New Jersey’s Daniel’s Law, which penalizes the dissemination of names and residential addresses of judicial, law enforcement, child protection investigators and other covered individuals, is having a significant damping effect on marketing efforts – including nonprofit solicitations – aimed at Garden State residents.

The extent to which the law is having an impact on nonprofit outreach is unknown because neither side is talking on the record, except in court papers. That includes attorneys for both sides. And with the exception of one New Jersey legislator, who sponsored the initial law, New Jersey state officials won’t comment, either.

While no nonprofits have been directly sued, data firms that have nonprofit clients along with for-profit clients are among those being pursued, including Acxiom, Adstra, Blackbaud, DatabaseUSA, Melissa Data and Specialists Marketing Services. There are more than 130 suits filed against marketers and data firms.

Defense attorneys have requested presiding U.S. District Court Judge Harvey Bartle, III grant a September 3, 2024 for hearing oral arguments in support of dismissal.

Nonprofits do not have to be sued to feel financial impact of the lawsuits. Data companies face legal and financial ramifications of providing names of people who have requested privacy. Given that at least 19,000 individuals have signed up to be excluded, a minimum $1,000 fine per instance can quickly add up, even if not every data file contains every name.

That’s not the only potential financial impact, of course: population-wise, New Jersey is the 11th largest state in America, according 2023 population estimates. Most national nonprofits would be loath to give up that large a slice of potential donors … and the fundraising efforts of regional, state and local nonprofits that could not market within the Garden State would be dealt a severe blow.

The data companies are fighting back. Lawyers for multiple defendants this past June filed a memorandum within the United States District Court for the District of New Jersey, where 73 of the complaints had been moved, in support of defendants’ motion to dismiss the plaintiffs’ complaint. According to the memorandum, the law is unconstitutional in part due to vagueness around the terms “disclose” and “otherwise make available” as well as the awarding of damages “triggered by a short and arbitrary compliance deadline, without any consideration of fault or extenuating circumstances.”

That memorandum includes one of the few acknowledgements of the potential impact of Daniel’s Law on nonprofits, and even that is in passing. The memorandum refers to “a wide variety of industries and services. They include, among other entities, real estate businesses; direct-mailing and marketing companies; data brokers; entities that provide fundraising solutions to charities and other nonprofits…”

At least one New Jersey official has stepped into the current proceedings. In early August, Attorney General of New Jersey Matthew J. Platkin submitted a brief in opposition to defendants’ motions to dismiss. In his brief, Platkin asserted, in part, that the law was not unconstitutional under the First Amendment as it primarily regulates commercial speech; that the information in question is regulated only because of the risk disclosure poses to privacy and security; and that comparable privacy protections have a longstanding tradition of coexisting with the First Amendment.

Platkin also further contends in the brief that Daniel’s Law is not overinclusive merely because it covers speech not shared with the public, that the 10-day verification process for opt-out requests is sufficient, and that the use of third-party intermediaries to make requests does not run afoul of first amendment concerns.

According to the brief, “allowing covered persons to enlist assistance in this challenging and time-intensive effort is a “reasonable” means of advancing New Jersey’s interests — which is all that the First Amendment requires.” New Jersey’s interests assumedly include preserving the privacy and security of its judicial officials.

Under Daniel’s Law’s provisions, mailers and data repositories such as marketing list vendors may be subject to fines for each individual effort aimed at someone who has asked to be placed on an exclusion list, if that request has not been complied with within 10 business days.

Atlas Data Privacy, which was set up as an intermediary for people wishing to opt out and which established standing in New Jersey via an office in a shared work space, has filed more than 130 civil action lawsuits in the Superior Court of New Jersey Law Division aimed at a wide spectrum of companies. The businesses include online “white pages” style directories, credit bureaus, real estate listings firms, data firms and marketing service firms, among others.

