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About the
Name-Exchange Lawsuit
MPR's Motion to Dismiss Name-Exchange Lawsuit
Defendant Minnesota Public Radio ("MPR") respectfully submits this memorandum in support of its motion to dismiss. The Amended Complaint ("Complaint") brought by the State of Minnesota ("State") fails to state a claim for relief. MPR has not violated Minnesota law governing the solicitation of charitable contributions, Minn. Stat. §§ 309.50 et seq. On the contrary, as demonstrated by the Complaint itself and its attachments, MPR has conducted its charitable solicitations according to the highest legal and ethical standards Background For purposes of this motion to dismiss brought under Minn. R. Civ. P. 12,
the Court need not look beyond the allegations of the Complaint, including its
attachments. Minn. R. Civ. P. 10.03 (pleading includes attached exhibits); MacKenzie
v. Belisle, 338 N.W.2d 33, 36-37 (Minn. 1983); Markwood v. Olson Mfg.
Co., 289 N.W. 830, 831-32 (1940). This information may be used by MPR to: verify your identity; manage a contest; gather your editorial comments and feedback; contact you for additional information; and fulfill your order or request. MPR may also use this information for marketing and promotional purposes. By providing this information, you may receive occasional email from MPR or selected third-parties. (Id. at 11-12.) This policy is publicly available at MPR's Web site. (Compl. 14.) MPR's donor list exchange practices are described in detail in its Member List Policy, which applies to all donors (by whatever means acquired) and a summary of which is also publicly available at MPR's Web site. (Compl. Exh. 1 at 3-4.) This policy states:(Compl. Exh. 1 at 3-4, bold in original.) MPR's 1999 written brochure, received by persons who have made a pledge of financial support to MPR, also describes MPR's list exchange practices and refers donors to MPR's Website. (Compl. Exh. 3-6.) The brochure states: Minnesota Public Radio occasionally makes the names of its members available to other organizations in which we think MPR members may be interested. If you prefer not to have your name passed along, please contact Member/Listener Services [at the address, phone number, email address or fax number provided].(Id.) The pledge card enclosed with this brochure provides a check-off box next to the following indented text: MPR occasionally exchanges its mailing list with other organizations. If you prefer that your name not be included, please check the box and return in the envelope provided, or call Member/Listener Services at 800-218-7123.(Compl. Exh. 4.) MPR's current position concerning exchanges of mailing lists is consistent with its prior policy and practice. MPR's 1996 brochure for members included a page entitled, "Answers to Frequently Asked Questions." (Compl. Exh. 5 at 2.) The brochure stated: Does MPR ever make its membership list available to other groups? (Id., bold in original.) The State's Allegations The State alleges that MPR misrepresented to the donating public the nature of MPR's use of donor information in list exchanges with other organizations. The Complaint alleges five misrepresentations. 1. That MPR does not merely exchange "names" on an "occasional" basis (Compl. 16);The State seeks relief from this Court in the form of a judgment against MPR declaring MPR's acts constitute multiple, separate violations of Minn. Stat. § 309.55, subd. 5;(1) enjoining MPR from engaging in these acts; awarding civil penalties of up to $25,000 per violation pursuant to § 309.57; and awarding costs and attorneys fees under § 309.57.
Under Minn. R. Civ. P. 12.02(e), a pleading will be dismissed if the facts
alleged in the complaint do not set forth a legally sufficient claim for the
relief demanded. Elzie v. Commissioner, 298 N.W.2d 29, 32 (Minn. 1980);
