Republican Party of New Mexico v. King , 741 F.3d 1089 ( 2013 )

FILED
United States Court of Appeals
Tenth Circuit
December 18, 2013
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
REPUBLICAN PARTY OF NEW
MEXICO; REPUBLICAN PARTY OF
BERNALILLO COUNTY;
REPUBLICAN PARTY OF DONA
ANA COUNTY; NEW MEXICO
TURN AROUND; NEW MEXICANS
FOR ECONOMIC RECOVERY PAC;
HARVEY YATES; ROD ADAIR;
CONRAD JAMES; HOWARD JAMES
BOHLANDER; MARK VETETO,
Plaintiffs-Appellees,
v. No. 12-2015
GARY K. KING, in his official
capacity as New Mexico Attorney
General; KARI E. BRANDENBURG;
JANETTA HICKS; ANGELA R.
PACHECO, in their official capacities
as District Attorneys,
Defendants-Appellants.
and
DIANNA J. DURAN, in her official
capacity as New Mexico Secretary of
State; AMY ORLANDO, in her
official capacity as District Attorney,
Defendants.
------------------------------
STATE OF VERMONT; STATE OF
HAWAII; STATE OF IOWA; STATE
OF MONTANA; STATE OF RHODE
ISLAND; STATE OF WEST
VIRGINIA,
Amici Curiae.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D.C. NO. 1:11-CV-00900-WJ-KBM)
Phillip Baca, Assistant Attorney General (Gary K. King, Attorney General, with
him on the briefs) Office of the Attorney General, Albuquerque, New Mexico, for
Appellants.
Randy Elf, James Madison Center for Free Speech, Terre Haute, Indiana (James
Bopp, Jr., James Madison Center for Free Speech, Terre Haute, Indiana, and Paul
M. Kienzle III, Scott & Kienzle, P.A., Albuquerque, New Mexico, with him on
the brief) for Appellees.
William H. Sorrell, Attorney General of Vermont, and Eve Jacobs-Carnahan,
Assistant Attorney General of Vermont, Montpelier, Vermont, David M. Louie,
Attorney General of Hawaii, Honolulu, Hawaii, Steve Bullock, Attorney General
of Montana, Helena, Montana, Darrell V. McGraw, Jr., West Virginia Attorney
General, Office of the Attorney General, Charleston, West Virginia, Tom Miller,
Attorney General of Iowa, Des Moines, Iowa, and Peter F. Kilmartin, Attorney
General, State of Rhode Island, Providence, Rhode Island, filed an Amici brief on
behalf of Appellants.
Before TYMKOVICH, McKAY, and O’BRIEN, Circuit Judges.
TYMKOVICH, Circuit Judge.
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This case requires us to consider state campaign finance regulations in light
of the Supreme Court’s ruling in Citizens United v. FEC, 558 U.S. 310 (2010).
Citizens United held that federal election law violated the First Amendment by
restricting independent political spending because the speaker was a
corporation—the holding allowed corporate entities to make unlimited
independent expenditures supporting or opposing issues or candidates as long as
the expenditures were not coordinated with a candidate for federal office.
Before the Court’s decision in Citizens United in 2010, however, New
Mexico had introduced a new state campaign finance law that imposed a host of
contribution and other limitations on political parties, political action committees,
and donors to such entities. In particular for purposes of this appeal, the state
limited the amount an individual may contribute to a political committee.
Potential donors, political parties, and political committees mounted an as-applied
challenge to the law in federal district court, contending several of its provisions
violated the First Amendment.
The district court agreed and issued a preliminary injunction, enjoining the
enforcement of two provisions: (1) limits on contributions to political committees
for use in federal campaigns, and (2) limits on contributions to political
committees that are to be used for independent expenditures, i.e., expenditures not
authorized by or coordinated with a candidate or candidate committee. See
Republican Party of N.M. v. King, 850 F. Supp. 2d 1206, 1216 (D.N.M. 2012).
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New Mexico appealed the latter ruling, contending that the limit on contributions
furthers the state’s compelling interest in preventing corruption or the appearance
of corruption in campaign spending.
As we explain below, the district court was correct that the challenged
provision cannot be reconciled with Citizens United and, as a result, did not err in
entering a preliminary injunction.
I. Background
New Mexico enacted in 2009 a measure that imposed campaign
contribution limits for statewide and nonstatewide elections. New Mexico’s law,
N.M. Stat. § 1-19-34.7, targets contributions to political committees and
candidates in several ways.
The statute caps contributions from individuals to political committees at
$5,000, contributions to candidates for nonstatewide office at $2,300, and
contributions to candidates for statewide office at $5,000. Id. § 1-19-34.7(A)(1). 1
1
The relevant section of the statute is as follows:
A. The following contributions by the following persons are prohibited:
(1) from a person, not including a political committee, to a:
(a) . . . .
(b) . . . .
(c) political committee in an amount that will cause that
person’s total contributions to the political committee to
exceed five thousand dollars ($5,000) during a primary
election or five thousand dollars ($5,000) during a general
election
(continued...)
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The statute also prohibits accepting or soliciting a contribution that violates one
of these limits. Id. § 1-19-34.7(C). Though “political committee” is defined
broadly to include political parties, id. § 1-19-26(L), in this case only non-party
political committees have challenged the constitutionality of the law as applied to
them. Both groups want to solicit and accept contributions for independent
expenditures in excess of the statutory maximum of $5,000. New Mexico defends
the law on the grounds that Supreme Court precedent permits restrictions for
contributions and such restrictions further the state’s anti-corruption interests.
