Independence Institute v. FEC ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 22, 2015 Decided March 1, 2016
No. 14-5249
INDEPENDENCE INSTITUTE, A COLORADO NONPROFIT
CORPORATION,
APPELLANT
v.
FEDERAL ELECTION COMMISSION,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:14-cv-01500)
Allen Dickerson argued the cause for appellant. With
him on the brief was Tyler Martinez.
Herbert W. Titus, William J. Olson, John S. Miles,
Jeremiah L. Morgan, and Robert J. Olson were on the brief for
amici curiae Citizens United, et al. in support of appellant.
Greg J. Mueller, Attorney, Federal Election Commission,
argued the cause for appellee. With him on the brief were
Lisa J. Stevenson, Deputy General Counsel, Kevin Deeley,
Acting Associate General Counsel, and Erin Chlopak, Acting
Assistant General Counsel. Michael Columbo, Attorney,
entered an appearance.
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J. Gerald Hebert, Lawrence M. Noble, Scott L. Nelson,
Fred Wertheimer, Donald J. Simon, and Charles Fried were on
the brief for amici curiae Campaign Legal Center, et al. in
support of defendant-appellee.
Before: GRIFFITH, KAVANAUGH, and WILKINS, Circuit
Judges.
Opinion for the Court filed by Circuit Judge KAVANAUGH,
with whom Circuit Judge GRIFFITH joins.
Dissenting opinion filed by Circuit Judge WILKINS.
KAVANAUGH, Circuit Judge: The Bipartisan Campaign
Reform Act of 2002, known as BCRA or the McCain-Feingold
Act, requires speakers who make “electioneering
communications” to disclose some of their donors. An
electioneering communication is a broadcast, cable, or satellite
communication that refers to a candidate for federal office and
is aired within 60 days of a general election. See 52 U.S.C.
§ 30104(f).
Independence Institute is a Section 501(c)(3) nonprofit
organization located in Colorado. In 2014, the Institute
supported a proposed federal statute that would reform federal
sentencing. Independence Institute wanted to run a radio
advertisement in favor of the proposed law. The
advertisement would encourage citizens to express their
support of the law to Colorado’s U.S. Senators, Mark Udall
and Michael Bennet.
The Institute intended to air the advertisement in the fall of
2014. At that time, however, Senator Udall was running for
re-election. The radio spot would therefore qualify as an
electioneering communication within the meaning of BCRA.
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As a result, Independence Institute would have to disclose
some of its donors.
Independence Institute says that 501(c)(3) nonprofit
organizations possess a First Amendment right to air issue
advertisements without disclosing their donors.
Independence Institute therefore sued the FEC, arguing that
BCRA’s disclosure requirement was unconstitutional as
applied to this situation.
The Institute asked the District Court to convene a
three-judge district court pursuant to the statutory provision
that requires three-judge district courts for constitutional
challenges to BCRA. See 52 U.S.C. § 30110 note. But the
District Court denied the Institute’s request for a three-judge
district court. On the merits, the District Court held that
Independence Institute’s claim was unavailing under
McConnell v. FEC, 540 U.S. 93 (2003) and Citizens United v.
FEC, 558 U.S. 310 (2010), which respectively upheld BCRA’s
disclosure requirement against a facial challenge and against
one particular as-applied challenge. See Independence
Institute v. FEC, 70 F. Supp. 3d 502, 506-15 (D.D.C. 2014).
On appeal, Independence Institute argues that the District
Court erred in denying the request for a three-judge district
court. Our review of that question is de novo. See LaRouche
v. Fowler, 152 F.3d 974, 981-86 (D.C. Cir. 1998).
***
On its face, BCRA requires that a three-judge district court
adjudicate Independence Institute’s First Amendment claim.
The Act states that a constitutional challenge to one of BCRA’s
provisions “shall be heard by a 3-judge court convened
pursuant to section 2284 of title 28.” 52 U.S.C. § 30110 note.