Rohricht v. O'Hare, 586 N.W.2d 587, 588 (Minn. Ct. App. 1998), review
denied. For purposes of a motion to dismiss under Rule 12, the complaint
includes exhibits attached to it. Minn. R. Civ. P. 10.03; MacKenzie v. Belisle,
338 N.W.2d at 36-37; Markwood v. Olson Mfg. Co., 289 N.W. at 831-32.
The sufficiency of the Complaint as a matter of law to establish a cause of
action may be determined by the terms of the exhibits. Markwood, 289
N.W. at 831-32. Where the provisions of the exhibits are plain and unambiguous,
they must prevail over inconsistent allegations in the Complaint. Id. Argument Based on the facts alleged by the State and set forth in the materials made
a part of the Complaint, MPR has not violated any Minnesota law regulating charitable
solicitations. Consistent with the highest ethical standards for charitable
fundraising, MPR exchanges directory information with other organizations as
disclosed to its members and the public. Even if the Court were to accept the
State's legal theory that a charity's use of members' directory information
comes within the purview of the charitable fraud statute, the facts as alleged
in the Complaint and its exhibits show no violation of the statute. In truth and in fact, defendant MPR does not exchange the mere "names" of its members "occasionally." Since January 1, 1995, MPR has allowed over 100 other organizations to use the names and addresses of MPR members for fundraising solicitation purposes in over 400 transactions, and has exchanged the telephone numbers of its members with at least 9 different organizations in at least 27 different transactions. That amounts to an average exchange of member names approximately once every four days. In total, defendant MPR has exchanged over three million member names, addresses, and telephone numbers with other organizations for fundraising solicitation purposes.(Compl. 16.) There are two parts to this allegation: that MPR said "names" but also exchanged addresses and sometimes telephone numbers; and that MPR said "occasionally" but conducted more than occasional list exchanges. Neither part of the allegation withstands the slightest scrutiny. Names. In each of the three MPR communications relied upon by the State as the source of the alleged misrepresentations, MPR described the kind of information included in its list exchanges as more than "names." In the first source, MPR's current Website, the public is informed that MPR's list exchanges include "name and contact information" (Compl. Exh. 1 at 11), "name and basic contact information" (id.), and again, "name and contact information" (id. at 12). Also at MPR's Website, the public is informed that MPR exchanges "portions of its membership list" with other organizations (id. at 3), "name and address only" for certain one-time use list exchanges (id.), and its "member list for telemarketing" with a more limited number of other organizations (id.). In the second source, MPR's 1999 brochure and pledge card mailed to contributors, donors are informed that MPR exchanges its "mailing list" with other organizations (Compl. Exh. 4), and that MPR makes "the names of its members" available for other organizations to contact (Compl. Exh. 3 at 6). The pledge card (Exh. 4) accompanied the brochure (Exh. 3), according to the Complaint (at 14(c)), and should be read as part of the same communication to donors. In the third source, MPR's 1996 brochure to contributors, in a section of frequently asked questions, MPR states, "Does MPR ever make its membership list available to other groups?" and answers, yes, MPR makes "the names of its members" available for other organizations to contact them. (Compl. Exh. 5 at 2, bold omitted, underline added.) By looking at the actual MPR sources, there is no way to construe any of these three sources as representing that only names would be exchanged, as the State alleges. The Website says "name and contact information." The 1999 brochure and accompanying pledge card says "mailing list." The 1999 brochure says "membership list." The State pulls the word "name" out of context and in effect misquotes what MPR actually said. All of the terms used by MPR - even where, in the context of other terms, MPR only says, "names" - are representations to the public and donors that MPR exchanges directory information about its members with other organizations. The category of "directory information" is significant in both state and federal law as a term describing basic contact information including name, address and telephone number. See, e.g., Minn. Stat. § 13.32, subd. 5; 47 U.S.C. § 222(e). The various terms used by MPR each indicate directory information and do not mislead persons about the kind of information being described. Occasionally. The State correctly notes that MPR represents to the public and donors that list exchanges are made "occasionally." The State incorrectly alleges that MPR's practice does not comport with this representation. This is a matter of simple math, in conjunction with one misleading "assumption" employed in the State's Complaint. The State makes two factual allegations about the frequency of MPR use of member names in list exchanges. First, the State alleges that MPR has provided MPR member information to other organizations in "400 transactions." (Compl. 