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D.E.L.T.A. Rescue v. Bureau of Charitable Organizations

July 8, 2009

D.E.L.T.A. RESCUE, PETITIONER
v.
BUREAU OF CHARITABLE ORGANIZATIONS, RESPONDENT



The opinion of the court was delivered by: Judge Cohn Jubelirer

Argued: February 24, 2009

BEFORE: HONORABLE DAN PELLEGRINI, Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE MARY HANNAH LEAVITT, Judge.

OPINION

D.E.L.T.A. Rescue (DELTA) petitions for review of the Final Adjudication and Order (A&O) of the Secretary of the Commonwealth (Secretary), which imposed an administrative fine of $3,000.00 against DELTA and ordered DELTA to cease its fundraising and solicitation within the Commonwealth until DELTA paid the administrative fine and complied with the registration, notification, and disclosure requirements of the Solicitation of Funds for Charitable Purposes Act (Act).*fn1 DELTA argues that: (1) the Act unconstitutionally infringes on DELTA's First and Fourteenth Amendment rights; (2) the disclosure requirement that the Secretary found DELTA to have violated is unconstitutionally vague; (3) the Secretary and the Department of State, Bureau of Charitable Organizations (Bureau) denied DELTA due process of law; (4) the Secretary's findings are not supported by substantial evidence; and (5) the Bureau is estopped from enforcing the Act against DELTA.

DELTA is a charity incorporated in California, the purpose of which is to provide "life-long care for over 1,200 abandoned dogs and cats at its shelter in Acton, Ca." (DELTA's Charitable Organization Registration Statement -- Form BCO-10 For the Fiscal Year Which Ended 12/31/99 (1999 Registration Statement) at 1.) In 1997, the Bureau initiated an investigation into whether DELTA was soliciting contributions in Pennsylvania without being registered as a charitable organization with the Bureau. As a result of this investigation, on June 7, 2000, the Secretary issued an order approving a Consent Agreement and Order (Consent Agreement) between DELTA and the Bureau in which DELTA admitted that it had solicited funds within the Commonwealth without first registering as a charitable organization with the Bureau as required by Section 15(a)(1) of the Act.*fn2

In the Consent Agreement, DELTA agreed to register with the Bureau as a charitable organization, not to solicit funds until it had registered as a charitable organization, and to pay a $5,000.00 administrative fine. DELTA registered as a charitable organization on July 7, 2000. Thereafter, DELTA maintained its registration "as a charitable organization from December 7, 2000 through November 11, 2001." (A&O Findings of Fact ¶ 7.) The record does not reflect that DELTA submitted an application for registration after this time period.

On January 4, 2001 the Bureau received a solicitation that DELTA had sent to an individual residing in Enola, Pennsylvania (First Solicitation).*fn3 This solicitation listed DELTA's address as "P.O. Box 9, Glendale, CA 91209." (First Solicitation, Hr'g Tr. Ex. C-3.) Additionally, the First Solicitation did not contain a disclosure statement required by Section 13(c) of the Act.*fn4 The Bureau received an additional solicitation on September 5, 2001, sent to an individual residing in Furlong, Pennsylvania and dated August 1, 2001 (Second Solicitation).*fn5 The Second Solicitation also stated an address of "PO Box 9, Glendale, CA 91209" and lacked the statement required by Section 13(c). (Second Solicitation, Examiner Hr'g Tr., Ex. C-3.)

On July 3, 2001, after DELTA had sent the First Solicitation, the Bureau informed DELTA that it violated the Act by failing to include the disclosure statement required by Section 13(c). The Bureau also informed DELTA that its solicitation did not comply with Section 13(b)(1) of the Act*fn6 because Section 13(b)(1) requires a charitable organization to disclose its location in its solicitations and, in the Bureau's opinion, "Post Office Box 9, Glendale, CA, is not considered a location." (Letter from Steven Ulrich, Special Investigator for the Bureau, to Leo Grillo, President of DELTA (July 3, 2001) at 1.) DELTA replied and raised issues regarding the constitutionality of the Act's requirements, similar to the arguments it raises before this Court. The Bureau replied to DELTA, acknowledging DELTA's concerns but stating that DELTA was still required to comply with the Act by disclosing its "physical location." The Bureau requested DELTA to reply within two weeks indicating that it understood the Act's requirements as described by the Bureau and would comply, or otherwise stop soliciting within the Commonwealth. The Bureau indicated that, if DELTA continued to solicit in the Commonwealth in violation of the Act, the case would be sent to a prosecuting attorney. The record contains no response from DELTA.

