Can Tennessee criminalize the use of a bank's name or non-public loan information in a solicitation without specific disclosures, or does the First Amendment protect that speech?

Subject

Opinion No. 13-54, Constitutionality of Statute Regulating Use of Bank Names, Trademarks, and Loan Information, July 11, 2013

Plain-English summary

In 2011 the Tennessee General Assembly amended the Tennessee Banking Act to address a specific direct-mail problem: solicitations that drop a homeowner's lender name or specific loan number into the envelope (e.g., "Your loan #4521 with First National Bank may be eligible for refinancing") to make the offer look authorized or affiliated. The new rules are in Tenn. Code Ann. § 45-2-1709(a)(1)(D) and (E), with a Class C misdemeanor penalty under (a)(2).

Subsection (D) governs use of bank trade names or trademarks (or confusingly similar versions). If a solicitor uses such a mark in a way "likely to cause confusion, mistake or deception as to the source of origin, affiliation or sponsorship," it's flatly unlawful. If the solicitor uses such a mark in any other way, the solicitation must include three disclosures in bold-face type on the front page:

• The solicitor's name, address, and telephone number;
• A statement that the solicitor is not affiliated with the named bank, S&L, or savings bank or any subsidiary/affiliate;
• A statement that the solicitation is not authorized or sponsored by that institution.

Subsection (E) governs use of "specific loan information that is not publicly available" (loan numbers, amounts, etc.) in a solicitation by anyone other than the lender or its authorized agent. The same three disclosures, plus a fourth: a statement that the loan information was not provided by the named institution.

Comm. Greg Gonzales of the Department of Financial Institutions asked whether these provisions and the Class C misdemeanor penalty under § 45-2-1709(a)(2) survive constitutional review.

The AG concluded yes.

Commercial speech and the Zauderer test. Commercial speech receives First Amendment protection but at a "subordinate position" in the hierarchy. Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 456 (1978). When a regulation merely requires disclosures targeting potentially deceptive commercial speech, the less-restrictive Zauderer test applies (not the Central Hudson four-part test). Under Zauderer, disclosure requirements must be (1) reasonably related to the state's interest in preventing consumer deception and (2) not unduly burdensome. Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985). The Tennessee Supreme Court applies the same test under art. I, § 19. BellSouth Adver. & Publ'g Corp. v. Tennessee Regulatory Auth., 79 S.W.3d 506, 520 (Tenn. 2002); Douglas v. State, 921 S.W.2d 180, 185 (Tenn. 1996).

Application here. The mandatory disclosures (solicitor identity, non-affiliation, no-sponsorship, source of loan info) plainly relate to preventing deception. Mailing recipients who see a bank's name or their own loan number in a solicitation can reasonably think the bank endorses or controls the offer. The disclosures directly address that confusion. The disclosure burden is modest: bold-face on the front page. It doesn't substantially impair the solicitor's ability to communicate its own offer.

Distinction from the AG's 2008 opinion. Op. 08-84 (Apr. 4, 2008) had concluded that an absolute ban on nonconsensual use of a lending institution's name or logo (even where not deceptive) would be unconstitutional. That's not what § 45-2-1709(a)(1)(D) and (E) do; they require disclosures, not an outright ban, except in the narrow case of marks likely to cause confusion.

Criminal penalty and vagueness. Violation is a Class C misdemeanor under § 45-2-1709(a)(2), with up to 30 days imprisonment or up to $50 fine, per § 40-35-111(e)(3). Reports of violations go to the local District Attorney General and the TBI under § 45-2-1717(a). A criminal statute is unconstitutionally vague only if persons of ordinary intelligence cannot understand the prohibited conduct, or if it invites arbitrary enforcement. Vill. of Hoffman Estates v. Flipside, 455 U.S. 489, 498 (1982); Grayned v. City of Rockford, 408 U.S. 104 (1972); State v. Lyons, 802 S.W.2d 590 (Tenn. 1990).