16.) Second, the State alleges that during this time period MPR has exchanged a total of "three million member names, addresses, and telephone numbers" with other organizations. (Id.) For purposes of this motion, the Court must take these factual allegations as true. What is the average frequency of MPR's exchange of each member's directory information? The answer is the total number of exchanges over the complete time period (3 million) divided by the total number of MPR members (87,000) divided by the number of years in the time period (5). The answer is about 6.9 exchanges of each member's information per year, or one exchange every 53 days. It defies reason and any ordinary sense of the meaning of the word, "occasionally," for the State to claim fraud or misrepresentation based on MPR's exchange of each member's information once every 53 days as "occasional."(2) This claim should be dismissed. The State purports to perform a mathematical calculation to support its conclusory allegation that MPR in fact exchanges member names once every four days. (Compl. 16.) The State says that because MPR has made 400 list exchanges over the past five years, there is an "average exchange of member names approximately once every four days." (Id.) (The precise calculation under the State's formula is once every 4.56 days.) The Complaint makes it sound as if each member's name is exchanged every four days, which, so the State then claims, cannot be considered "occasional." How can this be squared with the calculation, above, that each member's name is on average exchanged every 53 days? The key is that the State's calculation appears to assume that every one of the 400 transactions involved all 87,000 member names - and if that assumption were correct, the average frequency of name exchange would, in fact, be once every 4.56 days. But if that assumption were correct, the total number of names exchanged over the five years would be over 34 million, not 3 million. The State's apparent assumption that every transaction included all 87,000 member names is simply wrong, and the error is apparent from review of the Complaint and its exhibits. The 400 list transactions were partial list exchanges. As MPR states at its Website, MPR "occasionally exchanges portions of its membership list with other organizations." (Compl. Exh. 1 at 3, underline added.) Another simple calculation shows that MPR includes an average of 9% of its members on each list exchange (34 million divided by 3 million). Thus, putting the numbers together based on the State's allegations in its Complaint, MPR on average includes each member's directory information in a list exchange about once every 53 days, not every 4 days.(3) Neither part of the State's first allegation withstands the slightest scrutiny. MPR has not misrepresented either what information it exchanges, or how often it makes that exchange. This claim should be dismissed. Allegation Two The State alleges: Neither defendant MPR's brochures nor its website disclose the volume or identity of the organizations with which MPR exchanges the names and addresses of MPR members for fundraising purposes.(Compl. 17.) There are two parts to this allegation: that MPR fails to disclose the volume of exchanges and fails to disclose the identity of organizations with which it exchanges member names and addresses. Both parts of this allegation are baseless. Volume. The allegation in paragraph 17 adds no facts to those stated in paragraph 16. Substituting a term of quantity in paragraph 17, "volume," for a term of frequency in paragraph 16, "occasionally," does not change the allegation. Both terms are descriptive of the same core fact. The bottom line is the same: each member's directory information is exchanged, on average, 6.9 times per year. The "volume" of exchange is "occasional." Identity. The State's allegation that MPR does not disclose the identity of list exchange partners is true in the sense that MPR does not (based on the facts available to the Court on this Rule 12 motion) disclose the name of each list exchangee. But this is irrelevant. Minnesota charitable solicitations law does not impose a duty to disclose particular list exchangees, and the State has not cited any basis for requiring this of MPR.(4) In addition, the State has not pleaded a fraudulent omissions case. It is alleging that MPR made fraudulent representations.(5) No charity fraud claim is stated in alleging that MPR does not disclose the identity of list exchangees.(6) Allegation Three The State alleges: Defendant MPR's brochures do not disclose the fact that MPR exchanges the addresses of MPR members with other organizations for fundraising solicitation purposes.(Compl. 