Supreme Court of The United States
American Target Advertising, Inc.
Francine A. Giani, Division Director,
Utah Division of Consumer Protection,
On Petition for a Writ of Certiorari
To the U.S. Court of Appeals for the Tenth Circuit
BRIEF OF FREE SPEECH DEFENSE
AND EDUCATION FUND, INC., ET AL.,
AS AMICI CURIAE
IN SUPPORT OF PETITIONER
TABLE OF CONTENTS
TABLE OF AUTHORITIES
INTEREST OF AMICI CURIAE
SUMMARY OF ARGUMENT
I. CERTIORARI SHOULD BE GRANTED TO RESETTLE THE LAW GOVERNING IMPORTANT CONSTITUTIONAL PROTECTIONS
II. THE DECISION OF THE COURT OF APPEALS THAT THE UTAH ACT OPERATES AS A PERMISSIBLE PRIOR RESTRAINT CONFLICTS WITH THE FREEDOM OF THE PRESS AS AUTHORITATIVELY APPLIED BY THIS COURT
A. The Court Below Applied Inapplicable Precedents
B. Nothing in this Record Justifies the Imposition of a Prior Restraint
C. The Utah Act Confers Unconstitutional Editorial Power Upon the Government
III. THE DECISION OF THE COURT OF APPEALS TO APPLY "AN INTERMEDIATE LEVEL OF SCRUTINY" TO THE UTAH ACT CONFLICTS WITH APPLICABLE PRECEDENTS OF THIS COURT.
A. The Court Below Applied Inapplicable Supreme Court Precedents
B. The Utah Act is Not Content Neutral
C. The Utah Act Serves No Compelling Interest and Employs Impermissible Means to Prevent Fraud and Misrepresentation
IV. THE COURT OF APPEALS DISREGARDED THIS COURT'S APPLICABLE PRECEDENTS AND ERRONEOUSLY DENIED THE PETITIONER'S COMMERCE AND DUE PROCESS CLAIMS
A. The Court of Appeals Ignored This Court's Minimum Standard Prohibiting Extraterritorial State Regulations under the Commerce Clause
B. The Court Below Misapplied this Court's Jurisdictional Tests for State Regulations Under the Commerce and Due Process Clauses
TABLE OF AUTHORITIES
Article I, Section 8
Utah Code Ann. Secs. 13-22-1, et seq.
American Oil Co. v. Neill, 380 U.S. 451 (1965)
Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983)
Brown-Forman Distillers Corp. v. New York State Liquor Authority, 476 U.S. 573 (1986)
City of Cincinnati v. Discovery Network, 507 U.S. 410 (1993)
City of Ladue v. Gilleo, 512 U.S. 43 (1994)
Edgar v. MITE Corp., 457 U.S. 624 (1982)
Freedman v. Maryland, 380 U.S. 51 (1965)
FW/PBS, Inc. v. Dallas, 493 U.S. 215 (1990)
Healy v. The Beer Institute, 491 U.S. 324 (1989)
Lovell v. Griffin, 303 U.S. 444 (1938)
Martin v. City of Struthers, 319 U.S. 141 (1943)
Metromedia, Inc. v. San Diego, 453 U.S. 490 (1981)
Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974)
National Bellas Hess, Inc. v. Dept. of Revenue, 386 U.S. 753 (1967)
Near v. Minnesota, 283 U.S. 697 (1931)
New York Times v. United States, 403 U.S. 713 (1971)
Paris Adult Theatre I v. Slaton, 413 U.S. 49 (1973)
Police Dept. of City of Chicago v. Mosley, 408 U.S. 92 (1972)
Quill Corp. v. North Dakota, 504 U.S. 298 (1992)
R.A.V. v. City of St. Paul, 505 U.S. 377 (1992)
Renton v. Playtime Theatres, Inc., 475 U.S. 41 (1986)
Riley v. National Fed. of the Blind of N.C., 487 U.S. 781 (1988)
Rowan v. Post Office Dept., 397 U.S. 728 (1970)
Sect'y. of State v. Joseph H. Munson Co., 467 U.S. 947 (1984)
Simon & Schuster, Inc. v. N.Y. Crime Victims Board, 502 U.S. 105 (1991)
Southeastern Promotions Ltd. v. Conrad, 420 U.S. 546 (1975)
Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620 (1980)
Young v. American Mini Theatres, 427 U.S. 50 (1976)
4 W. Blackstone, Commentaries
on the Laws of England (U. of Chi. Press, Facs. ed. 1979) 9 Roberts, James
C., The Conservative Decade (1980)
INTEREST OF AMICI CURIAE
This amicus curiae brief
is submitted on behalf of the Free Speech Defense and Education Fund, Inc.
