People v. French
| Decision Date | 11 October 1988 |
| Docket Number | 87SA144,Nos. 87SA143,s. 87SA143 |
| Citation | 762 P.2d 1369 |
| Parties | The PEOPLE of the State of Colorado, Plaintiff-Appellant, v. Joseph Lawrence FRENCH and Thomas A. Atkins, Defendants-Appellees. The PEOPLE of the State of Colorado, Plaintiff-Appellant, v. Michael CALLAN and Robert Callan, Defendants-Appellees. |
| Court | Colorado Supreme Court |
Donald E. Mielke, Dist. Atty., Donna Skinner Reed, Deputy Dist. Atty., Golden, for plaintiff-appellant.
Springer and Steinberg, Jeffrey A. Springer, Harvey A. Steinberg, Keller, Dunievitz, Johnson & Wahlberg, Alex Stephen Keller, Denver, for defendants-appellees.
The People appeal two orders of dismissal of the Jefferson County District Court, holding that section 18-5-115(1)(a), 8B C.R.S. (1986), of the charitable fraud statute, is unconstitutionally overbroad. We affirm.
On December 19, 1986, indictments were returned in the Jefferson County District Court against Joseph L. French and Thomas A. Atkins, corporate officers of Bristlecone Telemarketing, Inc., charging them with charitable fraud and conspiracy to commit charitable fraud in violation of section 18-5-115, 8B C.R.S. (1986). They moved to dismiss the charges on the ground that section 18-5-115(1)(a) was unconstitutionally overbroad. The district court, relying on Schaumburg v. Citizens For a Better Environment, 444 U.S. 620, 100 S.Ct. 826, 63 L.Ed.2d 73 (1980), Secretary of State v. Joseph H. Munson Co., 467 U.S. 947, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984), and May v. People, 636 P.2d 672 (Colo.1981), concluded that speech pertaining to charitable solicitation is entitled to the highest degree of first amendment protection, and that the statute was not narrowly tailored to achieve the compelling state interest of preventing fraud. As a result, the district court held that section 18-5-115(1)(a) was unconstitutionally overbroad, and dismissed the charges. The People appealed the order of dismissal directly to this court pursuant to section 16-12-102, 8A C.R.S. (1986).
In a separate proceeding, Michael Callan and Robert Callan, corporate officers of Callan Publishing, Inc., were indicted by the Jefferson County grand jury for charitable fraud and conspiracy to commit charitable fraud in violation of section 18-5-115(1)(a). They also moved to dismiss the charges based on a claim that the statute was unconstitutional. The district court dismissed the charges. The People appealed directly to this court, and moved to consolidate the two cases. This court granted the motion, and we now consider these cases together.
Section 18-5-115 defines the crime of charitable fraud. In 1978, section 18-5-115(1)(a) provided:
(1) A person commits charitable fraud if such person commits any of the following acts:
(a) Solicits or receives contributions for a purpose or use which, by affirmative representations or through lack of adequate disclosure, leads the person or persons, to whom the solicitation is made or from whom the contribution is received, reasonably to believe that such contributions will be used for the primary benefit of a charitable organization while not intending that such contributions will be so used. Evidence that contributions are used other than primarily for the benefit of a charitable organization shall be admissible to prove that such contributions were solicited or received with the intent that the use would be other than primarily for the benefit of a charitable organization.
8 C.R.S. (1978) (emphasis added). In People v. Moyer, 670 P.2d 785, 789 (Colo.1983), we held that the phrases "primary benefit" and "primarily for the benefit" in section 18-5-115(1)(a) rendered the statute unconstitutionally vague because persons of common intelligence must guess at its meaning. We stated that it was "unclear whether the General Assembly intended 'primary benefit' to mean fifty percent of the proceeds, more than fifty percent of the proceeds, or a share larger than that received by any other party regardless of whether it amounted to fifty percent or more of the proceeds." Id. Also unclear was "whether the amount which constitutes the 'primary benefit' (whatever that may be) is to be calculated on the basis of the gross proceeds or net proceeds of the charitable solicitation." Id. Because we concluded those phrases rendered the statute void for vagueness, we did not address whether the statute was also unconstitutionally overbroad. Id. at 790.
In response to Moyer, the General Assembly amended section 18-5-115 by defining the terms "primary benefit," "adjusted gross proceeds," and "administrative costs." Ch. 134, § 1, § 18-5-115, 1984 Colo.Sess. Laws 546, 546-47. Section 18-5-115 in all other respects remained unchanged. As amended, section 18-5-115(1)(a) provided in pertinent part:
For the purposes of this subsection (1):
(I) "Primary benefit" means more than fifty percent of the adjusted gross proceeds.
