Harris County Bail Bond Board & International Fidelity Ins. Co. v. Carl R. Pruett & National American Ins. Co.

Opinion issued March 10, 2005

In The

Court of Appeals

For The

First District of Texas

NO. 01-02-01043-CV

HARRIS COUNTY BAIL BOND BOARD, INTERNATIONAL FIDELITY

INSURANCE COMPANY, AND ALLEGHENY CASUALTY COMPANY,

Appellants

V.

CARL R. PRUETT AND NATIONAL AMERICAN INSURANCE

COMPANY d/b/a ALLIED BONDING COMPANY, Appellees

On Appeal from the 125th District Court

Harris County, Texas

Trial Court Cause No. 2002-09290

O P I N I O N

On this day, the Court considered the motions for rehearing filed by all parties.

We OVERRULE all motions for rehearing. However, we withdraw our opinion and

judgment of October 14, 2004, and issue this opinion and judgment in its stead.

In this appeal, we consider the extent of (1) the rule-making authority granted

to a local bail bond board and (2) the First Amendment protection afforded

commercial speech. The Harris County Bail Bond Board (“the Board”) and two

insurance companies that issue bail bonds—International Fidelity Insurance Company

and Allegheny Casualty Company—appeal from a summary judgment granted in

favor of Carl R. Pruett, a bail bondsman, and National American Insurance Company

d/b/a/ Allied Bonding Company, another insurance company that issues bail bonds.

We decide whether (1) the Board had the power to pass two rules that attempt to

control the solicitation of business by bonding companies and (2) the rules adopted

by the Board are an unconstitutional restraint on the bonding companies’ First

Amendment rights. We affirm in part and reverse and render in part.

BACKGROUND

A. The Bail Bond Board Perceives a Problem

In the late 1990's, the Harris County Bail Bond Board

began receiving

complaints from law enforcement officers, as well as citizens, about bail bond

solicitation practices in the county. The Board perceived two specific areas of

concern. First, the Board received complaints about bondmen contacting defendants

with unexecuted warrants and “tipping [the defendants] off” that they would soon be

arrested. These complaints raised concerns about defendants fleeing from arrest,

officer safety, and victim safety, particularly in cases involving domestic violence.

Second, the Board received complaints about bondmen conducting telephone

solicitations during non-business hours. Some examples of these complaints included

telephone solicitations made between the hours of midnight and 5 a.m. and repeated

telephone calls during the first 24 hours after an arrest.

The Board, in 2000, asked bondsmen to refrain voluntarily from soliciting bond

business before an arrest was made and during non-working hours. After attempts

at voluntary compliance failed, the Board decided to address the issue by passing

rules regarding the solicitation of bail bond business in Harris County.

B. The Board Adopts Rules 24 and 25

On March 5, 2001, the Board enacted Rule 24

, which prohibits solicitation of

bail bond business from a person with an outstanding arrest warrant, and Rule 25,

which places certain time restrictions on the solicitation of bail bond business after

an arrest has been made. Rule 24 (the unexecuted-warrant rule) creates an exception

for municipal and Justice of the Peace warrants, because those warrants apply to

Class C misdemeanors, offenses punishable by fine only. Rule 25 (the 24-hour rule)

prohibits solicitation within the first 24 hours after arrest, and, after that time expires,

prohibits unsolicited contact between the hours of 9 p.m. and 9 a.m. Monday through

Saturday, and before noon on Sunday. Both Rule 24 and Rule 25 create an exception

to the limitations on the solicitation of bail bond business if there is a prior or existing

business relationship between the bondsman and the person requiring the bond.

C. The Board Suspends Pruett’s License

In late January 2002, the Board notified Pruett of a hearing on complaints

against him for violating Rules 24 and 25. The first complaint alleged that Pruett

violated Rule 25 by telephoning the complainant at 6:41 a.m. on the day after an

arrest. The second complaint alleged that Pruett violated Rule 24 by calling a

defendant with an outstanding arrest warrant, who then fled the area to avoid arrest.

At the Board hearing, Pruett acknowledged that he has violated Rules 24 and

25 and that he had instructed his employees to violate the rules as well. Accordingly,

on February 13, 2002, the Board voted to sustain the complaints and suspended

Pruett’s bail bond license for 7 days on each complaint.

D. Pruett Seeks and Obtains an Injunction

Pruett and National American Insurance Company d/b/a Allied Bonding

Company (collectively, “Pruett”) filed a petition seeking a declaratory judgment,

temporary restraining order, and temporary and permanent injunction. International

Fidelity Insurance Company and Allegheny Casualty Company (collectively,

“International”) intervened in the trial court in support of the local rules and of the

Board’s actions against Pruett. In April 2002, the trial court granted a temporary

injunction in Pruett’s favor.

The parties filed cross-motions for summary judgment, and, on August 29,

2002, the trial court granted Pruett’s motion and denied the Board and International’s

joint motion. The final judgment permanently enjoined the Board from (1) enforcing

Rules 24 and 25, and (2) giving any effect to its order suspending Pruett’s bail-bonding license. The judgment also severed the parties’ claims for attorney’s fees,

thereby rendering the summary judgment final for purposes of appeal.