("FSDEF"), a non-profit educational organization dedicated to defending First
Amendment rights, as well as other nonprofit organizations and commercial firms
seeking to protect their constitutional rights.
(1) FSDEF, incorporated in Maryland in 1995, is a nonpartisan
educational organization exempt from federal income tax under Internal Revenue
Code ("IRC") section 501(c)(3).
Joining as co-amicus is
the Free Speech Coalition, Inc. ("FSC"), a nonpartisan IRC section 501(c)(4)
organization dedicated to the protection of human and civil rights secured by
law, such as the right of free speech at issue in this litigation. Its members
include nonprofit organizations engaged in educational activities throughout the
country and for-profit firms that serve such nonprofits.
Joining as co-amici are
the following IRC section 501(c)(3) charitable/educational organizations that
use direct mail nationwide in their educational and fundraising efforts:
American Center for Law & Justice (DC), Inc.; American Civil Rights Union;
American Conservative Union; American Health Assistance Foundation; American
Studies Center; America's Future; America's Prayer Network; The Arthritis Trust
of America; Center for the Defense of Free Enterprise; Christian Legal Defense
Fund; Citizens United Foundation; Claremont Institute; Concerned Women for
America; The Freedom Alliance; High Frontier; Jerry Falwell Ministries; The
Leadership Institute; Lincoln Institute for Research and Education, Inc.; Media
Research Center; Second Amendment Foundation; U.S. Taxpayers Institute; World
Emergency Relief; and Young America's Foundation.
The following IRC section
501(c)(4) organizations, that use direct mail nationally in their educational
and fundraising efforts, also join as co-amici: The Abraham Lincoln
Foundation for Public Policy Research, Inc.; American Policy Center; Americans
Back in Charge Foundation; Americans for Tax Reform; Citizens Committee for the
Right to Keep & Bear Arms; Citizens United; The Liberty Alliance; National
Tax Limitation Committee; The Senior's Coalition; 60 Plus Association;
Traditional Values Coalition; and United Seniors Association.
Finally, the following for-profit
organizations join as co-amici. They, like petitioner, assist nonprofit
organizations with their educational and fundraising programs: Concepts Direct,
Inc.; Creative Response Concepts; the Delta Group USA, Inc.; Exempt Organization
Tax Consulting; Lewis & Company Marketing Communications, Inc.; Morgan
Meredith & Associates; Newport Creative Communications; Response Development
Corporation; Richard Norman Company; Squire & Heartfield Direct, Inc.;
Stephen Clouse & Associates, Inc.; and Stephen Winchell & Associates,
FSDEF and its co-amici
have a strong interest in the matters raised in this litigation, as they
may be both directly and indirectly affected by Utah's regulations. Moreover,
Utah's licensing and registration requirements at issue in this case are just
part of a national array of state and local laws and regulations which burden
the dissemination of ideas nationwide.
SUMMARY OF ARGUMENT
Certiorari should be granted to
resettle the law that was misapplied by the court of appeals. Had the court of
appeals adhered to applicable First Amendment principles governing prior
restraints, it would have struck down the entire Utah Act. Had the court adhered
to authoritative First Amendment principles governing regulations of core
political speech, it would have found the Utah Act an unconstitutionally
discriminatory regulation of the freedom of speech. Finally, had the court of
appeals adhered to applicable Commerce and Due Process principles governing the
territorial limits of state jurisdiction, as authoritatively applied by this
Court, it would have found the application of the Utah Act to petitioner
I. CERTIORARI SHOULD BE GRANTED TO
RESETTLE THE LAW GOVERNING IMPORTANT CONSTITUTIONAL PROTECTIONS
In its decision below, the United
States Court of Appeals for the Tenth Circuit erroneously applied the principles
of this Court in two critical areas of First Amendment jurisprudence, and
wrongly rejected the petitioner's Commerce Clause and Due Process challenges to
a Utah statute that purports to regulate the business conduct and First
Amendment activity of persons and organizations with no Utah contacts. The
potential ramifications of this decision, particularly in this era of
information explosion and communication on the Internet, cannot be overstated.
