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COMMONWEALTH PENNSYLVANIA v. NATIONAL FEDERATION BLIND AND AMERICAN BROTHERHOOD FOR BLIND (02/28/77)

decided: February 28, 1977.

COMMONWEALTH OF PENNSYLVANIA, APPELLEE,
v.
NATIONAL FEDERATION OF THE BLIND AND AMERICAN BROTHERHOOD FOR THE BLIND, APPELLANTS. COMMONWEALTH OF PENNSYLVANIA, APPELLANT, V. NATIONAL FEDERATION OF THE BLIND AND AMERICAN BROTHERHOOD FOR THE BLIND, INC., APPELLEES



COUNSEL

Allen C. Warshaw, Deputy Atty. Gen., Dept. of Justice, Harrisburg, for appellants.

Jerome H. Gerber, James L. Cowden, Harrisburg, for appellees.

Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Jones, C. J., did not participate in the consideration or decision of this case.

Author: Manderino

[ 471 Pa. Page 532]

OPINION

The Solicitation of Charitable Funds Act, Act of August 9, 1963, P.L. 628, as amended, 10 P.S. ยง 160-2(1) (Supp.1974-1975) requires all charities, domestic and foreign, to file a registration statement for approval by the Secretary of the Commonwealth prior to solicitation of funds in Pennsylvania. The registration is approved if it meets the requirements of the Act which are designed to protect the citizens of Pennsylvania from solicitations by unscrupulous charities including those who expend an excessive amount of the contributions received for expenses thus minimizing the monies available to directly benefit the beneficiaries of the charity.

The appellants, National Federation of the Blind (NFB) and American Brotherhood for the Blind, Inc., (ABB) are charitable organizations as defined in the Act. Both organizations are foreign corporations maintaining offices in Des Moines, Iowa. Appellants solicited

[ 471 Pa. Page 533]

    contributions from Pennsylvania residents in 1973 and 1974 by mailing letters to the homes of those solicited. Neither appellant filed a registration statement as required by the Act.

The Commonwealth of Pennsylvania, through the Attorney General, filed a complaint in equity which sought to enjoin further solicitations from Pennsylvania residents until the appellants complied with the filing requirements of the Act. The NFB and ABB filed preliminary objections to the Court's jurisdiction. The Commonwealth Court overruled the preliminary objections filed by appellants and subsequently denied the Commonwealth of Pennsylvania's request for a preliminary injunction. From these decrees the respective parties appeal.

THE APPEAL OF THE NATIONAL FEDERATION OF THE BLIND AND AMERICAN BROTHERHOOD FOR THE BLIND

The NFB and ABB contend that the Due Process Clause of the Fourteenth Amendment and the Commerce Clause of the United States Constitution prohibit the Commonwealth Court from exercising in personam jurisdiction over them. In effect they are arguing that because their only connection with Pennsylvania was the solicitation of contributions via the United States Mail, they are not subject to judicial scrutiny within this State. We cannot agree with this conclusion.

The Supreme Court of the United States set forth the due process standards of jurisdiction in a trilogy of cases beginning with International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) wherein the Court stated:

". . . due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he

[ 471 Pa. Page 534]

    have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" (Emphasis added.)

326 U.S. at 316, 66 S.Ct. at 158.

In McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), the Supreme Court of the United States applied this "minimum contacts" standard and concluded that California had jurisdiction over a foreign insurance company despite the fact that the company had no office or agent in California and had never solicited or done any insurance business in California apart from transactions through the mails involving a single insurance policy, the company's sole contact with California. The Court concluded that the state's manifest interest in providing effective means of redress for its residents outweighed any possible inconvenience to the insurer.

The limitations on the "minimum contacts" standard were expressed in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), where the Court decided that a Florida Court did not have jurisdiction over a nonresident trustee in a controversy involving the corpus of a trust. The Court distinguished McGee, supra, on three grounds. In McGee, (1) the cause of action arose out of an act done or transaction consummated in the forum state, (2) the forum state had enacted special legislation to exercise its "manifest interest" in providing effective redress ...


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