The federal appeals court based in Denver dismissed a constitutional challenge to a portion of Colorado’s law governing paid nonprofit solicitors, determining on Friday that the lawsuit against Secretary of State Jena Griswold was now moot.

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 annually and decide whether an application satisfies the requirements.

InfoCision Management Corporation, located in Akron, Ohio, alleged a portion of Colorado’s Charitable Solicitations Act infringed upon its free speech rights as a company paid to make solicitations. The dispute originated in 2018, when a federal judge in Ohio ordered InfoCision to pay a penalty of $250,000 and barred it from making misrepresentations to the public following allegations from the Federal Trade Commission of deceptive practices.

In response, Griswold’s office denied InfoCision’s attempt to renew its registration. Under the Charitable Solicitations Act, no one may act as a paid solicitor in Colorado if, among other things, another state or the U.S. government enjoined them from engaging in deceptive conduct within the past five years. 

U.S. District Court Senior Judge William J. Martínez sided against InfoCision in its legal challenge, prompting an appeal. During oral arguments last year before the U.S. Court of Appeals for the 10th Circuit, a three-judge panel expressed some concern that Colorado’s law was too broad. However, there was a more immediate issue: the five-year window following InfoCision’s injunction had ended and Griswold’s office recently permitted InfoCision to re-register.

The panel returned the case to Martínez and asked him to evaluate whether the case was now moot. In a May 14 order, he concluded the courts could do nothing further for InfoCision.

“While it may be true that other states are monitoring this litigation,” Martínez acknowledged, “InfoCision has not presented evidence that another state is considering revoking or denying its registration based on Colorado’s previous denial of its registration.”

Returning to the 10th Circuit, InfoCision insisted its rights were still in danger because other states could restrict its solicitation activities based on Colorado’s five-year suspension. It cited a statement from Mississippi’s assistant secretary of state confirming she would deny InfoCision’s registration unless Colorado issued an order “lifting the denial.”

The 10th Circuit panel, however, agreed with Martínez and Griswold that Mississippi had not actually committed to blocking InfoCision’s registration based on Griswold’s original denial. In fact, Mississippi appeared to take the opposite position once informed of all the circumstances.

“It is undisputed that InfoCision has successfully re-registered as a paid charitable solicitor in Colorado. Ordering the Secretary to register InfoCision is thus pointless,” wrote Judge Carolyn B. McHugh in the Aug. 9 order. She added that InfoCision’s fear of other states using Colorado’s 5-year-old denial to issue their own sanctions “is pure speculation.”

The panel’s majority, consisting of McHugh and Judge Scott M. Matheson Jr., declined to overturn Griswold’s original denial. Although McHugh acknowledged the “general practice” of vacating trial judges’ orders when cases become moot, she noted there was seemingly no precedent for doing the same with a state agency’s decision.

Judge Harris L Hartz dissented solely on the question of whether to let Griswold’s decision stand on the record. He believed the continued existence of InfoCision’s denial could, as the company argued, negatively affect it in other states even as InfoCision could no longer challenge it in court.

“When a court challenge to a decision by a federal administrative agency has become moot on appeal, the regular practice of the United States Supreme Court has been to order the agency to vacate and set aside its decision,” Hartz wrote. “I see no reason why the same practice should not apply to state administrative agencies that have been properly brought into federal court on a challenge to the agency action. After all, if the case had not been mooted, we would certainly have had full authority to order the state agency to vacate its order.”

The case is InfoCision Management Corp. v. Griswold.