If the decision below is allowed to stand, similar unconstitutional state
legislation will proliferate, imposing ever greater burdens on core First
At issue is Utah's Charitable
Solicitations Act (the "Utah Act"), embodying state law provisions similar to
the type found unconstitutional by this Court in Village of Schaumburg v. Citizens for a Better Environment, 444
U.S. 620 (1980), Sect'y. of
State v. Joseph H. Munson
Co., 467 U.S. 947 (1984), and Riley v. National Fed. of the Blind of N.C.,
487 U.S. 781 (1988). The court of appeals struck down a portion of the statute,
but left most of the provisions intact, incorrectly sustaining prior restraints
on core First Amendment speech.
The Utah Act not only imposes
licensing and disclosure requirements on nonresident, nonprofit organizations'
messages sent to residences in the state, if the messages contain requests for
charitable contributions -- the lifeblood of many nonprofit organizations -- it
also regulates the nonprofits' nonresident consultants. The Utah Act requires
such professional fundraising consultants to obtain a license
before entering into a contract to enhance "core First Amendment Speech," even
though that contract was entered into wholly outside Utah.
Moreover, as part of the licensing process, the firm must make detailed
disclosures of that consultant's methods, expenses, and fees in
connection with the planned solicitation in the state, net profits of the
previous calendar year earned from any of its consultative activities, the names
and residence addresses of officers and directors, and its personnel's previous
three-year employment histories.
The court of appeals below found
these burdensome and intrusive licensing and disclosure requirements
permissible, notwithstanding its finding that such requirements constituted a
"prior restraint." 199 F.3d 1241 (10th Cir. 2000), Pet. Cert. App. at 9a-10a.
Instead of subjecting the Utah Act to the constitutionally-required examination
applicable to prior restraints, however, the court of appeals nibbled around the
statute's unconstitutional edges, failing to apply strict scrutiny to the
state's claimed interest in protecting the people from fraud to justify
overriding core First Amendment rights of American Target Advertising, Inc.
("ATA") and its nonprofit organizational client, Judicial Watch.
II. THE DECISION OF THE COURT OF APPEALS THAT THE UTAH ACT
OPERATES AS A PERMISSIBLE PRIOR RESTRAINT CONFLICTS WITH THE FREEDOM OF THE
PRESS AS AUTHORITATIVELY APPLIED BY THIS COURT.
A. The Court Below Applied
Relying on Southeastern Promotions Ltd. v. Conrad, 420 U.S. 546 (1975), and FW/PBS, Inc. v. Dallas, 493 U.S. 215 (1990), the court
of appeals maintained that there were only "'two evils' that will not be
tolerated" in any system of prior restraint: (1) "[N]o system of prior restraint
may place 'unbridled discretion in the hands of a government official or
agency,'" and (2) "'a prior restraint that fails to place limits on the time
within which the decisionmaker must issue the license is impermissible.'" Pet.
Cert. App. at 10a. Neither the cases cited, nor the two-part test enunciated,
apply to this case where core First Amendment speech is mailed directly to
In Southeastern Promotions, the speech at
issue concerned a musical production which included group nudity and simulated
sex. In FW/PBS, the speech in
question emanated from sexually oriented businesses, including "adult" arcades,
book-stores, video stores, cabarets, motels, theaters, as well as escort
agencies, nude model studios and sexual encounter centers. In Southeastern Promotions, the question
presented was the constitutionality of the standards employed by a government
agency with authority to determine access to a government-owned and operated
municipal auditorium. In FW/PBS,
the question presented was the constitutionality of a city ordinance licensing
sexually oriented businesses.
Both cases dealt with "low" value
speech, bordering on constitutionally unprotected obscenity, and therefore not
subject to the higher standards governing prior restraints placed on core First
Amendment speech. Contrast Paris Adult Theatre I v. Slaton, 413 U.S. 49, 54-55 (1973)
(state law authorizing injunction against publication of obscenity consistent
with First Amendment so long as no restraint is imposed "until after a full
adversary proceeding and a final judicial determination [that] the materials
were constitutionally unprotected") with Near v. Minnesota, 283 U.S. 697 (1931) (state
law authorizing injunction against "malicious, scandalous and defamatory"
publication held unconstitutional even though no restraint imposed until after
full adversary hearing and judicial determination that publication was
Because the normal rules governing
prior restraints do not apply to sexually-explicit expression, this Court has
developed distinct sets of substantive and procedural rules to govern such
expressions. Substantively, the rules governing sexually-explicit material must
conform to the constitutionally-prescribed definition of obscenity as determined
by this Court. See Paris Adult
Theatre I, 413 U.S. at 69-70. Procedurally, the exercise of the power of
prior restraint with respect to such material must conform to the time
safeguards of Freedman v. Maryland, 380 U.S. 51, 58-60 (1965).
