Bailey v. Morales

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

________________________

No. 98-41071

________________________

MARK BAILEY, et al.,

Plaintiffs

MARK BAILEY, DC; TODD BOYD, DC; CURTIS COOK, DC

Plaintiffs-Appellants

-vs-

DAN MORALES, Attorney General, State of Texas

Defendant-Appellee

____________________________________________

Appeal from the United States District Court

for the Southern District of Texas

____________________________________________

September 16, 1999

Before JONES, and WIENER, Circuit Judges, and LITTLE, Chief

District Judge.*

LITTLE, District Judge:

Mark Bailey, D.C. (“Bailey”) appeals the district court’s

ruling upholding the constitutionality of Texas House Bill

1327 (“H.B. 1327").1 We REVERSE the district court’s ruling

*

Chief Judge F.A. Little, Jr. of the Western District of Louisiana, sitting by designation.

1

In so doing, the district court found no violation of the first or fourteenth amendments.

with respect to the first amendment and declare the statute

unconstitutional as applied to chiropractors.

I.

This case arises out of the Texas Legislature’s attempt

to regulate the “cottage industry” of alleged ambulance-

chasing chiropractors and others that has emerged in Texas.

Touting the state interests of consumer privacy, protection

and the need to preserve the reputations of state-licensed

professionals, the Seventy-Fifth Texas Legislature passed H.B.

1327, which prohibits chiropractors and other professionals

from soliciting employment, in person or over the telephone,

from individuals who have a special need for chiropractic

services arising out of a particular occurrence (e.g., an

accident) or a pre-existing condition (e.g., having

arthritis).2 The act exempts from its prohibition

2

In its pertinent parts, H.B. 1327 states: “A person commits an offense if, with intent to obtain an economic benefit the

person . . . (2) solicits employment, either in person or by telephone, for himself or for another[.]” 1997 Tex. Sess. Law Serv. 750

(H.B. 1327) (amending Tex. Penal Code Ann. § 38.12(1)(2)) (Vernon’s, W ESTLAW through TX LEGIS 750 (1997)).

Under the act, “soliciting employment” means:

to communicate in person or by telephone with a prospective client or a member of the prospective client’s

family concerning professional employment within the scope of a professional’s license, registration, or

certification arising out of a particular occurrence or event, or series of occurrences or events, or concerning

an existing problem of the prospective client within the scope of the professional’s license, registration , or

certification, f or the purpose of providing professional services to the prospective client, when neither the

person receiving the communication nor anyone acting on that person’s behalf has requested the

communication. The term does not include a communication initiated by a family member of the person

receiving a communication, a communication by a professional, who has a prior or existing professional-client

relationship with the person receiving the communication, or communication by an attorney for a qualified

nonprofit organization with the organization’s members for the purpose of educating the organization’s

members to understand the law, to recognize legal problems, to make intelligent selection of legal counsel,

or to use available legal services. The term does not include an advertisement by a professional through

public media.

2

communications initiated by the injured or ill person or a

member of his family, communications by a chiropractor (or

other professional) who has an existing professional-client

relationship with the injured or ill person, and

communications by attorneys for qualified nonprofit

organizations for the purpose of providing legal aid or

education to the organization’s members. The act also

prohibits solicitation via “runners” or telemarketing and by

distributing promotional gifts and items.3 Finally, the act

proscribes the acceptance of employment obtained by way of the

prohibited solicitation.4

Plaintiffs Mark Bailey, D.C., Todd Boyd, D.C. and Curtis

Cook, D.C. are chiropractors licensed and doing business in

the state of Texas. Plaintiffs testified that, prior to the

passage of H.B. 1327, they engaged in the following

Id. § 1 (amending Tex. Penal Code Ann. § 38.01(11)).

Finally, H.B. 1327 defines “professional” broadly as “an attorney, chiropractor, physician, surgeon, private investigator,

or any other person licensed, certified, or registered by a state agency that regulates a health care profession.” Id. (amending Tex.

Penal Code Ann. § 28.01(12)).

3

A person commits an offense if, with intent to obtain an economic benefit the person . . .

(3) pays, gives, or advances or offers to pay, give, or advance to a prospective client

money or anything of value to obtain employment as a professional from the prospective

client; (4) pays or gives or offers to pay or give a person money or anything of value to

solicit employment.

Id. § 2 (amending Tex. Penal Code Ann. §§ 38.12(a)(3),(4)); see also id. (amending Tex. Penal Code Ann. §§ 38.12(b)(1),(2)) (“A

person commits an offense if the person: (1) is . . . [a] chiropractor . . . and; (2) invests funds the person knows or believes are

intended to further the commission of an offense under Subsection (a).”).

