Madigan v. Telemarketing Associates
The Attorney General of Illinois brought a state fraud suit against Telemarketing Associates, a professional fund-raiser, on the basis that it retained 85% of charitable funds collected on behalf of a charity and, when soliciting, failed to inform donors that only 15% of their contribution would be distributed to the charity. The state court dismissed the complaint, finding that no cause of action had been stated under the facts alleged and the appellate court affirmed. The Supreme Court of Illinois affirmed, holding that the complaint was prohibited under First Amendment principles and was properly dismissed.
Question Presented:
Whether the First Amendment categorically prohibits a state from pursuing a fraud action against a professional fundraiser who represents that donations will be used for charitable purposes but in
fact keeps the vast majority of all funds donated.