18.) This allegation is just a variation on allegation one, discussed above, that MPR fraudulently stated that "mere 'names'" were exchanged and not addresses. On the contrary, MPR's 1999 brochure and accompanying pledge card stated that MPR exchanges "its mailing list" - a term which would be read and understood by any donor of ordinary intelligence as including the donor's address (the place to which mail goes when sent to "mailing list" recipients). MPR's 1996 brochure stated that MPR makes its "membership list" available to other groups - also a term ordinarily understood to include addresses as well as names. The point of the exchanges, as described by MPR, was to make it possible for MPR and other organizations actually to contact the persons on the lists exchanged, in MPR's case in order to make solicitations. It goes beyond the bounds of legal imagination to conclude that MPR fraudulently failed to disclose in its 1999 and 1996 brochures that it exchanges addresses when MPR told donors that it exchanges "its mailing list" (1999) or "its membership list" (1996) for the purpose of other organizations contacting the donors. This claim should be dismissed. Allegation Four The State alleges: Defendant MPR's brochures do not disclose the fact that MPR exchanges the telephone numbers of MPR members with other organizations for fundraising solicitation purposes.(Compl. 19.) This allegation boils down to whether or not MPR committed fraud by telling its members that it would exchange their "names" and its "mailing list" (1999 brochure and accompanying pledge card, Compl. Exh. 3 at 6 and Exh. 4) or their "names" and its "membership list" (1996 brochure, Compl. Exh. 5 at 2), and in practice exchanged member telephone numbers in 27 transactions over five years (Compl. 16). As discussed above, telephone numbers, along with addresses, are included within the category of "directory information" or basic contact information. In addition, telephone numbers are clearly included within "directory information" as stated in MPR's Website, which the State does not allege is misleading in this respect. (Compl. Exh. 1.) In each communication, MPR members are told that their directory information may be exchanged, and how they may direct MPR not to include their directory information in those exchanges. The "telephone number" fraud allegation is baseless.(7) Allegation Five In its most specious and conclusory allegation, the State purports to describe MPR's intentions in the selection of partners for list exchanges and suggests that this selection is, somehow, improper. The allegedly misleading language quoted in the Complaint is taken exclusively from MPR's 1999 and 1996 brochures, not its Website, so this allegation is limited to those two sources of MPR's communications with its members. (Compl. 21-22.) MPR states, in identical language in each year's brochure, that it makes member information "available to other organizations in which we think MPR members may be interested." (Compl. Exh. 3 at 6 and Exh. 5 at 2.) The State alleges that MPR in fact exchanges member information: for reasons other than it "think[s] MPR members may be interested." Upon reasonable belief, Defendant MPR's primary standard for exchanging the names, addresses, and telephone numbers of its members with a particular organization is whether such exchange will benefit MPR's fundraising activities. [] Defendant MPR has shown no evidence that it seeks to determine the interest of its members in divulging their names, addresses, or telephone numbers for fundraising solicitation purposes to organizations ranging from the Democratic National Committee, a political party, to groups engaged in lobbying efforts on controversial issues such as abortion and environmental regulation.(Compl. 21-22.) The gist of the State's fifth allegation is that MPR misrepresented to members how MPR chooses list exchange partners. The actual representation, in each brochure, was that MPR chooses "other organizations in which we think MPR members may be interested." (Compl. Exh. 3 at 6 and Exh. 5 at 2, emphases added.) The factual nub is MPR's subjective, corporate state of mind in choosing list exchange organizations, groups in which MPR believes ("we think") MPR members "may" (a possibility, not a certainty) be interested. The Attorney General apparently has reviewed the list of particular list exchange organizations and, substituting his judgment for MPR's judgment, has concluded that no MPR member could possibly be interested in them. This allegation fails to meet fundamental pleading standards and should be dismissed under Minn. R. Civ. P. 12 for failure to state a claim. The Court should not accept allegations in a complaint which are no more than "conclusions of law, unreasonable inferences or unwarranted deductions." Hiland Dairy, Inc., 402 F.2d at 973. Here, the State merely alleges that, "[u]pon reasonable belief," MPR's primary standard for choosing list exchange partners is not that MPR members may be interested. (Compl. 21.) The only additional allegation is that "MPR has shown no evidence" that it attempts to determine member interest in particular organizations with which it exchanges lists. (Compl. 22.) These are quintessential examples of poor pleading, asserting "unreasonable inferences" and "unwarranted deductions" as if they were facts. The State has alleged no facts which, if true, would establish that MPR's representations about its choice process are false.