4

“A person commits an offense if the person . . . (3) is a professional who knowingly accepts employment within the

scope of the person’s license, registration, or certification that results from the solicitation of employment in violation of Subsection

(a).” Id. (amending Tex. Penal Code Ann. § 38.12(b)(3)).

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activities: (1) visiting senior citizen centers to speak to

the elderly about the benefits of chiropractic care for the

alleviation of arthritis pain; (2) contacting employers to ask

them to refer injured workers for chiropractic care; (3)

employing telemarketers to call victims of accidents (whose

names are obtained from accident reports and work-related

injury reports) to inform them of the benefits of chiropractic

care; and (4) informing accident victims at the scene of an

accident that the chiropractor has witnessed about the

benefits of chiropractic care. The plaintiffs wish to

continue these activities, but they fear that H.B. 1327

outlaws their intended acts.

Plaintiffs filed suit on 4 September 1997, praying for

injunctive and declaratory relief on the grounds that H.B.

1327 violated their first and fourteenth amendment rights.

Without ever holding an evidentiary hearing or requesting the

submission of any evidence from the State of Texas (“the

State”), the district court upheld the constitutionality of

H.B. 1327. Agreeing with the suggestion of the State, the

district court held that visits to senior citizen centers and

requests for referrals from employers would not violate H.B.

1327, so long as neither the senior citizen centers nor the

employers received compensation from the chiropractors.

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II.

Recognizing that first amendment problems present

intertwined questions of law and fact, Fifth Circuit precedent

prescribes de novo review of the district court order. See

Moore v. Morales, 63 F.3d 358, 361 (5th Cir. 1995); Lindsay v.

City of San Antonio, 821 F.2d 1103, 1107-08 (5th Cir. 1987);

Dunagin v. City of Oxford, 718 F.2d 738, 748 n.8 (5th Cir.

1983) (plurality opinion, Reavley, J.), cited with approval in

Lockhart v. McCree, 476 U.S. 162, 170 n.3 (1986).

III.

Barratry involves stirring up or exciting litigation,

some of which may be frivolous. At common law, a cause of

action could not lie without three such instances. See, e.g.

9 FL Jur. 2d § 4 (1997); 2 Witkin & Epstein, Cal. Criminal Law

(2d ed. 1988) § 1131, p. 1310. Statutes, however, may make

individual acts of solicitation an offense of barratry. See

Tex. Penal Code Ann. art. 290 (1901) (repealed 1917); 9 FL

Jur. 2d § 4; see also Susan Lorde Martin, Syndicated Lawsuits:

Illegal Champerty or New Business Opportunity?, 30 Am. Bus.

L.J. 485, 488-89 (1992).

The offense of barratry has an ancient lineage. In some

form, the doctrine of barratry existed in Greek and Roman

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times, as well as in the Middle Ages in England. See Martin,

supra at 487. Moreover, the legal profession’s resistance to

solicitation derives from the Magna Carta-era traditions of

the English system of legal education. Beginning in the

thirteenth century, the Inns of Court trained wealthy young

men, who, needing no income, “viewed law practice as a public

service instead of a trade.” Katherine A. Laroe, Comment,

Much Ado About Barratry: State Regulation of Attorneys’

Targeted Direct-Mail Solicitation, 25 St. Mary’s L.J. 1513,

1519-20 (1994). This view even gave rise to an eighteenth

century law forbidding barristers from accepting fees, id. at

1520, much less soliciting them.

The State of Texas also has a long history with laws

against barratry: it enacted its first criminal barratry

statute in 1876. Id. at 1524. The barratry law has undergone

periodic updates, of which H.B. 1327 is the latest. And in

the years following 1876, the United States Supreme Court

explicitly acknowledged that the first amendment protects

commercial speech. Since solicitation of business by

chiropractors (even barratrous solicitations) is commercial

speech, this court must measure the prohibition imposed by

H.B. 1327 against the proscriptions of the first amendment.

6

Courts scrutinize commercial speech under the

intermediate standard set forth in Central Hudson Gas & Elec.

Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557 (1980).

This standard grants states free rein to regulate false,

deceptive or misleading speech. See id. at 563-64. If the

state wishes to regulate truthful and non-deceptive speech

that merely proposes a commercial transaction, however, the

state bears the burden of proving the following: (1) the

state has a substantial interest, (2) the regulation directly

and materially advances, and (3) the regulation is “narrowly

drawn.” See id. at 564-65.