On August 14, 2002, the Secretary promulgated an order "directing [DELTA] to cease and desist solicitations in Pennsylvania until such time as [DELTA] include[d] the required disclosure statement and its address as registered with the Department on its solicitation materials." (Cease Order, August 14, 2002. (emphasis added).)

On June 18, 2004, the Bureau came into possession of a third solicitation (Third Solicitation), which was also sent to an individual in Furlong, Pennsylvania.*fn7 The Third Solicitation included DELTA's address as "PO Box 9, Glendale, CA 91209," but lacked the disclosure statement required by Section 13(c).

On September 1, 2006 the Bureau issued an Order to Show Cause (OSC) against DELTA, alleging that DELTA, had violated Section 13(c) by failing to include the required disclosure statement in its solicitations, and had violated Section 13(b) of the Act because its solicitations "used a post office box rather than [DELTA's] location." (OSC Factual Allegations ¶ 8.) The OSC charged DELTA with violating Section 15(a)(1) of the Act*fn8 by soliciting in Pennsylvania while not properly registered in violation of Section 5(a) of the Act,*fn9 by soliciting contributions in Pennsylvania while subject to the Cease Order in violation of Section 17(a)(1) of the Act,*fn10 by failing to include the disclosure statement mandated by Section 13(c), and by failing to include its physical location in its solicitations as required by Section 13(b)(1).

A hearing was held before a hearing examiner on November 15, 2006. The Bureau presented the testimony of Mr. Ulrich and introduced the First, Second and Third Solicitations into evidence. DELTA did not present testimony, but did cross-examine Mr. Ulrich and introduced correspondence between DELTA and the Bureau into evidence. The hearing examiner compiled the evidence into a record, which was submitted to the Secretary for determination.

The Secretary reviewed the record and issued the A&O concluding that DELTA "is subject to sanctions under section 17(a)(1) and 15(a)(1) of the [Act] for soliciting charitable contributions in Pennsylvania in violation of [the Cease Order]." (A&O, Conclusions of Law (COL) ¶ 3.) The Secretary also concluded that DELTA violated Section 13(c) and (b)(1) by failing to include the disclosure statement and DELTA's location. (COL ¶¶ 4-5.) Finally, the Secretary concluded that DELTA violated the Act by soliciting without a current registration, in violation of Section 5(a). DELTA now appeals to this Court.*fn11

On appeal to this Court, DELTA argues that: (1) various sections of the Act which the Secretary found DELTA to have violated are unconstitutional; (2) the Secretary's order that DELTA cease and desist from soliciting contributions in the Commonwealth until DELTA complied with Section 13(b)(1) and Section 13(c) was unconstitutional; (3) DELTA was denied due process of law; (4) the Secretary's findings of fact are not supported by substantial evidence; and (5) the Bureau is estopped from enforcing the Act against DELTA.

DELTA first argues that various sections of the Act, which the Secretary found DELTA to have violated, are unconstitutional. DELTA argues that: (1) the requirement in Section 13(c) of the Act that charitable solicitations contain a disclosure statement violates the First and Fourteenth Amendments to the United States Constitution; (2) the requirement of Section 13(b)(1) of the Act that solicitations disclose a charitable organization's location violates the First and Fourteenth Amendments of the United States Constitution; (3) Section 13(b)(1) of the Act is unconstitutionally vague; and (4) Sections 5(a) and 15(a)(1) of the Act are unconstitutional prior restraints on speech.

DELTA argues that its solicitations are a form of protected speech under the First Amendment and, because Section 13(c) requires it to make the Disclosure Statement, which DELTA would not otherwise make, Section 13(c) violates DELTA's right to free speech. For the following reasons, we disagree.

As a preliminary matter, we note that DELTA is correct that its solicitations are protected speech under the First Amendment. The United States Supreme Court has held that charitable solicitation is speech that is fully protected by the First Amendment. Riley v. National Federation of the Blind, 487 U.S. 781, 788-89 (1988); Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620, 632 (1980). Restrictions on such protected speech must be narrowly ...


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