PROPRIETY OF SUMMARY JUDGMENT

The Board and International appeal, contending that the trial court erred in

granting summary judgment in Pruett’s favor. In several, related points of error, the

Board and International contend that (1) the Board possessed the power to issue Rules

24 and 25 and (2) Rules 24 & 25 do not unconstitutionally infringe on Pruett’s free

speech rights.

A. Standard of Review

The summary judgment rule provides a method of summarily ending a case that

involves only a question of law and no fact issues. Tex. R. Civ. P. 166a(c); Nixon v.

Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 548 (Tex. 1985); Robinson v. Budget

Rent-A-Car Sys., Inc. , 51 S.W.3d 425, 428 (Tex. App.—Houston [1st Dist.] 2001, pet.

denied); Cigna Ins. Co. v. Rubalcada , 960 S.W.2d 408, 411 (Tex. App.—Houston

[1st Dist.] 1998, no pet.). When, as here, both sides move for summary judgment, and

the trial court grants one motion and denies the other, we review the summary

judgment evidence presented by both sides and determine all questions presented.

Comm’rs Court v. Agan , 940 S.W.2d 77, 81 (Tex. 1997); Rubalcada , 960 S.W.2d at

411-12 . We render such judgment as the trial court should have rendered. Agan , 940

S.W.2d at 81 ; Rubalcada , 960 S.W.2d at 411-12 . The propriety of summary

judgment is a question of law; therefore, we review the trial court’s decision de novo.

See Natividad v. Alexsis, Inc. , 875 S.W.2d 695, 699 (Tex. 1994). When a trial court’s

order granting summary judgment does not specify the grounds relied upon, we will

affirm the summary judgment if any of the summary judgment grounds are

meritorious. FM Props. Operating Co. v. City of Austin , 22 S.W.3d 868, 872-73

(Tex. 2000).

Because this appeal requires us to interpret sections of the Occupation Code,

we restate the basic principles of statutory construction. Interpreting statutes is a

legal matter, subject to de novo review. Bragg v. Edwards Aquifer Auth. , 71 S.W.3d

729, 734 (Tex. 2002). The overriding goal of statutory interpretation is to determine

the legislature's intent. Cont’l Cas. Co. v. Downs , 81 S.W.3d 803, 805 (Tex. 2002).

In order to ascertain legislative intent, we first look to the plain and common meaning

of the words used by the Legislature. Tex. Gov’t Code Ann. § 311.011 (Vernon

1998 & Supp. 2004); Argonaut Ins. Co. v. Baker , 87 S.W.3d 526, 529 (Tex. 2002).

B. Did the Board Act Ultra Vires in Adopting Rules 24 and 25?

Pruett argues that the Board did not have the power to adopt Rules 24 and 25,

and that, in doing so, it acted ultra vires . Specifically, Pruett argues that (1) the

Legislature did not give the Board the authority to regulate the solicitation of bail

bonds until June 2001—six months after Rules 24 and 25 were passed; (2) Rules 24

and 25 were not authorized by law because they impose requirements relating to a

bonding license that are different from, or in addition to, those in the Bail Bond Act;

(3) the rules do not involve regulating “the execution of a bail bond by a bail bond

surety”; and (4) the rules violate the Open Records Act.

The Board argues that the

trial court erred if it granted summary judgment on any of the above-referenced

grounds. We address each issue accordingly.

1. Effect of the 2001 Legislative Amendments

In June 2001, after the Board adopted Rules 24 and 25, the Legislature passed

section 1704.101 of the Bail Bond Act, which provides as follows:

(a) a board by rule may regulate solicitations or advertisements by or on

behalf of bail bond sureties to protect:

(1) th public from:

(A) harassment;

(B) fraud;

(C) misrepresentation; or

(D) threats to public safety; or

(2) the safety of law enforcement officers.

(b) A bail bond surety, an agent of a corporate surety, or an employee of

the surety or agent may not make, cause to be made, or benefit from

unsolicited contact:

(1) through any means, including in person, by telephone, by

electronic methods, or in writing, to solicit bonding business

related to an individual with an outstanding arrest warrant that has

not been executed, unless the bail bond surety or agent for a

corporate surety has an existing bail bond on the individual; or

(2) in person or by telephone to solicit bonding business:

(A) that occurs between the hours of 9 p.m. and 9 a.m.; or

(B) within 24 hours after:

(i) the execution of an arrest warrant on the

individual; or

(ii) an arrest without a warrant on the individual.

(c) This section does not apply to a solicitation or unsolicited contact

related to a Class C misdemeanor.

Tex. Occ. Code Ann. § 1704.109 (Vernon 2004).

Section 1704.109, which basically mirrors Rules 24 and 25, had not been

enacted when the Board passed those rules. Pruett argues that the Legislature’s

passing section 1704.109 shows that it had not authorized the Board to regulate

solicitation before September 1, 2001. Pruett’s motion argues, “There was no reason

for the Legislature to engage in the redundant, pointless act of enacting a statute

granting boards power they already possessed.”