The appellees contend that Citizens United changes the analysis and mandates the
law’s invalidation.
The Plaintiffs—an assortment of state and local political parties, political
action committees (PACs), and individuals—contend that these campaign finance
provisions are unconstitutional as applied to them. The challengers include both
state and local party organizations: the Republican Party of New Mexico (NM-
GOP), the Republican Party of Dona Ana County, and the Republican Party of
Bernalillo County. The PACs include the New Mexicans for Economic Recovery
Political Action Committee (NMER) and New Mexico Turn Around (NMTA), two
entities organized to engage in express advocacy. NMER is registered as a
political committee with the New Mexico Secretary of State. Its stated purpose is
1
(...continued)
N.M. Stat. § 1-19-34.7.
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to make independent expenditures but not contributions to candidates’ campaigns.
NMTA has a broader purpose: to make both independent expenditures and
contributions to candidates’ campaigns.
Claiming an infringement on their First Amendment right to engage in
protected political speech, the organizations sought in district court a preliminary
injunction. The district court ultimately enjoined two provisions but only one is
on appeal: a provision which prevents individuals from making contributions to
political committees in excess of $5,000. N.M. Stat. § 1-19-34.7(A)(1). In
enjoining the enforcement of this provision, the district court found that under
Citizens United, the Supreme Court held there was no anti-corruption interest in
limiting independent expenditures. Consequently, the court concluded, as has
nearly every circuit court since Citizens United, there could be no anti-corruption
interest in limiting contributions to be used for such expenditures. The district
court also reasoned that even if NMER and NMTA had interests closely aligned
with a political party, this alignment would not change the analysis because,
under Supreme Court precedent, political parties could also make unlimited
independent expenditures. And as long as funds contributed to NMTA for
independent expenditures were kept segregated from funds that would be given to
candidates, the statute could not restrict those contributions.
New Mexico timely appealed the district court’s grant of the preliminary
injunction, and we exercise jurisdiction under 28 U.S.C. § 1292(a)(1).
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II. Analysis
To obtain a preliminary injunction the moving party must demonstrate: (1)
a likelihood of success on the merits; (2) a likelihood that the moving party will
suffer irreparable harm if the injunction is not granted; (3) the balance of equities
is in the moving party’s favor; and (4) the preliminary injunction is in the public
interest. Winter v. NRDC, Inc., 555 U.S. 7, 20 (2008). We review the grant of a
preliminary injunction for abuse of discretion. RoDa Drilling Co. v. Siegal, 552
F.3d 1203, 1208 (10th Cir. 2009).
This appeal centers on the first prong, the plaintiffs’ likelihood of success
on the merits.
A. Legal Framework–Campaign Finance Regulation
The First Amendment “has its fullest and most urgent application to speech
uttered during a campaign for political office.” Ariz. Free Enter. Club’s Freedom
Club PAC v. Bennett, 131 S. Ct. 2806, 2817 (2011) (internal quotation marks
omitted). A “major purpose of the First Amendment was to protect the free
discussion of governmental affairs” especially of candidates and their beliefs and
performance. Id. at 2828. And as the Supreme Court explained in its seminal
campaign regulation decision, Buckley v. Valeo, 424 U.S. 1, 14 (1976) (per
curiam), political speech is the lifeblood of democracy—it is the means by which
citizens learn about candidates, hold their leaders accountable, and debate the
issues of the day.
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But speech comes in many forms, and the Supreme Court in Buckley
recognized that the financing and spending necessary to enable political speech
receives substantial constitutional protection. See id. at 19. In fact, the Court
observed that restrictions on money spent on speech are the equivalent of
restrictions on speech itself: “A restriction on the amount of money a person or
group can spend on political communication during a campaign necessarily
reduces the quantity of expression by restricting the number of issues discussed,
the depth of their exploration, and the size of the audience reached.” Id. For
these reasons, laws that burden political speech are subject to careful judicial
review.
Buckley was careful to draw a distinction between limitations on
expenditures for political speech and limitations on contributions to candidates.
“[W]e have understood that limits on political expenditures deserve closer
scrutiny than restrictions on political contributions.” FEC v. Colo. Republican
Fed. Campaign Comm. (Colorado II), 533 U.S. 431, 440 (2001). Expenditures
are core political speech directly advancing public debate, subject to strict
scrutiny. Expenditures cannot be restricted unless narrowly tailored to advance a
compelling state interest. See FEC v. Wis. Right to Life, 551 U.S. 449, 464
(2007).
By contrast, contribution limitations that restrict “the amount that any one
person or group may contribute to a candidate or political committee entail[] only
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a marginal restriction upon the contributor’s ability to engage in free
communication.” Buckley, 424 U.S. at 20–21. A contribution only “serves as a
general expression of support for the candidate and his views,” and the quantity
of the contribution does not significantly affect this political communication. Id.
But such limitations still implicate core First Amendment rights. See Citizens
Against Rent Control v. City of Berkeley, 454 U.S. 290, 299 (1981) (“Placing
limits on contributions which in turn limit expenditures plainly impairs freedom
of expression.”). Thus, while not subject to strict scrutiny, contribution limits
still involve a “significant interference with associational rights” and “must be
closely drawn to serve a sufficiently important interest.” Davis v. FEC, 554 U.S.