The AG concluded the statutes are not facially vague:

• The required disclosures are spelled out word for word.
• "Confusingly similar" trademark has decades of meaning in Lanham Act cases (Leelanau Wine Cellars; Daddy's Junky Music Stores; Induct-O-Matic) and Tennessee trademark cases (Men of Measure; Century Homes).
• "Specific loan information that is not publicly available" is interpretable in its natural and ordinary sense.
• Some judgment in enforcement is normal and doesn't render a statute vague. Grayned, 408 U.S. at 114.
• Hypothetical edge-case vagueness isn't enough; the statute survives facial review. Hoffman Estates, 455 U.S. at 503.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Tennessee's commercial speech doctrine under art. I, § 19 has continued to evolve, and the federal cases shaping the Zauderer test have been refined since 2013 (notably NIFLA v. Becerra, 585 U.S. 755 (2018), which narrowed Zauderer's reach for non-commercial professional speech). Anyone applying this analysis today should re-read the current Supreme Court guidance on compelled-disclosure regimes.

Background and statutory framework

Tenn. Code Ann. § 45-2-1709(a)(1)(D). Unlawful to use the trade name or trademark (or confusingly similar mark) of any bank, S&L, savings bank, or subsidiary/affiliate in a solicitation if "likely to cause confusion, mistake or deception" as to source, affiliation, or sponsorship. In any other use of such a mark, the front page must contain in bold-face the solicitor's contact info, a non-affiliation statement, and a no-sponsorship statement.

Tenn. Code Ann. § 45-2-1709(a)(1)(E). Unlawful for anyone other than the lender or an authorized person to use a loan number, loan amount, or other non-publicly-available loan information in a solicitation unless the solicitation contains in bold-face on the front page the solicitor's contact info, a non-affiliation statement, a no-sponsorship statement, and a statement that the loan information used was not provided by the bank.

Penalty. § 45-2-1709(a)(2): Class C misdemeanor. § 40-35-111(e)(3): up to 30 days, $50 fine.

Enforcement reporting. § 45-2-1717(a): the Commissioner of the Department of Financial Institutions reports violations to the local District Attorney General and the Tennessee Bureau of Investigation.

Commercial speech doctrine.

• Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 762 (1976) (definition of commercial speech).
• Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 456 (1978) ("subordinate position" of commercial speech).
• Friedman v. Rogers, 440 U.S. 1, 9 (1979) (commercial speech may be regulated to ensure truthful and legitimate information).
• Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of New York, 447 U.S. 557, 566 (1980) (four-part test for restrictions).
• Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985) (reasonable-relation test for compelled disclosures).
• Milavetz, Gallop & Milavetz, P.A. v. United States, 559 U.S. 229, 249-53 (2010) (applying Zauderer to debt-relief disclosures).
• Discount Tobacco City & Lottery, Inc. v. United States, 674 F.3d 509, 558 (6th Cir. 2012) (applying Zauderer to commercial packaging).
• Int'l Dairy Foods Ass'n v. Boggs, 622 F.3d 628, 641 (6th Cir. 2010) (same).

Tennessee constitutional framework. BellSouth Adver. & Publ'g Corp. v. Tennessee Regulatory Auth., 79 S.W.3d 506, 520 (Tenn. 2002), applies Zauderer under art. I, § 19. Douglas v. State, 921 S.W.2d 180, 185 (Tenn. 1996). The "fit" question quotes Bd. of Trs. of State Univ. of New York v. Fox, 492 U.S. 469, 480 (1989): a "fit" not necessarily perfect but reasonable, not necessarily the least restrictive means but narrowly tailored.

Vagueness doctrine. Vill. of Hoffman Estates v. Flipside, 455 U.S. 489, 498 (1982), quoting Grayned v. City of Rockford, 408 U.S. 104, 108-09 (1972). Chambers v. Stengel, 256 F.3d 397 (6th Cir. 2001). State law: State v. Pickett, 211 S.W.3d 696, 704-05 (Tenn. 2007); State v. Lyons, 802 S.W.2d 590, 591 (Tenn. 1990); State v. Marshall, 319 S.W.3d 558, 563 (Tenn. 2010); State v. Burkhart, 58 S.W.3d 694, 700 (Tenn. 2001).