We find, however, that the Legislature’s subsequent act of providing specific

authority to the Board to regulate bond solicitation is of little assistance in

determining whether the Board possessed the authority to do so before the Legislature

acted. See Ervin v. State , 991 S.W.2d 804, 816 (Tex. Crim. App. 1999) (stating that

“[a]lthough we have held that subsequent enactments by the Legislature may be some

evidence of its intent in a prior version of the statute, we nevertheless give little

weight to those subsequent enactments in interpreting the prior law.”); Bullock v.

ABC Interstate Theatres, Inc , 557 S.W.2d 337, 340 (Tex. Civ. App.—Austin 1977,

writ ref’d n.r.e.) (stating that “[l]egislative intent in the original enactment of a statute

is not drawn from the size of the majority by which a subsequent Legislature amends

or repeals the statute. What the Legislature intended originally is to be found in the

language of the statute itself.”). Therefore, we conclude that the fact that the

Legislature saw fit to enact section 1704.109 to expressly give the Board the authority

to regulate the solicitation of bail bonds does not determine whether the Board

already possessed the power to do so.

As stated earlier, to ascertain legislative intent, we first look to the plain and

common meaning of the words used by the Legislature. Tex. Gov’t Code Ann. §

311.011 (Vernon 1998); Argonaut, 87 S.W.3d at 529 . Therefore, to determine

whether the Board possessed the power to enact Rules 24 and 25 in March 2001, we

look to the statute that grants the Board’s rule-making authority.

The rule-making authority of the Board is derived from section 1704.101 of the

Bail Bond Act, which provides in part:

A board shall:

(1) exercise powers incidental or necessary to the administration of this

chapter;

(3) supervise and regulate each phase of the bonding business in the

county;

(4) adopt and post rules necessary to implement this chapter.

Tex. Occ. Code Ann. § 1704.101(1), (3), (4) (Vernon 2004). Subsection (3) of

section 1704.101 specifically states that bail bond boards shall “supervise and

regulate each phase of the bonding business,”and subsection (4) provides bail bond

boards with the authority to “adopt and post rules” necessary to supervise and

regulate the bonding business. Therefore, the Board adopted its rules with statutory

authority.

2. Do Rules 24 and 25 Impose Additional License Requirements?

Pruett also argued, in his motion for summary judgment, that Rules 24 and 25

are ultra vires acts by the Board because they add to the license requirements

established by the Bail Bond Act. In support, Pruett relies on a line of cases and an

Attorney General opinion holding that county bail bond boards lack the authority to

impose different or additional requirements for obtaining a bondsman’s license.

In Walstad v. Dallas County Bail Bond Bd. , 996 S.W.2d 314, 315 (Tex.

App.—Dallas 1999, no pet.), a bail bondsman filed suit, alleging that the bail bond

board exceeded its authority by obtaining an independent appraisal of certain property

that the bondsman had listed in support of her application to renew her license, even

though the bondsman had complied with the Bail Bond Act requirement that she

submit statements from taxing authorities that contained appraisals meeting certain

standards. Id. at 315-16 . The board argued that, because it had the authority to

“regulate all phases of the bail bond business,” it could require an independent

appraisal. Id. at 316 . The court disagreed, holding that “bail bond boards lack the

authority to impose different or additional requirements for obtaining a bondsman’s

license.” Id. at 317 . Because the bondsman had submitted an appraisal that met the

requirements listed in the Bail Bond Act, the board could not require that she obtain

an independent appraisal. Id.

In Attorney General Opinion No. JC-0366 ( August 12, 2001), the Attorney

General was also asked whether a county bail bond board could consider an

independent appraisal on property executed in trust from bondsmen for purposes of

determining their financial limit for executing bonds. The attorney general opined,

“The board may not require the applicant to submit an independent appraisal of his

or her real property, because it has no authority to impose requirements in addition

to statutory requirements on applicants for licensure as bail bond sureties.” Id. ; see

also Tex. Fire & Cas. Co. v. Harris County Bail Bond Bd. , 684 S.W.2d 177, 178-79

(Tex. App.—Houston [14th Dist.] 1984, writ ref’d n.r.e.) (holding bail bond rule

requiring $100,000 security deposit invalid because it imposed addition burdens on

bail bond license applicants when statutory deposit required $5,000); Bexar County

Bail Bond Bd. v. Deckard , 604 S.W.2d 214, 216-17 (Tex. Civ. App.—San Antonio

1980, no writ) (same).

We find these cases distinguishable. All of the cases cited above involve

attempts by the boards to alter the licensing requirements specifically set forth in the

Bail Bond Act. Our case, however, does not involve licensing requirements—it

involves the Board’s attempts to regulate how already-licensed bondsmen solicit

business. As such, the present case is more like Dallas County Bail Bond Bd. v. Stein ,

771 S.W.2d 577, 579-80 (Tex. App.—Dallas 1989, writ denied). In Stein , the board

passed a rule that prohibited a licensed bondsman from employing an agent who was

a convicted felon. Id. at 578-79 . Stein, a convicted felon, filed suit to enjoin the

board from interfering with his employment for a licensed bondsman by enforcing the

rule. Id. at 579 . The Stein court distinguished Texas Fire & Casualty and Deckard

by stating:

In each of these cases, the county boards had denied applications for

licenses on the ground that the applicant failed to comply with certain

local rules. Since the Bail Bond Act expressly sets forth the

requirements for a license, these courts correctly reasoned that the local

boards lacked authority to impose different or additional requirements.