724, 740 n.7 (2008); Buckley, 424 U.S. at 25. 2
Contributions can come in several forms. In addition to direct
contributions to candidates, for example, expenditures coordinated with a
candidate are seen as indirect contributions, since they amount to nothing more
than spending by the candidate himself. Id. at 46 n.53. The Court has also
2
Some Justices have expressed disagreement with Buckley’s application of
a lower level of scrutiny to contribution limits. See, e.g., Randall v. Sorrell, 548
U.S. 230, 265–73 (2006) (Thomas, J., concurring). And Justice Stevens even
rejected the notion of money as speech by proxy, see Nixon v. Shrink Mo. Gov’t
PAC, 528 U.S. 377, 398–99 (2000) (Stevens, J., concurring), suggesting an even
lower level of scrutiny for campaign regulations. We need not weigh in on the
proper level of scrutiny for contribution limits, because in the wake of Citizens
United, limits on contributions to PACs for the purpose of making independent
expenditures are unconstitutional even under a lower level of scrutiny.
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upheld limits on contributions to political committees that make multiple
contributions to candidates, limits on contributions to political parties, and
restrictions on political parties’ coordinated expenditures with their candidates.
See Cal. Med. Ass’n v. FEC, 453 U.S. 182 (1981) (Cal-Med) (multi-candidate
political committees); McConnell v. FEC, 540 U.S. 93 (2003) (contributions to
political parties), overruled in part by Citizens United, 558 U.S. at 365–66;
Colorado II, 533 U.S. at 465 (coordinated expenditures by political parties).
But ever since Buckley, the Court has struck down limits on independent
expenditures, i.e., those that are not coordinated with candidates. The Court’s
rationale has been that independent expenditures by individuals do not pose the
same risks as direct contributions. 424 U.S. at 47–48. And in a series of cases
since Buckley the Court has repeatedly struck down limits on the independent
expenditures by political parties, political action committees, unions, and
corporations. See Colo. Republican Fed. Campaign Comm. v. FEC (Colorado I),
518 U.S. 604, 618 (1996) (political parties); FEC v. Nat’l Conservative PAC
(NCPAC), 470 U.S. 480 (1985) (political action committees); Citizens United, 558
U.S. at 365 (unions and corporations); First Nat’l Bank of Boston v. Bellotti, 435
U.S. 765, 795 (1978) (corporations).
The Buckley framework, importantly, recognizes only a narrow
governmental interest in regulating political speech—preventing corruption or the
appearance of corruption. When Buckley “identified a sufficiently important
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governmental interest in preventing corruption or the appearance of corruption,
that interest was limited to quid pro quo corruption.” Citizens United, 558 U.S. at
359. “The hallmark of corruption is the financial quid pro quo: dollars for
political favors.” NCPAC, 470 U.S. at 497.
Citizens United stepped into a long-running debate over what other
governmental interests might satisfy the government’s regulatory interest in
political speech. In that case, Citizens United, a non-profit corporation, produced
a documentary highly critical of Hillary Clinton, then a presidential candidate in
the 2008 Democratic primaries. 558 U.S. at 319–20. Because of the movie’s
strong criticism of Clinton’s candidacy, Citizens United worried the FEC might
deem the movie an “electioneering communication,” which, under 2 U.S.C.
§ 441b, corporations and unions were prohibited from making. An electioneering
communication was defined by federal law as “any broadcast, cable, or satellite
communication” that “refers to a clearly identified candidate for Federal office”
and was made within sixty days of a general election or thirty days of a primary
election. 2 U.S.C. § 434(f)(3)(A). The FEC regulation further defined an
“electioneering communication” as one that was “publicly distributed.” 11 C.F.R.
§ 100.29. Citizens United sought declaratory and injunctive relief against the
FEC, arguing that § 441b was unconstitutional as applied to its movie.
The Supreme Court struck down § 441b. The Court held that independent
expenditures could not be restricted merely because of the corporate identity of
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the speaker. In doing so, the Court overruled Austin v. Michigan Chamber of
Commerce, 494 U.S. 652 (1990), a plurality opinion which had held that
restrictions on political speech by corporations furthered a permissible
governmental interest in reducing the distorting financial influence of business
corporations on the political process. The Court rejected Austin’s application of a
broad anti-distortion rationale to support campaign finance restrictions and held
that the only valid interest for restricting political speech was preventing quid pro
quo corruption. Citizens United, 558 U.S. at 359. “The absence of
prearrangement and coordination of an expenditure with the candidate or his
agent not only undermines the value of the expenditure to the candidate, but also
alleviates the danger that expenditures will be given as a quid pro quo for
improper commitments from the candidate.” Id. at 357 (quoting Buckley, 424
U.S. at 47).
Citizens United thus resolved a longstanding debate over whether other
governmental interests could support restrictions on campaign financing. 3 “Over
time, various other justifications for restricting political speech have been
3
Disclosure and disclaimer requirements, on the other hand, are subject to
“exacting scrutiny” and may be upheld if there is “a ‘substantial relation’ between
the disclosure requirement and a ‘sufficiently important governmental
interest’”—namely, opening up information to the public. Citizens United, 558
U.S. at 366–67 (quoting Buckley, 424 U.S. at 64, 66). The Court upheld
disclosure requirements at issue in Citizens United because they provided the
electorate with information about the identity of the speaker and did not impose a
chill on political speech, even for independent expenditures.
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offered—equalization of viewpoints, combating distortion, leveling electoral
opportunity, encouraging the use of public financing, and reducing the appearance
of favoritism and undue political access or influence—but the Court has
repudiated them all. As such, after Citizens United there is no valid governmental
interest sufficient to justify imposing limits on fundraising by independent-
expenditure organizations.” Wis. Right to Life State PAC v. Barland, 664 F.3d
139, 153–54 (7th Cir. 2011) (citations omitted).