"Confusingly similar" trademark precedent. Leelanau Wine Cellars, Ltd. v. Black & Red, Inc., 502 F.3d 504, 515-17 (6th Cir. 2007); Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275 (6th Cir. 1997); Induct-O-Matic Corp. v. Inductotherm Corp., 747 F.2d 358 (6th Cir. 1984). Tennessee trademark cases: Men of Measure Clothing, Inc. v. Men of Measure, Inc., 710 S.W.2d 43 (Tenn. Ct. App. 1986); Century Homes of Knoxville, Inc. v. Associated Sunbelt Realtors, Inc., 621 S.W.2d 756 (Tenn. Ct. App. 1981).

Common questions

Our company sends refinance solicitations and references the homeowner's existing lender by name. What do we have to include?

Under § 45-2-1709(a)(1)(D), if your use of the bank name isn't "likely to cause confusion," you must include three bold-face front-page disclosures: your name/address/phone, that you are not affiliated with the named bank or any of its subsidiaries/affiliates, and that the solicitation is not authorized or sponsored by them. If your use is likely to cause confusion as to source, affiliation, or sponsorship, the use itself is unlawful regardless of disclosures.

We pull loan numbers from public records and include them in mailers. Does (E) apply?

(E) applies to "specific loan information that is not publicly available." If the loan number is genuinely public record (recorded mortgage may include some loan details), you may have a defense, but the safer practice is to include the four-disclosure block: contact info, non-affiliation, no-sponsorship, and a statement that the loan information wasn't provided by the bank. The penalty is small per violation, but the AG flagged DA and TBI referral, and aggregate enforcement risk is the practical concern.

What counts as a "confusingly similar" trade name or trademark?

The AG borrowed the Lanham Act analysis. Courts consider strength of the mark, relatedness of goods/services, similarity in appearance/sound/meaning, evidence of actual confusion, marketing channels, customer sophistication, intent, and likelihood of expansion. Daddy's Junky Music Stores; Leelanau Wine Cellars. If you're using a near-copy of a real bank's logo or a name that's a one-letter variant of a major lender, you're squarely in the "confusingly similar" zone.

What's the penalty for skipping disclosures?

A Class C misdemeanor, up to 30 days imprisonment, up to $50 fine per violation, plus the reputational and regulatory consequences of DFI referrals to the local DA and TBI. The criminal exposure is minor per piece, but mass-mail campaigns can multiply violations.

Can we challenge this as vague because we don't know what's "not publicly available"?

The AG concluded no facial vagueness. Some interpretive work is part of compliance, but persons of ordinary intelligence can figure out what isn't public. Edge-case vagueness arguments may exist for specific applications, but the statute on its face survives.

Does this affect compliance with federal direct-mail rules?

The AG didn't address federal preemption. Federal rules in this space (e.g., GLBA, Truth in Lending Act, FCRA) coexist with state consumer protection statutes. Compliance with both is required.