As Stein points out, however, the Bail Bond Act does not expressly set

forth eligibility requirements for employees of licensees. Thus, such

analysis is inapplicable to the present case.

Id. at 580. The Stein court also noted, “Where a statute expressly authorizes an

agency to regulate an industry, it impliedly authorizes the agency to promulgate rules

and regulations necessary to accomplish such purpose.” Id. The court held that the

board’s “broad rule-making power impliedly authorizes the Board to supervise and

regulate employees of bondsmen to the extent that such employees perform

meaningful duties in the bonding business.” Id. (emphasis added).

In Black v. Dallas County Bail Bond Board , 882 S.W.2d 434, 436 (Tex.

App.—Dallas 1994, no writ), the board adopted a rule requiring bondsmen to pay all

necessary and reasonable expenses incurred by the Sheriff’s Department relating to

the rearrest of a defendant whose bond had been forfeited. Black, a bondsman, filed

suit, alleging that the board had exceeded its rule-making authority because the

Legislature had deleted from the Bail Bond Act a provision that expressly made a

bondsman’s failure to pay rearrest costs a grounds for the suspension of his license.

Id. at 438 . Black argued that the change in the statute preempted the board’s

authority to adopt the rearrest rule . Id. The Black court held that “[t]he broad grant

of authority to supervise and regulate all phases of the bonding business impliedly

authorizes the Board to enact rules on any phase of the business.” Id. at 439 .

We agree with the courts in Black and Stein . The Bail Bond Act gives the

Board the broad power to “supervise and regulate each phase of the bonding

business” and to “adopt and post rules necessary to implement [the Bail Bond Act].”

Tex. Occ. Code Ann. § 1704.101(3), (4 ) (Vernon 2004). Rules 24 and 25 do not

add to or alter the licensing provisions of the Bail Bond Act. Therefore, we conclude

that the board did not exceed its broad rule-making authority by adopting Rules 24

and 25.

3. Do the Rules 24 and 25 regulate “the execution of a bail bond by a bail

bond surety”?

Pruett also alleges that the Board acted ultra vires in passing Rules 24 and 25

because, in 1999, the Legislature altered the definition of a “bonding business,”

thereby narrowing the Board’s power to regulate the bonding business. Before 1999,

the Bail Bond Act defined “bonding business” as “the occupation in which a

bondsman is engaged.” Act of May 26,1981, 67th Leg., R.S., ch. 312 § 2, 1981 Tex.

Gen. Laws 875 , 876 (since amended) (current version at Tex. Occ. Code Ann. §

1704.001(4) (Vernon 2004)). When the Occupations Code was codified in 1999, the

statute was changed to define a “bonding business” as “the execution of a bail bond

by a bail bond surety.” Act of May 10,1999, 76th Leg., R.S., ch. 388 § 1, 1999 Tex.

Gen. Laws 1431 , 2279 (since amended) (current version at Tex. Occ. Code Ann. §

1704.001(4) (Vernon 2004)).

Therefore, Pruett argues that, when Rules 24 and 25

were passed, the Board had only the power to regulate the actual execution of a bail

bond, not the solicitation of a bail bond.

We disagree. The Board was authorized, then and today, to “supervise and

regulate each phase of the bonding business in the county.” Tex. Occ. Code Ann.

§ 1704.101(3) (Vernon 2004) (emphasis added). To paraphrase, using the 1999

definition of “bonding business”—the Board was authorized to supervise and regulate

“each phase of the execution of a bail bond by a bail bond surety” in the county. We

hold that the power to regulate each phase of the execution of a bail bond includes

the power to regulate the solicitation of a bail bond, a necessary first step in the

execution of a bail bond.

4. Do the rules violate the Open Records Act?

Finally, Pruett argues that the Board acted ultra vires in passing Rules 24 and

25 because the rules violated the Texas Open Records Act. See Tex. Gov’t Code

Ann. § 552.001-552.353 (Vernon 1994 and Supp. 2004). Pruett’s motion cites the

public policy set forth in section 552.001(a) of the Open Records Act, which provides

as follows:

Under the fundamental philosophy of the American constitutional form

of representative government that adheres to the principle that

government is the servant and not the master of the people, it is the

policy of this state that each person is entitled, unless otherwise

expressly provided by law, at all times to complete information about

the affairs of government and the official acts of public officials and

employees. The people, in delegating authority, do not give their public

servants the right to decide what is good for the people to know and

what is not good for them to know. The people insist on remaining

informed so that they may retain control over the instruments they have

created. The provisions of this chapter shall be liberally construed to

implement this policy.