Neither of these rules applies to
the prior restraint of core First Amendment speech at issue in this case. As
Justice Brennan observed in his concurring opinion in New York Times v. United States, 403 U.S. 713, 726, n. *
(1971), the Pentagon Papers case:
Freedman v. Maryland ... and similar cases
regarding temporary restraints of allegedly obscene materials are not in point.
For those cases rest upon the proposition that "obscenity is not protected by
the freedoms of speech and press." ... Here there is no question but that the
material sought to be suppressed is within the protection of the First
Amendment.... [Citations omitted.]
The court of appeals below found
that "charitable solicitations," like the publication of the Pentagon Papers,
"qualify as protected speech for First Amendment purposes." Pet. Cert. App. at
3a. Yet it applied Freedman v.
Maryland to support its ruling
that the "ten-day" self-imposed administrative deadline for processing initial
applications and renewals of registration is constitutionally sufficient to
protect charitable organizations and their fundraising partners from any
impermissible prior restraint. Pet. Cert. App. At 15a-17a. As this Court ruled
in the Pentagon Papers case, however, where the government seeks prior restraint
of core First Amendment speech, the quesion is whether it has overcome the
"heavy presumption against [the restraint's] constitutional validity." 403 U.S.
B. Nothing in this Record
Justifies the Imposition of a Prior Restraint.
The court of appeals found that
the "Utah Act targets the secondary effects of professional solicitations,
i.e., increased fraud and misrepresentation." Pet. Cert. App. at 4a.
Just because a prior restraint targets a "secondary effect" of core First
Amendment speech does not mean that it meets the high constitutional standard
required of prior restraints. In the Pentagon Papers case, Justice Brennan
stated in his concurring opinion that "the First Amendment tolerates
absolutely no prior restraints of the press predicated upon
surmise or conjecture that untoward consequences may result." New York Times, 403 U.S. at 725-26
Moreover, protecting the public
from "increased fraud and misrepresentation" does not rise to the level of the
extraordinary interest that the government must show to justify a prior
restraint. According to this Court's precedents, "there is a single, extremely
narrow class of cases in which the First Amendment's ban on prior judicial
restraint may be overridden ...." Id. at 726 (Brennan, J., concurring)
(citation omitted). As Chief Justice Charles Evans Hughes wrote, any exception
to "the deep-seated conviction" against prior restraints requires clear and
convincing proof of an imminent danger of the highest order. Near v. Minnesota, 283 U.S. at 715-16, 718
These rulings apply with special
force in this case. ATA and its founder, Richard A. Viguerie, are pioneers in
political direct mail. "When it comes to conservative fundraising one name
stands out above all the rest: Richard A. Viguerie. Often referred to as the
'Godfather of the New Right,' ... his constituent response mailing[s] have
inundated Congress with millions of postcards, letters, and petitions." James C.
Roberts, The Conservative Decade, at 59 (1980). As the district court
found in this case, ATA has continued its role in direct mail as the fundraising
consultant employed by Judicial Watch, a "'political watchdog' organization," to
"plan, manage and prepare materials relating to Judicial Watch's nationwide
information distribution and fundraising program." (23 F.Supp.2d 1303 (D. Utah
1998), Pet. Cert. App. at 23a).
Although the court below found
that "[m]andatory registration and disclosure enable Utah citizens to make
informed decisions concerning their charitable donations," this record does not
indicate that the information furnished to Utah ever reaches any Utah citizen.
Nor does the statute require the Director of the Division of Consumer Protection
to publish the information contained in the filings that he receives. Thus, Utah
has not met its "very heavy burden" to justify any prior restraint. See
New York Times, 403 U.S. at 730
(White, J. concurring).
According to the controlling
precedents of this Court, Utah cannot justify its prior restraint upon ATA and
Judicial Watch any more that the United States could justify its attempted prior
restraint upon The New York Times and The Washington
Post. In this case, the state claims that its effort is to stop the
secondary effects of increased fraud and misrepresentation; in the Pentagon
Papers case, the government's effort was undertaken to stop the "secondary
effects" of danger to the "national security." As this Court stated, the only
remedy permitted by the First Amendment is a subsequent prosecution for
violation of a valid law.
C. The Utah Act Confers
Unconstitutional Editorial Power Upon the Government.