Citizens United also opened the playing field for independent expenditures
by non-profit corporations. After Citizens United, the Court no longer perceives a
“threat of quid pro quo corruption”
when independent groups spend money on political
speech. By definition, an independent expenditure is
political speech presented to the electorate that is not
coordinated with a candidate. The separation between
candidates and independent expenditure groups negates
the possibility that independent expenditures will result
in the sort of quid pro quo corruption with which [the
Court’s] case law is concerned. In short, the
candidate-funding circuit is broken. Citizens United thus
held as a categorical matter that independent
expenditures do not lead to, or create the appearance of,
quid pro quo corruption.
Id. at 153 (internal quotation marks omitted).
It is worth repeating: the Court firmly rejected the contention that
independent expenditures give rise to corruption or the appearance of corruption.
“The appearance of influence or access . . . will not cause the electorate to lose
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faith in our democracy. By definition, an independent expenditure is political
speech . . . not coordinated with a candidate.” Citizens United, 558 U.S. at 360.
And, in any event, as the Court saw it, “[i]ngratiation and access . . . are not
corruption,” id., since “[f]avoritism and influence are not . . . avoidable in
representative politics. It is in the nature of an elected representative to favor
certain policies, and, by necessary corollary, to favor the voters and contributors
who support those policies.” Id. at 359 (quoting McConnell, 540 U.S. at 297
(Kennedy, J., concurring in part and dissenting in part)).
In sum, Citizens United resolved the right of a non-profit corporation to
make independent expenditures without limits as to their source and amount. In
its wake, the circuit courts have also uniformly struck down limitations on
contributions to entities engaged in independent expenditures. Those cases are
relevant to our conclusion here.
In the first decision analyzing contribution limitations following Citizens
United, the D.C. Circuit found unconstitutional the Bipartisan Campaign Reform
Act’s contribution limits as applied to an independent expenditure-only group.
SpeechNow.org v. FEC, 599 F.3d 686 (D.C. Cir. 2010). Recognizing the
government’s anti-corruption interest as the only legitimate basis for limiting
contributions, the D.C. Circuit reasoned that “because Citizens United holds that
independent expenditures do not corrupt or give the appearance of corruption as a
matter of law, then the government can have no anti-corruption interest in
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limiting contributions to independent expenditure-only organizations.” Id. at 696.
The court rejected the argument that independent expenditures “lead to
preferential access for donors and undue influence over officeholders,” because,
following Citizens United, “ingratiation and access . . . are not corruption.” Id. at
694 (alteration omitted). In response, the FEC argued that Citizens United did
not unsettle Buckley’s decision upholding contribution limits. Buckley, however,
concerned only direct contributions to candidates. The court reasoned that
although limits on direct contributions to candidates may prevent quid pro quo
corruption, limits on contributions for the purpose of making independent
expenditures promote no anti-corruption interest. Id.
Five other circuits have also struck down contribution limits to independent
expenditure groups. See N.Y. Progress & Prot. PAC v. Walsh, 733 F.3d 483, 487
(2d Cir. 2013) (holding that an aggregate limit on an individual’s contributions is
unconstitutional as applied to contributions to groups for independent
expenditures); Texans for Free Enter. v. Tex. Ethics Comm’n, 732 F.3d 535, 538
(5th Cir. 2013) (holding that a state law ban on corporate contributions cannot be
applied to independent expenditure committees); Farris v. Seabrook, 677 F.3d
858, 867 (9th Cir. 2012) (concluding there was no state interest limiting
contributions to independent recall committees at $800); Thalheimer v. City of
San Diego, 645 F.3d 1109, 1121 (9th Cir. 2011) (concluding, in affirming grant of
preliminary injunction, that local ordinance capping contributions to independent
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expenditure committees at $500 violated First Amendment); Long Beach Area
Chamber of Commerce v. City of Long Beach, 603 F.3d 684, 698–99 (9th Cir.
2010) (holding that local ordinance restricting contributions cannot be applied to
political action committee seeking to use funds for independent expenditures);
Barland, 664 F.3d at 155 (holding that state law restricting contributions at
$10,000 cannot be applied to independent expenditure committees); N.C. Right to
Life, Inc. v. Leake, 525 F.3d 274, 293 (4th Cir. 2008) (holding unconstitutional a
state law limiting contributions to $4,000 as applied to independent expenditure
committees). 4
With this framework, we turn to New Mexico’s regulations.
B. Application
4
The Eleventh Circuit in an unpublished opinion declined to hold
unconstitutional limits on PAC-to-PAC contributions for the purpose of
independent expenditures. See Alabama Democratic Conference v. Broussard,
__ F. App’x __, 2013 WL 5273304 (11th Cir. Sept. 19, 2013). The panel cited
evidence of coordination between the Alabama Democratic Party and the Alabama
Democratic Conference PAC in holding that the state may be able to justify the
application of a contribution limitation. But even so, the logic of Citizens United
would insist on the enforcement of bans on coordination, rather than targeting an
entire class of contributions to independent groups. Citizens United did not treat
corruption as a fact question to be resolved on a case-by-case basis. Instead, the
Court considered whether independent speech is the type that poses a risk of quid
pro quo corruption or the appearance thereof. See Citizens United, 558 U.S. at
360. The Court determined that speech through independent expenditures does
not pose such a risk. But it did not question the government’s authority to
enforce restrictions against coordination between candidates and independent
expenditure PACs—coordination breaks the essential independence of the
expenditure and has always been deemed the functional equivalent of a candidate
contribution. Id.
