Dayton Area Visually Impaired Persons, Inc. v. Fisher, s. 93-3977

Citation70 F.3d 1474
Decision Date16 November 1995
Docket Number93-3979,Nos. 93-3977,s. 93-3977
PartiesDAYTON AREA VISUALLY IMPAIRED PERSONS, INC., an Ohio Non-Profit Corporation; Wayne County Foster Parents Network, an Unincorporated Ohio Non-Profit Association; Ohio Telemarketing Association, Inc., an Ohio Non-Profit Corporation, Plaintiffs-Appellants/Cross-Appellees, v. Lee FISHER, Attorney General, State of Ohio, Defendant-Appellee/Cross-Appellant, J. Anthony Sawyer, City Attorney of the City of Dayton, Ohio; Lee J. Falke, Prosecuting Attorney, Montgomery County, Ohio, Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

Richard Saphire, Dayton Law School, Dayton, OH, Louis A. Jacobs, Columbus, OH, Barry A. Fisher (argued and briefed), Fleishman, Fisher & Moest, Los Angeles, CA, for Dayton Area Visually Impaired Persons, Inc., Wayne County Foster Parents and Ohio Telemarketing Association, Inc.

Noelle T. Tsevdos (briefed), Office of the Attorney General for the State of Ohio, Columbus, OH, Richard Cardray (argued and briefed), Grove City, OH, Jeffrey S. Sutton, State Solicitation Administration, Columbus, OH, for Lee Fisher.

Kenneth Eugene Barden, Office of the City Attorney, Dayton, OH, for J. Anthony Sawyer.

Before: ENGEL, NORRIS, and DAUGHTREY, Circuit Judges.

DAUGHTREY, J., delivered the opinion of the court, in which ENGEL, J., joined. NORRIS, J. (p. 1490), delivered a separate opinion concurring in part and dissenting in part.

DAUGHTREY, Circuit Judge.

This interlocutory appeal stems from the district court's order both granting and denying injunctive relief in response to First Amendment and equal protection challenges to Ohio's recently enacted charitable solicitation statutes. The suit, seeking declaratory and injunctive relief, was brought by three plaintiffs, Dayton Area Visually Impaired Persons, Inc. ("DAVIP"), the Wayne County Foster Parents Network, and the Ohio Telemarketing Association, against the defendants, principally Lee Fisher, then the Ohio Attorney General.

In their complaint, the plaintiffs alleged that selected portions of the Ohio Charitable Solicitation Act violate the First and Fourteenth Amendments' guarantees of free speech and non-establishment of religion. The district court agreed with the plaintiffs that four discrete portions of the statutes relating to charitable fundraising were unconstitutional and should not be enforced. In all other respects, the district court refused to issue a preliminary injunction that would effectively invalidate the statutes' provisions. Both the plaintiffs and the defendants appeal to this court from those portions of the district court order decided adversely to their positions. For the reasons detailed in this opinion, we affirm the judgment of the district court.

FACTUAL AND PROCEDURAL BACKGROUND
The Statute

In 1990, the Ohio General Assembly passed a comprehensive revision of the Professional solicitors are prohibited by O.R.C. Sec. 1716.07 from engaging in any solicitation in the state until they have registered with the Attorney General, submitted a required $200 fee, and obtained a surety bond in the amount of $25,000. Moreover, such solicitors are required to provide certain general and financial information on an application, as well as "any other information that the attorney general may require," and must submit "a full and fair description of the charitable program for which the solicitation campaign is being carried out." The same section of the statute also contains certain record-keeping requirements and prohibits service as a professional solicitor by anyone who has been convicted within the five previous years of any felony or of a prior violation of the Charitable Solicitations Act. Professional solicitors are further required by the provisions of O.R.C. Sec. 1716.07(F) to collect contributions solely in the name of the charitable organization on whose behalf the contribution was solicited and, within two days of receiving the donation, to deposit the entire amount of the contribution into a bank account under the sole control of the charitable organization.

