Misc. Ramblings

As is the case with many judicial decisions, there is some good news and some bad news. The good news is the the U.S. Supreme Court reaffirmed yesterday that fraud is not protected speech under the First Amendment to the U.S. Constitution.

In ILLINOIS EX REL. MADIGAN, ATTORNEY GENERAL OF ILLINOIS v.TELEMARKETING ASSOCIATES, INC., ET AL. CERTIORARI TO THE SUPREME COURT OF ILLINOIS, No.01-1806, 538 U.S.____(2003) (see it here in a 346k pdf file)

The Illinois Attorney General filed a complaint in state court, alleging, inter alia, that Telemarketers represented to donors that a significant amount of each dollar donated would be paid over to VietNow for specifically identified charitable endeavors, and that such representations were knowingly deceptive and materially false, constituted a fraud, and were made for Telemarketers' private pecuniary benefit.

In this case, VietNow, a charitable nonprofit corporation contracted with a telemarketer to solicit donations. The contract provided, among other things, that 85 percent of the money received would go to the for profit telemarketer, leaving 15 cents, on every dollar, to VietNow. The fraud occurred when the Telemarketers intentionally misled prospective donors into believing the majority of the donation would be going to VietNow.

The bad news (other than 85 percent of the donations going to the telemarketer and not to help Vietnam veterans - ed)? That the court reaffirmed that charitable solicitations are protected speech. That is, commercial speech, in the form of a charitable solicitation, even if, theoretically, 99.99999999 percent of the donation went to the telemarketer, is protected under the First Amendment as long as the Telemarketers does not mislead anyone regarding the amount going to them. Of course, the potential donor must ask the telemarketer what the split is because the telemarketer is under no obligation to volunteer that information. And even if you ask, that doesn't mean the telemarketer has to divulge that information. But if they refuse to tell you, and you decide to give them money anyway, then shame on you.

I guess you can file this under "let the buyer (or in this case, donor) beware."

Aloha!