Tex. Gov’t Code Ann. § 552.001(a) (Vernon 1994 and Supp. 2004). In his

appellate brief, Pruett argues, “This Board violates this statute by enforcing the rules

to keep the public from obtaining access , through bondsmen, to public-record jail-inmate and open-warrants information.” (Emphasis added).

Pruett, however, lacks standing necessary to make such a claim. Rules 24 and

25 do not prohibit Pruett from obtaining access to public information, and Pruett does

not contend that he has been denied access to public information. Instead, Pruett

contends that the general public has been prevented from receiving information that

he wishes to disseminate. Because Pruett has not been denied access to public

information, he has no standing to complain that Rules 24 and 25 violate the Open

Records Act. See Hunt v. Bass , 664 S.W.2d 323, 324 (Tex. 1984) (stating that

standing consists of some interest peculiar to person as individual and not as member

of general public).

Accordingly, we hold that the Board did not act ultra vires when it enacted

Rules 24 and 25.

C. Are Rules 24 and 25 Unconstitutional?

In his motion for summary judgment, Pruett contends that, even if Rules 24 and

25 were not ultra vires acts, they are unconstitutional prior restraints on free speech.

In two issues, the Board contends that the trial court erred by concluding that Rules

24 and 25 are unconstitutional prior restraints on free speech.

The Board argues that

Rules 24 and 25 meet the constitutional requirements for commercial speech, as set

forth by the United States Supreme Court in the Central Hudson test. See Cent.

Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of New York , 447 U.S. 557 , 100 S.

Ct. 2343 (1980).

Central Hudson provides a four-part analysis for determining the validity of

restrictions on commercial speech: (1) whether the speech is concerning a lawful

activity and is not misleading; (2) whether the restriction seeks to implement a

substantial governmental interest; (3) whether the restriction directly advances the

governmental interest; and (4) whether the restriction reaches no further than

necessary to accomplish the objective. See id. at 566 , 100 S. Ct. at 2351 . Under the

Central Hudson test, the Board bears the burden of justifying the challenged

restriction as furthering its substantial interest. See Greater New Orleans

Broadcasting Ass’n, Inc. v. United States , 527 U.S. 173, 183 , 119 S. Ct. 1923, 1930

(1999).

1. Rule 24—The Open Warrants Rule

As noted earlier, the open warrants rule prohibits bondsmen from soliciting

bond business from an individual with an outstanding warrant. The rule does not

apply to solicitations if there is an “existing business relationship” between the

bondsman and the individual requiring the bond. We consider whether this rule is

constitutional under the Central Hudson test.

(a) whether the speech is lawful and not misleading

Rule 24 meets the requirement of the first prong of Central Hudson because

soliciting bail bond sales from people with outstanding warrants is a lawful activity,

and there is no allegation that the information provided by Pruett was misleading. (b) whether there is a substantial governmental interest

The Board asserts that Rule 24 was designed to ensure the safety of police

officers and the public. The Board argues that prohibiting the solicitation of bonds

from people with outstanding warrants will prevent bondmen from “tipping off”

defendants that they are soon to be arrested. Such action, the Board argues, will

reduce the risk of flight by defendants and will diminish the risk of harm to arresting

officers and complainants. Pruett responds that the only interest advanced by the

Board is “killing competition” in the bond industry by restricting the speech of

bondsmen who solicit business in this manner. While it is true that decreased

competition may result from the rules enacted by the Board, such a factor does not

automatically negate the substantial interest advanced by the Board. Therefore, we

hold that the Board has articulated “substantial government interest” in support of

Rule 24, i.e., the safety of arresting officers and complainants in criminal cases. See,

e.g., Morales v. Ellen , 840 S.W.2d 519, 525-26 (Tex. App.—El Paso 1992, writ

denied) (holding that law enforcement exemption to Open Records Act excludes

disclosure of information that, if revealed, “might endanger the life or physical safety

of law enforcement personnel, or interfere with law enforcement and crime

prevention”).

(c) whether the restriction advances the government interest

Under Central Hudson , the Board has the burden of showing that its regulation

directly and materially advances the aforementioned interests. “Mere speculation or

conjecture” will not satisfy that 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 v. Fane , 507 U.S. 761, 770 , 113 S. Ct. 1792, 1800 (1993). A regulation

may not be sustained if it provides only ineffective or remote support for the

government’s purpose. Central Hudson , 447 U.S. at 564 , 100 S. Ct. at 2350 .

Pruett contends that Rule 24 is “too underinclusive and filled with competition-killing exemptions to directly advance the Board’s stated goals.” As to Rule 24, we

disagree. The Board presented the testimony of numerous peace officers, all of whom

agreed that the element of surprise was important in executing an arrest warrant.

Detective B. Harwell testified that he did not want suspects to know that he was

coming to execute a warrant because “[o]ur safety is involved when the individual is

aware that there is a warrant for their arrest and we are going to come get him.”

Harwell also testified that “[a]nytime you contact [a defendant] to notify him that I

want to solicit your business as an attorney or as a bondsman, you risk my life.”

