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SEC'Y OF STATE OF MD. V. MUNSON CO., 467 U. S. 947 (1984)

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U.S. Supreme Court

Sec'y of State of Md. v. Munson Co., 467 U.S. 947 (1984)

Secretary of State of Maryland v. Joseph H. Munson Co., Inc.

No. 82-766

Argued October 31, 1983

Decided June 26, 1984

467 U.S. 947

Syllabus

A Maryland statute prohibits a charitable organization, in connection with any fundraising activity, from paying expenses of more than 25% of the amount raised, but authorizes a waiver of this limitation where it would effectively prevent the organization from raising contributions. Respondent is a professional fundraiser whose Maryland customers include various chapters of the Fraternal Order of Police, at least one of whom was reluctant to contract with respondent because of the statute's percentage limitation. Respondent brought suit in a Maryland Circuit Court for declaratory and injunctive relief, alleging that it regularly charges an FOP chapter in excess of the 25% limitation, that petitioner Secretary of State had informed it that, if it refused to comply with the statute, it would be prosecuted, and that the statute violated its right to free speech under the First and Fourteenth Amendments. Without addressing petitioner's argument that respondent lacked standing to assert its claims, the Circuit Court upheld the statute, and the Maryland Court of Special Appeals affirmed. The Maryland Court of Appeals reversed, holding that respondent had standing to challenge the statute's facial validity, that the statute was unconstitutional, and that its flaws were not remedied by the waiver provision.

Held:

1. Respondent has standing to challenge the statute. Not only does respondent satisfy the "case" or "controversy" requirement of Art. III, because it has suffered both threatened and actual injury as a result of the statute, but there also is no prudential reason against allowing respondent to challenge the statute. Where the claim is that the statute is overly broad in violation of the First Amendment, the Court has allowed a party to assert the rights of another without regard to the ability of the other to assert his own claim. T he activity sought to be protected is at the heart of the business relationship between respondent and its customers, and respondent's interests in challenging the statute are completely consistent with the First Amendment interests of the charities it represents. Petitioner's concern that respondent should not have standing to challenge the statute as overbroad because it has not demonstrated that the statute's overbreadth is "substantial," is more properly chanroblesvirtualawlibrary

Page 467 U. S. 948

reserved for the determination of respondent's challenge on the merits. Pp. 467 U. S. 954-959.

2. Regardless of the waiver provision, the statute is unconstitutionally overbroad, its percentage restriction on charitable solicitation being an unconstitutional limitation on protected First Amendment solicitation activity. Schaumburg v. Citizens for a Better Environment, 444 U. S. 620. Pp. 467 U. S. 959-970.

(a) The waiver provision does not save the statute. Charitable organizations whose high solicitation and administrative costs are due to information dissemination, discussion, and advocacy of public issues, rather than to fraud, remain barred by the statute from carrying on those protected First Amendment activities. Pp. 467 U. S. 962-964.

(b) This is not a "substantial overbreadth" case where the plaintiff must demonstrate that the statute "as applied" to him is unconstitutional. Here there is no core of easily identifiable and constitutionally proscribable conduct that the statute prohibits. The statute cannot distinguish organizations that have high fundraising costs not due to protected First Amendment activities from those that have high costs due to protected activity. The flaw in the statute is not simply that it includes some impermissible applications, but that, in all its applications, it operates on a fundamentally mistaken premise that high solicitation costs are an accurate measure of fraud. Where, as here, a statute imposes a direct restriction on protected First Amendment activity, and where the statute's defect is that the means chosen to accomplish the State's objectives are too imprecise, so that, in all its applications, the statute creates an unnecessary risk of chilling free speech, the statute is properly subject to facial attack. Pp. 964-968.

(c) Whether the statute regulates before- or after-the-fact is immaterial. Whether the charity is prevented from engaging in protected First Amendment activity by lack of a solicitation permit or by knowledge that its fundraising activity is illegal if it cannot satisfy the percentage limitation, the chill on the protected activity is the same. The facts that the statute restricts only fundraising expenses, and not other expenses, and that a charity may elect whether to be bound by its fundraising percentage for the prior year or to apply the 25% limitation on a campaign-by-campaign basis, do nothing to alter the fact that the significant fundraising activity protected by the First Amendment is barred by the percentage limitation. And the fact that the statute regulates all charitable fundraising, and not just door-to-door solicitation, does not remedy the fact that the statute promotes the State's interests only peripherally. Pp. 968-970.

294 Md. 160, 448 A.2d 935, affirmed. chanroblesvirtualawlibrary

Page 467 U. S. 949

BLACKMUN, J., delivered the opinion of the Court, in which BRENNAN, WHITE, MARSHALL, and STEVENS, JJ., joined. STEVENS, J., filed a concurring opinion, post, p. 467 U. S. 970. REHNQUIST, J., filed a dissenting opinion, in which BURGER, C.J.,and POWELL and O'CONNOR, JJ., joined, post, p. 467 U. S. 975.





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