National Awareness Foundation v. Abrams
| Decision Date | 28 March 1995 |
| Docket Number | D,No. 507,507 |
| Parties | NATIONAL AWARENESS FOUNDATION; Child Protection Program Foundation; Lee DeYoung; Shaunnah Hammonds; Jacquelyn L. Escoban; Anthony D. Grady; Rhonda Lee Morales, Plaintiffs-Appellants, v. Robert ABRAMS, Attorney General of the State of New York; Gail S. Shaffer, Secretary of State of the State of New York, Defendants-Appellees. ocket 94-7478. |
| Court | U.S. Court of Appeals — Second Circuit |
Errol Copilevitz, Kansas City, MO (John P. Jennings, Jr., Copilevitz, Bryant, Gray & Jennings, P.C., Kansas City, MO, of counsel), for plaintiffs-appellants.
David G. Samuels, New York City (G. Oliver Koppell, Atty. Gen., Pamela A. Mann, Asst. Atty. Gen., New York City, of counsel), for defendants-appellees.
Nicholas Gilman, Esq., Washington, DC (Gilman, Pangia & Balsamo, Washington, DC, William J. Olson, John S. Miles, William J. Olson, P.C., McLean, VA, Mark B. Weinberg, Weinberg & Jacobs, Rockville, MD, of counsel), for amicus curiae Free Speech Coalition, Inc.
Before: CARDAMONE, PIERCE, and MINER, Circuit Judges.
Appellants National Awareness Foundation, Child Protection Program Foundation, Lee DeYoung, Shaunnah Hammonds, Jacquelyn L. Escoban, Anthony D. Grady and Rhonda Lee Morales (collectively "plaintiffs" or "appellants") appeal from a judgment entered on April 18, 1994 in the United States District Court for the Southern District of New York (Gerard L. Goettel, Judge ), which dismissed their complaint against the New York Attorney General and the New York Secretary of State (collectively "defendants" or "appellees"). This action was brought under 42 U.S.C. Sec. 1983 and challenged the constitutionality of N.Y. Executive Law Sec. 173-b(1), which requires professional solicitors in the employ of professional fundraisers to register with the State and pay an $80 annual fee before conducting fundraising activities in New York. Plaintiffs' complaint sought, inter alia, a declaration that Sec. 173-b(1) is unconstitutional under the United States Constitution on the grounds that the statute violates (1) the First Amendment as an unconstitutional tax and prior restraint on protected expression; and (2) the Equal Protection Clause of the Fourteenth Amendment by requiring $80 fees from solicitors working for professional fundraisers, while exempting officers, volunteers and employees of charitable organizations or fundraising counsel. In an earlier ruling, National Awareness Found. v. Abrams, 812 F.Supp. 431 (S.D.N.Y.1993) ("National Awareness I "), the district court held that Sec. 173-b(1) would not violate the First Amendment if New York established a reasonable connection between the $80 fee and the administrative and enforcement costs associated with regulating professional solicitors each year. However, the court denied cross-motions for summary judgment on that claim because the factual record was insufficient to permit a ruling as a matter of law. Apropos the equal protection claim, the court granted summary judgment in favor of defendants, finding that Sec. 173-b(1) was sufficiently tailored to serve the governmental interest in regulating independent professional solicitors who were otherwise unaccountable. The parties agreed to a Joint Stipulation of Facts, and in a later decision, National Awareness Found. v. Abrams, 848 F.Supp. 511 (S.D.N.Y.1994) ("National Awareness II "), the district court
granted judgment on a stipulated record in favor of defendants, holding that Sec. 173-b(1) did not violate the First Amendment because the $80 fee was nominal and reasonably connected to the administrative and enforcement costs of the registration system. On appeal, appellants challenge the district court's rulings in National Awareness I and National Awareness II that Sec. 173-b(1) is not unconstitutional under the First Amendment and the Equal Protection Clause of the Fourteenth Amendment. We affirm.
The solicitation and collection of funds for charitable purposes in New York is governed by N.Y. Executive Law Sec. 171-a et seq. ("Article 7-A"). Article 7-A sets forth, inter alia, registration requirements for charitable organizations, professional fundraisers and professional solicitors seeking to engage in fundraising activities in New York. This action, brought under 42 U.S.C. Sec. 1983, challenges the constitutionality of Sec. 173-b(1) of Article 7-A, which provides in pertinent part:
No person shall act as a professional solicitor in the employ of a professional fund-raiser ... before he has registered with the secretary.... Application for registration ... shall be accompanied by a fee in the sum of eighty dollars. Such registration ... shall be for a period of one year....