(8) Moreover, the State's assertion that MPR has "shown no evidence" supporting its described choice process turns the rules of pleading on their head; it is the State's burden in bringing this Complaint to plead facts sufficient to support its claim for relief. The State chose to bring its Complaint in this public judicial forum and is subject to this forum's rules.(9) The State's fifth allegation flaunts those rules as if the State could assert its desired conclusion without pleading any actual facts to support it.(10) II. THE CHARITABLE FRAUD SECTION OF THE MINNESOTA STATUTES DOES NOT APPLY TO MPR'S LIST EXCHANGE POLICY AND PRACTICE. The State misuses the Minnesota charitable fraud statute by bringing this Complaint. The fraud section of the statute covers deceptive disclosures about the nature of the charitable solicitor and the purposes for which the requested funds will be used. The Complaint should be dismissed because the law the State asks this Court to enforce does not apply to MPR's list exchange policy and practice. In addition, should the Court reach the argument, the State's proposed application of the statute against MPR would unconstitutionally restrict MPR's rights of free speech and association under the First Amendment. A. The Charitable Fraud Section of Minn. Stat. 309.55 Does Not Apply To MPR's Disclosures About List Exchange Practices.In its Complaint, the State tries to include MPR's disclosures about list exchange policies within the same category as fraudulent "disclosures" prohibited under Minn. Stat. § 309.55, subd. 5. This misstates the law. The Complaint accurately quotes the first clause of § 309.55, subd. 5, but ignores the remainder of the subdivision. (Compl. 24.) The subdivision begins as the State notes: No charitable organization and no person acting on behalf of a charitable organization shall use or employ any fraud, false pretense, false promise, misrepresentation, misleading statement, misleading name, mark or identification, or deceptive practice, method or device, with the intent that others should rely thereon in connection with any charitable solicitation . . . .The subdivision continues with particular examples of the kind of fraud it prohibits: . . . including any such actions or omissions designed to confuse or mislead a person to believe that such organization is another organization having the same or like purposes [identity fraud]; or to believe that the funds being solicited are or will be used for purposes and programs conducted within or for persons located within the state of Minnesota when such is not the case [location fraud]; or to otherwise present purposes and uses of the funds which are not as provided within the purposes and uses filed upon registration of said organization under this chapter, or if no such registration has been filed, then as provided under the exemption of said organization from federal and state income taxes as an organization formed and operating for charitable purposes as defined herein [purposes fraud].Other sections of the charitable solicitations law proscribe endorsement fraud - using the name of a person in solicitation literature without their written consent, § 309.55, subd. 1 - and allocation fraud - the amount of the contribution which is actually a gift and therefore is tax deductible, § 309.556, subd. 1(b). In Heritage Publishing Co. v. Fishman, 634 F. Supp. 1489, 1500-01, 1504-05 (D. Minn. 1986), the Chief Judge Alsop described the Minnesota charitable solicitations law as intending to prohibit identity, purpose, endorsement and allocation fraud. Reported cases have not held (or even discussed) that a state or federal charitable fraud law may be applied to a charity's list exchange practices. On the contrary, a review of reported cases illustrates the intent of charitable solicitation fraud law: a) identity fraud This brief review of reported charitable fraud cases includes cases from various
jurisdictions, over a long period of time, and both civil and criminal enforcement
actions, in order to illustrate the nature of charitable fraud actions. Notably
lacking from this review are any cases involving alleged misrepresentations
related to exchanges of charitable donor lists, let alone details like frequency,
address, telephone number or identity of exchange organizations. The reason
is simple: neither the Minnesota statute nor other charitable fraud statutes
