Nefedro v. Montgomery County (Ct. of Appeals)

Filed: June 10, 2010

Opinion by Judge Clayton Green, Jr.

Held: Montgomery County's ordinance that prohibits the acceptance of payment for fortunetelling ("Fortunetelling Ordinance") violates the First Amendment of the U.S. Constitution because it is regulates noncommercial protected speech and it is not narrowly tailored to promote a compelling Government interest.

Facts: Nick Nefedro wanted to open a fortunetelling business in Montgomery County. Nefedro filed suit in Circuit Court for Montgomery County after he alleged he was denied a business license from the Montgomery County Licensing Department because of the Fortunetelling Ordinance. The Circuit Court granted the County summary judgment and concluded that the Fortunetelling Ordinance was constitutional. Nefedro appealed to the Court of Special Appeals and the Court of Appeals issued a writ of certiorari.

Analysis: As an initial matter, the Court concluded that Nefedro had standing to bring the constitutional challenge because he was adversely affected by the Fortunetelling Ordinance considering he intended to open a fortunetelling business and would be subject to penalties under the Fortunetelling Ordinance if he did so.

Next, the Court decided whether the Ordinance violated the First Amendment. The Court agreed with Nefedro that the Ordinance violates Nefedro's right to freedom of speech under the First Amendment because it regulates speech and that regulation violates the First Amendment. The Court disagreed with the County's analysis that the Ordinance only regulates conduct, not speech, because it prohibits the payment of money for fortunetelling services, not fortunetelling itself, and therefore does not implicate the First Amendment. Citing to the Supreme Court and various state courts, the Court found that this was not a meaningful distinction. The Court explained that the County imposes a burden on speech when protected speech is made punishable for the exchange of payment.

The Court also refused to accept the County's assertion that fortunetelling is "inherently fraudulent" and therefore should not receive First Amendment protection. While the Court agreed that the First Amendment does not protect fraudulent statements, the Court was not convinced that fortunetelling always involves fraud. The Court noted that fortunetelling provides benefits to recipients, in the form of entertainment or information.

Further, the Court did not accept the County's argument that the Ordinance regulates commercial speech, which receives less scrutiny than laws restricting noncommercial speech. Speech is not commercial simply because it has an economic motivation. Because the purpose of fortunetelling is to provide a benefit to the recipient in the form of entertainment or information, it is not solely related to the economic interests of the speaker.

Lastly, the statute does not pass muster under the First Amendment for being "narrowly tailored to promote a compelling Government interest" because a less restrictive alternative would serve the Government's purpose. The Government's stated interest in the Ordinance was to combat fraud that apparently ensues from fortunetelling. The Court reasoned that a less restrictive, effective means of combating fraud would be to make fraud illegal, and Montgomery County and the state of Maryland already have such laws.

The full opinion is available in pdf.