Opinion ID: 2226774
Heading Depth: 1
Heading Rank: 3

Heading: Characteristics and practices of the national organization

Text: Our examination of the national organization (and its local affiliates) proceeds along three lines set out in Minn.Stat. § 363.01(18) (1980): (1) is the national organization a business in that it sells goods and extends privileges in exchange for annual membership dues?; (2) is the national organization a public business in that it solicits and recruits dues paying members but is unselective in admitting them?; and (3) is the national organization a public business facility in that it continuously recruits and sells memberships at sites within the State of Minnesota? The record before us clearly reveals that the answers to those questions are affirmative. We address first whether the national organization is a business. The national organization urges this court to draw a distinction between an organization's internal activities (e. g., membership dues) and its external activities (e. g., inviting the public to participate in the organization and the activities it conducts). With this distinction the national organization contends that membership in it is equivalent to ownership of the organization; it then concludes that ownership, or a share of ownership of an organization, is beyond the scope of Minn.Stat. § 363.01(18) (1980), for that subdivision concerns only the goods and privileges offered or sold to the public by a business, and does not concern its ownership. To be substantiated, the analogy would have to be borne out, in the record, by the way the national organization regards its current and prospective members, i. e. as its present and potential owners, rather than as its customers. The record before us reveals a national organization that regards its members more as customers than as owners. The national organization's Officers' & Directors' Guide 1978-79 refers to members as the officers' customers. (Exhibit 6, p. 27). The national organization's Recruitment Manual has this preface to its recommended sales approach to prospective members: JAYCEES, THE PRODUCT you are selling, is outstanding from any angle. Jaycees is the `best value' you can get.  (Exhibit 24, p. 5) (emphasis in original). The Recruitment Manual cautions that [o]nce a young man becomes a member, the responsibility to deliver the goods you sold him begins. (Exhibit 24, p. 1). The national organization's Regional Director's Handbook 1977-78 discusses How to Sell Jaycees and reminds the directors to Know your product. (Exhibit 44, p. 21). The product being sold is membership in an organization whose aim is the advancement of its members. Thus, the national organization's Chapter President's Management Handbook 1977-78 reminds the presidents of their responsibility to ensure that those holding individual memberships will indeed have a slight edge in life over the non-Jaycee   . (Exhibit 2, p. 36). This edge that members obtain takes several forms. The president of the national organization, in letters published in Future (the official publication of the organization), maintains that it is the greatest young men's leadership-training organization   . Future, Jan.-Feb. 1979, at 4 (Exhibit 55); Future, March-April 1979, at 5 (Exhibit 54). The organization asks business firms to pay the dues of individual memberships for a number of their employees; the fact that firms often do so suggests that those employees are viewed by their firms as receiving an edge, and that may help them when they are considered for promotion. Those holding individual memberships and who become officers in the organization thereby receive enhanced leadership experience and enjoy the enhanced privileges and advantages of making contacts with others, often business contacts. In this regard we note that the national organization has successfully sued under the trade-mark laws to have one of its disaffiliated chapters enjoined from infringing on its name and from engaging in unfair competition with the national organization, United States Jaycees v. San Francisco Junior Chamber of Commerce, 513 F.2d 1226 (9th Cir. 1975); the concurring opinion of Judge Ely observed that it seems clear that the term `Junior Chamber of Commerce' does refer to the specific source of a `product' (the National/Jaycees)   . Id. By virtue of its sale of individual memberships (with the accompanying goods and privileges) the national organization is a business. Is the national organization a public business? The national organization contends that it is a private organization; its brief cites three decisions by Circuit Courts of Appeal and claims that these upheld the non-public character of the national organization. See New York City Jaycees, Inc. v. United States Jaycees, Inc., 512 F.2d 856 (2d Cir. 1975); Junior Chamber of Commerce v. Missouri State Junior Chamber of Commerce, 508 F.2d 1031 (8th Cir. 1975); Junior Chamber of Commerce of Rochester, Inc. v. United States Jaycees, 495 F.2d 883 (10th Cir.) cert. denied, 419 U.S. 1026, 95 S.Ct. 505, 42 L.Ed.2d 301 (1974). Those decisions, however, are inapposite. In each of them the issue was whether the national organization's receipt of federal funds and its status as a tax exempt organization constituted state action sufficient to subject it to scrutiny under a federal