Not only does the First Amendment
require a high threshold justification to uphold prior restraints, it denies to
the government the exercise of editorial control that the freedom of the press
secures to the people. This principle has been recognized since the days of Sir
William Blackstone, who wrote in his Commentaries that "[e]very freeman
has an undoubted right to lay what sentiments he pleases before the public: to
forbid this, is to destroy the freedom of the press...." 4 W. Blackstone,
Commentaries on the Laws of England 151-52 (U. of Chi. Press, Facs. ed.
1979). Thus, this Court denied to the State of Florida power to force the
state's print media to be "fair" to candidates in an election campaign, because
this power would intrude upon the "function of editors" which absolutely belongs
to the media owners. Miami Herald
Publishing Co. v. Tornillo, 418 U.S. 241 (1974).
This power of editorial control is
not confined, however, to the speaker or publisher, but extends also to the
hearer or recipient. Hence, this Court held in Martin v. City of Struthers, 319 U.S. 141
(1943), that it was unconstitutional for the city to interpose itself between a
door-to-door hand biller and the homeowner. As Justice Hugo Black wrote for the
While door to door distributors of literature may be either a nuisance or a blind for criminal activities, they may also be useful members of society engaged in the dissemination of ideas....
Freedom to distribute information to every citizen whenever he desires to receive it is so clearly vital to the preservation of a free society that, putting aside... regulations of time and manner of distribution, it must be fully preserved....
The National Institute of
Municipal Law Officers has proposed a form of regulation to its member cities
which would make it an offense for any person to ring the bell of a householder
who has appropriately indicated he is unwilling to be disturbed. This ...
leaves the decision as to whether distributors may lawfully call at a
home where it belongs -- with the home-owner himself. [Id. at
145, 147, 148 (emphasis added).]
In 1970, this Court reaffirmed the
unalienable right of the householder to control what comes into his home. Chief
Justice Warren Burger wrote:
In today's complex society we are
inescapably captive audiences for many purposes, but a sufficient measure of
individual autonomy must survive to permit every householder to exercise control
over unwanted mail. [Rowan v.
Post Office Dept., 397 U.S. 728,
Under the Utah Act, however, it is
the Director of the Division of Consumer Protection -- not the householder --
who decides whether the householder will receive certain mail. It is the
Director whom a charitable solicitor and its fundraiser must satisfy that they
have not, for example, "materially misrepresented ... the purpose and manner in
which contributed funds and property will be used in connection with any
solicitation." Utah Code Ann. Sec. 13-22-12(1)(b)(v), Pet. Cert. App. at
57a-58a. This exercise of censorial power is unconstitutional. As Justice
Brennan stated in Riley,
487 U.S. at 791:
"The very purpose of the First
Amendment is to foreclose public authority from assuming guardianship of the
public mind." To this end, the government, even with the purest of motives, may
not substitute its judgment as to how best to speak for that of speakers
and listeners; free and robust debate cannot thrive if directed by the
government. We perceive no reason to engraft an exception to this settled rule
for charities. [Citation omitted, emphasis added.]
Contrary to the erroneous
assumption of the court of appeals below, this case does not concern the
constitutionality of the discretion of a government official in relation to the
use of government-owned property. See Pet. Cert. App. 10a. Rather, it
concerns the discretion that a government official has over the private mail box
of a householder. According to this Court's ruling in Bolger v. Youngs Drug Products Corp., 463 U.S.
60 (1983), the only discretion that a government official has
with respect to a piece of mail, if it is otherwise legal, is to honor the
discretion of the householder: "[w]e have never held that the government itself
can shut off the flow of mailings to protect those recipients who might
potentially be offended." Id. at 72. The householder, not the
government, must decide whether mail is misleading, and therefore, worthy of the
trash can, or the kitchen table for family discussion and consideration. As
Justice Scalia stated in his concurring opinion in Riley, "it is safer to assume that the
people are smart enough to get the information they need than to assume that the
government is wise or impartial enough to make the judgment for them." 487 U.S.
III. THE DECISION OF THE COURT OF APPEALS TO APPLY "AN
INTERMEDIATE LEVEL OF SCRUTINY" TO THE UTAH ACT CONFLICTS WITH APPLICABLE
PRECEDENTS OF THIS COURT.
A. The Court Below Applied
Inapplicable Supreme Court Precedents.