Part of the reason for silence might be the stakes. When Daniel’s Law was passed by the New Jersey legislature and signed into law in 2020, leaders within the nonprofit community immediately saw potential pitfalls. The law, officially known as P.L. 2020, c.125, allows courts to award:

* Actual damages, but not less than liquidated damages computed at the rate of $1,000 for each violation of this act;

* Punitive damages upon proof of willful or reckless disregard of the law;

* Reasonable attorney’s fees and other litigation costs reasonably incurred; and,

* Any other preliminary and equitable relief as the court determines to be appropriate.” Its enactment opens to fines nonprofits where fundraisers inadvertently use names and addresses in their solicitation efforts of those who have requested protection.

The law came about after Daniel Anderl, the late son of Esther Salas, a United States district judge of the United States Court for the District of New Jersey was shot to death by Roy Den Hollander in 2020. Hollander, a lawyer who was angry about a ruling issued by Salas, had located the judge’s home, disguised himself as a delivery person, and shot both Daniel and Mark Anderl, Judge Salas’s husband.

Mark Anderl recovered from his injuries. Hollander was later discovered dead from an apparent self-inflicted gunshot wound. After his death Hollander was linked to another murder, a little more than a week earlier, of an attorney in California. The resulting New Jersey law, which was established to protect court officials, was named in honor of Daniel Anderl.

A representative for Atlas told The NonProfit Times earlier this year that no nonprofits had been directly served with lawsuits. Multiple requests throughout July and August for updates regarding the number of lawsuits, whether nonprofits that hold databases of prospects, donors, volunteers and other associated individuals had been targeted in subsequent lawsuits, and additional actions on the part of either Atlas or those served were met with promises of responses, but no actual answers.

Despite the public acknowledgement of the potential impact on nonprofits, the consequences could be dire. If third-party sources of names within New Jersey are constrained due to concerns of penalties, nonprofits’ ability to expand beyond their own donor and prospect files might be significantly curtailed.

Other potentially involved parties claimed they were unaware of issues surrounding the lawsuits. New Jersey State Sen. Joe Cryan (D-20), one of the initial sponsors of the law, said he was unaware of potential unintended consequences of the law for nonprofits having been brought to his office.

“The idea that nonprofits are going through some sort of situation is kind of a new one on me,” Cryan told The NonProfit Times. “What we did is we changed the laws so that there was an opportunity for class action suits. Under Daniel’s Law in New Jersey, the data companies have decided that it’s too much work to [redact names and addresses upon request from their files].”

By allowing class action status for requestors, the law gave greater incentive for data companies to comply with the requests, rather than having each requestor sue individually, which would be more taxing on each complainant, Cryan added.

Cryan said he was not aware of any concerns having been brought to his office, and he did appear willing to entertain negative consequences of the legislation on the tax-exempt community. “It’s never the intention of the legislation to impact folks who do God’s work in nonprofits,” he said. “Be sure of that.”

Other states, including California, Georgia, Florida, Hawaii, Idaho and Maryland, have either passed or are considering a patchwork of similar laws, with varying levels of exemptions for nonprofits.

On the surface the law would seem to be basic consumer-friendly legislation. But another clause in Daniel’s Law requires that “not later than 10 business days following receipt thereof, a person, business, or association shall not disclose or re-disclose on the Internet or otherwise make available, the home address or unpublished home telephone number of any covered person…”.

That clause seems innocuous enough. “No one’s sitting there with an alarm clock waiting through the midnight hour on the day to start enforcement of whether you’re complying or not,” Cryan said, reiterating that there hadn’t been much compliance before the class-action provision was enacted.

But therein lies the rub. An outside entity could collect requests from covered individuals who want to be removed from databases, dump these requests en masse onto a data provider, check on business day 11 for any unprocessed requests and then sue the data provider for $1,000 per missed opportunity.