constitutional standard. All three circuit courts answered that question in the negative. To hold, however, that by such activities the national organization is not an entity of state action is far from holding that it is a private organization, and, in fact, gives no insight to the construction of the statute in controversy. The national organization contends that the most relevant reported case is the Oregon Supreme Court's decision that Cub Scouts were not within the definition of a place of public accommodation, and, therefore, could exclude girls from membership. Schwenk v. Boy Scouts of America, 275 Or. 327, 551 P.2d 465 (1976). Because of its reasoning, the decision is irrelevant to the present controversy. The Oregon Supreme Court conceded that the Boy Scouts of America may not be a distinctly private club so as to come within the Oregon statute's exemption of private clubs. 275 Or. at 335, 551 P.2d at 469. [8] The court relied almost entirely on the statute's legislative history that showed that there was some doubt as to whether the Y.M.C.A. and the Y.W.C.A. were places of public accommodation. The court reasoned, then, that by analogy the Oregon Public Accommodation Act was not intended to include the Boy Scouts of America, at least to the extent of requiring it to accept applications by girls for membership. 275 Or. at 336, 551 P.2d at 469. The statute in controversy here has a quite different legislative history. Therefore, the Supreme Court of Oregon's decision in Schwenk provides neither analogy for nor insight into the question before this court. [9] There are, however, cases that provide criteria for deciding, in the context of a public accommodation statute, whether a group is private or public. See Nesmith v. Young Men's Christian Association, 397 F.2d 96 (4th Cir. 1968); Cornelius v. Benevolent Protective Order of Elks, 382 F.Supp. 1182 (D.Conn.1974); Wright v. Cork Club, 315 F.Supp. 1143 (S.D.Tex.1970). Two criteria tend to be used: (1) the selectiveness of the group in the admission of members, i. e., standards and a formal procedure by which membership is restricted; and (2) the existence of limits on the size of the membership. See Nesmith, 397 F.2d at 102; Cornelius, 382 F.Supp. at 1203; Wright, 315 F.Supp. at 1153. The national organization would have us disregard these clear standards, or to observe, instead, that Minn.Stat. § 363.01(18) (1980) makes no mention of size as a criterion. Thus, it argues to apply such a test would leave officers of small organizations wondering whether their group has become too big to avoid the criminal penalties of the statute. The national organization's contention lacks merit. A public organization can avoid criminal penalties by simply not engaging in prohibited, unfair discrimination. Private associations and organizations  those, for example, that are selective in membership  are unaffected by Minn.Stat. § 363.01(18) (1980). Any suggestion that our decision today will affect such groups is unfounded. We, therefore, reject the national organization's suggestion that it be viewed analogously to private organizations such as the Kiwanis International Organization. Instead, we look at what this national organization is by itself. The record before us reveals a national organization that strives for growth, especially in individual memberships; it is unselective in those to whom it sells its memberships; selectiveness occurs only in the privileges and benefits it accords to those holding one kind of membership rather than another. Counsel for the national organization contended, in oral argument, that a process of natural selection operates to make its membership selective. We find that process unexplained, unsupported, and unpersuasive. We find, in fact, that the national organization encourages continuous recruitment and discourages the use of any selection criteria. More than 80% of the national officers' time is devoted to spurring on the sale of memberships. The Regional Director's Handbook 1977-78 advises: Don't set membership goals for chapters. Let them set their own (as long as they plan an increase in membership). (Exhibit 44, p. 14) (emphasis in original). The national organization's Committee Chairman's Workbook, in its instructions on how a chairman should present a project for his board's approval, proclaims that Jaycees are in the People business  not the project business (Exhibit 43, p. 2) (emphasis in original) and advises the chairman to emphasize and link Publicity Value and Recruitment Value. If your project will get the chapter's name in the paper and will possibly result in a few new members for the chapter, be sure that these facts `headline' your presentation. It's sure to `perk up their interest' in your project. (Exhibit 43, p. 5). More than half of the organization's individual and group achievement awards are conditioned, in part, upon recruitment achievement. (Exhibit 76). The organization encourages record breaking performance in selling memberships, e. g., most in a year by one person (348), most in a month (134), most in a lifetime (1,586). (Exhibit 70, p. 20). This continuous concern for growth undercuts the national organization's claim to be a private organization. Most important, though, is the absence of selection criteria. This is evinced by the national organization's Officer & Directors' Guide 1977-78 which advises that the emphasis in recruitment be on quantity rather than quality: What is your obligation as Jaycees? Is it to only recruit a chosen few who    are deemed to be quality members?    