The court below subjected the Utah
Act to "'an intermediate level of scrutiny'" on the grounds that it is a
"[c]ontent neutral regulation of protected speech." The court reached the
conclusion that the Utah Act was "content neutral" solely on the basis that the
Act was "designed not to 'suppress the expression of unpopular views' but rather
to control the 'secondary' effects of speech." In support of this proposition,
the court relied upon only one case, Renton v. Playtime Theatres, Inc.,
475 U.S. 41 (1986). Here again, the court of appeals has relied upon a
precedent that demonstrably does not apply to this case.
Renton dealt with a city zoning
ordinance that applied only to "adult motion picture theatres." Accordingly,
this Court followed a special rule governing "zoning ordinances designed to
combat the undesirable secondary effects" of "businesses that purvey sexually
explicit materials," id. at 49, supporting that special rule on the
grounds that "'society's interest in protecting this type of expression is of a
wholly different, and lesser, magnitude then the interest in
untrammeled political debate....'" Id. n.2., quoting Young v. American Mini Theatres, 427 U.S. 50,
70 (1976) (plurality opinion).
As Justice Scalia recently
observed, "our society, like other free but civilized societies, has permitted
restrictions upon the content of speech in a few limited areas,
which are 'of such slight social value as a step to truth that any benefit that
may be derived from them is clearly outweighed by the social interest in order
and morality.'" R.A.V. v. City of St. Paul, 505 U.S. 377, 382-83
(1992) (emphasis added). And as Justice Scalia has further explained, the
categories of "low" value speech have increasingly narrowed,
not broadened, as the court of appeals below erroneously assumed when it
extended to core First Amendment speech special rules designed only for fringe
First Amendment speech. See id. at 383-84.
Had the court below correctly
applied this Court's precedents, it would have found that the First Amendment
standard of "content neutrality" was not met, as it was in Renton, solely because the Utah Act
was not designed to "suppress the expression of unpopular views." Rather, as
this Court ruled in Riley,
a charitable solicitation case, the standard of "content
neutrality," applicable to a core First Amendment speech case, also requires
that a law not discriminate on the basis of subject matter. Thus, this Court has
specifically ruled that core political speech cannot be parsed, as if it were a
commercial advertisement, to separate out that which is subject to the state's
interest in preventing fraud. Riley, 487 U.S. at 795-96. Yet, that
is exactly what the court of appeals did, focusing only upon the "secondary
effects" of charitable solicitations. Had it correctly subjected the Utah Act
"to exacting First Amendment scrutiny," as required by Riley, 487 U.S. at 798, it would have
found that the Utah Act is not content neutral.
B. The Utah Act is Not
Just because a law targets fraud
or misrepresentation does not make it content neutral. After all, the North
Carolina Charitable Solicitations Act in Riley targeted "fraud," but
this Court found the requirement that professional fundraisers make certain
disclosures to potential donors to be "a content-based regulation of speech."
487 U.S. at 795. Here also the Utah Act is content-based, even though it is
designed to prevent fraud.
The Act does not apply to all
charitable solicitations in the state. Section 13-22-8 contains 10
exemptions, including charitable solicitations conducted by a "bona
fide religious, ecclesiastical or denominational organization," solicitations by
"broadcast media owned and operated by an educational institution or
governmental entity, or any entity organized solely for the support of that
broadcast media," "any school accredited by the state, any accredited
institution of higher learning, or club or parent, teacher, or student
organization within and authorized by the school in support of the operations or
extra-curricular activities of the school," and "a public or higher education
foundation established under Title 53A or 53B."
In City of Ladue v. Gilleo, 512 U.S. 43, 52 (1994), this
Court warned that a city sign ordinance, allegedly designed to achieve
environmental and safety objects, but which contained (coincidentally) 10
"[e]xemptions from an otherwise legitimate regulation of a medium of speech,"
may "diminish the credibility of the government's rationale for restricting
speech in the first place." Such "under-inclusiveness" triggers strict scrutiny
to determine if the exemptions relate solely to the non-speech reasons for the
statute. This Court found a city ordinance unconstitutional because it excepted
"peaceful picketing of any school involved in a labor dispute" from its ban on
picketing near schools. Police Dept. of
City of Chicago v. Mosley, 408 U.S. 92, 100-101 (1972).
As this Court reiterated in City of
Cincinnati v. Discovery
Network, 507 U.S. 410, 416 (1993), it "was the city's burden to establish
a 'reasonable fit' between its legitimate interests of safety and esthetics and
its choice of a limited and selective prohibition ... as the means chosen to
serve those interests."