Citations

Tenn. Code Ann. § 45-2-1709(a)(1)(D), (a)(1)(E), (a)(2); § 45-2-1717(a); § 40-35-111(e)(3). U.S. Const. amend. I, V, XIV. Tenn. Const. art. I, § 8, § 19. Cases: Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976); Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447 (1978); Friedman v. Rogers, 440 U.S. 1 (1979); Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of New York, 447 U.S. 557 (1980); Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985); Milavetz, Gallop & Milavetz, P.A. v. United States, 559 U.S. 229 (2010); Discount Tobacco City & Lottery, Inc. v. United States, 674 F.3d 509 (6th Cir. 2012); Int'l Dairy Foods Ass'n v. Boggs, 622 F.3d 628 (6th Cir. 2010); BellSouth Adver. & Publ'g Corp. v. Tennessee Regulatory Auth., 79 S.W.3d 506 (Tenn. 2002); Douglas v. State, 921 S.W.2d 180 (Tenn. 1996); Bd. of Trs. of State Univ. of New York v. Fox, 492 U.S. 469 (1989); Vill. of Hoffman Estates v. Flipside, 455 U.S. 489 (1982); Grayned v. City of Rockford, 408 U.S. 104 (1972); Chambers v. Stengel, 256 F.3d 397 (6th Cir. 2001); State v. Pickett, 211 S.W.3d 696 (Tenn. 2007); State v. Lyons, 802 S.W.2d 590 (Tenn. 1990); State v. Marshall, 319 S.W.3d 558 (Tenn. 2010); State v. Burkhart, 58 S.W.3d 694 (Tenn. 2001); Leelanau Wine Cellars, Ltd. v. Black & Red, Inc., 502 F.3d 504 (6th Cir. 2007); Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275 (6th Cir. 1997); Induct-O-Matic Corp. v. Inductotherm Corp., 747 F.2d 358 (6th Cir. 1984); Men of Measure Clothing, Inc. v. Men of Measure, Inc., 710 S.W.2d 43 (Tenn. Ct. App. 1986); Century Homes of Knoxville, Inc. v. Associated Sunbelt Realtors, Inc., 621 S.W.2d 756 (Tenn. Ct. App. 1981). Prior AG opinion: Op. 08-84 (Apr. 4, 2008).

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2013/op13-054.pdf

Original opinion text

July 11, 2013

Opinion No. 13-54

Constitutionality of Statute Regulating Use of Bank Names, Trademarks, and Loan Information

QUESTION

Is Tenn. Code Ann. § 45-2-1709(a)(1)(D) and (E), which regulates commercial speech and prescribes criminal penalties, constitutional?

OPINION

Yes. The statute's regulation of commercial speech and prescription of criminal penalties for violations of such regulations are constitutionally permissible.

ANALYSIS

In 2011 the General Assembly amended the Tennessee Banking Act to regulate a person's use of certain trade names, trademarks, and loan information in solicitations offering products or services. Tenn. Code Ann. §§ 45-2-1709(a)(1)(D) and (E). Subsection (D) requires a solicitor who uses a trade name or trademark belonging to certain financial institutions to make specific disclosures in the advertisement of products or services in order to prevent confusion or deception as to the source, affiliation, or sponsorship of the offerings:

It is unlawful for a person to use the trade name or trademark, or a confusingly similar trade name or trademark, of any bank, savings and loan association, savings bank or subsidiary or affiliate of any bank, saving and loan association, saving bank or subsidiary in a solicitation for the offering of services or products if such use is likely to cause confusion, mistake or deception as to the source of origin, affiliation or sponsorship of such products or services; or, to use the trade name or trademark, or confusingly similar trade name or trademark, to that of any bank, savings and loan association, savings bank or subsidiary or affiliate of any bank, saving and loan association, saving bank or subsidiary in any manner in a solicitation for the offering of services or products unless the solicitation clearly and conspicuously states the following in bold-face type on the front page of the solicitation:

(i) The name, address and telephone number of the person making the solicitation;

(ii) A statement that the person making the solicitation is not affiliated with the bank, savings and loan association, savings bank or subsidiary or affiliate of any bank, saving and loan association, saving bank or subsidiary; and

(iii) A statement that the solicitation is not authorized or sponsored by the bank, savings and loan association, savings bank or subsidiary or affiliate of any bank, saving and loan association, saving bank or subsidiary.

Tenn. Code Ann. § 45-2-1709(a)(1)(D). Subsection (E) governs the use of loan information. If a person other than the lender or someone authorized by the lender uses a loan number, loan amount, or other non-publicly available loan information in the advertisement of services or products, the solicitation must contain specific disclosures regarding the identity of the solicitor and the source of the loan information:

It is unlawful for a person, other than the lender or a person authorized by the lender, to use a loan number, loan amount, or other specific loan information that is not publicly available in a solicitation for the purchase of services or products, unless the solicitation clearly and conspicuously states the following in bold-face type on the front page of the solicitation:

(i) The name, address, and telephone number of the person making the solicitation;

(ii) A statement that the person making the solicitation is not affiliated with the bank, savings and loan association, savings bank or subsidiary or affiliate of any bank, saving and loan association, saving bank or subsidiary;

(iii) A statement that the solicitation is not authorized or sponsored by the bank, savings and loan association, savings bank or subsidiary or affiliate of any bank, saving and loan association, saving bank or subsidiary; and

(iv) A statement that the loan information used was not provided by the bank, savings and loan association, savings bank or subsidiary or affiliate of any bank, saving and loan association, saving bank or subsidiary.

