American Charities for Reasonable v. Shiffrin
| Decision Date | 31 March 1999 |
| Docket Number | No. 3:98CV1050JBA.,3:98CV1050JBA. |
| Citation | 46 F.Supp.2d 143 |
| Parties | AMERICAN CHARITIES FOR REASONABLE FUNDRAISING REGULATION, INC., et al. v. Mark SHIFFRIN, et al. |
| Court | U.S. District Court — District of Connecticut |
Richard C. Robinson, Sorokin, Sorokin, Gross, Hyde & Williams, Hartford, CT, Clifford Perlman, Edward N. Mazlish, Perlman & Perlman, New York, NY, for American Charities for Reasonable Fundraising Regulation Inc., Bill of Rights Foundation, Inc., plaintiffs.
David Edward Ormstedt, Attorney General's Office, Holly Jean Bray, Attorney General's Office, Hartford, CT, for Consumer Protection, Connecticut, Mark Shiffrin, Comm., State of Connecticut, Richard Blumenthal, Atty. General, defendants.
RULING ON MOTION TO DISMISS [DOC. # 20] AND MOTION FOR PRELIMINARY INJUNCTION [DOC. # 3]
Plaintiff American Charities is a membership organization whose members consist of numerous charities, nonprofit "umbrella" organizations, and other fundraising organizations. Plaintiff Bill of Rights Foundation ("BRF"), which joined this action as a co-plaintiff by way of the Amended Complaint, is a nonprofit organization that alleges it has been chilled from commencing any fundraising activities in Connecticut out of fear of inadvertent violation of the Connecticut Unfair Trade Practices Act (CUTPA), Conn. Gen.Stat. § 42-110a et seq., and the state sweepstakes law, Conn. Gen.Stat. § 42-295 et seq. The plaintiffs have moved for a pre-enforcement preliminary injunction to enjoin the State of Connecticut from using these two statutes to regulate charitable fundraising. The plaintiffs also move for a declaratory judgment under 28 U.S.C. § 2201 that these statutes are unconstitutionally vague on their face and are otherwise unconstitutionally "chilling" of plaintiffs' First Amendment rights.
Defendants Mark Shiffrin, Commissioner of the Connecticut Department of Consumer Protection, and Richard Blumenthal, Attorney General of the State of Connecticut, have moved to dismiss the case on the grounds that 1) plaintiff American Charities lacks standing under § 1983 to bring this action on behalf of its member organizations, 2) plaintiff BRF lacks standing and fails to state a cause of action for a violation of its First Amendment rights, 3) the Court should abstain under the Younger abstention doctrine, 4) the Court should abstain under the Rooker-Feldman doctrine, 5) the Court should abstain under the Pullman doctrine.
The Court concludes that plaintiff American Charities lacks standing to bring suit under 42 U.S.C. § 1983; plaintiff BRF has failed to state a cognizable allegation of First Amendment chill sufficient to confer standing; federal abstention is not appropriate; American Charities' amendment of the complaint to add a cause of action under the Declaratory Judgment Act was proper.
The plaintiffs bring this case pursuant to § 1983 and the Declaratory Judgment Act, arguing that in using CUTPA, Conn. Gen. Stat. § 42-110a et seq., and the "sweepstakes law," Conn. Gen.Stat. § 42-295 et seq., to regulate charitable solicitations, Connecticut has infringed the plaintiffs' First Amendment rights by directly impairing their ability to communicate with the public because of plaintiffs' fear of inadvertent statutory violations.
CUTPA provides that
(a) No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.
(b) It is the intent of the legislature that in construing subsection (a) of this section, the commissioner and the courts of this state shall be guided by interpretations given by the Federal Trade Commission and the federal courts to Section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1)), as from time to time amended.
(c) The commissioner may, in accordance with chapter 54, establish by regulation acts, practices or methods which shall be deemed to be unfair or deceptive in violation of subsection (a) of this section. Such regulations shall not be inconsistent with the rules, regulations and decisions of the federal trade commission and the federal courts in interpreting the provisions of the Federal Trade Commission Act.
(d) it is the intention of the legislature that this chapter be remedial and be so construed.
Conn Gen.Stat. § 42-110b. In Count One of their complaint, the plaintiffs assert that this statute is overly broad and vague, and thus improperly infringes their First Amendment rights by the resulting uncertainty as to what conduct is or is not statutorily prohibited.