The State has asserted three interests in this case: (1)

forbidding solicitation where the sellers are likely to engage

in, and the prospective buyers are vulnerable to, undue

influence, intimidation, overreaching, or other vexatious

conduct; (2) protecting the privacy and tranquility of injured

people; and (3) upholding the reputations and public images of

the professionals licensed by the state. We accept this

showing as one that satisfies the Central Hudson standard,

since the Supreme Court has recognized each of these interests

as being substantial. See Florida Bar v. Went For It, Inc.,

515 U.S. 618, 624-25 (1995) (maintaining ethical standards in

state-licensed professions, privacy); Edenfield v. Fane, 507

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U.S. 761, 770 (1993) (preventing fraud, maintaining ethical

standards, privacy); Ohralik v. Ohio State Bar Ass’n, 436 U.S.

447, 460 (1978) (maintaining ethical standards, preventing

vexatious conduct).

Despite its strong interests, however, the State has not

satisfied its burden of showing that H.B. 1327 materially and

directly advances them. The Supreme Court has established

that “mere speculation or conjecture” will not satisfy the

burden; “rather, a governmental body seeking to sustain a

restriction on commercial speech must demonstrate that the

harms it recites are real and that its restriction will in

fact alleviate them to a material degree.” Edenfield, 507

U.S. at 770-71. This standard is by no means insurmountable:

the Supreme Court permits states to justify speech regulations

by “reference to studies and anecdotes pertaining to different

locales altogether, or even . . . based solely on history,

consensus, and ‘simple common sense.’” Went For It, 515 U.S.

at 628 (citations omitted). And yet, in Edenfield, the

Supreme Court held that the state of Florida had not carried

its burden when “[i]t present[ed] no studies[,] . . .[t]he

record [did] not disclose any anecdotal evidence[,] . . . [and

t]he only suggestion that a ban on solicitation might help

prevent fraud and overreaching . . . [was an] affidavit . . .

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which contain[ed] nothing more than a series of conclusory

statements[.]” 507 U.S. 771.

Here, the State concedes that it relies on “common

sense,” not data or empirical evidence, to demonstrate that

H.B. 1327 directly and materially advances its interests. The

only other way it attempts to carry its burden is by citation

in its brief, as authority for its position, to the statements

of two House members made during the 19 March 1997 public

hearing about the bill. But these statements (which

constitute two conclusory opinions and one anecdote) are not

even part of the record, nor have they been introduced into

evidence. Therefore, the success of the State’s effort to

carry its burden on this prong depends on the plausibility of

the State’s insistence that in-person and telephonic

solicitation of injured or ill people by chiropractors is

“inherently conducive to overreaching and other forms of

misconduct.” Ohralik, 436 U.S. at 464. While speaking to

seniors at senior citizen centers and contacting employers

about injured workers5 are activities that do not seem

5

Though the district court held that H.B. 1327 would not proscribe these efforts, the plain language of the statute clearly

embraces speaking to seniors at a senior citizen center within its scope, and nothing within the statute suggests the existence of

an exception on the basis of whether the senior citizen center receives a fee from the chiropractor because the senior citizen center

would not be soliciting for the chiropractor.

Whether asking employers to refer injured workers falls within the statute is less clear. If the chiropractor pays the

employer, then the conduct clearly violates § 38.12(a)(4). If the chiropractor does not pay the employer, however, then the

chiropractor may not be “soliciting,” since the chiropractor is not speaking to the prospective client or a member of his family (unless

“client” is construed to include an employer who refers injured workers). The district court did not ratiocinate this issue at all; it

merely stated, summarily, that it agreed with the State that speaking to employers would not offend H.B. 1327 so long as the

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inherently conducive to overreaching, nor likely to result in

provoking public ire toward chiropractors, “accident”

telemarketing and dispensing advice at accident scenes clearly

are undertakings imbued with potential for abuse. On balance,

however, such a broad ban lacking a time limit does not

directly and materially advance the State’s admittedly

important interests because it sweeps too many extraneous

activities within its purview.

Similarly, the State has not met its burden to show

narrow tailoring. On this third prong, all the Supreme Court

requires is “‘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

‘in proportion to the interest served’[.]” Went For It, 515

U.S. at 632 (quoting Board of Trustees of State Univ. of N.Y.

v. Fox, 492 U.S. 469, 480 (1989)). “[T]he ‘least restrictive

means’ test has no role in the commercial speech context.”

Id.

The State’s argument is merely a bald assertion that H.B.

1327 is a prophylactic rule and reasonably proportional to the

chiropractor did not pay the employer.

10

substantial state interests it serves. Yet two instances

belie the State’s claim. First, the plain language of H.B.

1327 proscribes such activities as speaking to seniors at a

senior citizen center about the benefits of chiropractic

treatment. Perhaps realizing that such breadth was

constitutionally unacceptable, the state conceded to the

district court that such conduct is not offensive, and the

district court held that the statute does not apply to that

activity. Essentially, the district court “cherry picked” its

way through the statute: it judicially created an exception--

unbidden by the language of the statute--to skirt the

constitutional infirmity.6 This plainly indicates that the

statute is not reasonably tailored.