Tenn. Code Ann. § 45-2-1709(a)(1)(E). Violation of either subsection is a Class C misdemeanor. Tenn. Code Ann. § 45-2-1709(a)(2). A Class C misdemeanor is punishable by a term of imprisonment of not greater than thirty days, or a fine not to exceed $50, or both. Tenn. Code Ann. § 40-35-111(e)(3). The Commissioner of the Department of Financial Institutions is to report criminal violations to the appropriate District Attorney General and the Tennessee Bureau of Investigation. Tenn. Code Ann. § 45-2-1717(a).

Both subsections (D) and (E) are constitutional in their regulation of commercial speech. The United States Supreme Court defines "commercial speech" as "expression related solely to the economic interests of the speaker and its audience" that does "no more than propose a commercial transaction." Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 762 (1976). The First Amendment to the United States Constitution safeguards commercial speech from unwarranted governmental intrusion, but since commercial speech occupies "a subordinate position in the scale of First Amendment values," Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 456 (1978), it enjoys a more limited measure of protection than noncommercial speech. Commercial speech, therefore, may be regulated to insure the free flow of truthful and legitimate commercial information to consumers. Friedman v. Rogers, 440 U.S. 1, 9 (1979).

The United States Supreme Court has established a four-part test to determine whether governmental regulations that prohibit or limit commercial speech satisfy the First Amendment. Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of New York, 447 U.S. 557, 566 (1980). However, where the government merely requires disclosures that target potentially deceptive or misleading commercial speech, the less-restrictive framework set out in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626 (1985), is applied. As the United States Supreme Court explained:

We do not suggest that disclosure requirements do not implicate the advertiser's First Amendment rights at all. We recognize that unjustified or unduly burdensome disclosure requirements might offend the First Amendment by chilling protected commercial speech. But we hold that an advertiser's rights are adequately protected as long as disclosure requirements are reasonably related to the State's interest in preventing deception of consumers.

Zauderer, 471 U.S. at 651; see also Milavetz, Gallop & Milavetz, P.A. v. United States, 559 U.S. 229, 249-53 (2010) (applying Zauderer reasonable relation test to requirements that agencies providing debt relief services disclose that debt relief may involve bankruptcy relief); Discount Tobacco City & Lottery, Inc. v. United States, 674 F.3d 509, 558 (6th Cir. 2012) (applying Zauderer to determine the constitutionality of disclosure requirements in commercial packaging and advertising); Int'l Dairy Foods Ass'n v. Boggs, 622 F.3d 628, 641 (6th Cir. 2010) (same). Likewise, the Tennessee Supreme Court utilizes the Zauderer framework to evaluate the constitutionality of disclosure requirements under Article I, § 19, of the Tennessee Constitution. BellSouth Adver. & Publ'g Corp. v. Tennessee Regulatory Auth., 79 S.W.3d 506, 520 (Tenn. 2002); Douglas v. State, 921 S.W.2d 180, 185 (Tenn. 1996).

This Office has previously opined that an absolute ban on any nonconsensual use of a lending institution's name or logo where the use of the name or logo is not deceptive or misleading in solicitations for products or services would be found unconstitutional under the First Amendment and Article I, § 19. Tenn. Att'y Gen. Op. 08-84 (April 4, 2008). Such is not the case here, however. Tenn. Code Ann. § 45-2-1709(a)(1)(D) does not ban a solicitor's use of a financial institution's trade name or trademark, except where such use would be likely to cause confusion, mistake, or deception, and effectively requires that such use be accompanied by specific disclosures in the solicitation itself. Similarly, Tenn. Code Ann. § 45-2-1709(a)(1)(E) provides that a solicitor may use non-publicly available loan information as long as certain accompanying disclosures are made. The statutes, therefore, will satisfy the First Amendment and Article I, § 19, if their disclosure requirements: (1) are reasonably related to the State's interest in preventing deception of consumers; and (2) are not unduly burdensome. Zauderer, 471 U.S. at 651; BellSouth Advertising, 79 S.W.3d at 520.