                Ohio's charitable solicitation law, codified as Chapter 1716 of the Ohio Revised Code and as Sec. 2901.32 of the Code, in an effort to curtail fraudulent activities in the solicitation of charitable donations.  Pursuant to the act, all non-exempt charitable organizations in the state intending to solicit contributions must file with the attorney general a registration form containing, among other things, the names, addresses, and phone numbers of directors and officers, financial information from the prior fiscal year, and "[a]ny other information that the attorney general may, by rule, require."   O.R.C. Sec. 1716.02(B) (emphasis added).  Furthermore, those entities required by the act to register with the state must also provide annual financial reports on forms prescribed by the Attorney General, O.R.C. Sec. 1716.04, and must pay a registration fee between $50 and $200, according to a set scale, if the charitable organization received at least $5000 in contributions in the last fiscal or calendar year.  O.R.C. Sec. 1716.02(D)(1).  Exempt from the registration requirements, however, are various educational and charitable organizations meeting certain stated criteria and "any religious agencies and organizations."   O.R.C. Sec. 1716.03
                

Pursuant to O.R.C. Sec. 1716.08, the act imposes a duty on professional solicitors to include certain provisions in their contracts with charitable organizations. Specifically, such contracts must specify the percentage of gross revenue from a solicitation campaign that a charity will receive and the percentage of gross revenue that the solicitor will claim as compensation. Furthermore, at the point of solicitation, prior to requesting a contribution verbally, and at least contemporaneously with a written request for a contribution, a professional solicitor is required by the provisions of O.R.C. Sec. 1716.08(B) to reveal the solicitor's name, the fact that the solicitor is a professional solicitor, and the name and address of the charitable organization on whose behalf the solicitation is being conducted. If the person being solicited requests information regarding the percentage of gross revenue the charity will receive from the campaign, the solicitor must respond truthfully to that inquiry. This section of the statute also provides that a professional solicitor may not represent that tickets to an event will be donated to other individuals unless the solicitor has, prior to initiation of the solicitation campaign, received written commitments from the persons who will use the tickets and has filed those written commitments with the attorney general.

Whoever violates a provision of the statute, or any rule promulgated thereunder, is guilty of the misdemeanor of solicitation fraud. O.R.C. Sec. 1716.99(A). A second violation of the statute or an applicable rule subjects the violator to conviction of grand solicitation fraud, a felony of the third degree. Moreover, each solicitation in violation of the provisions of O.R.C. Sec. 1716 constitutes a separate offense of solicitation fraud. Finally, failure to abide by the requirements of the statute subjects a violator to civil penalties of up to $10,000 per violation, costs, and attorney's fees. O.R.C. Sec. 1716.16(B).

Also at issue in this matter are the provisions of O.R.C. Sec. 2901.32, a statute seeking

to regulate the improper solicitation of contributions for the purpose of distributing information relating to missing children, which appears to have been added to the 1990 legislation as an after-thought. Pursuant to the terms of that enactment, no organization may solicit such contributions unless it has been incorporated as a nonprofit corporation for at least two years, has been exempt from federal income taxes pursuant to Sec. 501(a) of the Internal Revenue Code for at least two years, and "does not use fund-raising counsel, professional solicitors, commercial co-venturers, or other charitable organizations" for soliciting funds from the public. O.R.C. Secs. 2901.32(A)(1)-(3).

The Parties

DAVIP is a non-profit corporation whose purpose it is to educate, benefit, and offer support and information to visually impaired individuals. Because the organization cannot afford an in-house staff to raise the funds necessary for the corporation to carry out its objectives, DAVIP has, in the past, relied upon professional solicitors to seek contributions for the work of the corporation.

The Foster Parents Network is an unincorporated association of individuals committed to providing training, advocacy, and support for foster parents and foster children. Like DAVIP, this group has, because of its limited resources and organization, decided to retain the services of a professional solicitor to assist it in its fund-raising activities.

The Ohio Telemarketing Association is a non-profit corporation whose members include professional solicitors who engage in fund-raising on behalf of charitable and non-profit organizations in Ohio. The Association brings this action on behalf of its members, who contend that their ability to represent charitable organizations is substantially diminished as a result of the statutory requirements enforced by the defendants.

The principal defendant is the Ohio Attorney General, who championed passage of the new charitable solicitation regulations in the Ohio legislature, after they had been drafted and promulgated by the National Association of Attorneys General as a "model act." Also named as defendants in the suit, but not participating significantly in this appeal, are two local officials vested with certain enforcement responsibilities by the charitable solicitation statute.

The District Court Proceedings

After the filing of the plaintiffs' complaint, the defendants moved the district court to dismiss this matter for failure to...

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