the Defendants deem unfair.
Instead, the Defendants presumably base their Governmental interests on the following language contained in Riley:
We do not suggest that States must sit idly by and allow their citizens to be defrauded. North Carolina anti-fraud law, and we presume that law enforcement officers are ready and able to enforce it.
Riley, 487 U.S. at 795. Indeed, the Defendants’ Opposition repeatedly asserts that the Governmental interest which they are promoting is the protection of the public from fraud.
Contrary to the Defendants assertions, CUTPA is not an anti-fraud law. The elements of fraud in the State of Connecticut are: a false representation made as to a statement of fact; which was untrue and known to be untrue by the party making it; which was made to induce the other party to act on it; and that he did so act to his injury. Paiva v. Vanech Heights Construction Co., Inc., 159 Conn. 512, 271 A.2d 69 (1970). In addition, fraud must be proven not just by “a fair preponderance of the evidence,” but by “clear and satisfactory evidence,” or “clear, precise and unequivocal evidence.” Alaimo v. Royer, 188 Conn. 36, 448 A.2d 207 (1982). In contrast, for an act to violate CUTPA, it must be shown by a mere preponderance of the evidence that the “cigarette rule” has been violated.
As should be readily apparent from comparing the definition of fraud with the definition of unfair or deceptive trade practice embodied in the “cigarette rule,” CUTPA differs materially and substantially from fraud. While fraud requires a heightened standard of proof, CUTPA does not. See Omega Engineering, Inc. v. Eastman Kodak Co., 908 F.Supp. 1084 (D.Conn. 1995)(holding that since CUTPA addresses different concerns than anti-fraud laws, the pleading requirements of CUTPA are more relaxed than those for fraud and there is less need for a clear and satisfactory standard of proof to succeed on a CUTPA claim). While fraud requires a false statement of fact made with knowledge, CUTPA does not. See Associated Inv. Co. Ltd. Partnership v. Williams Associates IV, 645 A.2d 505, 230 Conn. 148 (1994)(holding that CUTPA does not require proof of intent to deceive, defraud, or mislead); see also, Web Press Services Corp. v. New London Motors, Inc., 203 Conn. 342, 362-3, 525 A.2d 57 (1987)(holding that “knowledge of falsity, either constructive or actual, need not be proven to establish a violation of CUTPA”). Finally, while fraud requires that the false statements be made to induce the party to act on them, and that the party did in fact act on them to his injury, CUTPA does not. See Prishwalko v. Bob Thomas Ford, Inc., 636 A.2d 1383, 33 Conn. App. 575 (1994)(CUTPA proscribes a broader range of conduct than common law misrepresentation, and a CUTPA plaintiff need not prove reliance or even that the representation became a part of the basis for the bargain). If the governmental interest at stake in this case is protecting the public from fraud, CUTPA is an extremely weak means for achieving that alleged interest.14
There can be no doubt that Government may not suppress core First Amendment activities on the basis that they violate CUTPA’s emasculated definition of fraud. As the Supreme Court held in Cantwell v. Connecticut, 310 U.S. 296, 310 (1940),
[t]o persuade others to his own point of view, the pleader, as we know, at times, resorts to exaggeration, to vilification of men who have been, or are, prominent in church or state, and even to false statement. But the people of this nation have ordained in the light of history, that, in spite of the probability of excesses and abuses, these liberties are, in the long view, essential to enlightened opinion and right conduct on the part of the citizens of a democracy.
Clearly, CUTPA, which does not require falsity, intent, or reliance, may not be used to suppress charitable speech. See also Briggs v. Ohio Elections Commission, 61 F.3d 487, 494 (6th Cir. 1995)(regulation of fraudulent speech requires a finding of either knowing falsity or reckless disregard for the truth in order to be constitutional).
The Defendants cannot justify CUTPA even under the intermediate level scrutiny test. Thus, the Plaintiffs have demonstrated a likelihood of succeeding on the merits even if the Court applies intermediate level scrutiny.
