Edenfield v. Fane

• Decision Date: 26 April 1993
• Docket Number: No. 91-1594,91-1594
• Parties: Fred H. EDENFIELD, et al., Petitioners v. Scott FANE
• Court: U.S. Supreme Court

507 U.S. 761

113 S.Ct. 1792

123 L.Ed.2d 543

Fred H. EDENFIELD, et al., Petitioners

v Scott FANE.

No. 91-1594.

Argued Dec. 7, 1992.

Decided April 26, 1993.

Syllabus ^*

Respondent Fane, a Certified Public Accountant (CPA) licensed to practice by the Florida Board of Accountancy, sued the Board for declaratory and injunctive relief on the ground that its rule prohibiting CPAs from engaging in "direct, in-person, uninvited solicitation" to obtain new clients violated the First and Fourteenth Amendments. He alleged that but for the prohibition he would seek clients through personal solicitation, as he had done while practicing in New Jersey, where such solicitation is permitted. The Federal District Court enjoined the rule's enforcement, and the Court of Appeals affirmed.

Held: As applied to CPA solicitation in the business context, Florida's prohibition is inconsistent with the free speech guarantees of the First and Fourteenth Amendments. Pp. ____.

(a) The type of personal solicitation prohibited here is clearly commercial expression to which First Amendment protections apply. E.g., Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 762, 96 S.Ct. 1817, 1825, 48 L.Ed.2d 346. Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 98 S.Ct. 1912, 56 L.Ed.2d 444, which upheld a ban on in-person solicitation by lawyers, did not hold that all personal solicitation is without First Amendment protection. In denying CPAs and their clients the considerable advantages of solicitation in the commercial context, Florida's law threatens societal interests in broad access to complete and accurate commercial information that the First Amendment is designed to safeguard. However, commercial speech is "linked inextricably" with the commercial arrangement that it proposes, so that the State's interest in regulating the underlying transaction may give it a concomitant interest in the expression itself. Thus, Florida's rule need only be tailored in a reasonable manner to serve a substantial state interest in order to survive First Amendment scrutiny. See, e.g., Central Hudson Gas & Electric Corp. v. Public Service Comm'n of New York, 447 U.S. 557, 564, 100 S.Ct. 2343, 2350, 65 L.Ed.2d 341. Pp. ____.

(b) Even under the intermediate Central Hudson standard of review, Florida's ban cannot be sustained as applied to Fane's proposed speech. The Board's asserted interests—protecting consumers from fraud or overreaching by CPAs and maintaining CPA independence and ensuring against conflicts of interest—are substantial. However, the Board has failed to demonstrate that the ban advances those interests in any direct and material way. A governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree. Here, the Board's suppositions about the dangers of personal solicitation by CPAs in the business context are not validated by studies, anecdotal evidence, or Fane's own conduct; and its claims are contradicted by a report of the American Institute of Certified Public Accountants and other literature. Nor can the ban be justified as a reasonable time, place, or manner restriction on speech. Even assuming that a flat ban on commercial solicitation could be regarded as such a restriction, the ban still must serve a substantial state interest in a direct and material way. Pp. ____.

(c) The ban cannot be justified as a prophylactic rule because the circumstances of CPA solicitation in the business context are not "inherently conducive to overreaching and other forms of misconduct." Ohralik, supra, at 464, 98 S.Ct., at 1922-1923. Unlike a lawyer, who is trained in the art of persuasion, a CPA is trained in a way that emphasizes independence and objectivity rather than advocacy. Moreover, while a lawyer may be soliciting an unsophisticated, injured, or distressed lay person, a CPA's typical prospective client is a sophisticated and experienced business executive who has an existing professional relation with a CPA, who selects the time and place for their meeting, and for whom there is no expectation or pressure to retain the CPA on the spot. In addition, Ohralik in no way relieves a State of the obligation to demonstrate that its restrictions on speech address a serious problem and contribute in a material way to solving that problem. Pp. ____.

945 F.2d 1514 (CA11 1991), affirmed.

KENNEDY, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, BLACKMUN, STEVENS, SCALIA, SOUTER, and THOMAS, JJ., joined. BLACKMUN, J., filed a concurring opinion. O'CONNOR, J., filed a dissenting opinion.

Parker D. Thomson, Miami, FL, for petitioners.

David C. Vladeck, Washington, DC, for respondent.

Justice KENNEDY delivered the opinion of the Court.