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Section 2284 also says “shall”: A three-judge district court
“shall be convened when otherwise required by Act of
Congress,” such as BCRA. 28 U.S.C. § 2284.*
To be sure, Section 2284 is not absolute. It requires a
three-judge district court “unless” the single district court
judge “determines that three judges are not required.” Id.
But in its recent decision in Shapiro v. McManus, the Supreme
Court interpreted that language to mean that the single district
court judge should determine only “whether the ‘request for
three judges’ is made in a case covered by § 2284(a) – no more,
no less.” 136 S. Ct. 450, 455 (2015), slip op. at 5.
Because Independence Institute’s complaint raises a First
Amendment challenge to a provision of BCRA, Section
2284(a) entitles it to a three-judge district court.
* In relevant part, the judicial review section of BCRA
provides as follows: “(a) If any action is brought for declaratory or
injunctive relief to challenge the constitutionality of any provision of
this Act or any amendment made by this Act, the following rules
shall apply: (1) The action shall be filed in the United States District
Court for the District of Columbia and shall be heard by a 3-judge
court convened pursuant to section 2284 of title 28, United States
Code.” 52 U.S.C. § 30110 note (emphasis added). In turn, 28
U.S.C. § 2284 provides in relevant part: “(a) A district court of
three judges shall be convened when otherwise required by Act of
Congress, or when an action is filed challenging the constitutionality
of the apportionment of congressional districts or the apportionment
of any statewide legislative body. (b) In any action required to be
heard and determined by a district court of three judges under
subsection (a) of this section, the composition and procedure of the
court shall be as follows: (1) Upon the filing of a request for three
judges, the judge to whom the request is presented shall, unless he
determines that three judges are not required, immediately notify the
chief judge of the circuit . . . .” 28 U.S.C. § 2284.
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The only remaining barrier to Independence Institute’s
request for a three-judge district court is the general
jurisdictional requirement that a suit must raise a substantial
federal question. As the Supreme Court explained in Shapiro:
“Absent a substantial federal question, even a single-judge
district court lacks jurisdiction, and a three-judge court is not
required where the district court itself lacks jurisdiction of the
complaint or the complaint is not justiciable in the federal
courts.” Id. at 455, slip op. at 5-6 (internal quotation marks
omitted).
But as the Shapiro Court stressed, the exception for
insubstantial claims is narrow. It applies only when the case
is “essentially fictitious, wholly insubstantial, obviously
frivolous, and obviously without merit.” Id. at 456, slip op. at
7 (quoting Goosby v. Osser, 409 U.S. 512, 518 (1973))
(internal quotation marks omitted). The Supreme Court has
emphasized, moreover, that “the adverbs” are “no mere
throwaways”: The “limiting words ‘wholly’ and ‘obviously’
have cogent legal significance.” Id. (quoting Goosby, 409
U.S. at 518) (internal quotation marks omitted).
The bar that a complaint must clear is “low.” Id. at 456,
slip op. at 7. “Constitutional claims will not lightly be found
insubstantial for purposes of the three-judge-court statute.”
Id. at 455, slip op. at 6 (alterations and internal quotation marks
omitted).
The FEC argues that Independence Institute’s case fails to
clear even that low bar because, according to the FEC,
McConnell and Citizens United render Independence
Institute’s First Amendment claim “essentially fictitious,
wholly insubstantial, obviously frivolous, and obviously
without merit.” Id. at 456, slip op. at 7; see McConnell v.
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FEC, 540 U.S. 93, 196-99 (2003); Citizens United v. FEC, 558
U.S. 310, 366-69 (2010). We disagree.
BCRA requires speakers who make electioneering
communications to disclose some of their donors. 52 U.S.C.
§ 30104. In McConnell, the Supreme Court rejected a facial
challenge to BCRA’s disclosure requirement. See
McConnell, 540 U.S. at 196-99. But the Court allowed future
as-applied challenges. Id. at 199. In Citizens United, the
Supreme Court rejected one such as-applied challenge, which
attempted to limit BCRA’s disclosure requirement to those
electioneering communications that constitute express
advocacy or the functional equivalent of express advocacy for
a candidate. See Citizens United, 558 U.S. at 368-69.
