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Edenfield v. Fane

Supreme Court of the United States
507 US 761, 123 L. Ed. 2d 543, 1993 U.S. LEXIS 2985 (1993)
ELI5:

Rule of Law:

A state's blanket prohibition on direct, in-person, uninvited solicitation by Certified Public Accountants (CPAs) to potential business clients unconstitutionally restricts commercial speech under the First Amendment. The state must demonstrate with evidence, not just speculation, that the ban directly and materially advances a substantial government interest.


Facts:

  • Scott Fane, a Certified Public Accountant (CPA), was licensed to practice in Florida.
  • Prior to moving to Florida in 1985, Fane had a practice in New Jersey where he specialized in tax advice for small and medium-sized businesses.
  • In New Jersey, Fane successfully built his client base by making unsolicited telephone calls to business executives to explain his services, a practice permitted by New Jersey law.
  • Upon moving to Florida, Fane wished to use the same direct solicitation method to build his new practice.
  • A Florida Board of Accountancy rule comprehensively prohibited CPAs from engaging in 'direct, in-person, uninvited solicitation,' which it defined to include uninvited telephone calls to potential clients.
  • Fane found this rule to be a significant obstacle, as his experience showed that businesses typically do not change accountants without such direct outreach.

Procedural Posture:

  • Scott Fane sued the Florida Board of Accountancy in the U.S. District Court for the Northern District of Florida, seeking declaratory and injunctive relief.
  • The District Court granted summary judgment to Fane, enjoining the enforcement of the solicitation ban as applied to CPAs in the business context.
  • The Board of Accountancy appealed the decision to the U.S. Court of Appeals for the Eleventh Circuit.
  • A divided panel of the Eleventh Circuit affirmed the trial court's judgment.
  • The U.S. Supreme Court granted certiorari to review the decision of the Court of Appeals.

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Issue:

Does a state rule that completely bans direct, in-person, uninvited solicitation by Certified Public Accountants (CPAs) to potential business clients violate the free speech protections of the First and Fourteenth Amendments?


Opinions:

Majority - Justice Kennedy

Yes. A state rule that completely bans direct, in-person, uninvited solicitation by CPAs to potential business clients violates the free speech protections of the First and Fourteenth Amendments. The Court applied the Central Hudson test for commercial speech. Although Florida asserted substantial state interests in preventing fraud and overreaching and in maintaining CPA independence, it failed to meet its burden of demonstrating that its outright ban directly and materially advanced those interests. The Board offered no studies or anecdotal evidence to prove that the harms it feared were real and that the ban would alleviate them. This case is distinguishable from Ohralik v. Ohio State Bar Assn., which upheld a similar ban for lawyers, because the circumstances are different. Unlike the vulnerable accident victims in Ohralik, Fane's target clients are sophisticated business executives who are less susceptible to pressure, and a CPA's professional role emphasizes objectivity rather than persuasion.


Dissenting - Justice O'Connor

No. A state rule that completely bans direct, in-person, uninvited solicitation by CPAs to potential business clients does not violate the free speech protections of the First and Fourteenth Amendments. States have the authority to prohibit commercial speech that is inconsistent with the standards of a learned profession. There is no significant constitutional difference between the solicitation ban for attorneys upheld in Ohralik and this ban for CPAs, as both are experts whose status can be used to overawe inexpert clients, including small business owners. The majority improperly treats this as a narrow 'as-applied' challenge to Fane's specific speech, yet the lower court's injunction was broad, striking down the rule for all CPAs in the business context. The rule should be upheld as a valid prophylactic measure under the Central Hudson test.


Concurring - Justice Blackmun

Yes. A state's complete ban on direct, in-person, uninvited solicitation by CPAs to potential business clients is unconstitutional. While joining the majority opinion, this concurrence is written to express the view that truthful, non-coercive commercial speech should be entitled to full First Amendment protection, not merely an 'intermediate standard' of review.



Analysis:

This decision significantly narrows the precedent set in Ohralik, clarifying that prophylactic bans on in-person professional solicitation are not universally permissible. The Court's ruling establishes that the validity of such a ban is highly context-dependent, requiring analysis of the specific profession, the target audience, and the nature of the solicitation. By distinguishing CPAs soliciting business executives from lawyers soliciting accident victims, the Court heightened the evidentiary burden on the state to justify restrictions on commercial speech. This makes it more difficult for states to enact broad prohibitions on professional advertising without concrete evidence that the regulation directly alleviates a real and substantial harm.

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