How you sign up a member is not nearly as important as what you do with that member once he has been inducted. (Exhibit 52, p. 21). According to Lowell Larson, the Executive Director for the affiliated organization of Minnesota, the national organization does not publish anything with respect to criteria that local chapters should use to select their members; there is, instead, an emphasis on soliciting memberships from as many people and as diverse as possible. (Hearing Transcript, p. 112). Mr. Larson further testified that, to his knowledge, there has never been a rejection of any application for membership. (Hearing Transcript, p. 135). By virtue of its unselective, vigorous sale of memberships, the national organization is a public business. We pass to the last and seemingly most difficult question: Is this national organization a public business facility ? The national organization contends that only if it were to establish a business at a physical location within the State of Minnesota, and invite the patronage of the general public    would that place or facility constitute a place of public accommodation under Minn.Stat. § 363.01(18) (1980). Brief for Appellant at 17. That argument substitutes a literal, ordinary definition of place of public accommodation for the one enacted by the legislature. The history of the anti-discrimination statutes shows that the scope of the older statute, still in force, Minn.Stat. § 327.09 (1980), concentrated on locations and encompassed both fixed and mobile sites. The newer statute, in controversy here, Minn.Stat. § 363.01(18) (1980), focuses on the conduct of a business facility of any kind. We are not persuaded by analogies to hotels, restaurants, and hot tamale stand[s]. Brief for Appellant at 17. Food and lodging do not exhaust the category of a business    facility of any kind    whose goods,    privileges, [and] advantages are    sold or otherwise made available to the public. Minn. Stat. § 363.01(18) (1980) (emphases added). Leadership skills are goods, business contacts and employment promotions are privileges and advantages, and each site in the State of Minnesota where the sale of those goods is solicited, promoted, and consummated is unquestionably a business facility. If we were to look for a fixed site of the national organization's business facility we would find it in the affiliated state organization's headquarters in Chaska, Minnesota, where the state organization's officers devote much of their time to promoting the solicitation and sale of memberships by the local chapters. If we were to look for mobile sites of the national organization's business facilities we would find them in the sometimes door-to-door, company-to-company solicitation of members for the organization, and we would find them in the oft-shifted sites at which the affiliated local chapters hold meetings during part of which a sales approach is usually made to prospective members invited to the meeting for that purpose. See Future, March-April 1979, at 24 (Many chapters use refreshments as a means to get [membership] prospects to the meeting,    if that is the only way  use it. quoting New Recruitment Manual (Exhibit 54)). A variety of enterprises that serve the public do not extend their goods and privileges from the same physical location (e. g. electricians, locksmiths, learning-at-home courses), and often they do not own or lease the sites at which they offer their goods and privileges. Cf. First National Bank v. Dickinson, 396 U.S. 122, 137, 90 S.Ct. 337, 345, 24 L.Ed.2d 312 (1969), (holding that an armoured car picking up merchants' cash boxes and checks is a branch bank, a place of business, under § 7 of the McFadden Act.) An instructive analogy can be found in a decision by the New Jersey Appellate Division that held Little League to be a place of public accommodation. National Organization for Women v. Little League Baseball, Inc., 127 N.J.Super. 522, 318 A.2d 33, aff'd mem., 67 N.J. 320, 338 A.2d 198 (1974). Unlike the new statute in the instant case, the New Jersey statute does not provide a brief definition of place of public accommodation; instead, it enumerates 65 varieties of such places. [10] Little League was not one of the enumerated varieties. The New Jersey court considered a broad construction of place to be appropriate because the statutory noun `place' (of public accommodation) is a term of convenience, not of limitation. 