Indiana Voluntary Firemen's Ass'n, Inc. v. Pearson
| Decision Date | 29 November 1988 |
| Docket Number | No. IP 87-1052-C.,IP 87-1052-C. |
| Citation | 700 F. Supp. 421 |
| Parties | INDIANA VOLUNTARY FIREMEN'S ASSOCIATION, INC., et al., Plaintiffs, v. Linley E. PEARSON, Attorney General of the State of Indiana, Defendant. |
| Court | U.S. District Court — Southern District of Indiana |
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Bryce H. Bennett, Jr., G. Frederick Glass, Riley, Bennett & Egloff, Indianapolis, Ind., Errol Copilevitz, John P. Jennings, Jr., Copilevitz, Bryant, Gray & Jennings, Kansas City, Mo., for plaintiffs.
David M. Sommers and Christine M. Page, Deputy Attys. Gen., Indianapolis, Ind., for defendant.
This case presents a fundamental question concerning the scope of protection afforded by the first amendment's right of free speech. More specifically, this court is asked to determine whether an Indiana statute requiring professional fundraising solicitors to divulge to potential donors certain details about the financial arrangements between themselves as professional solicitors and their represented charities is unconstitutionally overbroad under the first amendment to the United States Constitution.
On April 16, 1987, the 105th General Assembly of the State of Indiana enacted Senate Enrolled Act Number 484, an act designed to amend certain provisions of the Professional Fundraiser Consultant and Solicitor Registration Statute the Statute, Indiana Code Ann. §§ 23-7-8-1 to -8 (Burns 1984). The amendments effected by the Act took force on September 1, 1987. See Ind.Code § 1-1-3-3. As amended, the Statute imposes a number of restrictions on the activities of professional fundraiser consultants and professional solicitors hereinafter referred to collectively as "professional solicitors" whenever those professionals desire to work on behalf of charitable organizations. For instance, under the statute professional solicitors are required to register annually with the consumer protection division of the office of the state attorney general. Ind. Code § 23-7-8-2. As part of that registration, the Statute requires that professional solicitors reveal such details as the "names and addresses of all officers, employees, and agents who are actively involved in fundraising" and "the name or names under which they intend to solicit contributions." Ind.Code § 23-7-8-2(a)(1) to -(5). The amended Statute also demands that professional solicitors enter into only written contracts with charitable organizations and that copies of those contracts be filed with the consumer protection division along with "the projected dates when soliciting will begin and end" and "the location and telephone number from where solicitation will be conducted." Ind.Code § 23-7-8-2(d) & (e).
Two particular sections of the Statute, however, are directly relevant to the present litigation. Indiana Code section 23-7-8-1 sets out the definitions of a number of terms used throughout the Statute. Specifically, "charitable organization" is defined as "any organization described in section 501 of the Federal Internal Revenue Code," and "professional solicitor" is defined as expressly excluding from its scope "a charitable organization or an officer, employee, member, or volunteer of a charitable organization." Ind.Code § 23-7-8-1. This same section also sets up a two-tiered definition for the statutory term "solicit." One form of solicitation is described as the sale of "any advertisement, advertising space, membership, or tangible item ... when or where in connection with such a sale ... any statement is made that the whole or any part of the proceeds from the sale will be used for any charitable purpose or benefit any charitable organization." Ind.Code § 23-7-8-1(2) hereinafter a "subdivision (2) solicitation". The second form of solicitation is defined as any other type of request, made "directly or indirectly, for financial assistance in any form on the representation that the financial assistance will be used for a charitable purpose." Ind.Code § 23-7-8-1(1) hereinafter a "subdivision (1) soliciation".
A second section of the Statute, Indiana Code section 23-7-8-6, in turn, sets out two different categories of disclosure requirements, one for each type of solicitation. If a professional solicitor conducts a subdivision (2) solicitation, he or she must provide each potential donor with a "written confirmation" disclosing three different items: the name of the charitable organization that the solicitor represents; the fact the solicitor is a compensated professional; and "the percentage of charitable contributions that are to be received by the charitable organization or the fee or compensation received by the consultant and the charitable organization under the contract with the charitable organization." Ind.Code § 23-7-8-6(c).
For subdivision (1) solicitations that are made orally, section 23-7-8-6 requires that these same three disclosures be made twice: "at the time of the solicitation and before the donor agrees to make a contribution" and a second time "within ten (10) days after that person has been solicited, or before the contribution is received by the solicitor." Ind.Code § 23-7-8-6(a) & (b). If the original solicitation is made in person, then both sets of disclosures must be made in writing. Ind.Code § 23-7-8-6(b). If the original solicitation is made by telephone, the first set of disclosures may be made orally but the second set must be made in writing. Id. If the original subdivision (1) solicitation is itself in writing, the three disclosures need be made only once, in writing, at the time of the solicitation. Id.
Indiana Code section 23-7-8-8 establishes three different remedies the state may seek in the event of a violation of the Statute. First, the attorney general may bring an action to enjoin a violation of the Statute — and to receive such injunctive relief, the state "is not required to establish irreparable harm but only a violation of a statute or that the requested order promotes the public interest." Ind.Code § 23-7-8-8(c). Second, for each violation of the Statute, the state may be awarded civil penalties of up to five hundred dollars ($500). Id. Third, and most significantly, any person who "knowingly or intentionally" fails to make the disclosures prescribed in section 23-7-8-6 thereby commits a Class A infraction, subjecting that person to a possible adverse judgment of up to ten thousand dollars ($10,000), plus costs. Ind. Code §§ 23-7-8-8(d); XX-X-XX-X(a) & (e).
On October 1, 1987, the plaintiffs1 filed the present cause of action against the defendant, Linley E. Pearson (in his official capacity as Attorney General of the State of Indiana), requesting preliminary and permanent injunctions against enforcement of Indiana Code sections 23-7-8-1 and 23- 7-8-62 and seeking a declaration that those same sections of the Indiana Code "are unconstitutional, in whole or in part, and violative of the First, Fifth and Fourteenth Amendments to the Constitution of the United States." Complaint at 13-14. The request for a preliminary injunction was withdrawn by the plaintiffs on October 23, 1987. See Status Conference Report and Order at 2.
This matter is presently before the court on the defendant's motion to dismiss and on the parties' cross-motions for summary judgment. The defendant urges that the plaintiffs' complaint should be dismissed for at least four different reasons: (1) this case is not yet ripe for adjudication; (2) each of the plaintiffs lacks adequate standing to assert the claims set out in the complaint; (3) the defendant is forfended by eleventh amendment immunity; and (4) t...
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