A "professional solicitor" is defined as "[a]ny person who is employed or retained for compensation by a professional fund raiser to solicit contributions for charitable purposes...." Id. Sec. 171-a(5). Section 171-a(4) of Article 7-A exempts a "bona fide officer, volunteer or employee of a charitable organization or fund raising counsel" from the definition of "professional fundraiser," and, thus, from the registration requirements of Sec. 173-b(1).
Plaintiffs are five individual professional solicitors who have paid the $80 fee, and two charitable organizations that utilize the services of professional solicitors. Defendants are the New York Attorney General and the New York Secretary of State, both of whom are charged with the administration and enforcement of Article 7-A. On January 31, 1992, plaintiffs filed an amended complaint in the district court seeking a declaration that Sec. 173-b(1) is unconstitutional under the First and Fourteenth Amendments, and a permanent injunction enjoining its enforcement. They alleged that the $80 fee required by Sec. 173-b(1) violates (1) the First Amendment as an unconstitutional tax and prior restraint on protected expression; and (2) the Equal Protection Clause of the Fourteenth Amendment by requiring $80 fees from solicitors working for professional fundraisers, while exempting officers, volunteers and employees of charitable organizations or fundraising counsel from similar registration and payment of fees.
The parties filed cross-motions for summary judgment. On the First Amendment claim, plaintiffs argued that the $80 fee constituted an unconstitutional tax and prior restraint on protected expression because the fee was not nominal and the revenues collected were not used solely to defray the State's administrative costs associated with the statute. Defendants countered that plaintiffs focused solely on the administrative costs of the Office of Charities Registration ("OCR"), the department responsible for collecting the fee, while ignoring the costs to other state agencies of enforcing Sec. 173-b(1); they pointed out that the Charities Bureau of the Attorney General's office provided support services to OCR, as well as investigated and prosecuted violations of Sec. 173-b(1). In National Awareness I, the district court narrowed the question of the fee's acceptability under the First Amendment to two issues:
First, can enforcement costs be considered when judging a fee's impact on a regulated activity, or are only administrative costs--meaning the costs of processing and issuing fees--to be considered? And if yes, have defendants offered evidence sufficiently showing the link between the fee and their administrative and enforcement costs?
812 F.Supp. at 433-34. It found that the costs of enforcing Sec. 173-b(1) could be considered, and concluded that "if New York establishe[d] a reasonable connection between the $80 registration fee for professional solicitors and the particular administrative and enforcement On the equal protection claim, plaintiffs argued that the statute's distinction between professional solicitors working for professional fundraisers who were required to pay the fee, and officers, volunteers or employees of charitable organizations or fundraising counsel, who were excluded from the definition of "professional fundraiser" and therefore not subject to the fee, was an unconstitutional distinction that discriminated against them on the basis of the content of their speech or based upon the nature of their employment. Defendants responded that in-house solicitors were not similarly situated to professional solicitors necessitating identical treatment under the Equal Protection Clause. The court ruled in favor of defendants, noting that all professional solicitors not working in-house for a charitable organization were charged the $80 fee; that all charitable organizations were required to register with the State and to comply with even more comprehensive regulations; that content of speech played no role in the distinction; that plaintiffs offered no evidence indicating that smaller charities were unable to conduct their own fundraising or comply with the statutory requirements; and that even assuming a professional solicitor could not afford the fee, nothing stopped a charity from making its solicitations without employing professional fundraisers. Id. The court concluded that New York's regulation of all charitable fundraisers and organizations was devised to protect the public from unsupervised fundraising activities and that the system was "tailored to serve the particular government interests in regulating both charitable organizations and independent professional fundraisers." 1 Id.
costs each year associated with its regulation of these fundraisers, the fee would not represent an unconstitutional prior restraint on plaintiffs' 1st Amendment rights." Id. at 434. Since the factual record was insufficient to permit a ruling as a matter of law, the court denied both plaintiffs' and defendants' motions on this claim. Id. at 435
Thereafter, the parties agreed to a Joint Stipulation of Facts, stipulating to the following facts which remain...
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