Sergeant B. Carr testified, “Certainly on [Rule] 24, on the officer safety, having done

that for 13 years personally on the street myself, I don’t want anybody to know I am

coming. It’s that element of surprise, not only for my safety, but the defendant, as

well as anybody that’s around the defendant.” Officer S. Ballard, an officer in the

child-abuse unit of the police department, testified that if child-abuse defendants

know that an arrest is imminent, it “poses a risk to the child if the child is still in the

home with the offender, or if he knows where CPS has placed them, or if the child is

with a relative placement, he would also have access to the child.” In sum, all of the

peace officers’ testimony presented at the hearing supported the position that Rule 24

was helpful in maintaining the element of surprise when making an arrest on an open

warrant and in protecting both the officers and victims against the risk of physical

injury by the person subject to arrest.

However, many of the officers testified that Rule 24 did not go far enough,

because it exempts from compliance bondsmen having “existing business

relationships” with those individuals requiring a bond. Pruett argues that the

“existing business relationship” exemption is so broad that, in effect, the exception

swallows the rule, thereby providing only ineffective or remote support for the

Board’s stated purpose. To properly address this contention we first define “existing

business relationship.”

At oral argument, the Board argued that “existing business relationship” means

that the bondsman involved has in place an existing, current bond on the person

requiring another bond. We agree. The existence of a current relationship based on

an existing bond is the reasonable interpretation to be given to the phrase, especially

when contrasted with the phase “ prior or existing business relationship” used in Rule

25.

Furthermore, this definition is in accord with the newly-enacted section

1704.109 of the Texas Occupations Code, which allows bondsmen with “an existing

bail bond on [an] individual” to solicit bonding business from that individual even

though there is an outstanding arrest warrant that has not been executed. See Tex.

Occ. Code Ann. § 1704.109 (Vernon 2004) .

Having decided that the term “existing business relationship,” as that term is

used in Rule 24, refers to the relationship between a bondsman and an individual for

whom the bondsman has provided a current, existing bond, we next decide whether

the exclusion of such bondsmen from the solicitation prohibition of Rule 24 makes

the rule ineffective.

Pruett argues that bondsmen are more likely to have “an existing-business-relationship” with a repeat offender, and that repeat offenders are more likely to

endanger law enforcement officers upon learning of a pending warrant than first-time

offenders. In other words, Pruett argues that allowing the solicitation of those already

out on a bond actually increases the risk of injury to officers.

Although a rule with no exceptions might provide even more safety to police

officers, we do not believe that the exception in Rule 24 “swallows the rule.” There

are legitimate and valid reasons to exclude bondsmen with existing bonds on

defendants from the rule prohibiting the solicitation of bonds from individuals with

unexecuted warrants. For example, a bondsman with an existing bond on a defendant

would likely have reason to call the defendant upon learning of the existence of an

unexecuted warrant, as the commission of a new offense could likely effect the

existing bond. It is impractical to allow the bondsman to discuss an existing bond,

but to prohibit him from discussing the possibility of acting as a bondsman on the

new offense. Furthermore, a bondsman with an existing bond on a defendant has no

incentive to call a defendant whom he believed would flee or resist arrest, because

such action by the defendant could cause a forfeiture of the original bond.

Therefore, we conclude that Rule 24 directly advances the Board’s interests in

preventing defendants from fleeing and in protecting those involved in the arrest

process, despite the existence of an exception to the rule for bondsmen with “existing

business relationships” with defendants. Accordingly, we conclude that prong three

of the Central Hudson test has been met.

(d) whether the restriction reaches no further than necessary

Pruett contends that the Board has not satisfied the fourth element of Central

Hudson because, according to Pruett, there are other, less restrictive, means by which

the Board could address its concerns about offender flight and officer safety.

However, the Board “is not required to employ the least restrictive means

conceivable, but must demonstrate narrow tailoring of the challenged regulation to

the asserted interest—‘a fit that is not necessarily perfect, but reasonable.’” Greater

New Orleans Broadcasting , 527 U.S. at 188 , 119 S. Ct. at 1932 (quoting Bd. of

Trustees of State Univ. of N.Y. v. Fox , 492 U.S. 469, 480 , 109 S. Ct. 3028, 3035

(1989)). Under the fourth prong of the Central Hudson test, the Board is required to

show that the regulation reaches no further than necessary to accomplish its objective.

Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 507 , 101 S. Ct. 2882, 2892

(1981).

Pruett argues that Rule 24 “is clearly overbroad with respect to Appellees’ calls

to the tens of thousands of citizens with open warrants who receive letters from the

Sheriff suggesting that they post bond.” Essentially, Pruett is arguing that the Rule

24 does not alleviate the problem of offender flight and officer safety because it

regulates only solicitation by bondsmen and does not address other groups of people

that might “tip off” defendants, such as the Sheriff’s Department and attorneys.