In this case, Independence Institute says that it is raising a
different as-applied challenge to BCRA, and it asserts that
Citizens United therefore is not controlling here.
Independence Institute seeks to distinguish Citizens United on
the ground that Independence Institute is a 501(c)(3) charitable
nonprofit organization, whereas Citizens United was a
501(c)(4) advocacy organization. According to Independence
Institute, 501(c)(3) charitable groups serve different purposes
and have greater interests in privacy than do 501(c)(4)
advocacy groups. It argues, moreover, that the Government
has less of an interest in publicly identifying the donors to
501(c)(3) groups. Independence Institute contends that the
First Amendment therefore protects it against BCRA’s
disclosure requirement.
In Citizens United, the Supreme Court did not address
whether a speaker’s tax status or the nature of the nonprofit
organization affects the constitutional analysis of BCRA’s
disclosure requirement. See 558 U.S. at 369. And the FEC
cites no precedent from the Supreme Court (or any other court)
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rejecting the argument advanced here by Independence
Institute. The nature of our system of legal precedent is that
later cases often distinguish prior cases based on sometimes
slight differences. See, e.g., Arizona Christian School Tuition
Org. v. Winn, 563 U.S. 125 (2011); Michigan v. Bryant, 562
U.S. 344 (2011); see generally Richard M. Re, Narrowing
Precedent in the Supreme Court, 114 COLUM. L. REV. 1861
(2014). Here, we cannot say that Independence Institute’s
attempt to advance its as-applied First Amendment challenge is
“essentially fictitious, wholly insubstantial, obviously
frivolous, and obviously without merit.” Shapiro, 136 S. Ct.
at 456, slip op. at 7. That is not to suggest that Independence
Institute’s argument is a winner. Independence Institute’s
501(c)(3) argument may or may not prevail on the merits, but
Section 2284 “entitles” the Institute to make its case “before a
three-judge district court.” Id.
Independence Institute also contends that the First
Amendment bars compelled disclosure of donors unless the
electioneering communication is unambiguously
campaign-related. The FEC responds that McConnell and
Citizens United squarely rejected that argument. Cf.
Republican National Committee v. FEC, 130 S. Ct. 3544
(2010), affirming Republican National Committee v. FEC, 698
F. Supp. 2d 150, 156-58 (D.D.C. 2010) (rejecting this
distinction of McConnell and Citizens United). We do not
address that argument. Because Independence Institute has
advanced at least one argument – the 501(c)(3) argument – that
is not “essentially fictitious, wholly insubstantial, obviously
frivolous, and obviously without merit,” the case must proceed
to a three-judge court. Shapiro, 136 S. Ct. at 456, slip op. at 7.
When a case falls within Section 2284 and requires a
three-judge district court, “a single judge shall not . . . enter
judgment on the merits” of any claim. 28 U.S.C.
§ 2284(b)(3); see Shapiro, 136 S. Ct. at 455, slip op. at 5.
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***
Independence Institute is entitled to make its case to a
three-judge district court. Therefore, we reverse the judgment
of the District Court denying the request for a three-judge
district court, vacate the judgment of the District Court in favor
of the FEC, and remand the case to the District Court with
directions for it to initiate the procedures to convene a
three-judge district court.
So ordered.
WILKINS, Circuit Judge, dissenting: Independence
Institute believes that the definition of “electioneering
communication” under the Bipartisan Campaign Reform Act
of 2002 (“BCRA”), as well as the Act’s disclosure provisions
for electioneering communications, is unconstitutionally
overbroad. In my view, a misreading of Buckley v. Valeo,
424 U.S. 1 (1976), underpins and is fatal to both of these
claims. As a result, I disagree that the several immaterial
factual distinctions that the Institute offers to distinguish its
challenge from that in Citizens United v. FEC, 558 U.S. 310
(2010), such as its tax status, can transform its case into one
presenting a substantial constitutional question. See Shapiro
v. McManus, 136 S. Ct. 450, 455-56 (2015).
