1. The Court granted cert today in two cases. First, in Illinois v. Lidster (02-1060), the Court agreed to consider the lawfulness of a roadblock established by Illinois law enforcement officers to investigate a prior offense. The Illinois Supreme Court held the checkpoint violated the Fourth Amendment, and now the Court will decide. Next, just when you think you’d heard the last of the Clinton-era independent counsels, the Court agreed to hear Office of Independent Counsel v. Favish (02-954). This case is about photographs relating to the death of Vince Foster (haven’t heard that name in a while), and whether the Independent Counsel properly withheld them from a FOIA request under an exemption which protects from disclosure “records or information compiled for law enforcement purposes” if their production “could reasonably be expected to constitute an unwarranted invasion of privacy.” (The Court also “GVR’d” another case, Brown v. United States (02-8263) in light of the Solicitor General’s brief. Hard to tell what this case is about, although it sounds like the feds made a mistake.)
2. In case you missed it, the district court finally issued its opinion — all 1,650+ pages of it — in the campaign finance case. (Maybe there’s someone out there who is going to read all those pages (aside from the parties), but I’m not really sure who that would be.) The idea had originally been that the district court would issue its opinion in plenty of time to hear any appeals in the Supreme Court this Term and thus resolve any lingering issues about the constitutionality of McCain-Feingold long before the parties gear up for the 2004 Presidential campaign. But the district court’s opinion didn’t issue until May 2, and thus threw a big kink into this plan. After all, the Court’s Term ends at the end of June, and that leaves only two months for briefing, argument, and decision. (And cutting into the Court’s three-month summer vacation is just not an option.) So, unclear what will happen, although the lead plaintiffs have already filed a jurisdictional statement, indicating that they plan to file a motion proposing procedures for disposing of the case. Stay tuned, but it sounds like the Court might issue a campaign finance case this Term after all.
Enough with the preliminaries, and on to the opinions.
Pretend you’re seventeen years old and asleep in your bed. Three police officers wake you up with a flashlight at 3:00 am, saying “we need to go and talk.” They put you in handcuffs and lead you (barefoot, in boxer shorts and a t-shirt) to a patrol car. After a short detour to stop at the scene of a crime, they take you to the police station where they interrogate you about the crime. Under these circumstances, do you reasonably believe that you are you free to leave and crawl back to bed? The Texas Court of Appeals said “yes,” but the Court summarily reversed in a per curiam decision today. Kaupp v. Texas (02-5636). (Contrary to popular opinion, there’s nothing in the Court’s rules that reserves summary reversals for Ninth Circuit decisions.) Not much else to say about this opinion, except it makes you wonder whether those Texas judges ever studied criminal procedure. I don’t practice criminal law, but even I thought this one was easy. (And I’m not saying that just because it was 9-0.)
Finally, in Illinois v. Telemarketing Associates, Inc. (01-1806), Justice Ginsburg, for a unanimous Court, held that fundraisers who make false or misleading representations about how donations will be used may be prosecuted for fraud. The telemarketers in this case were retained by a Vietnam veterans organization to solicit donations for the group. Under their contract, only 15% of the money went to the veterans; 85% went to the telemarketers. Nevertheless, the telemarketers told potential donors that “a significant amount of each dollar donated” would go to the charity and that the funds “would go to further charitable purposes.” Illinois filed suit against the telemarketers alleging fraud, and the telemarketers promptly moved to dismiss arguing that the fraud claim was barred by the First Amendment. The Illinois courts agreed with the telemarketers, and today, the Supreme Court reversed.
The Court began with basic principles: The First Amendment protects the right to engage in charitable solicitation, but it does not protect fraud. Nevertheless, in past decisions, the Court has held unconstitutional certain statutes designed to prevent fraud in charitable solicitations. In Schaumburg, for example, the Court invalidated an ordinance that prohibited charitable organizations from soliciting contributions unless 75% of the receipts were used for charitable purposes. Munson invalidated a similar law, and Riley invalidated a law that prohibited professional fundraisers from retaining an “unreasonable” or “excessive” fee. In each of these cases, the statute was defended as an anti-fraud measure on the theory that fraud could be inferred merely from the percentage of charitable donations absorbed by fundraising costs. In each case, the Court rejected this argument.
These decisions, according to the Court, leave open a corridor for fraud actions to guard the public against false or misleading solicitations. There are critical differences between fraud actions focused on representations made in individual cases and statutes that categorically ban solicitations when fundraising costs run high. While portions of Illinois’ complaint focused attention on the high fees retained by the telemarketers, the complaint in large part focused on what the telemarketers misleadingly represented to potential donors. According to the Court, fraud actions targeted at misleading affirmative representations are distinguishable from the statutes invalidated in Schaumburg, Munson, and Riley. In those cases, the focus was on the percentage of solicitations used for charitable purpose in the hope that these rules would sweep in fraudulent practices, but Illinois’ complaint focused only on affirmative misrepresentations. Moreover, unlike the Schaumburg line of cases that imposed a prior restraint on solicitation, in a fraud action, the state bears the burden of proof.. This type of procedural protection provides “breathing room” for protected speech. The First Amendment does not require, however, a blanket exemption from fraud liability for a fundraiser who intentionally misleads in calls for donations. In sum, while high fundraising costs, without more, do not establish fraud, states are free to sue charities for fraud when they affirmatively mislead citizens about their fundraising costs.
Scalia (joined by Thomas) concurred. According to Scalia, if the only representations made by the solicitors were that the donations would be used for a charitable purpose, the First Amendment would prohibit a fraud claim. He joins the Court’s opinion, however, because the affirmative misrepresentations went well beyond this potentially benign statement.