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Citizens United governs the outcome in this case. Because there is no
corruption interest in limiting independent expenditures, there can also be no
interest in limiting contributions to non-party entities that make independent
expenditures. If an entity can fund unlimited political speech on its own without
raising the threat of corruption, no threat arises from contributions that create the
fund. As every other circuit to consider the issue has recognized, quid pro quo
corruption no longer justifies restrictions on uncoordinated spending for
independent expenditure-only entities, and the absence of a corruption interest
breaks any justification for restrictions on contributions for that purpose.
Consequently, as the district court found, NMER is likely to succeed on the
merits of its First Amendment challenges to New Mexico’s law.
The district court also found in favor of NMTA, which would like to make
both candidate contributions and independent expenditures. New Mexico’s
arguments require more consideration. But in the end, as we explain, the
difference does not materially change our conclusions in light of Citizens United.
Any anti-corruption interest posed by candidate contributions are resolved by the
limitation on those contributions—NMTA’s direct contributions to candidates are
limited to $10,000 per election cycle. No such interest is met by limitations on its
independent expenditures as long as there is no coordination with candidates. In
short, New Mexico should be satisfied that its $10,000 per election cycle
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limitation averts corruption or its appearance, and thus has no further interest in
limiting contributions intended for independent expenditures.
In an instructive case, the D.C. Circuit addressed the situation where a PAC
made independent expenditures and contributed to individual candidates. Emily’s
List v. FEC, 581 F.3d 1 (D.C. Cir. 2009). The court explained that a PAC that
makes independent expenditures “does not suddenly forfeit its First Amendment
rights when it decides also to make direct contributions to parties or candidates.”
Id. at 12. The court noted the PAC merely needs to ensure that its contributions
to parties or candidates come from an account set up for that purpose, not one
used for independent expenditures. Id. Applying these principles, the court
found unconstitutional regulations requiring Emily’s List to use a portion of its
limited “hard-money” funds (those given directly to candidates) for
advertisements, get-out-the-vote efforts, and voter registration drives. Id. at 16.
In other words, the PAC had the right to raise unlimited funds for independent
spending and could not be forced to fund portions of their independent activities
from their hard-money accounts (for which contributions were limited to $5,000).
Id. The FEC did not petition the Supreme Court for certiorari and ultimately
withdrew the challenged regulations. See 11 C.F.R. § 106.6(c), (f), reversed by
75 Fed. Reg. 13223 (Mar. 19, 2010).
In this case, NMTA is similarly situated. It makes both independent
expenditures and candidate contributions. It maintains separate accounts for these
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purposes and, under the record we have, adheres to contribution limits for
donations to its candidate account. In these circumstances, under the logic of
Citizens United, no anti-corruption interest is furthered as long as the NMTA
maintains an account segregated from its candidate contributions. See Carey v.
FEC, 791 F. Supp. 2d 121, 131–32 (D.D.C. 2011) (concluding that maintaining
separate accounts for direct contributions and for independent expenditures
satisfies federal law). Because NMTA maintains such a segregated account, it
does not run afoul of candidate contribution restrictions.
New Mexico puts forward two main counter-arguments: (1) it points to
Supreme Court precedent prior to Citizens United that, it contends, supports limits
on contributions for independent expenditures; and (2) the state’s interest in
preventing circumvention of valid contribution limits is a compelling interest
even after Citizens United.
In support of its first argument, New Mexico points to Buckley, Cal-Med,
Colorado I, and McConnell. Yet every one of those cases concerns contributions
to entities different than those at issue here, and none supports its argument.
In Buckley, the Court upheld contribution limits to candidates but struck
down limits on expenditures. One of the contribution limits the Court upheld was
the $25,000 aggregate limit on contributions to candidates and political
committees. 424 U.S. at 38. But the Court was not addressing contributions to
political committees for independent expenditures, only contributions to “political
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committees likely to contribute to [a particular] candidate.” Id. The concern was
that the absence of an aggregate cap would facilitate “evasion of the $1,000
contribution limitation.” Id. In other words, a donor could make numerous
contributions to different PACs likely to make contributions to the favored
candidate and thereby evade the individual limits on contributions to candidates.
The aggregate limitation served a justifiable limit on a donor’s ability to
contribute dollars directly to a candidate, either personally or through a PAC. 5
Similarly, in Cal-Med, the Supreme Court reaffirmed contribution limits to
multi-candidate political committees, i.e., PACs that made campaign
contributions to multiple candidates. The Court reasoned, as in Buckley,
Congress could restrict contributions to such committees or else individuals could
circumvent the $1,000 limit on individual contributions and the $25,000 aggregate
limit. 453 U.S. at 197–99. In the opinion, however, there was no discussion, let
alone approval, of contribution restrictions for independent expenditures. In fact,
Justice Blackmun, in his concurring (and controlling) opinion, underscored that “a
different result would follow if [the restrictions] were applied to contributions to
a political committee established for the purpose of making independent
5
The federal aggregate limitations are currently subject to a challenge in
the Supreme Court in McCutcheon v. FEC, No. 12-536 (U.S. argued Oct. 8,
2013).
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expenditures, rather than contributions to candidates.” Id. at 203 (Blackmun, J.,
concurring) (emphasis added).
