Opinion ID: 221071
Heading Depth: 2
Heading Rank: 3

Heading: The Constitutionality of Section 17.922(d)'s Fee Arrangement Disclosure Requirement Under the First Amendment

Text: Section 17.922(d) of the Act requires for-profit solicitors who collect donations through public receptacles to make three disclosures: (1) the solicitor's contact information; (2) that donations will be sold for profit; and (3) the amount of the flat fee paid to the charity by the solicitor. The district court held that the identification and the sold-for-profit disclosure requirements were constitutional under the First Amendment, but that the fee-arrangement disclosure requirement was facially unconstitutional.
We must first determine whether the public receptacle disclosures at issue are merely commercial speech, subjecting § 17.922(d) to the intermediate level of constitutional scrutiny set forth in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980), [6] or whether the disclosures are charitable solicitations, and thus subjecting the regulations to the stricter scrutiny announced in the Supreme Court's trilogy of cases relating to charitable solicitations Riley v. National Federation of the Blind of North Carolina, Inc., 487 U.S. 781, 108 S.Ct. 2667, 101 L.Ed.2d 669 (1988); Secretary of State of Maryland v. Joseph H. Munson Co., 467 U.S. 947, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984); and Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620, 100 S.Ct. 826, 63 L.Ed.2d 73 (1980). Texas argues that the district court erred by applying the stricter scrutiny of Schaumburg and its progeny, suggesting that the receptacles at issue in this case represent nothing more than an upturned palm. We disagree. The essence of Texas's argument is that, to the extent the receptacles speak, their message amounts to little more than a proposal of a commercial transaction: donate goods here. Accordingly, Texas relies heavily on the following language from Schaumburg for the proposition that this court should distinguish passive donations to public receptacles from more active solicitations by mail, telephone, or door-to-door visits: [C]haritable appeals for funds, on the street or door to door, involve a variety of speech interestscommunication of information, the dissemination and propagation of views and ideas, and the advocacy of causesthat are within the protection of the First Amendment. Soliciting financial support is undoubtedly subject to reasonable regulation but the latter must be undertaken with due regard for the reality that solicitation is characteristically intertwined with informative and perhaps persuasive speech seeking support for particular causes or for particular views on economic, political, or social issues, and for the reality that without solicitation the flow of such information and advocacy would likely cease. Canvassers in such contexts are necessarily more than solicitors for money. 444 U.S. at 632, 100 S.Ct. 826. But this is an unpersuasive distinction. Schaumburg 's mention of on the street or door to door solicitations is reflective of the statute at issue in that case, not a meaningful ground on which to distinguish donations to public receptacles. Black's law dictionary defines solicitation as [t]he act or an instance of requesting or seeking to obtain something. BLACK'S LAW DICTIONARY 1520 (9th ed. 2009). Solicitation is not limited to in-person communication. More importantly the speech interests identified in Schaumburg communication of information, the dissemination and propagation of views and ideas, and the advocacy of causesare surely implicated by the public receptacles. The mere inclusion of the name of a charity on a donation box communicates information about the beneficiary of the benevolence and explicitly advocates for the donation of clothing and household goods to that particular charity. At a minimum, the donation boxes implicitly advocate for that charity's views, ideas, goals, causes, and values. It is clear that Texans have choices when choosing to dispose of unwanted clothing or household goods. The Texas Association of Goodwills, as amicus supporting Texas before the district court, submitted a photograph of a parking lot with at least four separate donation receptacles, each presumably supporting a different charity. A generous Texan who chooses to donate his goods is thus faced with a marketplace of charitable options; the public receptacles are not mere collection points for unwanted items, but are rather silent solicitors and advocates for particular charitable causes. Contrary to Texas's position, the public receptacles represent far more than an upturned palm or a mere proposal of a commercial transaction [that says] donate goods here. Rather, the donation bins' solicitation is characteristically intertwined with informative and perhaps persuasive speech seeking support for particular causes or for particular views on economic, political, or social issues. Schaumburg, 444 U.S. at 632, 100 S.Ct. 826. Accordingly, we reject Texas's characterization of the speech related to the public receptacles as mere commercial speech.
Having determined that the public receptacle disclosures at issue are charitable solicitations, we evaluate the constitutionality of § 17.922(d) under the standard announced in Riley, Munson, and Schaumburg. The Act will therefore be sustained as constitutional under the Speech Clause if (1) it serves a sufficiently strong, subordinating interest that the [government] is entitled to protect and (2) it is `narrowly drawn ... to serve the interest without unnecessarily interfering with First Amendment freedoms.' Munson, 467 U.S. at 960-61, 104 S.Ct. 2839 (quoting Schaumburg, 444 U.S. at 636-37, 100 S.Ct. 826). Our discussion, however, can be brief. The Charities did not challenge the district court's holding that the identification and the sold-for-profit disclosure requirements are constitutional under the First Amendment. Texas did not challenge the district court's holding that the fee arrangement disclosure requirement, as applied to telephonic, door-to-door, or mail solicitation are unconstitutional under the First Amendment. Indeed, the able Assistant Solicitor General correctly conceded at oral argument that the fee arrangement disclosure portions of this statute ... cannot be squared with the Supreme Court's opinion in Riley.  We agree. In Riley, the Supreme Court held that the North Carolina statute at issuewhich required fund-raisers to disclose the average percentage of money they had turned over to charities within the past yearwas not narrowly tailored. See Riley, 487 U.S. at 798-801, 108 S.Ct. 2667. The Court held that [i]n contrast to the prophylactic, imprecise, and unduly burdensome rule the State has adopted to [further its interest], more benign and narrowly tailored options are available. Id. at 800, 108 S.Ct. 2667. Specifically, the Court said that the State may itself publish the detailed financial disclosure forms it requires professional fundraisers to file. This procedure would communicate the desired information to the public without burdening a speaker with unwanted speech during the course of a solicitation. Id. Alternatively, the Court explained, the State may vigorously enforce its antifraud laws to prohibit professional fundraisers from obtaining money on false pretenses or by making false statements. Id. In this case, there is nothing stopping Texas from requiring for-profit resellers to file financial disclosure forms, which Texas could publish without burdening the charities with unwanted speech on the receptacle notices. Texas could also ramp up its anti-fraud enforcement efforts. Both of these alternative means are available to Texas and both would be less of a burden on the Charities' speech rights than the Act's fee arrangement disclosure requirement. We have rejected Texas's characterization of the public receptacle disclosures as pure commercial speech and hold that § 17.922 regulates charitable solicitations and is to be evaluated under Riley, Munson, and Schaumburg. Same standard, same result. The fee arrangement disclosure requirement for public receptacles is unconstitutional under the First Amendment.