(II) "Adjusted gross proceeds" means the gross proceeds less the actual fair market value of the direct cost incurred to provide goods, services, entertainment, including rents paid for facilities used to provide such entertainment, products, or commodities which are received by the donor in exchange for his payment. In arriving at adjusted gross proceeds, administrative costs shall not be subtracted from gross proceeds.
(III) "Administrative costs" means:
(A) Salaries or commissions and other compensation paid directly or indirectly to solicitors; and
(B) Administrative expenses, including, but not limited to, salaries, attorney fees, rents, excluding rents for facilities used for entertainment as provided for in subparagraph (II) of this paragraph (a), telephone charges, advertising expenses, or other related expenses incurred as administrative or overhead items.
8B C.R.S. (1986). As a result, a person who solicited contributions for a purpose which led the person solicited reasonably to believe that more than 50% of the adjusted gross proceeds would go to the charitable organization while not intending that such contributions would be so used, committed charitable fraud under section 18-5-115(1)(a). In addition, the statute by implication compelled a fundraiser who charged a fee in excess of 50% of the adjusted gross proceeds to disclose to the person solicited that the charity received less than half of the adjusted gross proceeds. The district court found this version of the statute unconstitutionally overbroad. 1
Before deciding whether a statute is unconstitutionally overbroad, we must first determine whether the parties challenging the statute have standing to challenge its validity. People ex rel. Tooley v. Seven Thirty-Five East Colfax, 697 P.2d 348, 355 (Colo.1985). If these parties do have standing, they bear the burden of proving that the statute, which is entitled to a presumption of constitutionality, see People v. Moore, 674 P.2d 354, 357 (Colo.1984), is unconstitutional beyond a reasonable doubt, see People v. McBurney, 750 P.2d 916, 917 (Colo.1988).
Standing requires a party to show injury in fact to a legally protected interest. Marco Lounge, Inc. v. City of Federal Heights, 625 P.2d 982, 984 (Colo.1981). The general rule is that a party may not base standing on an actual injury to the legally protected interest of third parties. Warth v. Seldin, 422 U.S. 490, 499-501, 95 S.Ct. 2197, 2205-06, 45 L.Ed.2d 343 (1975); Parrack v. Town of Estes Park, 628 P.2d 1014, 1016 (Colo.1981). In the context of first amendment overbreadth challenges, however, the rules of standing are relaxed so as to permit litigants to challenge a statute "not because their own rights of free expression are violated, but because of a judicial prediction or assumption that the statute's very existence may cause others not before the court to refrain from constitutionally protected speech or expression." Secretary of State v. Joseph H. Munson Co., 467 U.S. 947, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984) (citing Broadrick v. Oklahoma, 413 U.S. 601, 612, 93 S.Ct. 2908, 2916, 37 L.Ed.2d 830 (1973) (footnote omitted)); State Bd. for Community Colleges v. Olson, 687 P.2d 429, 435 (Colo.1984). See generally J. Nowak, R. Rotunda & J. Young, Constitutional Law 87-91 (2d ed. 1984). In this case, the appellees argue that the statute is overbroad because it infringes on charitable organizations' freedom of speech. This averment is sufficient to demonstrate injury to a legally protected interest of charitable organizations. We therefore conclude that the appellees have third party standing to challenge the constitutionality of section 18-5-115.
Resolution of this dispute turns on three United States Supreme Court cases: Schaumburg v. Citizens For a Better Environment, 444 U.S. 620, 100 S.Ct. 826, 63 L.Ed.2d 73 (1980), Secretary of State v. Joseph H. Munson Co., 467 U.S. 947, 104 S.Ct. 2839, 81 L.Ed.2d 86 (1984), and Riley v. National Federation of the Blind, 487 U.S. 781, 108 S.Ct. 2667, 101 L.Ed.2d 669 (1988).
In Schaumburg, the Court struck down an Illinois municipal ordinance prohibiting charities using less than 75% of their receipts for charitable purposes from soliciting contributions door-to-door or on public streets. The Court held that the ordinance infringed on the charitable organization's first and fourteenth amendment rights by being unconstitutionally overbroad. The Court rejected the claim that charitable solicitation entails simply commercial speech, noting that, in the context of seeking support for particular causes or for particular views on economic, political, or social issues, fundraisers "are necessarily more than solicitors for money." 444 U.S. at 632, 100 S.Ct. at 834. Because charitable solicitation "is characteristically intertwined with informative and perhaps persuasive speech," the Court measured the ordinance under the strict scrutiny standard. Id. It held that the ordinance was deficient in two respects. First, it was not substantially related to the...
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