Judge blocks city from enforcing donation box ordinance

2014-02-20T17:45:00Z 2014-06-11T17:35:11Z Judge blocks city from enforcing donation box ordinanceBy LORI PILGER / Lincoln Journal Star JournalStar.com

A U.S. District judge this week said constitutional flaws are readily apparent in a Lincoln city ordinance that would have banned some outdoor clothing donation boxes.

The city agreed to hold off on enforcing the new ordinance this summer after Linc-Drop Inc. of La Vista filed a federal challenge.

In an order this week, U.S. District Judge John Gerrard found that, given U.S. Supreme Court precedent, Linc-Drop's suit was "highly likely" to succeed on First Amendment grounds.

And he granted a motion to block the city from enforcing the ordinance, which would have required at least 80 percent of the gross proceeds from donation boxes to be used for charitable purposes and charged a $150 fee to place or use them.

Violating the ordinance would be punishable by as many as six months in jail and a $500 fine.

City Councilman Carl Eskridge, who sponsored it, said he will talk about options with the city attorney next week.

One of the alternatives always has been to simply require notification on the boxes that they are not charitable drop boxes, Eskridge said.

During discussion of the topic, he said, people were "kind of astonished" that donated clothing did not stay in Lincoln and that most of the money raised by selling the clothing went to a for-profit company.

City Council approval of the ordinance prompted the lawsuit by Linc-Drop Inc., which contracts with the March of Dimes Foundation to place 70 donation boxes in Lincoln.

In its suit, Linc-Drop alleged that banning boxes from which most of the profit goes to private companies, not charities, would violate the company's constitutional right to engage in protected speech and it "unfairly, arbitrarily, and unreasonably" treats larger charitable organizations different than smaller ones.

Gerrard wrote that the U.S. Supreme Court has made it clear that soliciting charitable donations is, without question, constitutionally protected speech.

When another city set a 75 percent limitation, the court found it "a direct and substantial limitation on protected activity" that could not be held up unless it served a sufficiently strong governmental interest.

While the city's goal of preventing fraud may serve that purpose, it can't label groups fraudulent if they use more than 25 percent of money raised on fundraising, salaries or overhead, the Supreme Court found.

In Gerrard's order, he wrote: "The court has drawn a clear constitutional line 'between regulation aimed at fraud and regulation aimed at something else in the hope that it would sweep fraud in during the process.'"

He said the question is not whether Linc-Drop is engaged in charitable solicitation; it is whether the ordinance regulates charitable solicitation.

"And it does," Gerrard found.

He also found Lincoln's 80 percent requirement unconstitutionally over-broad and said the permit requirement was no more constitutionally sound.

"The ordinance is, in fact, so plainly contrary to U.S. Supreme Court precedent that the court is somewhat surprised the case has reached this juncture," Gerrard wrote.

Reach Lori Pilger at 402-473-7237 or lpilger@journalstar.com or follow her on Twitter at LJSpilger. Reporter Nancy Hicks contributed to this report.

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