That might be what Atlas Data Privacy, which set itself up as an intermediary to collect names and addresses of requestors, has done. As part of the mid-June memorandum seeking dismissal, attorneys supporting the data companies claimed: “Even though Atlas solicited assignors for months over the course of 2023, it did not send Defendants purported non-disclosure notifications on behalf of these individuals as they signed up — as one would expect had Atlas truly had their safety at heart. Instead, Atlas waited months until it had amassed more than 19,000 assignors, and only then began sending purported non-disclosure notifications on their behalf during the December 2023 holiday season, in enormous email blasts of thousands of emails at a time…”

According to Robert Tigner, regulatory council for The Nonprofit Alliance in Washington, D.C., Atlas’s actions had an immediate and chilling impact on access to fundraising prospects within New Jersey. “At least in the short run, people who were sued said, ‘We can’t do this work for you because we have no way to, at the moment, screen out any names that might be from New Jersey, and we have no way in the world of knowing whether your donors or some people you’d like to mail to are in law enforcement.’ The consequence was that nonprofits who used that supplier to do the [modeling and prospect selection] simply didn’t mail. Which means they’re losing their opportunity to reach New Jersey residents.”

Modifications to the legislation as a result of unintended consequences have already been proposed. The Election Law Enforcement Commission (ELEC) in Trenton, New Jersey, which oversees and administers laws governing campaign contributions, expenditures disclosure and other aspects of election law, including some activities from Section 527 and 501(c)4 organizations, requires transparency regarding contributions and contributors – the very information Daniel’s Law obscures, in the case of court officials.

Some people, such as judges and prosecutors, are already prohibited from making political contributions. “But some could have made donations in the past, as a lawyer or before they were a judge, and maybe they had their home address on them,” ELEC’s Deputy Director Joe Donohue told The NonProfit Times. “We could blank out every address of the 1.6 million contributors through computer software,” Donohue said. “But then we’re in direct violation of our own act. We’re hiding contributor data. We’re here to make contributor data available to public, and under the law that includes street addresses.”

According to Donohue, perhaps a quadruple handful of individuals have requested their information be removed for ELEC’s files. For now, ELEC is in a holding pattern as corrective legislation is currently working its way through the system.

What the amendment does not do is address the concerns of the nonprofit community regarding fundraising activities that inadvertently use prohibited names in their addresses. In theory, nonprofits could be subject to fines for each individual violation.

That’s the theory, anyway. In practice, most of the legal action seems to have been focused against data companies. Allegedly, at any rate: Multiple data firms, both within New Jersey and throughout the country, did not respond to comment, or in many cases even acknowledge requests for comment, from The NonProfit Times.

What happens next is uncertain. “That [September 3] hearing is the next thing on the docket, and after everything has been submitted, including amicus briefs, the judge will likely hold oral arguments,” said Dustin P. Mansoor, an associate with New York City-based internet marketing, technology industries and telemarketing-focused law firm Klein Moynihan Turco. He added that given the unique properties of the case the judge would likely forego the usual behavior of just reading the various court papers and issuing a decision. But whatever the judge decides to do, Mansoor believes a decision will likely take a long time. Mansoor was not aware of any injunctive relief having been granted in the meantime.

“In in all likelihood, [the law] will be [upheld] given the hurdle that in constitutionality challenges, it’s an extremely, extremely high bar to clear,” Mansoor said, when pressed for a prediction. “I would anticipate a pretty severe dampening effect on the ability of nonprofits to obtain information relative to fundraising,” he said.

Klein Moynihan Turco is not representing any of its clients in legal actions related to this case.

While the matter is being thrashed out in the courts, The Nonprofit Alliance’s Tigner tentatively recommended nonprofit marketers continue their outreach activities, provided they can find willing vendors. “I would tell my members to proceed with care. My best guess is — not necessarily for jurisdictional reasons, but at least for PR reasons — that they at least in any kind of short run, are not going to be sued by Atlas under Daniel’s Law. Therefore, it would be a shame to halt their fundraising activity, because that’s a loss. And that’s a loss to their beneficiaries, too.”

Tigner pulled no punches when asked to speculate about the motivation behind Atlas’s actions. “I think this is about money,” he said. “It’s not about protecting the privacy of law enforcement officers whose data they’ve collected.”

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