A federal judge is standing by his prior determination that Colorado’s regulations on charitable solicitations are constitutional, amid a First Amendment challenge to the law itself and to the manner in which Secretary of State Jena Griswold applied it to an Ohio-based company.

InfoCision Management Corporation, located in Akron, Ohio, alleged a portion of Colorado’s Charitable Solicitations Act unconstitutionally infringed upon its free speech rights as a company that is paid to make solicitations on behalf of nonprofit groups. Further, InfoCision claimed Griswold’s office abused its discretion in 2019 by denying the renewal of InfoCision’s registration and affected its ability to “engage in fully protected speech.”

But in November, U.S. District Court Judge William J. Martínez rejected those arguments, noting the legal provision used to deny InfoCision’s registration was unrelated to the content of solicitors’ speech, and instead pertained to who was doing the “speaking.” Importantly, InfoCision differed in one key respect from other paid solicitors: The federal government had prohibited InfoCision from continuing to use deceptive practices.

“The statute only prohibits persons enjoined from engaging in deceptive conduct from acting as paid solicitors for a defined period,” Martínez wrote. “InfoCision can still speak, for example, about the work of its clients and advocate for their policy priorities. The provision simply prohibits InfoCision from acting as a paid solicitor in Colorado.”

Although InfoCision asked the judge to reconsider his decision, Martínez declined to do so earlier this month, finding nothing had changed that would affect his legal reasoning.

Colorado’s legislature enacted the Charitable Solicitations Act after finding fraudulent solicitations on behalf of charities were a “widespread practice” that siphoned money away from legitimate organizations. The law requires the secretary of state to look at registration applications for paid solicitors and decide within 10 days whether an application satisfies requirements.

The provision at issue in InfoCision’s lawsuit stipulates that no one may act as a paid solicitor in Colorado if, among other things, they are under an injunction from another state or the U.S. government prohibiting them from engaging in deceptive conduct.

InfoCision has represented approximately 30 different nonprofit and charity clients, including the American Heart Association, American Cancer Society and March of Dimes. In Septembet 2017, it signed a document labeled “Stipulated order for permanent injunction,” after the Federal Trade Commission accused InfoCision of violating the law while making telephone calls on behalf of its clients. InfoCision characterized the government’s actions as a “difference in interpretation” over the need for InfoCision to promptly disclose the purpose of its calls.

Although there was no finding of wrongdoing, InfoCision agreed to pay a $250,000 civil penalty and was “enjoined from engaging in” further deceptive practices.

On July 30, 2018, InfoCision, which had long been registered as a paid solicitor in Colorado, sought to renew its application with the office of then-Republican Secretary of State Wayne Williams. It disclosed the FTC injunction, as well as past legal action taken against it in several other states. On Aug. 10, Williams’ office denied the renewal after determining the settlement with the FTC was the type of injunction that disqualified a company from being able to solicit donations under the Charitable Solicitations Act.

“Because deception can occur in states other than Colorado, Colorado must be able to look to court orders and administrative proceedings from other states when fashioning restrictions to protect Coloradans,” the Colorado Attorney General’s Office explained in the litigation.

InfoCision objected and the secretary of state’s office retracted its denial — only because it realized it had missed the legal deadline by one day for denying InfoCision’s renewal. By default, InfoCision therefore received its renewal for one year.

Then in 2019, with Griswold, a Democrat, as the new secretary of state, the office once more denied InfoCision’s renewal on the grounds that the federal injunction prohibiting InfoCision from engaging in deceptive business practices disqualified the company from registering as a paid solicitor under Colorado’s Charitable Solicitations Act.

InfoCision then sued, challenging the constitutionality of the state law and also Griswold’s application of the disqualification provision.

“Speaking as a professional solicitor is not only InfoCision’s business, work, and livelihood; it is its fundamental right,” wrote the company’s lawyers. “Even if the legislature’s intent was benign, the statutory ban sweeps fully protected charitable speech within its proscription, thereby silencing protected speech before it is to occur. That is the ‘essence of censorship.'”

InfoCision asked Martínez to evaluate the constitutionality of the law using “strict scrutiny,” alleging the disqualification provision amounted to a restriction on the content of speech that is only permissible in narrow circumstances. The government, in contrast, argued the Charitable Solicitations Act applied not to the content of the speech, but to the speaker itself. Specifically, to paid solicitors who the U.S. government prohibits from engaging in deceptive practices.

Martínez agreed the law applied to speakers and not to the content of speech, meaning the disqualification provision was not subject to strict scrutiny. He evaluated the provision by asking whether it supported a key governmental interest that was unrelated to the suppression of speech, and whether the government would achieve its interest less effectively without the law. In all instances, Martínez answered yes.

The purpose of the disqualification provision, he wrote in a Nov. 9 order, “is not simply to inform the public but to protect Coloradans from deceptive solicitors siphoning off contributions that would otherwise be available for legitimate charitable organizations.”

As for Griswold’s actions in denying InfoCision’s renewal, Martínez found that, just as the law required the secretary of state to approve any application after the 10-day deadline expired, it required the disqualification of any paid solicitor that is covered by an injunction.

“Both of the Secretary’s decisions demonstrate compliance with the statute and her lack of discretion in carrying out its mandates,” the judge added.

One month later, InfoCision asked Martínez to reconsider his ruling. The company mentioned a federal lawsuit out of Connecticut, in which a judge blocked various portions of Connecticut’s regulations on paid solicitors after finding they violated the First Amendment. None of the provisions, however, pertained to injunctions for deceptive conduct.

Because the judge in Connecticut had determined the paid-solicitor requirements were content based, InfoCision argued the reasoning requires “the same result in each case.”

Martínez was unmoved. Not only was he not bound by another trial judge in a different state, but the Connecticut decision had been issued four months before his own ruling. 

There was “nothing preventing Plaintiff” from bringing the case to his attention earlier, Martínez wrote in a brief Aug. 4 order.

In a statement, Griswold’s office said the judge’s refusal to reconsider his decision “reaffirms that the secretary of state’s action to protect the public and consumers who make charitable contributions was appropriate.”

Karen Donnelly, an attorney for InfoCision, indicated she plans to appeal Martínez’s ruling.

“The district court’s decisions applied the incorrect level of First Amendment scrutiny required for prior restraints on charitable speech and they have a chilling effect on First Amendment rights,” she said.

The case is InfoCision Management Corporation v. Griswold.