The provisions of Tenn. Code Ann. §§ 45-2-1709(a)(1)(D) and (E) do not offend either the First Amendment of the United States Constitution or Article I, § 19 of the Tennessee Constitution when reviewed under the aforementioned standards. Subsection (D) requires a solicitor who uses a trade name or trademark (or a confusingly similar trade name or trademark) belonging to another financial institution to: (1) disclose the name, address, and telephone number of the solicitor; (2) state that the solicitor is not affiliated with the affected financial institution or any of its subsidiaries or affiliates; and (3) state that the solicitation is not authorized or sponsored by the affected financial institution or any of its subsidiaries or affiliates. Under subsection (E), a solicitor who uses non-publicly available loan information must make these same disclosures, as well as state that the loan information used in the solicitation was not provided by the affected financial institution or any of its subsidiaries or affiliates. To help insure that consumers see these messages, both statutes require the disclosures to be made in bold-face type on the front page of the solicitation. Without the statutory disclosures, consumers could be more easily misled into believing that the advertised offering is sponsored or authorized by the financial institution associated with the trade name, trademark, or loan information included in the solicitation. Thus, the first step of the Zauderer test is satisfied since the disclosures required by the statutes plainly and reasonably relate to the State's interest in preventing the flow of potentially deceptive information to consumers.

In evaluating the second step of the Zauderer test to determine whether the statutory disclosure requirements are unduly burdensome, consideration should be given to the reasonableness of the fit between the regulations that are employed and the governmental interests that are served:

What our decisions require is a "'fit' between the legislature's ends and the means chosen to accomplish those ends," –a fit that is not necessarily perfect, but reasonable; that represents not necessarily the single best disposition but one whose scope is "in proportion to the interest served"; that employs not necessarily the least restrictive means but . . . a means narrowly tailored to achieve the desired objective. Within those bounds we leave it to the governmental decisionmakers to judge what manner of regulation may best be employed.

BellSouth Advertising, 79 S.W.3d at 521 (quoting Bd. of Trs. of State Univ. of New York v. Fox, 492 U.S. 469, 480 (1989) (citations omitted)). In this case, the State has an important interest in preventing the deception of consumers through regulation of potentially misleading solicitations that contain the trade name, trademark, or non-public loan information associated with a financial institution that has no connection to the advertised offering. The chosen means to advance this interest are disclosure requirements that inform consumers about the identity of the solicitor, the sponsorship of the solicitation, and the source of the loan information used in the solicitation. These requirements do not substantially affect a solicitor's ability to communicate its own commercial information to consumers in the marketplace, nor are the requirements otherwise disproportionate to the important governmental interest that is served. The statutory disclosure requirements, therefore, do not impose an undue burden on solicitors of products or services.

The criminal sanctions imposed for a violation of Tenn. Code Ann. §§ 45-2-1709(a)(1)(D) and (E) are likewise constitutional. The General Assembly may generally impose criminal sanctions for violations of laws regulating commercial speech as long as such laws are not unconstitutionally vague. The Due Process Clauses of the Fifth and Fourteenth Amendments to the United States Constitution require that these offenses be defined so that ordinary people can understand the conduct prohibited and so that arbitrary and discriminatory enforcement is not encouraged. As the United States Supreme Court has explained:

It is a basic principle of due process that an enactment is void for vagueness if its prohibitions are not clearly defined. Vague laws offend several important values. First, because we assume that man is free to steer between lawful and unlawful conduct, we insist that laws give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly. Vague laws may trap the innocent by not providing fair warning. Second, if arbitrary and discriminatory enforcement is to be prevented, laws must provide explicit standards for those who apply them. A vague law impermissibly delegates basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory application.