C. Substantial overbreadth analysis does not save the constitutionality of CUTPA
The Defendants assert that in order to prevail, the Plaintiffs must show that CUTPA is “substantially overbroad.” Defendants’ Opposition at page 21-4. To this there are two responses. First, the substantial overbreadth analysis is only applicable to the extent that the Plaintiffs’ constitutional challenge is a facial one: to the extent that it is an as-applied challenge, the substantial overbreadth doctrine is irrelevant. See, e.g., Bigelow v. Virginia, 421 U.S. 809 (1975)(holding that intervening amendment to statute challenged rendered facial challenge moot since there was no possibility of substantial overbreadth, but nevertheless upholding the as-applied challenge on overbreadth grounds). Second, as has been pointed out above, there is no dispute that the Defendants apply CUTPA to a substantial number of charitable speakers. See page 8 of the Defendants’ Opposition. Since each of these substantial number of applications to charitable speech is unconstitutional, even under a substantial overbreadth analysis the Plaintiffs’ challenge is likely to succeed.
The Plaintiffs have demonstrated that they are presently suffering irreparable harm, and that they are likely to succeed on the merits of their challenge to CUTPA and the Sweepstakes Law. Accordingly, their Application for Preliminary Injunctive Relief should be granted by this Court.
PLAINTIFFS AMERICAN CHARITIES FOR
REASONABLE FUND RAISING REGULATION,
INC. and BILL OF RIGHTS FOUNDATION, INC.
Perlman & Perlman
Federal Bar No.: CT19078
220 Fifth Avenue, 7th Floor
New York, New York 10001
Tel.: (212) 889-0575
Richard C. Robinson
Federal Bar No.: CT04321
Sorokin, Gross & Hyde, P.C.
One Corporate Center
Hartford, CT 06103
I hereby certify that on this 19th day of October, 1998, a copy of the foregoing was mailed, via first class mail, postage prepaid, to:
David E. Ormstedt
Holly Jean Bray
Assistant Attorney General
P.O. Box 120
Hartford, CT 06141-0120
Tel.: (860) 808-5020
Attorney for Plaintiffs
2 The Defendants’ censorship activities in enforcing a vague and overbroad statute such as CUTPA, whose total lack of precision delegates virtually unlimited enforcement and discretion, imparts a chill so extreme that it thwarts the sending of charitable messages into the State of Connecticut. The Defendants cannot transform the unconstitutional characteristics of CUPTA into the thing that immunizes it from constitutional challenge.
3 Although the Defendants summarily assert that CUTPA would pass strict scrutiny, see Defendants’ Opposition at page 16, fn. 4, they put forth no arguments and cite no cases in support of that naked assertion. Specifically, they do not cite a compelling government need justifying these regulations. Even if, for the purposes of argument, the proffered “important” interest offered to support intermediate scrutiny (namely, protecting the public from fraud) is also a “compelling” interest (an assertion the Plaintiffs challenged in their original Memorandum in Support of Preliminary Injunction), the Defendants offer no argument that they have chosen the least restrictive means for achieving that purpose. Specifically, they do not contest the Plaintiff’s assertion that a law prohibiting fraud is a more benign and narrowly tailored means for protecting the public from fraud than is CUTPA - which by the Defendants own admission is “admittedly, and of necessity, imprecise.” Defendants’ Opposition at page 34. Thus, if this Court determines that strict scrutiny should be applied in the Plaintiffs’ instant constitutional challenge, the Defendants will have offered no arguments to rebut the presumption of invalidity of government regulations which are subjected to the strict scrutiny test. Accordingly, if strict scrutiny applies, the Plaintiffs necessarily have demonstrated a likelihood of success on the merits for the purpose of the instant Application for Preliminary Injunction.
4 The Defendants maintain that strict scrutiny is inapplicable because CUTPA and the Sweepstakes Law are both “economic measures meant to protect the public from deceptive and unfair practices.” Defendants’ Opposition, at page 14. The fact that the only authority that they can cite for this proposition is a quotation from the Riley dissent (which was rejected by the Court 8 to 1) demonstrates the bankruptcy of this assertion. It would be an improper exercise of judicial activism for this Court to overrule the majority opinion in Riley by adopting the rule propounded by the lone dissenter in that case.
5 The text of that footnote bears repeating here:
The dissent suggests that the State’s regulation is merely economic, having only an indirect effect on protected speech. However, as we demonstrate, the burden here is hardly incidental to speech. Far from the completely incidental impact of, for example, a minimum wage law, a statute regulating how a speaker may speak directly affects that speech. Here, the desired and intended effect of the statute is to encourage some forms of solicitation and discourage others.
Riley, 487 U.S. at 789 fn. 5 (citations omitted).