include list exchanges within their scope. B. Granting the Relief Requested for the State's Fifth Allegation Concerning MPR's Choice of List Exchange Organizations Would Violate the First Amendment.The State's fifth allegation is that MPR misrepresented to members how MPR chooses list exchange partners. MPR stated that it exchanges member information based on its choice of "other organizations in which we think MPR members may be interested." (Compl. Exh. 3 at 6 and Exh. 5 at 2.) The focus of this claim is MPR's exercise of its judgment in choosing list exchange organizations, groups in which MPR believes MPR members may be interested. The State's allegation reeks of heavy-handed censorship, infringing MPR's fundamental First Amendment rights of free speech and free association. Charitable fundraising solicitation involves core free speech rights and merits full protection under the First Amendment. Secretary of State of Maryland v. S.H. Munson Co., 467 U.S. 947, 959 (1984); Village of Schaumberg v. Citizens for a Better Environment, 444 U.S. 620, 632 (1980); Heritage Publishing Co. v. Fishman, 634 F. Supp. 1489, 1497-98 (D. Minn. 1986). The U.S. Supreme Court stated that charitable appeals for funds "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." Village of Schaumberg, 444 U.S. at 632. The Court described: the reality that [charitable] 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 [] the reality that without solicitation the flow of such information and advocacy would likely cease.Id. The bottom line is that the government may not restrict charitable solicitations unless the restriction is narrowly tailored to protect a compelling governmental interest. Id.; S.H. Munson, 467 U.S. at 959; Heritage Publishing Co., 634 F. Supp. at 1498.(11) The State alleges that MPR's actual choice of organizations for list exchanges does not comport with MPR's declared intention to choose organizations in which MPR thinks its members may be interested. The State asks this Court to declare that MPR has made improper choices in such organizations and to enjoin MPR from making these choices in the future. A clearer example of governmental censorship in violation of the First Amendment is difficult to conceive. MPR has told its members that it will exercise its judgment to choose list exchange organizations in which it believes members may be interested. MPR has a fundamental First Amendment right to choose to whom it wishes to speak, such as the members of other particular organizations on lists it receives. The choice of to whom to speak, targeted speech, is basic to the First Amendment protection of free speech, see Florida Bar v. Went For It, 515 U.S. 618, 623 (1995), as is the choice of those other organizations with which one chooses to associate, see Hurley v. Irish-American Gay, Lesbian & Bisexual Group of Boston, 515 U.S. 557 (1995). MPR's process for choosing potential speech recipients - those organizations whose donors might share MPR's desire "to enrich the mind and nourish the spirit through radio, related technology, and services" (Compl. Exh. 1 at 8) - should not be second-guessed by the Attorney General or by this Court.(12) The State has no compelling interest which justifies overriding MPR's exercise of its First Amendment discretion in this area. In addition, because the content of the allegedly misleading miscommunication that the State asks this Court to enjoin and punish concerns MPR's choice of speech partners, granting the State's requested relief would not meet the "content neutral" requirement for state action under the First Amendment. In Heritage Publishing Co., Judge Alsop considered whether certain provisions of the charitable solicitation statute violated the First Amendment. He stated: The task of this court is to determine whether the criteria which the state establishes for entry into the profession of fund-raiser in some way infringes upon the First Amendment rights of the party seeking entry. For example, it is clear that Minnesota could not deny a license to a professional fund-raiser based upon the fund-raiser's political or religious statements or beliefs. Id., 634 F. Supp. at 1500 (emphasis added). Similarly in the present
case, the State seeks to impose a civil fine and injunction based upon MPR's
choice of speech (list) exchangees. Indeed, the State's Complaint specifically
challenges whether MPR properly chose to exchange lists with "organizations
ranging from the Democratic National Committee, a political party, to groups
engaged in lobbying efforts on controversial issues such as abortion and environmental
regulation." (Compl. 22.)(13) This claim is not a "content
neutral" imposition on MPR's actions, but an exercise of State power to attack
MPR's substantive choices about speech it has chosen to make available to its
donors. The claim misuses the charitable solicitation fraud statute to engage
in censorship.(14) Conclusion For all these reasons, Minnesota Public Radio respectfully requests
that the Court grant its motion and dismiss the Amended Complaint in its entirety. FAEGRE & BENSON LLP NOTES
1 It is not clear from the Complaint whether
the State alleges that each of the five alleged misrepresentations constitutes
a separate violation of Minn. Stat. § 309.55, subd. 5, or that each of the three
MPR communications (Website, 1999 brochure and 1996 brochure) constitutes a
separate violation, or that each separate list exchange (400) or each use of
each name in a list exchange (3 million) constitutes a separate violation. Because
the State alleges that the nature of the violation is misrepresentation, the
relevant "separate violation[s]" should be considered the three communications
or, at most, the five alleged misrepresentations within those three communications.