In the next case New Mexico identifies, Colorado I, the Supreme Court
addressed independent expenditure limits on political parties. The Court held that
Congress could not limit the uncoordinated expenditures of political parties, but
the principal opinion noted that contributions to parties may pose a threat of
corruption because they enable independent party expenditures to benefit a
particular candidate. Colorado I, 518 U.S. at 617.
The Court made clear in McConnell, however, that the government could
limit contributions to parties because of their inherent connection to and close
affiliation with their candidate standard-bearers. In McConnell, the Court upheld
limits on soft-money contributions to political parties—funds used for issue
advocacy and get-out-the-vote efforts. The Court held that “contributions to a
federal candidate’s party in aid of that candidate’s campaign threaten to
create—no less than would a direct contribution to the candidate—a sense of
obligation.” McConnell, 540 U.S. at 144. “This is particularly true of
contributions to national parties, with which federal candidates and officeholders
enjoy a special relationship and unity of interest.” Id. at 145.
McConnell demonstrates the Court’s belief that political parties are so
inherently affiliated with candidates to justify a presumption that money a
contributor might give to a party will be spent on that candidate, thereby evading
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the candidate contribution limits. But neither Colorado I nor McConnell has
anything to say about contributions to political entities unaffiliated with
candidates or parties. And given Citizens United, there can be no similar concern
with contributions for independent expenditures by an entity unaffiliated with a
candidate.
Drilling deeply into McConnell, New Mexico further argues that one
footnote—footnote 48—should be read as justifying restrictions on contributions
to non-party political committees. The footnote discusses the Court’s holding in
Cal-Med, which as we have explained, upheld contributions limitations to multi-
candidate PACs to implement the $1,000 cap on contributions to particular
candidates and the $25,000 combined cap on contributions to all candidates. 6
6
In responding to Justice Kennedy’s dissent arguing a narrow view of
corruption, the McConnell majority upheld BCRA’s restriction on soft money
contributions to political parties, stating,
[I]n [Cal-Med], we upheld FECA’s $5,000 limit on
contributions to multicandidate political committees. It
is no answer to say that such limits were justified as a
means of preventing individuals from using parties and
political committees as pass-throughs to circumvent
FECA’s $1,000 limit on individual contributions to
candidates. Given FECA’s definition of ‘contribution,’
the $5,000 and $25,000 limits restricted not only the
source and amount of funds available to parties and
political committees to make candidate contributions,
but also the source and amount of funds available to
engage in express advocacy and numerous other
noncoordinated expenditures. If indeed the First
(continued...)
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New Mexico claims the footnote expands Cal-Med not just to prevent the
circumvention of aggregate contribution limits to candidates but also to limit
independent expenditures.
Yet there is good reason this interpretation is misplaced. As noted above,
Justice Blackmun in his concurring opinion in Cal-Med stated that his decision to
uphold the limit on contributions would be different if the restrictions “were
applied to contributions to a political committee established for the purpose of
making independent expenditures, rather than contributions to candidates.” Cal-
Med, 453 U.S. at 203 (Blackmun, J., concurring). In other words, Justice
Blackmun concluded “that contributions to political committees can be limited
only if those contributions implicate the governmental interest in preventing
actual or potential corruption.” Id. (emphasis added). And Justice Blackmun was
the fifth vote upholding the statute, and thus his more narrow view of the Court’s
holding is controlling. See Marks v. United States, 430 U.S. 188, 193 (1977)
(“[T]he holding of the Court may be viewed as that position taken by those
6
(...continued)
Amendment prohibited Congress from regulating
contributions to fund the latter, the
otherwise-easy-to-remedy exploitation of parties as
pass-throughs (e.g., a strict limit on donations that could
be used to fund candidate contributions) would have
provided insufficient justification for such overbroad
legislation.
540 U.S. at 152 n.48.
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Members who concurred in the judgments on the narrowest grounds.”). Absent
strong evidence to the contrary, it is unlikely that the McConnell Court meant to
expand the narrow holding of Cal-Med.
The McConnell Court’s analysis, moreover, was primarily aimed at the
soft-money activities of parties, namely, Congress’s concern that parties acted as
“pass-throughs” because of their natural affiliation with the party’s candidates.
McConnell, 540 U.S. at 152 n.48. But groups that do not share a party
relationship are treated differently. The Court noted that “[i]nterest groups . . .
remain free to raise soft money” and affirmed Congress’s recognition of the “real-
world differences between political parties and interest groups when creating a
system of campaign finance.” Id. at 188. These comments reflect the Court’s
acceptance of the analytical differences between parties and independent
expenditure groups for purposes of First Amendment protection: more onerous
contribution restrictions may be placed on political parties than on independent
groups. At most, what McConnell’s reliance on Cal-Med stands for is that
political parties have a close enough relationship with candidates such that
Congress can justifiably restrict contributions to parties—in ways that go beyond
merely preventing the circumvention of contribution limits to candidates. In that
case, it meant soft-money to parties was an appropriate target. But there is no
analog here for independent political committees. As one court explained, it is
“not an exaggeration to say that McConnell views political parties as different in
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kind than independent expenditure committees.” N.C. Right to Life, 525 F.3d at
293.
New Mexico’s reading of footnote 48 is also inconsistent with the holding
of Citizens United. The holding in McConnell suggested that it is proper to
evaluate a donation or expenditure’s “potential impact on a candidate’s election”
or “value to the candidate” when assessing the potential for actual or apparent
corruption. 540 U.S. at 152. This discussion and footnote 48 were responses to
Justice Kennedy’s narrower and “crabbed view of corruption,” id.—a view that
the Supreme Court (per Justice Kennedy now in the majority) expressly adopted
in Citizens United as the only justification for campaign finance restrictions.