The “cigarette rule” and the mandatory disclosures contained in the Sweepstakes Law directly affect the speech choices of charitable speakers in Connecticut so much so that many choose to forego speaking in the state entirely. Thus these laws clearly “encourage some forms of solicitation and discourage others.” Under Riley, that makes these regulations “direct and substantial limitations” on the ability of charitable speakers which must be subjected to strict scrutiny.
It should be noted that the North Carolina law at issue in Riley as well as the Maryland law at issue in Munson were not, contrary to the Defendants’ assertions, direct regulations of charities themselves but rather were economic regulations of the fees professional solicitors could charge. Despite the fact that it was conceded that regulation of professions (such as solicitors) was a traditional state activity, the statutes in Riley and Munson were struck down because they placed a substantial burden on core speech activities.
6 All three statutes that were invalidated were premised on legislative determinations of what was “fair and reasonable” for a charity to pay a third party from the proceeds of solicitations conducted on the charity’s behalf.
7 As set forth in the Plaintiffs’ Memorandum in Support of Application for Preliminary Injunction, the “cigarette rule” is the means by which an act is determined to be unfair or deceptive under CUTPA. Under this rule an act is “unfair or deceptive” if (1) the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by the statutes, the common law, or otherwise, i.e., in other words, whether it is within some penumbra of common law, statutory, or other concept of unfairness; (2) it is immoral, unethical, oppressive, or unscrupulous; or (3) it causes substantial injury to consumers. See Stamford Hospital v. Farenga, 2 CSCR 789 (July 6, 1987).
8 For the purposes of this brief, “Sweepstakes Law” refers both to Conn. Gen. Stat. § 42-295 et seq. and Regulation § 42-110(b)-23.
9 Indeed, the one specific instance of the Defendants’ wielding of CUTPA against charitable speakers presently in the record demonstrates that the Defendants enforce CUTPA on a content-based basis. The Defendants admit that they are prosecuting The Children’s Charity Fund Corp. (“CCF”) because they allege that the content of CCF’s solicitations unfairly communicates the primary purpose of the organization. See Defendants’ Motion to Dismiss at page 5.
10 As Rita Smith attested to in her Affidavit, attached to the Plaintiffs’ original Application for Preliminary Injunction, the additional cost to ACFRFR’s charitable members of complying with the mandatory disclosures demanded by the Defendants pursuant to the Sweepstakes Law substantially increases the cost of their disseminating public education messages to Connecticut residents. See Rita Smith Affidavit at paragraph 7.
11 It should be remembered that under the “cigarette rule,” the speech about which the Commissioner complains need not even have been unlawful, so long as in his discretion it fits within some penumbra of unfairness.
12 Each of the laws struck down in Schaumburg, Munson and Riley applied to the charitable speaker regardless of the particular message he wished to convey. Similarly, the Defendants herein argue that CUTPA is content-neutral because all charitable speakers are subject to its provisions, regardless ofthe underlying charitable message they wish to convey.
13 In striking down the ordinance without lowering the level of scrutiny applied, the Court held that
[T]he Court long has recognized that, by limiting the availability of particular means of communication, content-neutral restrictions can significantly impair the ability of individuals to communicate their views to others....To ensure “the widest possible dissemination of information” and the “unfettered interchange of ideas,” the First Amendment prohibits not only content-based restrictions that censor particular points of view, but also content-neutral restrictions that unduly constrict the opportunities for free expression.
City of Ladue, 512 U.S. at 55 fn. 13 (citations omitted)(quoting Stone, Content-Neutral Restrictions, 54 U.Chi.L.Rev. 46, 57-8 (1987)).
14 The substantial differences between fraud and CUTPA were specifically intended by the legislature. As counsel for the Defendants’ has written previously, the justification for CUTPA “is partly due to the fact that traditional actions for...fraud...are too difficult and expensive to prove.” Langer, R. and Ormstedt, D., The Connecticut Unfair Trade Practice Act, 54 Conn. Bar Journal 388, 388 (1980). The authors further list six factors which distinguish CUTPA from fraud: (1) proof of actual deception is not necessary to establish a CUTPA violation; (2) knowledge of falsity is not required to establish a CUTPA violation; (3) immateriality of intent: a person may have completely innocent intentions and still violate CUTPA;(4) and (5) literal truth is not a defense to a CUTPA violation; (6) if a word or term is merely ambiguous, and one meaning is false, the word or term is held to be deceptive. Langer, R. and Ormstedt, D., The Connecticut Unfair Trade Practice Act, 54 Conn. Bar Journal 388, 399 (1980).