Should the State assert instead that each list exchange or each use of each
name in a list exchange constitutes a separate violation, that assertion would
be barred under Bell v. United States, 349 U.S. 81 (1955); see Blenski
v. State, 245 N.W.2d 906 (Wis. 1976). 2 "Occasionally" is defined as, "at times,
from time to time, now and then." Random House Dictionary of the English
Language at 1339 (2d ed. unabridged). In the employment context, doctors'
orders restricting a worker to activities performed "occasionally" is defined
as an activity performed up to one-third of the time. U.S. Dept. of Labor, Dictionary
of Occupational Titles at 1013 (4th Ed. 1991); Social Security Ruling 83-10,
20 C.F.R. § 404.1567(a) (defines "occasionally" as from very little up to one-third
of the time). See also Minn. Stat. § 167.27, subd. 8(2) (defines "occasional"
sales or leases of motor vehicles exempt from certain requirements as the sale
or lease "of not more than five motor vehicles in a 12-month period"); Minn.
Stat. § 169.72, subd. 4 ("occasional" use of studded snow tires permitted in
state, defined as no "more than 30 days in any consecutive six-month period");
Minn. Stat. § 245A.02, subd. 6a (drop-in child care program defined as program
of "occasional" use "up to a maximum of 90 hours per child, per month"). The
term is not defined within the Minnesota charitable solicitation statute. Given
the imprecise nature of the term, MPR's average exchange of each member's information
once every 53 days certainly falls within the zone of reasonable interpretation
of "occasionally." 3 The State might contend that "occasional"
exchanges should be measured by the frequency of list transactions (every 4.5
days), not the frequency of average member directory information transactions
(every 53 days). Because the allegation is "misrepresentations to donors," the
proper frame of reference is the expectation of individual donors with respect
to exchanges of their own directory information, i.e., once every 53 days. 4 One searches in vain for any such obligation
imposed in any section of the law, Minn. Stat. §§ 309.50 et seq. The
State appears to be attempting to use its regulatory power to create new laws. 5 In order to allege a fraudulent omission,
the State would have to allege as an essential element that MPR had a duty to
disclose the omitted statement. But it has failed to do so. See Midland Nat'l
Bank v. Perranoski, 299 N.W.2d 404, 413 (Minn. 1980) (duty to disclose must
underlie allegation of fraudulent omission); Klein v. First Edina Nat'l Bank,
196 N.W.2d 619 (no fraudulent omission unless law imposes duty to disclose);
cf. Basic Inc. v. Levinson, 485 U.S. 224 (1988) (same principle in securities
fraud context). 6 Even if this "undisclosed identity" allegation
were legally relevant, the allegation is baseless. MPR consistently describes
the list exchangees as "selected third parties" (Compl. Exh. 1 at 11), "select
companies and organizations, including other public radio stations and programs"
(Id.), "other organizations" (Compl. Exh. 1 at 3, also Exh. 4), and "other
organizations in which we think MPR members may be interested" (Compl. Exh.
3 at 6, also Exh. 5 at 2). There are no factual allegations in the Complaint
that any of these statements is false or misleading. 7 It should also be noted that MPR, like
all groups engaging in charitable fundraising solicitations, has a First Amendment
right to engage in telephone solicitations, which may not be prohibited by the
government. See Planned Parenthood League of Massachusetts, Inc. v. Attorney
General, 464 N.E.2d 55 (Mass.), cert. denied, 469 U.S. 858 (1984). 8 The phrase indicates not only MPR's intent
to exercise its subjective discretion ("we think") but also that the focus of
that discretion is the subjective frame of mind of MPR members ("may be interested").