Citizens United affirmed that government can restrict campaign financing only to
prevent actual or apparent quid pro quo corruption. To the extent that footnote 48
rests on the assumption that the government may restrict speech for any reason
besides the prevention of actual or apparent quid pro quo corruption, New
Mexico’s reading is foreclosed by Citizens United. 7
7
New Mexico’s interpretation of footnote 48 also threatens to upend the
longstanding Buckley framework. If a contribution to outside groups for the
purpose of making independent expenditures implicates the government’s anti-
corruption interest, then the same interest is implicated by the independent
expenditures themselves. This would mean that “the entire Buckley edifice, built
on a foundation of a contribution-expenditure dichotomy, falls.” Richard L.
Hasen, Buckley Is Dead, Long Live Buckley: The New Campaign Finance
Incoherence of McConnell v. Federal Election Commission, 153 U. Pa. L. Rev.
31, 70 (2004). “Is that what the Court really intended buried in a few sentences
(continued...)
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One district court suggested that even if limits on contributions to
independent expenditure-only PACs are unconstitutional, hybrid PACs that make
both independent expenditures and contributions to candidates may implicate the
government’s anti-corruption interest. In Stop This Insanity, Inc. Employee
Leadership Fund v. FEC, 902 F. Supp. 2d 23 (D.D.C. 2012), the court held that a
hybrid PAC’s use of separate bank accounts for campaign contributions and
independent expenditures was insufficient to overcome the appearance of
corruption that exists when a single entity conducts both activities. In so holding,
the court disagreed with another judge in the district, see Carey, 791 F. Supp. 2d
at 131–32, and more directly with the D.C. Circuit’s holding in Emily’s List, 581
F.3d at 12.
Stop This Insanity does not offer a compelling rationale why combining two
activities, neither of which by itself is corrupting, into a single entity suddenly
increases the risk of real or apparent quid pro quo corruption. The court asserted
that a PAC’s direct contribution compromises, or at least appears to compromise,
the independence of its express advocacy. See id. But a direct contribution is not
an example of the type of coordination that implicates a PAC’s independent
advocacy. In Citizens United, the Court held that independent expenditures are
7
(...continued)
of a footnote in one of the longest cases in Supreme Court history?” Id.; see also
Emily’s List, 581 F.3d at 14 n.13 (declining to adopt expansive reading of
footnote 48).
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by definition uncoordinated with candidates and cannot lead to the appearance of
quid pro quo corruption. 558 U.S. at 360. 8 A hybrid PAC’s direct contribution
does not alter the uncoordinated nature of its independent expenditures; there still
must be some attendant coordination with the candidate or political party to make
corruption real or apparent. 9 In any event, a hybrid PAC must respect both direct
8
We recognize, of course, that candidates are no doubt grateful for the
support of independent groups, but as we point out above, Citizens United held
that “ingratiation and access . . . are not corruption.” 558 U.S. at 310. For an
interpretation of independent expenditures supported by the Press Clause of the
First Amendment that avoids this difficulty, see Michael W. McConnell,
Reconsidering Citizens United as a Press Clause Case, 123 Yale L.J. 412 (2013)
(concluding Citizens United’s non-corruption explanation is overall unconvincing
and made the decision appear “naïve or obtuse”).
9
The FEC distinguishes independent expenditures from coordinated
contributions under the following regulation:
(a) The term independent expenditure means an
expenditure by a person for a communication expressly
advocating the election or defeat of a clearly identified
candidate that is not made in cooperation, consultation,
or concert with, or at the request or suggestion of, a
candidate, a candidate's authorized committee, or their
agents, or a political party committee or its agents.
....
(c) No expenditure shall be considered independent if
the person making the expenditure allows a candidate, a
candidate’s authorized committee, or their agents, or a
political party committee or its agents to become
materially involved in decisions regarding the
communication . . . .
11 C.F.R. § 100.16 (2013).
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contribution limits and anti-coordination laws. These measures satisfy the
government’s anti-corruption interest with respect to hybrid PACs. 10
Finally, New Mexico contends that its anti-circumvention rationale justifies
the contribution limits. See Colorado II, 533 U.S. at 456 (“[A]ll members of the
Court agree that circumvention is a valid theory of corruption.”). New Mexico
argues the threat of circumvention gives the state the authority to restrict
contributions and expenditures that are not directly corrupting but may facilitate
10
Stop This Insanity conflicts with Carey, another case from the same
district court. Carey endorses the concept a single entity may make both
candidate contributions and independent expenditures from segregated accounts.
See 791 F. Supp. 2d at 130–32. The FEC, for now, also endorses that approach:
The Commission will no longer enforce 2 U.S.C.
§§441a(a)(1)(C) and 441a(a)(3), as well as any
implementing regulations, against any nonconnected
political committee with regard to contributions from
individuals, political committees, corporations, and
labor organizations, as long as (1) the committee
deposits the contributions into a separate bank account
for the purpose of financing independent expenditures,
other advertisements that refer to a Federal candidate,
and generic voter drives (the “Non-Contribution
Account”), (2) the Non-Contribution Account remains
segregated from any accounts that receive
source-restricted and amount-limited contributions for
the purpose of making contributions to candidates, and
(3) each account pays a percentage of administrative
expenses that closely corresponds to the percentage of
activity for that account.
FEC Statement on Carey v. FEC, Reporting Guidance for Political Committees
that Maintain a Non-Contribution Account (Oct. 5, 2011),
http://www.fec.gov/press/Press2011/20111006postcarey.shtml.