It was not enough, then, for the
circuit court to accept the Utah claim that the law was aimed only at the
"secondary effects of increased fraud and misrepresentation." See
Pet. Cert. App. at 4a, n. 1. To the contrary, the Utah Act
should have been strictly scrutinized to determine if the 10 categories of
charitable solicitations exempted from the Act did not raise the same risk of
"increased fraud and misrepresentation" as the charitable solicitations subject
to the law.
This error was compounded by the
circuit court's refusal even to acknowledge that the Act singles out charitable
solicitations by direct mail for special regulation, leaving commercial
solicitations by direct mail unregulated. Such a preference for commercial over
noncommercial speech has been found by this Court to be unconstitutional. Metromedia, Inc. v. San Diego, 453 U.S. 490, 521 (1981)
C. The Utah Act Serves No
Compelling Interest and Employs Impermissible Means to Prevent Fraud and
In Simon & Schuster, Inc. v. N.Y. Crime Victims Board, 502 U.S.
105, 115 (1991), Justice O'Connor wrote that a "statute is presumptively
inconsistent with the First Amendment if it imposes a financial burden on
speakers because of the content of their speech." This principle, she noted, not
only applies to a tax, but also to any regulation which imposes a financial
burden upon some speakers, but not others, on the basis of the content of their
speech: "In the context of financial regulation, it bears repeating," Justice
O'Connor explained, "that the government's ability to impose content-based
burdens on speech raises the specter that the government may effectively drive
certain ideas or viewpoints from the marketplace." Id., at 116.
The court of appeals completely
disregarded this well-established principle, ruling that the financial burdens,
except for the bonding or letter of credit requirement, served only "the state's
substantial interest in fighting fraud" and "defray[ed] reasonable
administrative costs." Pet. Cert.
App. at 6a-7a. According to
Simon & Schuster, however,
the correct inquiry is whether the Utah Act "imposes a financial disincentive
only on speech of a particular content." 502 U.S. at 116. That inquiry can only
be answered by examination of the statutory language laying out the
qualifications set for claiming exemption from the Act.
According to Utah Code Section
13-22-5(b) "a bona fide religious, ecclesiastical or denominational
organization" may claim an exemption if the charitable solicitation "is made for
a church, missionary, religious or humanitarian purpose." According to Section
13-22-5(c), an "entity organized solely for the support of [certain] broadcast
media" may claim exemption for charitable solicitations related to the support
of such broadcast media. Section 13-22-5(g) exempts certain accredited schools
and universities for charitable solicitations "in support of the operations or
extracurricular activities of the school." These three examples alone
demonstrate that ATA and Judicial Watch, and other organizations and
solicitations that do not qualify for any exemption, face a "financial
disincentive" that the exempted organizations do not face.
Applying strict scrutiny, the Utah
Act may be sustained only if it "'serves a compelling state interest and is
narrowly drawn to achieve that end.'" Id. at 118. Although Utah may
have an interest in protecting its residents from fraud and misrepresentation,
the state legislature's exemption of 10 categories of charitable solicitations
from regulation by this Act alone casts significant doubt upon the "strength" of
the interest in preventing fraud and misrepresentation. If the state's interest
were compelling, there would have been full coverage without exception. See
City of Ladue, 512
U.S. at 53.
Not only is the claim that the
Utah Act serves a compelling state interest weakened by the statutory
exemptions, but those exemptions also weaken the claim that the statute is
narrowly drawn to achieve the state's goal. The question here is whether Utah
may single out some fundraising counsel and impose upon those persons -- but not
others -- duties to register and disclose certain information as a preventive
measure to combat "increased fraud and misrepresentation." According to this
Court's precedents, the answer is no. Such a law is "impermissibly
underinclusive" (id. at 51, emphasis added), because
such increased risk "'can be controlled by narrowly drawn statutes' ... focusing
on the abuses and dealing even-handedly" with charitable
solicitations "regardless of subject matter." Police Dept. of Chicago v. Mosley, 408 U.S. at 102.
IV. THE COURT OF APPEALS DISREGARDED THIS COURT'S APPLICABLE PRECEDENTS AND ERRONEOUSLY DENIED THE PETITIONER'S COMMERCE AND DUE PROCESS CLAIMS.
A. The Court of Appeals
Ignored This Court's Minimum Standard Prohibiting Extraterritorial State
Regulations under the Commerce Clause.
Utah asserted, and the court of
appeals found, that the Utah Act did not regulate ATA's conduct outside of
Utah's borders. Supporting its finding, the court of appeals attempted to
distinguish this case from Brown-Forman
Distillers Corp. v. New York
State Liquor Authority, 476 U.S. 573 (1986). The court of appeals missed
the point of Brown-Forman,
because it failed to acknowledge that the practical effect of the Utah Act is to
regulate activities wholly outside the state, which, in turn, exposes
nonresidents to the likelihood of "inconsistent obligations in different
states." Brown-Forman, 476 U.S.