127 N.J.Super. at 531, 318 A.2d at 37. The court then observed that the place, in the case of Little League, is the ball field. Presumably the court was not unaware of the fact that Little League often does not own the real estate on which its ball fields are located, for as the court noted: [W]e discern nothing in the statute or its underlying purposes to persuade us that what would otherwise be a place of public accommodation is any less so because its management and sponsorship is by a non-profit or membership organization rather than a commercial enterprise, or because it does not have exclusive use of possession of the site of its operations. Id. at 531-32, 318 A.2d at 38. The national organization before this court attempts to distinguish the Little League case on two grounds. First, it argues that Little League dominates organized baseball for children, whereas this national organization does not dominate the field of organized community services. That distinction is irrelevant to the question of what constitutes a place of public accommodation, because no insight into that question can be drawn from the concept of such domination. The national organization's second basis for distinguishing Little League is that Little League, by making extensive use of local community owned facilities, thereby engaged in discrimination on public property and thus involved a unit of government. The New Jersey court did not decide the case on, or even mention that as a basis for its decision. Again, the distinction does not detract from the significant fact that the New Jersey Supreme Court held that a place of public accommodation or a facility is less a matter of whether the organization operates on a permanent site, and more a matter of whether the organization engages in activities in places to which an unselected public is given an open invitation. The question, therefore, of what constitutes a facility, or more precisely, a public business facility turns ultimately on whether the organization invites only a screened and selected portion of the public, or whether, instead, it has a standing, open invitation to an unscreened, unselected, and unlimited number of persons from the general public. Little League did little screening except to age and sex, and the New Jersey Supreme Court affirmed a decision that Little League constituted a place of public accommodation. By contrast, the national organization before this court does even less screening because it admits women to associate membership, and therefore, it has given an open invitation to virtually anyone to become a dues paying individual or associate member. The meeting place to which that unscreened, unselected, and unlimited number of persons is invited, constitutes as we see it a public business facility. We have discussed the term facility with regard to sites, both fixed and mobile. We acknowledge, however, that courts in other jurisdictions have construed the term more liberally, and have done so since the late Nineteenth Century  a time when this state's anti-discrimination statute was new and included mention of facilities. Thus, in 1898, the Supreme Court of Montana had to decide whether money raised by a tax levied, under a statute, for the purpose of furnishing additional school facilities could be used to pay salaries of teachers; the question depended upon the scope of the expression additional school facilities as employed in the statute. The court rejected a narrow interpretation that would have limited such facilities to inanimate objects. State ex rel. Knight v. Cave, 20 Mont. 468, 52 P. 200, (1898). As the court observed, [t]hat which aids, assists, or makes more easy the acquisition of knowledge is a convenience and an advantage, and is clearly a facility. Books, maps, globes, and charts are facilities to the imparting of knowledge.    But the meaning of the word is not limited to inanimate bodies or things. Men are often facilities. Without a crew to man his vessel, the master of a ship would not have the necessary facilities. A school with a complement of pupils in every room, but lacking teachers, would certainly not have facilities to carry on educational work.    Parents often remove their families to a place with good school or educational facilities, the chief reason actuating them being the quality of teachers, and not the mere inanimate advantages.    Teachers are the means of imparting knowledge to pupils, and are therefore educational facilities. 20 Mont. at 475-76, 52 P. at 203 (emphasis added). Accord, Nekoosa-Edwards Paper Co. v. Railroad Commission of Wisconsin, 193 Wis. 538, 547, 213 N.W. 633, 636 (1927) (facilities includes human agencies) (We see no difficulty in holding that the switch engine with its crew    constitutes a facility   .); see Cheney v. Tolliver, 234 Ark. 973, 977, 356 S.W.2d 636, 634 (1962). We need not decide whether facilities should be construed to include persons. What we decide here is that an organization engaged in the business of seeking to advance its members and to add to their ranks by assiduously selling memberships in this state is a public business facility. In more familiar terms, such an organization has more than the minimum contacts to qualify as doing business in this state, and its facilities are anywhere it promotes, solicits, and engages in the sale of memberships on an unselective basis. We have discussed this question, for the most part, without reference to the prohibited kind of discrimination involved in this case. The certified question does not ask us to weigh the merits of this organization's business policies. If the national organization now before this court were conducting its business by discriminating on the basis of race, prohibited in Minnesota since 1885, we would have no difficulty holding that its activity was prohibited; the fact that the discrimination in this case is based on sex, prohibited in Minnesota since 1973, [11] in no way alters our decision and its grounds. The answer to the certified question is affirmative.