Similar laws restricting professional advertising in different fields received disparate treatment in 1998. The U.S. Court of Appeals for the Seventh Circuit struck down an Illinois law that attempted to regulate the solicitation of clients by real estate agents. Pearson v. Edgar, 1998 U.S. App. LEXIS 18260 (7th Cir. 1998). Meanwhile, the Eleventh Circuit upheld a Georgia law prohibiting the uninvited, face-to-face solicitation of potential clients by lawyers. Falanga v. State Bar of Georgia, 150 F.3d 1333 (11th Cir. 1998).

Real Estate Solicitation in Pearson v. Edgar

   Pearson v. Edgar is the latest decision in a twisted saga surrounding the constitutionality of an Illinois statute intended to prohibit "blockbusting." Blockbusting is a real estate practice in which real estate agents encourage homeowners to put their homes on the market by exploiting fears of change in the racial composition of the neighborhood that will result in declining home values. The statute, 720 ILCS 590/1 §1(d), allows homeowners to notify real estate agents that they do not wish to be solicited; solicitation of such a homeowner by a real estate agent is a criminal offense.

   In 1986, Century 21 Pearson, Inc. Realtors, realtor Alvin Pearson, and his employee Brenda Curtis were criminally charged with violating this statute. Their criminal complaints were dismissed but only after both Pearson, Curtis, and another employee were assessed a $100 fine and placed under court supervision. In turn, Pearson and Curtis filed a civil rights suit alleging the statute violated the First Amendment, the Equal Protection Clause, and that it was unconstitutionally vague. They sought a preliminary injunction preventing its enforcement.

   The U.S. District Court for the Northern District of Illinois dismissed the case after finding the complaint failed to state a claim under the First Amendment. Plaintiff Curtis filed an appeal. The U.S. Court of Appeals for the Seventh Circuit affirmed. Curtis v. Thompson, 840 F.2d 1291 (7th Cir. 1988). The case was remanded to the district court, where it was dismissed in its entirety. Pearson v. Thompson, 1989 U.S. Dist. Lexis 8970 (N.D. Ill. 1989). The plaintiffs appealed and the Seventh Circuit once again affirmed. Pearson v. Thompson, 955 F.2d 46 (7th Cir. 1992).

   The plaintiffs petitioned the U.S. Supreme Court for a writ of certiorari. The Supreme Court granted the writ, vacated the opinion, and remanded the case back to the Seventh Circuit for further consideration in light of the Supreme Court's recent decision in City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410 (1993). Pearson v. Edgar, 507 U.S. 1015 (1993).

   The Seventh Circuit, in turn, remanded the case to the district court. Pearson v. Thompson, 4 F.3d 997 (7th Cir. 1993). The district court conducted an evidentiary hearing in light of Discovery Network. At the conclusion of that hearing, the district court held that the State of Illinois had failed to satisfy the four-part test for commercial speech set forth in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980). Specifically, the district court found the state had failed to prove that the statute directly advanced its asserted goals, the prevention of blockbusting and the protection of residential privacy.

   On appeal, the Seventh Circuit upheld the district court's determination that this statute violated the First Amendment. Pearson v. Edgar, 1998 U.S. App. LEXIS 18260 (7th Cir. 1998). The court began its analysis by reviewing a previous decision in this case, Curtis v. Thomas, 840 F.2d 1291 (7th Cir. 1988). In Curtis, the Seventh Circuit held that the state had adequately proved the statute furthered the state's interest in protecting residential privacy. In reaching that result the court relied on the Central Hudson test: (1) The speech must concern lawful activity and not be misleading; (2) the asserted governmental interest must be substantial; (3) the regulation must directly and materially advance the governmental interest asserted; and (4) the regulation must not be more extensive than necessary to serve that interest. Central Hudson, 447 U.S. at 566. The Seventh Circuit held that the statute satisfied this test.

   In the instant review of the statute, the Seventh Circuit first ruled that the anti-blockbusting provisions did not satisfy the third and fourth prongs of Central Hudson. It noted that the district court had found as a fact that blockbusting no longer occurred with any frequency in Illinois. The appellate court could not call this finding clearly erroneous. Without evidence that blockbusting was a problem in Illinois, the court of appeals could not say that the regulation directly advanced the governmental interest asserted or that the regulation was not more extensive than necessary to serve that interest.

