State v. Wagner

Murphy, C. J., delivered the opinion of the Court. Appellee Margaret Wagner was charged in the Criminal Court of Baltimore in a ten-count indictment with violating Maryland Code, Article 56, Section 230A — the so-called Maryland “blockbusting” statute — which declares it a misdemeanor:— “* * * for any person> flrm> corporation or association, whether or not acting for monetary gain, knowingly to induce or attempt to induce another person to transfer an interest in real property, or to discourage another person from purchasing real property, by representations regarding the existing or potential proximity of real property owned, used, or occupied by per ⁴¹⁶ sons of any particular race, color, religion, or national origin, or to represent that such existing or potential proximity will or may result in: 1. The lowering of property values; 2. a change in the racial, religious, or ethnic character of the block, neighborhood or area in which the property is located; 3. an increase in criminal or antisocial behavior in the area; or 4. a decline in quality of the schools serving the area.” (Emphasis supplied.) Specifically, Wagner was charged in the indictment with knowingly inducing, or knowingly attempting to induce, a named individual to transfer an interest in designated real property by making representations proscribed by the statute. In no count of the indictment, however, was it averred that Wagner made the proscribed representations while acting for monetary gain.

Wagner moved to dismiss the indictment on the ground that the statute upon which the indictment was predicated violated her federal and state constitutional rights, particularly her First Amendment guarantee of freedom of speech. She claimed that the statute “prohibits private conversations between laymen who stand to gain nothing from a real estate transaction”; that the statute constituted a “blanket restriction of speech, guilty or innocent alike” without regard to profit motive and, therefore, must be held constitutionally defective. The court (Liss, J.) dismissed the indictment on the ground that it was fatally defective because it omitted an essential averment, viz., it failed to allege that in making the prohibited representations Wagner was acting for monetary gain. In so holding, the court expressly adopted the reasoning contained in the nisi prius opinion of the Circuit Court for Baltimore County (Proctor, J.) in the case of State v. Mason (Criminal No. 35899), decided July 1, 1969, which involved the same statute and a similar indictment.

In that case, Judge Proctor held that so long as the representations prohibited by the statute were made by a person “acting for monetary ⁴¹⁷ gain” the statute did not violate First Amendment rights of freedom of speech and was constitutional, but not otherwise. He concluded that unless an indictment charging a violation of the statute specifically alleged that the representations were made while the accused person was acting for monetary gain, it must be found fatally defective and since the defect was one of substance, and not merely form, the indictment could not be amended. Appealing from the court’s order dismissing the indictment (see Maryland Code, Article 5, Section 14), the State claims that even if the statute is constitutional only to the extent that it proscribes representations made by a person while acting for monetary gain, nevertheless it is not necessary to so allege in the indictment in order properly to charge the statutory offense. The State argues that an indictment charging an offense based on a statute which is constitutional only in part need not specify that it applies only to that part of the statute which is constitutional.

The State maintains that it was incumbent upon the court to give the indictment the same construction it gave the statute and, consequently, it should have found the indictment, framed in the essential words of the statute, constitutionally valid to the same extent as the statute upon which it was based. Whether its case is within that part of the statute held constitutional is, according to the State’s position, determinable only after the State has presented its case at trial; and whether it can prove that the accused was acting for monetary gain is simply an evidentiary matter, with a failure of proof in this particular requiring acquittal. The State advances the alternative argument that the statute is constitutional in all its parts and applies to those acting for monetary gain as well as those not so acting. It maintains in this connection that freedom of speech under the First Amendment is not an absolute right; that it is subject to reasonable restriction when necessary to safeguard the public interest; that the restrictions on speech contained in the statute, whether or not applied to representations made while acting for monetary gain, are limited ⁴¹⁸ to narrow and well-defined circumstances, viz., to knowing inducements or attempts to induce the transfer of real property or the discouragement of the purchase of real property in several specifically delineated particulars; that the statute is limited by its language “so as not to prohibit the casual conversation or statements made in a social or political context but prohibits essentially only the commercial exploitation associated with ‘blockbusting’ ”; and that so viewed the statute is not broadly stifling of the fundamental personal liberties of any individual but is aimed specifically at prohibiting the public evil of “blockbusting” by the only means possible.

The State concludes that since the statute may be constitutionally applied regardless of whether the representations are made for monetary gain it is completely unnecessary that an allegation specifying that the representations were made for monetary gain appear in an indictment charging a violation of the statute. Appellee Wagner claims that the statute and indictment drawn in its language, which failed to charge that she made the prohibited representations while acting for monetary gain, are unconstitutionally overbroad and in clear violation of the First Amendment. She claims that while the State can regulate or proscribe speech which offends a paramount governmental interest, it can do so only by narrowly drawn and well-defined language. She contends that the statute condemns as criminal any statement, regarding the existing or potential proximity of certain persons, made by anyone who induces or attempts to induce anyone else to sell or buy real property, or who discourages anyone from buying real property; that, consequently, the statute prohibits all statements of advice or opinion, honestly believed by their speakers, and made under circumstances and for purposes which, while they may not all be worthy of approval, still do not involve any governmental concern; that this clear and deliberate overreaching of the Legislature in enacting the statute not only has the deleterious effect of inhibiting freedom of expression in a purely non-commercial, non- ⁴¹⁹ action area, but also permits a conviction based solely on utterances which are fully protected by the First Amendment; and, consequently, since the statute is unconstitutional any indictment drawn within its language is constitutionally defective.

Appellee claims, in short, that a necessary element of the criminal activity of “blockbusting” is that the accused person shall have acted for monetary gain; and that an indictment which does not allege this element of the offense not only fails to charge a crime but also subjects anyone to criminal conviction for the making of a constitutionally protected statement. “Blockbusting” is the practice of inducing owners of property to sell because of the actual or rumored advent into the neighborhood of a member of a racial, religious or ethnic group. Summer v. Township of Teaneck, 251 A. 2d 761 (N. J.). Speaking for the Supreme Court of New Jersey in that case, Chief Justice Weintraub said, in depicting the evils of the practice of blockbusting, that “[s]ellers are exploited and hostility is excited both in those who are persuaded their economic interests are thus threatened and in the group of citizens who are given to understand their presence is a blight.” At page 763. Appellee Wagner defines and describes the practice in her brief in these concise and succinct terms: “The practice of inducing homeowners to sell their homes at a price substantially lower than the fair market value by instilling the fear of a complete racial, religious, or ethnic turnover in their neighborhood is known as ‘blockbusting’ or ‘panic peddling.’ * * * “In the classic blockbusting case, homes are purchased in a white neighborhood at depressed prices by a speculator and resold at inflated prices to Negroes who have a limited access to the housing market.

Because the blockbuster is able to create an unfair market, both the seller and the purchaser lose. Sellers are forced to dispose of their homes by selling them in an artificially unfavorable market. Purchasers are forced to pay exorbitant sums to obtain housing. ⁴²⁰ “The blockbuster’s technique consists of direct personal contacts with the white homeowners in a neighborhood. With telephone and door-to-door solicitation, he predicts an influx of blacks, a resulting deterioration of schools and an increase in crime in the neighborhood.

Such predictions may often be fabricated or exaggerated. He will usually insist that property values are dropping rapidly and that every day the homeowner delays will be costly. He then offers ready cash to make the purchase. With enough repetition, his conduct may induce a neighborhood panic, and the once all-white or slightly integrated neighborhood rapidly becomes all black or ghettoized.” That it was the clear intention of the General Assembly of Maryland to broadly prohibit the practice of “blockbusting” by its enactment of Section 230A is beyond question.

In describing the