Church of Scientology Flag Service Org., Inc. v. City of Clearwater

• Decision Date: 30 September 1993
• Docket Number: No. 91-3988,91-3988
• Citation: 2 F.3d 1514
• Parties: CHURCH OF SCIENTOLOGY FLAG SERVICE ORG., INC., Plaintiff-Appellant, v. CITY OF CLEARWATER, Milton A. Galbraith, Jr., City Attorney of the City of Clearwater, Cynthia E. Goudeau, City Clerk of the City of Clearwater, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1514

2 F.3d 1514

62 USLW 2218

CHURCH OF SCIENTOLOGY FLAG SERVICE ORG., INC., Plaintiff-Appellant, v. CITY OF CLEARWATER, Milton A. Galbraith, Jr., City Attorney

of the City of Clearwater, Cynthia E. Goudeau,

City Clerk of the City of Clearwater,

Defendants-Appellees.

No. 91-3988.

United States Court of Appeals,

Eleventh Circuit.

Sept. 30, 1993.

Paul B. Johnson, Johnson & Johnson, Tampa, FL, Eric M. Lieberman, Edward Copeland, Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C., New York City, for plaintiff-appellant.

Alan S. Zimmett, Sargent, Repka & Covert, M.A. Galbraith, Jr., City Atty., Clearwater, FL, Lawrence R. Velvel, Nasha, NH, for defendants-appellees.

Appeal from the United States District Court for the Middle District of Florida.

Before ANDERSON and DUBINA, Circuit Judges, and CLARK, Senior Circuit Judge.

DUBINA, Circuit Judge:

This appeal involves a challenge to an ordinance regulating the solicitation of funds by charitable organizations in the City of Clearwater, Florida ("Clearwater"). Plaintiff Church of Scientology Flag Service Organization, Inc. ("Scientology") claims that the ordinance deprives it of rights and liberties guaranteed by the First and Fourteenth Amendments of the Constitution of the United States in violation of 42 U.S.C. Sec. 1983. Scientology appeals the district court's order granting summary judgment to the defendants (collectively "the City") ¹ and denying summary judgment to Scientology. Church of Scientology Flag Servs. Org. v. City of Clearwater, 756 F.Supp. 1498 (M.D.Fla.1991). We affirm in part, vacate in part, reverse in part and remand.

I. BACKGROUND

Scientology, a worldwide organization, maintains one of the largest centers of its activities in Clearwater. The history, organization, doctrine and practices of Scientology have been thoroughly recounted in numerous judicial decisions. See, e.g., Hernandez v. Commissioner, 490 U.S. 680, 684-86, 109 S.Ct. 2136, 2141, 104 L.Ed.2d 766 (1989); Church of Scientology v. Commissioner, 823 F.2d 1310, 1313-14 (9th Cir.1987), cert. denied, 486 U.S. 1015, 108 S.Ct. 1752, 100 L.Ed.2d 214 (1988); Founding Church of Scientology v. United States, 409 F.2d 1146, 1151-52 (D.C.Cir.), cert. denied, 396 U.S. 963, 90 S.Ct. 434, 24 L.Ed.2d 427 (1969), and on remand, United States v. Article or Device Hubbard Electrometer, 333 F.Supp. 357 (D.D.C.1971); Christofferson v. Church of Scientology, 57 Or.App. 203, 644 P.2d 577, 580-81, pet'n denied, 293 Or. 456, 650 P.2d 928 (1982), and cert. denied, 459 U.S. 1206, 103 S.Ct. 1196, 75 L.Ed.2d 439 (1983).

We need not reiterate this background because the district court found that no genuine factual issues existed to dispute Scientology's claim of being a bona fide religion. See 756 F.Supp. at 1502-04. The district court granted partial summary judgment to Scientology on that issue. Id. at 1532; accord Founding Church of Scientology, 409 F.2d at 1160; Christofferson, 644 P.2d at 600-01. As the City has neither appealed from that order nor argued that Scientology is not entitled to protection under the religion clauses of the First Amendment, we must assume that the district court was correct. In addition, without deciding the question ourselves, we note that research has not uncovered any holdings that Scientology is not a religion for First Amendment purposes. But cf. Church of Scientology v. Commissioner, 823 F.2d at 1316-18 (upholding Tax Court determination that Church of Scientology was not entitled to religious tax exemption under 26 U.S.C. Sec. 501(c)(3) for certain years because its revenues inured to the benefit of individuals and non-religious entities).

II. PROCEDURAL HISTORY

In 1983 the City enacted Ordinance No. 3091-83 (the "1983 Ordinance"). The 1983 Ordinance imposed substantial recordkeeping and disclosure requirements for all charities and religious organizations soliciting funds in Clearwater. Scientology filed an action in the district court seeking an injunction against its enforcement. That action was consolidated with a similar case brought by Americans United for Separation of Church and State, Inc. ("Americans United"). Before the district court could rule on the law's validity, however, the City enacted Ordinance No. 3479-84 (the "1984 Ordinance"), repealing and modifying the 1983 Ordinance in part. Clearwater, Fla., Code Ordinances, tit. VIII, Sec. 100 (1984) (hereinafter "Code Sec. ---"). Both plaintiffs filed new lawsuits to challenge the revised ordinance and its 1983 predecessor.