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the evasion of other valid limits. Yet there can be no freestanding anti-
circumvention interest. As Cal-Med and Colorado II indicate, there must be an
underlying risk of corruption that justifies a contribution limit, and there must be
a real possibility of evading those valid limits through unlimited contributions.
Here, there is no underlying risk of corruption since NMTA’s contributions to
candidates are controlled and any independent expenditures are not corrupting.
Citizens United, 558 U.S. at 360. As long as the PAC does not pass along the
donors’ funds to candidates or coordinate with candidates in making expenditures,
there is no possibility that unlimited contributions for independent expenditures
will enable donors to skirt otherwise valid contribution limits. 11
As a fallback argument, New Mexico has suggested both here and below
that NMER and NMTA are not really independent of the Republican Party of New
Mexico, due to overlapping membership between the leadership of the PACs and
that of the state and local branches of the Republican Party. See Aplt. Br. at 9;
11
In Alabama Democratic Conference, an Eleventh Circuit panel suggested
that hybrid PACs could pose a unique risk of circumvention of individual
contribution limits. A supporter of a particular candidate may donate to a hybrid
PAC’s independent expenditure account while extracting a promise from the PAC
to donate to a particular candidate from its hard-money account. 2013 WL
5273304 at *2. The potential that a large donor may extract a promise that the
PAC will contribute to a particular candidate, however, concerns only the control
over the PAC’s agenda. It does not affect the funds available in the PAC’s hard-
money account, which is subject to strict restrictions on the amount it may raise
from a single donor and contribute to single candidate. This scenario would not
result in circumvention of individual contribution limits.
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Aplt. App. 129–30. The district court rejected these concerns: “Since political
parties legally can make independent expenditures, the mere fact that NMER and
NMTA are closely related to political parties does not affect the analysis
regarding their ability to make independent expenditures.” Aplt. App. 299.
We agree, but with this caveat. While it is true that political parties can
make unlimited independent expenditures, see Colorado I, 518 U.S. at 618, the
Supreme Court in McConnell upheld restrictions on soft-money contributions to
political parties—funds not passed along to candidates’ campaigns but used for a
party’s general operating costs, get-out-the-vote drives, and issue advocacy. And
McConnell supports limits like those in BCRA that restrict soft-money
contributions to political parties. See McConnell, 540 U.S. at 145 (noting that an
“ample record in these cases” supported the congressional finding that soft-money
contributions to national party committees have “a corrupting influence”).
The difference between this case and McConnell, however, is that New
Mexico’s definition of a “political committee” includes both political parties and
nonparty political committees. N.M. Stat. § 1-19-26(L). A state political party,
due to McConnell, is much less likely to bring a successful as-applied challenge
to a limitation on the contributions it may receive, particularly if there was record
evidence of state or local “parties hav[ing] sold access” to candidates. 540 U.S.
at 153 (emphasis in original); see also Republican Nat’l Comm. v. FEC, 698 F.
Supp. 2d 150 (D.D.C. 2010) (three-judge panel) (applying McConnell, post-
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Citizens United, to uphold federal ban on unlimited soft-money to state and local
parties).
While the record suggests that there is some overlapping leadership, 12 the
question before us is whether political committees that are not formally affiliated
with a political party or candidate may receive unlimited contributions for
independent expenditures. On this question the answer is yes.
If the political committees are indirectly controlled by political parties, that
would raise a separate issue—coordination. Though this question is not before
us, we note that the Supreme Court has long upheld provisions which designate
coordinated expenditures as indirect contributions. See Colorado II, 533 U.S. at
464–65; Buckley, 424 U.S. at 46 & n.53. If a PAC were making expenditures that
were coordinated with a political party, then such expenditures could be deemed
contributions to a political party. And those contributions would be subject to
whatever limitations that are still valid under McConnell. If New Mexico
believes that there is improper coordination between a PAC and a state or local
12
For example, Chris Collins is listed as the treasurer of NMER on its
registration form with the New Mexico Secretary of State, Aplt. App. 60, and he
attests to this fact in the Plaintiffs’ verified pleadings, id. at 39–40. In a separate
part of the same verified pleadings, Collins also declares that he is the chairman
of the Republican Party of Bernalillo County. Id. at 35–36. In their complaint,
Plaintiffs admit that NMER was “organized by” NM-GOP but insist that it
“operates completely independently of the NM-GOP, candidates, officeholders,
NM-GOP officers and staff, NM-GOP’s Executive Committee, and the NM-GOP
chairman.” Id. at 22.
-31-
political party, then it could bring an enforcement action. But the record at the
preliminary injunction stage does not disclose any unlawful coordination, nor did
the parties adequately brief the issue on appeal or below.
In sum, contribution limits must be “closely drawn” to serve “a sufficiently
important interest,” namely, the prevention of corruption or the appearance of
corruption. The Supreme Court has held that independent expenditures do not
invoke the anti-corruption rationale, and New Mexico does not differentiate
between contributions for independent expenditures and contributions for
candidate contributions. We therefore conclude that NMER and NMTA have
satisfied their showing of likelihood of success that N.M. Stat. § 1-19-34.7(A)(1)
is unconstitutional as applied to contributions to those organizations to be used
solely for independent expenditures.
III. Conclusion
Because NMER and NMTA are likely to prevail on the merits in their
challenge against New Mexico’s law, we AFFIRM the district court’s grant of a
preliminary injunction enjoining the law’s enforcement.
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