This Court addressed a similar argument in Eller Media v. City of Houston , 101

S.W. 3d 668 (Tex. App.—Houston [1st Dist.] 2003, pet. denied). In Eller Media , a

billboard company argued that a Houston city ordinance prohibiting the construction

of new, off-premises billboards failed prong four of the Central Hudson test because

the removal of off-premises signs would not make a “significant improvement” in the

appearance of Houston given that the ordinance did not address the issue of on-premises signs. Id. at 677 . This Court noted that the government can make different

regulations for off- and on-premises signs because there are different considerations

behind their functions. Id. Citing Metromedia v. City of San Diego , we concluded

that the City had satisfied the fourth prong of Central Hudson. Id. at 678. In

Metromedia, the United States Supreme Court also addressed a billboard ordinance

that contained exceptions for some on-site advertising. In holding that the ordinance

met the fourth prong of the Central Hudson test, the Court stated:

If the city has a sufficient basis for believing that billboards are traffic

hazards and are unattractive, then obviously the most direct and perhaps

the only effective approach to solving the problems they create is to

prohibit them. The city has gone no further than necessary in seeking

to meet its ends. Indeed, it has stopped short of fully accomplishing its

ends: It has not prohibited all billboards, but allows onsite advertising

and some other specifically exempted signs.

453 U.S. at 508 , 101 S. Ct. At 2893.

In this case, the Board has a sufficient basis for believing that bondsmen who

solicit business from individuals with unexecuted warrants contribute to offender

flight and put police officers and victims at risk. Even though Rule 24 may not fully

accomplish its goal of preventing offender flight and increasing officer/victim safety

in connection with arrests because it regulates only solicitation by bondsmen, we

conclude that, like the billboard ordinances in Eller Media and Metromedia , it goes

no further than necessary in seeking to accomplish its goal. Rule 24 does not prohibit

commercial speech, it merely postpones it until after an arrest warrant has been

executed. See Anderson Courier Servs. , 104 S.W.3d at 125-26 (holding prohibition

on use of accident reports for personal gain failed Central Hudson test because not

limited in time).

We conclude that Rule 24 is not an unconstitutional restriction on commercial

speech. Accordingly, we sustain the Board’s issue relating to the constitutionality of

Rule 24.

2. Rule 25—The 24-Hour Rule

As noted earlier, the 24-hour rule contains two components. First, the rule

prohibits all solicitation within 24 hours after the execution of an arrest warrant.

Second, after 24 hours have expired, the rule prohibits all calls made during non-business hours. Both components of Rule 25 contain an exception for bondsmen who

have “prior or existing business relationships” with the person requiring a bond.

(a) Solicitation prohibited during non-business hours

Rule 25 provides that, once 24 hours have elapsed from the execution of an

arrest warrant, no bondsman may solicit bond business after 9 p.m. or before 9 a.m.,

Monday through Saturday, or before 12 noon on Sunday. The Board argues that this

component of Rule 25 does not attempt to regulate constitutionally protected

commercial speech. We agree.

The first prong of Central Hudson requires that the speech at issue concern a

“lawful activity” and not be misleading. 447 U.S. at 566 , 100 S. Ct. at 2351 . The

government may freely regulate commercial speech that concerns unlawful activity

or is misleading. Florida Bar v. Went For It, Inc. , 515 U.S. 618, 623-34 , 115 S. Ct.

2371 -2376 (1995).

Texas law already prohibits telephonic solicitation before noon or after 9.p.m.

on Sunday, and between the hours of 9 p.m. and 9 a.m., Monday through Saturday.

See Tex. Bus. & Com. Code Ann. § 37.02(a)(2) (Vernon 2002 and Supp. 2004). As

such, the Board may “freely regulate” solicitation by bondsmen during these hours.

Accordingly, we sustain the Board’s issue relating to the portion of Rule 25

that prohibits solicitation during non-business hours.

(b) Solicitation prohibited during first 24 hours post-arrest

Rule 25 also provides that bondsmen may not solicit bond sales at any time

during the first 24 hours after an arrest. The rule provides an exception for bondmen

with “prior or existing business relationships” with the individual requiring a bond.

We consider whether this rule is constitutional under the Central Hudson test.

(i) whether the speech is lawful and not misleading

Rule 25 meets the requirement of the first prong of Central Hudson because

soliciting bail bond sales from people within 24 hours of their arrest is lawful, and

there is no allegation that the information provided by Pruett was misleading.

(ii) whether there is a substantial governmental interest

The Board presented evidence that Rule 25 is designed to prohibit “undue

harassment and solicitation of the general citizenry beyond normal business hours

that other telephone solicitors could use.” The blanket prohibition during the first 24

hours after arrest is necessary, according to the Board, because “[i]t is during the

initial 24 hours after arrest that the greatest solicitation abuse occurs.” The Board

presented evidence of citizen complaints about repetitive telephone calls (“20 to 40

calls”) during the first 24 hours after arrest. The Board was also concerned about the

“professional image of bondsmen.”

The Supreme Court has held that “[t]he State’s interest in protecting the well-being, tranquility, and privacy of the home is certainly of the highest order in a free

and civilized society.” Carey v. Brown , 447 U.S. 455, 471 , 100 S. Ct. 2286, 2295-96

(1980). Furthermore, “[s]tates have a compelling interest in the practice of

professions within their boundaries, and . . . as part of their power to protect the

public, health, safety, and other valid interests[,] they have broad power to establish

standards for licensing practitioners and regulating the practice of professions.”