   The court also found that the state's interest in protecting residential privacy did not pass muster. In so holding, the court analyzed the Supreme Court decision in Discovery Network. In Discovery the Supreme Court considered a restriction that banned the distribution of handbills from commercial newsracks but imposed no similar ban on "regular" newspapers. The city asserted that safety and aesthetics justified its regulation. The Supreme Court agreed these were substantial interests but disagreed that the regulation at issue furthered those interests. Discovery Network, 507 U.S. at 424. The Seventh Circuit found that two major concepts permeate Discovery Network: (1) the importance of "reasonable fit" between the restriction on speech and the goal to be achieved by that restriction; and (2) the value of commercial speech - while commercial speech enjoys less protection than noncommercial speech, it is not entitled to so much less protection that it may be banned without adequate justification. Pearson, 1998 U.S. Dist. LEXIS 18260 at 14.

   The court of appeals applied these two principles to the case at hand and declared the Illinois statute unconstitutional. While the speech at issue was lawful and not misleading and the interest in protecting residential privacy was substantial, the court held that the state had not shown a reasonable fit between the law and the asserted interest:

The Supreme Court's decisions require "a 'fit' between the legislature's ends and the means chosen to accomplish those ends - a fit that is not necessarily perfect, but reasonable; that represents not necessarily the single best disposition but one whose scope is Oin proportion to the interest served, that employs not necessarily the least restrictive means but, as we have put it in other contexts discussed above, a means narrowly tailored to achieve the desired objective." Pearson, 1998 U.S. Dist. LEXIS 18260 at 16 (citations omitted).

   The court affirmed the judgment of the district court that the Illinois statute violated the First Amendment.

Legal Solicitation in Falanga v. State Bar of Georgia>

   A Georgia restriction on face-to-face solicitation by attorneys was upheld despite a First Amendment challenge. Falanga v. State Bar of Georgia, 150 F.3d 1333 (11th Cir. 1998). The regulation at issue was a Georgia Rule of Court prohibiting direct personal solicitation of clients who have not sought the advice of a lawyer, as well as the retention by lawyers of agents to personally solicit clients on the lawyers' behalf. Attorneys Robert Falanga and Ronald Chalker challenged the law as violative of their First Amendment rights. The U.S. District Court for the Northern District of Georgia ruled in an unpublished opinion that the prohibition on in-person, uninvited solicitation was unconstitutional.

   On appeal, the U.S. Court of Appeals for the Eleventh Circuit reversed. Id. Before engaging in a traditional analysis under the four-part test found in Central Hudson, the court noted that the essence of the parties' dispute revolved around the application of two U.S. Supreme Court cases: Ohralik v. Ohio State Bar Association, 436 U.S. 447 (1978), and Edenfield v. Fane, 507 U.S. 761 (1993).

   In Ohralik, a personal injury lawyer approached two young accident victims at a time when the victims were incapable of making judgments or protecting their own interests. One was in traction and the other had just returned home from the hospital. The Supreme Court of Ohio sanctioned the lawyer, rejecting his contention that enforcement of the rules prohibiting face-to-face solicitation of potential clients violated the First Amendment. The U.S. Supreme Court affirmed. The Court characterized the lawyer's conduct as "a striking example of the potential for overreaching that is inherent in a lawyer's in-person solicitation of professional employment." Ohralik, 436 U.S. at 468.

   Edenfield was decided 15 years later. The case involved a certified public accountant who wished to obtain clients by making unsolicited business calls and arranging meetings to explain his services and expertise - a violation of existing Florida law. The U.S. Supreme Court agreed with the CPA that the blanket ban on direct, in-person, uninvited solicitation by CPAs could not be sustained as applied to the proposed speech. Edenfield, 507 U.S. at 767.

   The court of appeals decided that Ohralik provided a better framework for the facts of this case. It noted that the Ohio law in Ohralik restricted lawyers' in-person, uninvited solicitation through substantially identical means as the Georgia regulation at issue. Unlike Edenfield, Georgia lawyers regulated by this rule do not solicit business clients, but rather solicit poor, uneducated individuals who are usually in desperate situations. Finally, the court noted that the Supreme Court itself had distinguished Edenfield from Ohralik:

Unlike a lawyer, a CPA is not "a professional trained in the art of persuasion. A CPA's training emphasizes independence and objectivity, not advocacy.... The typical client of a CPA is far less susceptible to manipulation than the young accident victim in Ohralik. Fane's prospective clients are sophisticated and experienced business executives who understand the services that a CPA offers and, in general, the prospective client has an existing professional relation with an accountant and so has an independent basis for evaluating the claims of a new CPA seeking professional work." Falanga, 150 F.3d at 1340 (citing Edenfield, 507 U.S. at 775).

   The court of appeals reversed the district court's holding that the ban on in-person, uninvited solicitation was unconstitutional, holding instead that the State Bar of Georgia could restrict this form of advertising consistent with the First Amendment rights of lawyers.