In previous cases we have considered the constitutionality of state laws prohibiting lawyers from engaging in direct, personal solicitation of prospective clients. See Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978); In re Primus, 436 U.S. 412, 98 S.Ct. 1893, 56 L.Ed.2d 417 (1978). In the case now before us, we consider a solicitation ban applicable to Certified Public Accountants (CPAs) enacted by the State of Florida. We hold that, as applied to CPA solicitation in the business context, Florida's prohibition is inconsistent with the free speech guarantees of the First and Fourteenth Amendments.

I

Respondent Scott Fane is a CPA licensed to practice in the State of Florida by the Florida Board of Accountancy. Before moving to Florida in 1985, Fane had his own accounting CPA practice in New Jersey, specializing in providing tax advice to small and medium-sized businesses. He often obtained business clients by making unsolicited telephone calls to their executives and arranging meetings to explain his services and expertise. This direct, personal, uninvited solicitation was permitted under New Jersey law.

When he moved to Florida, Fane wished to build a practice similar to his solo practice in New Jersey but was unable to do so because the Board of Accountancy had a comprehensive rule prohibiting CPAs from engaging in the direct, personal solicitation he had found most effective in the past. The Board's rules provide that a CPA "shall not by any direct, in-person, uninvited solicitation solicit an engagement to perform public accounting services . . . where the engagement would be for a person or entity not already a client of [the CPA], unless such person or entity has invited such a communication." Fla.Admin.Code § 21A-24.002(2)(c) (1992). "[D]irect, in-person, uninvited solicitation" means "any communication which directly or implicitly requests an immediate oral response from the recipient," which, under the Board's rules, includes all "[u]ninvited in-person visits or conversations or telephone calls to a specific potential client." § 21A-24.002(3).

The rule, according to Fane's uncontradicted submissions, presented a serious obstacle, because most businesses are willing to rely for advice on the accountants or CPAs already serving them. In Fane's experience, persuading a business to sever its existing accounting relations or alter them to include a new CPA on particular assignments requires the new CPA to contact the business and explain the advantages of a change. This entails a detailed discussion of the client's needs and the CPA's expertise, services and fees. See Affidavit of Scott Fane &Par 7, 11 (App. 11, 15).

Fane sued the Board in the United States District Court for the Northern District of Florida, seeking declaratory and injunctive relief on the ground that the Board's anti-solicitation rule violated the First and Fourteenth Amendments. Fane alleged that but for the prohibition he would seek clients through personal solicitation and would offer fees below prevailing rates. Complaint &Par 9-11 (App. 3-4).

In response to Fane's submissions, the Board relied on the affidavit of Louis Dooner, one of its former Chairmen. Dooner concluded that the solicitation ban was necessary to preserve the independence of CPAs performing the attest function, which involves the rendering of opinions on a firm's financial statements. His premise was that a CPA who solicits clients "is obviously in need of business and may be willing to bend the rules." Affidavit of Louis Dooner, App. 23. In Dooner's view, "[i]f [a CPA] has solicited the client he will be beholden to him." Id., at 19. Dooner also suggested that the ban was needed to prevent "overreaching and vexatious conduct by the CPA." Id., at 23.

The District Court gave summary judgment to Fane and enjoined enforcement of the rule "as it is applied to CPAs who seek clients through in-person, direct, uninvited solicitation in the business context." Civ.Case No. 88-40264-MNP (ND Fla., Sept. 13, 1990) (App. 88). A divided panel of the Court of Appeals for the Eleventh Circuit affirmed. 945 F.2d 1514 (1991).

We granted certiorari, 504 U.S. ----, 112 S.Ct. 2272, 119 L.Ed.2d 199 (1992), and now affirm.

II

In soliciting potential clients, Fane seeks to communicate no more than truthful, non-deceptive information proposing a lawful commercial transaction. We need not parse Fane's proposed communications to see if some parts are entitled to greater protection than the solicitation itself. This case comes to us testing the solicitation, nothing more. That is what the State prohibits and Fane proposes.

Whatever ambiguities may exist at the margins of the category of commercial speech, see, e.g., Pittsburgh Press Co. v. Pittsburgh Comm'n on Human Relations, 413 U.S. 376, 384-388, 93 S.Ct. 2553, 2558-2560, 37 L.Ed.2d 669 (1973), it is clear that this type of personal solicitation is commercial expression to which the protections of the First Amendment apply. E.g., Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S....