Goldfarb. v. Virginia State Bar , 421 U.S. 773, 792 , 95 S. Ct. 2004, 2016 (1975).

Thus, we conclude that the Board has shown a substantial government interest

in enacting the solicitation ban during the first 24 hours after arrest.

(iii) whether the restriction advances the government

interest and reaches no further than necessary

We next consider whether the ban on bond solicitation during the first 24 hours

post-arrest meets the third and fourth prongs of the Central Hudson test. The third

prong of the Central Hudson tests asks whether the speech restriction directly and

materially advances the government interest. Greater New Orleans Broadcasting,

527 U.S. at 188 , 119 S. Ct. at 1932 . “This burden is not satisfied by mere speculation

or conjecture; 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 v. Fane , 507

U.S. at 770-71 , 113 S. Ct. at 1800 . Consequently, “the regulation may not be

sustained if it provides only ineffective or remote support for the government’s

purpose.” Central Hudson , 447 U.S. at 564 , 100 S. Ct. at 2343 . The fourth prong of

the Central Hudson test “compliments the direct advancement inquiry of the third,

asking whether the speech restriction is not more extensive than necessary to serve

the interests that support it.” Greater New Orleans Broadcasting , 527 U.S. at 188 ,

119 S. Ct. at 1932 .

Pruett again argues that Rule 25 fails to meet prongs three and four because its

exception “swallows the rule,” thus making it ineffective to support the Board’s

purpose. As to this part of Rule 25, we agree. We begin by noting that the exception

in Rule 25 is much broader than that in Rule 24. While the exception in Rule 24

applies only to a bondsman with an existing bond on an individual requiring a bond,

the exception in Rule 25 applies to a bondsman with a “ prior or existing business

relationship” with an individual requiring a bond. (Emphasis added). As such, Rule

25, as written, allows a bondsman with a current bond on an individual, or one who

has ever had a business relationship with the individual in the past , to contact that

person during the initial 24 hours after arrest to solicit new bond business from him.

Pruett argues that the Board has shown no valid reason for a rule that squelches

competition by prohibiting newcomers to the bail business from competing for that

business during the initial 24 hours after arrest.

We agree. In Greater New Orleans Broadcasting , the Supreme Court

considered the constitutionality of a statute that allowed Indian-owned casinos to

participate in broadcast advertising, but prohibited non-Indian casinos from doing the

same. 527 U.S. at 190 , 119 S. Ct. at 1933 . The Court noted that the purpose the

government sought to advance—reducing the societal costs of casino gambling—was

not advanced by distinguishing between the types of casino owners who could

advertise by broadcast. Id. at 193 , 119 S. Ct. at 1935 . “[T]he Government presents

no convincing reason for pegging its speech ban to the identity of the owners or

operators of the advertised casinos.” Id. at 191 , 119 S. Ct. at 1934 . The Court noted

that, while there may be valid reasons for regulating non-Indian businesses differently

from tribal businesses, those differences did not “justify abridging non-Indians’

freedom of speech more severely than the freedom of their tribal competitors.” Id.

at 193 , 119 S. Ct. at 1934 . The Court noted that “decisions that select among

speakers conveying virtually identical messages are in serious tension with the

principles undergirding the First Amendment.” Id. at 194 , 115 S. Ct. at 1935 .

In this case, the Board presented no valid reason to justify a rule that

differentiates within the same class of speakers, i.e., bondsmen. The rule, effectively,

grants a bondsman with “prior or existing business relationships” an exclusive right

to solicit repeat business from its prior customer during the first 24 hours after arrest.

The rule also allows a bondsman with prior or existing business relationships with a

person requiring a bond an unfettered right to call that person as many times as he

wants during the initial 24 hours after arrest, while denying bondsmen without prior

or existing business relationships the right to attempt to solicit business at all during

the same time period. The exception in Rule 25, as opposed to that in Rule 24, is too

broad to sufficiently advance the Board’s stated purpose.

Accordingly, we conclude that the portion of Rule 25 that prohibits bondsmen

who have no “prior or existing business relationships” with individuals requiring a

bond from soliciting bond sales during the initial 24 hours after arrest is an

unconstitutional prior restraint on free speech. As such, we overrule the Board’s

issue relating to the 24-hour prohibition on solicitation of bond business after arrest.

CONCLUSION

We affirm the portion of the judgment of the trial court that enjoins the Board

from enforcing the prohibition against the solicitation of bail bond business during

the initial 24-hour period after arrest, found in Rule 25. We reverse the portion of the

judgment of the trial court that enjoins the Board from (1) enforcing Rule 24's

prohibition against the solicitation of bail bond business from those with unexecuted

warrants, (2) enforcing Rule 25's prohibition against the solicitation of bail bond

business during non-business hours, and (3) giving effect to the order suspending

Pruett’s bail bond license. We remand for further proceedings. We express no

opinion as to whether Pruett’s license should be suspended after consideration of this

opinion.

We overrule all pending motions.

Sherry Radack Chief Justice

Panel consists of Chief Justice Radack and Justices Alcala and Bland.