Second, the part of H.B. 1327 that amends Texas Penal

Code § 38.12(a)(3) is overly broad as it makes no reference to

solicitation when it criminalizes otherwise innocent marketing

techniques. That section says: “A person commits an offense

if, with intent to obtain an economic benefit the person . . .

(3) pays, gives, or advances or offers to pay, give, or

advance to a prospective client money or anything of value to

6

Though courts should construe statutes to avoid constitutional infirmity, see United States v. Boerner, 505 F.2d 1064,

1067-68 (5th Cir. 1975), the district court’s interpretation seems to have exceeded the scope of “construing” and entered the

territory of “rewriting.”

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obtain employment as a professional from the prospective

client.”

The State intimates that the breadth of this subpart

should not be troubling because this section does not regulate

speech and therefore would not implicate the first amendment.

We reject the State’s contention. In the Fifth Circuit, when

deciding whether particular conduct or actions constitute

speech, “we ask whether an intent to convey a particularized

message was present and whether the likelihood was great that

the message would be understood by those who viewed it.”

Cabrol v. Town of Youngsville, 106 F.3d 101, 109 (5th Cir.

1997) (citing Texas v. Johnson, 491 U.S. 397, 404 (1989)); see

also Jones v. Collins, 132 F.3d 1048, 1054-55 (5th Cir. 1998).

Here, offering to give money or anything of value to obtain

employment in a professional capacity constitutes commercial

speech. Chiropractors engage in such conduct with an intent

to convey a particularized message: hire me, try my service.

Moreover, those who receive the money or anything of value are

likely to understand the message because rebates, free samples

and risk-free trials of products are common marketing tools.

Therefore, we find that § 38.12(a)(3) regulates speech, and we

now consider its scope and legitimacy.

12

In so doing, we conclude that this section is neither

reasonably tailored nor reasonably proportional to the harm

the State seeks to prevent. It is not limited to in-person or

telephonic solicitation of an injured or ill person; rather,

this section facially applies to any advertising, including

advertising via public media, that offers money or anything of

value (e.g., a free adjustment) to induce a client to try

chiropractic services. The section is not bounded by a time

limit (such as Went For It’s 30 day moratorium) or target

group (for instance, Went For It’s recent victims of

accidents). And the section criminalizes commercial speech

that is both unobjectionable and unquestionably protected by

the first amendment (e.g., a print advertisement offering a

free adjustment to anyone interested). This is not the first

time the State, in its zeal to prohibit “accident”

telemarketing by chiropractors, has cast its nets too broadly.

See Innovative Database Systems v. Morales, 990 F.2d 217, 220-

222 (5th Cir. 1993) (“A total ban on the use of lawfully

obtained, public information to contact any person who was

recently involved in a motor vehicle accident . . . is too

broad a prohibition to prevent the perceived evil.”).

Given the poor fit between means and ends, H.B 1327 is

unconstitutional as applied to chiropractors. We need not

13

here determine the purview and legitimacy of the statute as it

applies to other covered professionals. As the Court noted in

Edenfield, “the constitutionality of a ban on personal

solicitation will depend upon the identity of the parties and

the precise circumstances of the solicitation.” 507 U.S at

557.

IV.

If a statute is so vague that it does not afford

defendants fair notice of the proscribed conduct, then the

statute offends the due process clause of the fourteenth

amendment. See Stromberg v. California, 283 U.S. 359, 369

(1931) (“A statute which upon its face, and as authoritatively

construed, is so vague and indefinite as to permit the

punishment of the fair use of this opportunity [for free

political discussion] is repugnant to the guaranty of liberty

contained in the Fourteenth Amendment.”); see also United

States v. Lanier, 520 U.S. 259, 265 (1997); United States v.

Harriss, 347 U.S. 612, 617 (1954).

Bailey argues that H.B. 1327 is void for vagueness

because “it cannot mean what it says” and because law

enforcement officials and the judiciary will read exceptions

into the law. That the law cannot mean what it says does not

make it vague; here, for instance, what H.B. 1327 forbids is

14

clear, but also confounding in its scope. Similarly, the fact

that the law may be susceptible to differing constructions by

the judiciary and law enforcement officers does not create a

vagueness problem where, as here, the text of the law is

plain, though its breadth is unusual. The vagueness doctrine

is not a suitable vehicle for finding this statute

unconstitutional.

V.

Since H.B. 1327 neither advances the state’s interests

materially and directly nor is it narrowly tailored, we

REVERSE the district court’s ruling and declare that the act

is unconstitutional as applied to chiropractors.

REVERSED.

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