The sweepstakes law and its implementing administrative regulations, Conn. Agencies Regs. § 42-110b-23, proscribe certain activities associated with sweepstakes promotions, and require certain disclosures in connection with such promotions, such as a statement of the odds of winning, and a statement of the dollar value of any prize being offered. Conn. Gen.Stat. § 42-295 et seq., the "sweepstakes law," provides that:
As used in sections 42-295 to 42-300, inclusive:
(1) "Advertise" means the use of the media, mail, computer, telephone or personal contact to offer to a specifically named person the opportunity to participate in a sweepstakes or a game of skill and such offer represents that such person has been awarded or will be awarded a prize;
(2) "Consumer product" means any article used primarily for personal, family or household purposes;
(3) "Person" means an individual, corporation, association, partnership or any other entity;
(4) "Prize" includes, but is not limited to, an award, gift certificate, travel coupon or anything else of value regardless of whether there are any conditions or restrictions attached to the receipt of the prize that is separate and distinct from the goods, services or property promoted by the sponsor;
(5) "Promoter" means a person conducting a sweepstakes;
(6) "Simulated check" means a document which looks similar to a check but is not currency or a check, draft, note, bond or other negotiable instrument;
(7) "Sponsor" means a person on whose behalf the sweepstakes is being conducted to promote or advertise goods or services of that person;
(8) "Sweepstakes" means a legal contest or game where a prize is distributed by lot or by chance and does not require a permit or license to operate in the state;
(9) "Verifiable retail value" means: (A) A price at which a substantial number of the prizes have sold at retail in the local market no earlier than one year prior to the advertisement of the sweepstakes by a person other than the promoter or sponsor; (B) if the prize is not available for retail sale in the local market, the retail value of an item substantially similar to the prize in quality, quantity, grade and utility; or (C) if the value cannot be established under subparagraph (A) or (B) of this subdivision, no more than three times the cost of the prize to the promoter or sponsor; and
(10) "800 number" means a prefixed telephone number for which no charge is assessed.
Sweepstakes. Restrictions on advertisements
No person may advertise a sweepstakes if there is any condition or restriction attached to the receipt of any prize a person wins in the sweepstakes, unless the condition or restriction to claim the prize is through any method which does not require any purchase, payment of a fee or any other consideration, such as (1) a telephone call in the participant's extended local calling area, (2) a telephone call to an 800 number, or (3) a visit to a retail establishment in the local marketing area which does not require the participant to attend a sales presentation. For purposes of this section, completing publicity or liability releases, eligibility affidavits or assuming liability for federal, state or local taxes, federal, state or local licenses or registration fees or other similar costs does not constitute a condition or restriction.
Required disclosures
(a) A person advertising a sweepstakes in this state shall disclose in immediate proximity to and in at least the same size and face type as the description of each prize in the advertisements: (1) The verifiable retail value of such prize; (2) if the element of chance is involved, the odds of winning such prize, expressed in arabic numerals as a fraction or ratio or, if the odds depend upon the number of entries received, a statement that the odds depend upon the number of entries received; and (3) whether the receipt of the prize is restricted or qualified in any way, including, but not limited to, travel dates or times, classes of travel or airlines, provided the person advertising the sweepstakes may include a statement substantially similar to the following: "major restrictions may apply to the use, availability or receipt of this prize" and include the specific rules or restrictions in a separate statement in the advertisement.
(b) A person advertising a sweep-stakes in this state shall clearly and conspicuously disclose the following information: (1) The name and address of the promoter and the sponsor of the sweepstakes; and (2) any conditions or restrictions on the eligibility to receive the prize, including, but not limited to, age, residence, employment or marital status.
Games of skill. Restriction on advertisement
No person shall advertise a game of skill where a prize with a fair market value of over two hundred dollars is awarded to a winner if participants are required to pay an entry or judging fee or are solicited to purchase a good or service designed to assist the participant in winning the game of skill provided the participant may be required to purchase a consumer product or service if the game of skill is designed primarily to promote such product or service.
Simulated checks. Restricted use
No person may distribute or otherwise transfer a simulated check in connection with a sweepstakes in this state unless the simulated check clearly and conspicuously...
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