The State's allegation that MPR should have employed some objective method to
ascertain member interests misconstrues the phrase actually used by MPR. Moreover,
what objective data would confirm MPR members' (plural) true interests: one
interested member? two? ten percent? a majority? Is MPR's representation about
its choice process even capable of being proved true or false? The bottom line,
for this motion, is that the State has not pleaded facts which, if true, would
establish that MPR committed fraud with this representation. 9 The State's failure to plead facts in
support of its claim is particularly telling in the area of charitable solicitation
law, where the Attorney General is given broad powers of investigation and discovery
without commencing a civil action. Minn. Stat. § 309.533, subds. 1 & 5. 10 In addition, the State's fifth claim
asks this Court to restrict MPR's rights of free speech and free association
protected under the First Amendment. The unconstitutionality of this claim is
discussed in detail in Part II.B, below, and provides a separate reason to dismiss
the claim in addition to the reasons stated in this Part I. 11 The standard is different for commercial
speech, where the government may restrict any false or misleading communication.
Central Hudson Gas & Elec. Corp. v. Public Service Comm'n, 447 U.S. 557,
563 (1980). Fully-protected speech - even when false - may not be restrained
without an extraordinary showing, Nebraska Press Ass'n v. Stuart, 427
U.S. 539, 561 (1976), nor may it be compelled, Miami Herald Publishing Co.
v. Tornillo, 418 U.S. 241, 258 (1974) ; and damages may not be imposed for
fully-protected speech without some showing of fault or scienter by the
speaker, Gertz v. Robert Welsh, Inc., 418 U.S. 323 (1976). At the least,
the State's fifth claim could not survive First Amendment scrutiny without pleading
and proving that MPR deliberately or recklessly lied to donors about its subjective
process for choosing list exchange organizations. The State has not pleaded
that kind of claim here, nor could it consistent with Rule 11. 12 Significantly, the Complaint alleges
no facts directly regarding MPR's decision process, despite the Attorney General's
extensive investigatory powers in this area. See note 9, supra.
Instead, the State points to the identity of MPR's speech recipients and, substituting
its judgment for MPR's, infers that MPR could not possibly have thought about
its members' interests in making those choices. That inference does not
withstand Rule 12 scrutiny and violates the First Amendment. 13 MPR chose to discontinue list exchanges
with political parties and political candidates in 1999, as stated in its Member
List Policy, Compl. Exh. 1 at 3-4. 14 The State's first four allegations
are "content neutral" in this respect, as they concern alleged misrepresentations
not about MPR's choice process, but about such viewpoint-neutral matters as
the frequency and scope of disclosure of directory information. 15 One can imagine (and the State just
served) an interrogatory directed from the State to MPR asking MPR to detail
all facts which show that its members would be "interested" in, or "benefit"
from, having their contact information traded with, e.g., Planned Parenthood,
the Democratic National Committee, the National Wildlife Federation, or other
particular organizations. Such an intrusive, McCarthy-esque interrogatory would
be patently unconstitutional. 16 Where a plaintiff challenges "conduct
which is prima facie protected by the First Amendment, the danger that the mere
pendency of the action will chill the exercise of First Amendment rights" requires
more exacting scrutiny of the complaint at the Rule 12 stage of proceedings.
Franchise Realty Interstate Corp. v. San Francisco Local Joint Executive
Board of Culinary Workers, 542 F.2d 1076, 1082-83 (9th Cir. 1976), cert.
denied, 430 U.S. 940 (1977); see also New York Times Co. v. Sullivan,
376 U.S. 254, 267-83 (1964) (recognizing the potential chilling effects of litigation
concerning conduct protected by the First Amendment); cf. Foley v. WCCO Television,
Inc., 449 N.W.2d 497, 504 (Minn. Ct. App. 1989) (recognizing judicial inquiry
may adversely affect First Amendment rights), review denied, cert. denied,
497 U.S. 1038 (1990). | ||||||