Furthermore, Utah's claim that it
has jurisdiction over an out-of-state business that does not even conduct
business in the state is so far-reaching that, if accepted, it would seriously
undermine the constitution's commitment to the free flow of interstate commerce.
In Edgar v. MITE Corp., 457 U.S. 624, 641 (1982),
this Court addressed the constitutionality of an Illinois statute that "directly
regulate[d] transactions ... wholly outside the State of Illinois." Recognizing
its "sweeping extra-territorial effect," this Court found the Illinois law
invalid solely because it "purport[ed] to regulate directly and to interdict
interstate commerce, including commerce wholly outside the State." Id.,
457 U.S. at 642-43. This per se rule of unconstitutionality was
reaffirmed in Healy v. The Beer Institute, 491 U.S. 324, 336
(1989), where Justice Blackmun wrote that "[t]aken together, our cases
concerning the extraterritorial effects of state economic regulation stand
at a minimum for the ... proposition [that] the 'Commerce
Clause ... precludes the application of a state statute to commerce that takes
place wholly outside of the State's borders, whether or not the commerce has
effects within the State.'" (Emphasis added.)
B. The Court Below Also
Misapplied this Court's Jurisdictional Tests for State Regulations Under the
Commerce and Due Process Clauses.
The only territorial connection
that ATA had with the State of Utah is that its client, Judicial Watch, chose to
solicit, by direct mail, contributions from Utah residents. According to National Bellas Hess, Inc. v. Dept. of Revenue, 386 U.S. 753, 758-60
(1967), use of the mails to solicit business and deliver goods is not a
sufficient nexus under the Commerce Clause to justify requiring the mailer to
collect a use tax. That bright-line rule was expressly affirmed in Quill Corp. v. North Dakota, 504 U.S. 298, 314-15
According to the court of appeals,
however, that bright-line rule applies only to tax burdens, not "licensing and
registration requirements." Pet. Cert. App. at 18a-19a. The court is seriously
mistaken. As this Court stated in Quill, the Commerce Clause's
requirement that there be a "substantial nexus" between the taxing state and the
person burdened with collecting the tax reflects "structural concerns about the
effects of state regulation on the national economy." 504 U.S.
at 312 (emphasis added). Indeed, the burdens imposed in National Bellas Hess and Quill were not a "tax" per
se, but a regulation requiring the collection of a tax owed not by the
out-of-state seller, but by the in-state buyer. The court of appeals erred,
therefore, in limiting the reach of the "substantial nexus" test to a
"formalistic" distinction between a "tax burden" and a "licensing and
registration requirement." See Quill, 504 U.S. at 314-15.
Not only did the court of appeals seriously mistake the jurisdictional rule under the Commerce Clause, but it erroneously assumed that the Due Process rule that governs the exercise of state judicial power is identical to the one governing the exercise of legislative power. See Pet. Cert. App. at 19a-20a. Chiding ATA for claiming that the Due Process rules are different "[w]ithout apparent authority," the Court of Appeals ignored Justice Scalia's concurring opinion, joined in by Justices Kennedy and Thomas, in Quill that stated their "understand[ing] ... that the due process standards for adjudicative jurisdiction and those for legislative (or prescriptive) jurisdiction are [not] necessarily identical...." 504 U.S. at 319-20. Indeed, this Court's ruling in American Oil Co. v. Neill, 380 U.S. 451 (1965), demands more contacts with a taxing state than mere "purposeful availment" in order to justify the imposition of a tax on revenues generated by activities taking place wholly outside the taxing state. Likewise, here, the imposition of burdensome regulatory requirements upon ATA's activities taking place wholly outside of the State of Utah demands more contact with Utah than knowing that some of the direct mail of a national solicitation campaign was "purposefully directed" to Utah residents.
For the reasons stated, the
petition for a writ of certiorari should be granted.
1. Pursuant to Supreme Court Rule 37.6, it is hereby certified that no counsel for a party authored this brief in whole or in part, and that no person or entity other than these amici curiae made a monetary contribution to the preparation or submission of this brief.
2. Amici requested and received the written consents of the parties to the filing of this brief amicus curiae. Such written consents, in the form of letters from counsel of record for the parties, have been submitted for filing to the Clerk.