In the second Scientology suit, the district court ruled the 1983 Ordinance unconstitutional on its face and permanently enjoined the City from enforcing it. The court further ruled the 1984 version facially valid, without reaching the question of its validity as applied to Scientology and Americans United. The City appealed the former ruling and Scientology and Americans United were permitted to file interlocutory cross-appeals of the latter. We vacated the former as moot, reasoning that challenges to the repealed 1983 Ordinance posed no live controversy suitable for judicial resolution. Church of Scientology Flag Serv. Org. v. City of Clearwater, 777 F.2d 598, 604-06 (11th Cir.1985), cert. denied, 476 U.S. 1116, 106 S.Ct. 1973, 90 L.Ed.2d 656 (1986) (hereinafter Scientology-Clearwater I ), overruled, Northeastern Fla. Chapter of Associated Gen. Contractors of Am. v. City of Jacksonville, --- U.S. ----, ----, 113 S.Ct. 2297, 2301, 124 L.Ed.2d 586 (1993). We dismissed the interlocutory cross-appeals as improvidently granted, finding nothing in the record to support (or controvert) a conclusion that the plaintiffs possessed a sufficient interest in the outcome of the litigation to confer standing. Scientology-Clearwater I, 777 F.2d at 607. But see Pennell v. City of San Jose, 485 U.S. 1, 7-8, 108 S.Ct. 849, 855, 99 L.Ed.2d 1 (1988) (holding that allegations of complaint should be accepted as true and construed in favor of standing when there is no factual record). We also affirmed the district court's denial of preliminary injunctive relief. 777 F.2d at 608.

Scientology continued to prosecute its second action challenging the 1984 Ordinance. Scientology also petitioned for leave to amend the complaint in its first pending action to challenge the new 1984 law. The district court apparently did not rule on that petition but rather proceeded to address the merits in the second Scientology case. Upon granting summary judgment to the City in that second case, from which this appeal followed, the district court dismissed with prejudice the earlier action for want of prosecution. The court also denied Scientology's request for attorney fees in the first action. In Church of Scientology Flag Service Organization v. City of Clearwater, 2 F.3d 1514 (11th Cir.1993) (hereinafter Scientology-Clearwater II ), this panel vacated the district court's denial of attorney fees in the first filed action. ²

Having found that Scientology had standing to sue in the second action, the district court further found the 1984 Ordinance constitutional, both on its face and as applied to Scientology, and therefore granted the City's motion for summary judgment and denied Scientology's cross-motion for summary judgment. Scientology then perfected this appeal.

III. THE ORDINANCES

The 1984 Ordinance, like its 1983 predecessor, is designed to regulate the solicitation of contributions within Clearwater by "charitable organizations," a term that includes religious groups. Code Sec. 100.01(1). The regulated "solicitation of funds" is defined to mean:

any request, within the City of Clearwater, for the donation of money, property, or anything of value ...; or the selling or offering for sale of any property, real or personal ..., whether of value or not, including but not limited to, goods, books, pamphlets, tickets, publications or subscriptions to publications, upon the representation, express or implied, that the proceeds of such sale will be used for a charitable purpose.

Code Sec. 100.01(2) (emphasis added). "Expressly excluded from the meaning of 'solicit funds' ... is any offer of membership in any charitable organization." Id. As Scientology points out, virtually any sale of religious literature carries the implied representation that the proceeds will be used to further the seller's purposes or, at least, to "benefit" the organization. (Appellant's Br. at 34-35). In essence, therefore, all speech that is not delivered gratis will subject a charitable organization to regulation. An organization is exempt, however, if it is all-volunteer and/or small in scale. Code Sec. 100.02(1). A similar exemption applies to all-volunteer scholarship organizations. Code Sec. 100.02(2).

The 1984 Ordinance is a licensing statute that requires charitable organizations to disclose certain information about themselves, their officers and the methods and purposes of the solicitation. A non-exempt organization that solicits without obtaining an annual registration certificate from the city clerk commits a criminal offense. Code Sec. 100.05(1)(i). To obtain that certificate, an organization must file a registration form with the clerk. The form is a public document, Code Sec. 100.03(7), submitted under oath, which must disclose among other things:

(a) The name of the person registering and desiring to solicit funds for charitable purposes.

(b) Whether the person registering is a natural person, partnership, corporation, or association and, ...

(c) A reference to all determinations of tax-exempt status under the Internal Revenue Code of the United States and law of any state, and the laws of any county or municipality.

(d) A brief description of the charitable purpose for which the funds are to be solicited, and a brief explanation of the intended use of the funds toward that purpose.

(e) The names, mailing address[es] and telephone number[s] of all individuals authorized to disburse the proceeds of the...