Vill. of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498 (1982) (quoting Grayned v. City of Rockford, 408 U.S. 104, 108-09 (1972)); see also Chambers v. Stengel, 256 F.3d 397, 400 (6th Cir. 2001) (applying Grayned to determine whether statutes criminalizing solicitation of accident victims by attorneys within thirty days of the accident are unconstitutionally vague). The Tennessee Supreme Court also applies the principles established in Grayned to determine whether criminal statutes enacted by the General Assembly are unconstitutionally vague under Article I, § 8, of the Tennessee Constitution. State v. Pickett, 211 S.W.3d 696, 704-05 (Tenn. 2007); State v. Lyons, 802 S.W.2d 590, 591 (Tenn. 1990). A relatively strict construction of the statutes and case law is warranted since criminal penalties are at stake. Chambers, 256 F.3d at 400; State v. Marshall, 319 S.W.3d 558, 563 (Tenn. 2010). It is the duty of the court, however, "to adopt a construction which will sustain a statute and avoid constitutional conflict if its recitation permits such a construction." Lyons, 802 S.W.2d at 592.

The language of the subsections at issue here does not run afoul of the due process provisions of the federal or Tennessee Constitutions. The disclosures required by Tenn. Code Ann. §§ 45-2-1709(a)(1)(D) and (E) are unambiguous. It is also plain that the required disclosures must be made in bold-face type on the front page of the solicitation. Further, subsection (D)'s application to solicitations for products or services that contain the trade name or trademark, or a "confusingly similar" trade name or trademark, belonging to a covered financial institution is sufficiently clear, as is subsection (E)'s application to solicitations containing "specific loan information that is not publicly available." Although the statutes do not provide definitions for such terms, the words used may be understood when taken in their "natural and ordinary sense" and within "the context of the statements of law contained in relevant statutes and court rulings." Lyons, 802 S.W.2d at 592-93. Indeed, whether a person's use of a trademark is "confusingly similar" to the trademark of another has been interpreted for decades in the context of cases decided under the Lanham Act. See, e.g., Leelanau Wine Cellars, Ltd., v. Black & Red, Inc., 502 F.3d 504, 515-17 (6th Cir. 2007); Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275, 280, 283-84 (6th Cir. 1997); Induct-O-Matic Corp. v. Inductotherm Corp., 747 F.2d 358, 361 (6th Cir. 1984). In addition, Tennessee's trademark laws have been applied to cases involving the use of similar trade names to determine "the likelihood of confusion among consumers." Men of Measure Clothing, Inc. v. Men of Measure, Inc., 710 S.W.2d 43, 47 (Tenn. Ct. App. 1986); see also Century Homes of Knoxville, Inc. v. Associated Sunbelt Realtors, Inc., 621 S.W.2d 756, 759 (Tenn. Ct. App. 1981). Persons of ordinary intelligence, therefore, may readily comprehend the statutes' requirements and prohibitions.

Moreover, the language of the subsections is sufficiently precise to provide a limiting standard to law enforcement officials. The mere fact that enforcement may require the exercise of some judgment does not render a statute void for vagueness. Grayned, 408 U.S. at 114. Further, speculative danger of arbitrary or discriminatory application will not support a vagueness challenge, particularly where, as here, there is no record of the statutes actually being enforced in an arbitrary or discriminatory manner. Hoffman Estates, 455 U.S. at 503; State v. Burkhart, 58 S.W.3d 694, 700 (Tenn. 2001). Although there may be hypothetical situations in which application of Tenn. Code Ann. §§ 45-2-1709(a)(1)(D) and (E) could present questions of possible vagueness, the subsections as written are not unconstitutionally vague on their face.

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

JOE SHIRLEY
Senior Counsel

Requested by:

The Honorable Greg Gonzales
Commissioner
Tennessee Department of Financial Institutions
414 Union Street, Suite 1000
Nashville, TN 37219