The Institute’s core contention in this lawsuit is that
Buckley created an “unambiguously campaign related” gloss
on the definition of electioneering communications. In its
view, the only speech that should be considered an
electioneering communication, and therefore trigger the
BCRA’s reporting and disclosure requirements, is speech that
is “unambiguously related” to a campaign. The Institute filed
a two-count complaint, and this reading of Buckley is central
to both causes of action. In its first count, the Institute
premised its attack on the definition of electioneering
communication on “the dichotomy between issue speech and
political speech in Buckley,” Compl. ¶ 101, and it sought a
declaration that its proposed advertisement does not constitute
an “electioneering communication” under the BCRA, as
properly defined, id. ¶¶ 113-114. In its second count,
repeatedly citing Buckley, id. ¶¶ 120-122, the Institute
attacked the BCRA disclosure requirements, alleging that “if
a group does not have ‘the major purpose’ of political
activity, only communications that ‘expressly advocate the
election or defeat of a clearly identified candidate’ are subject
to disclosure,” id. ¶ 122 (citing Buckley, 424 U.S. at 80).
2
Accordingly, the Institute made Buckley its centerpiece in
its briefing before the district court. It urged that the BCRA’s
definition of electioneering communication “impermissibly
blurs the line between candidate advocacy, which may be
regulated, and issue advocacy, which generally cannot.” See
Mot. Prelim. Inj. 22 (citing Buckley, 424 U.S. at 42-44). The
Institute’s argument on disclosure was that no Supreme Court
case since Buckley did away with the “unambiguously
campaign related standard,” and that in particular “[t]he
disclosure upheld in Citizens United was for donors who
explicitly contributed for a communication that is the
functional equivalent of express advocacy—not genuine issue
speech.” Id. at 14; see also Appellant Br. 34 (“Neither
Citizens United nor McConnell modified Buckley’s
‘unambiguously campaign related’ limitation.”).
There’s only one problem – the Institute’s reading of
Buckley is squarely foreclosed by subsequent Supreme Court
precedent. In McConnell v. FEC, the Court called the
argument that Buckley’s constitutional holding requires a
gloss on the BRCA’s definition of “electioneering
communication” to permit “so-called issue advocacy” a
“misapprehen[sion] [of] our prior decisions,” and rejected the
idea that “Buckley drew a constitutionally mandated line
between express advocacy and so-called issue advocacy.”
540 U.S. 93, 190 (2003), overruled on other grounds by
Citizens United v. FEC, 558 U.S. 310 (2010); id. (“[T]he
express advocacy restriction was an endpoint of statutory
interpretation, not a first principle of constitutional law.”).
More troublingly, the Institute asks us to overlook the
fact that the Supreme Court expressly rejected its broader
argument in Citizens United. There, the Court said: “The
principal opinion in [FEC v. Wisconsin Right to Life, Inc., 551
U.S. 449 (2007)] limited 2 U.S.C. § 441b’s restrictions on
3
independent expenditures to express advocacy and its
functional equivalent. Citizens United seeks to import a
similar distinction into BCRA's disclosure requirements. We
reject this contention.” Citizens United, 558 U.S. at 368-69
(citation omitted) (emphasis added).
I do not see how this lawsuit even “clears Goosby’s low
bar” of substantiality. Shapiro, 136 S. Ct. at 456 (citing
Goosby v. Osser, 409 U.S. 512 (1973)). Both claims raised
by the Institute rely upon the contention that the BCRA’s
disclosure provisions should only apply to unambiguously
campaign related speech, but the “unsoundness [of that
argument] so clearly results from the previous decisions of
[the Supreme] Court as to foreclose the subject and leave no
room for the inference that the questions sought to be raised
can be the subject of controversy.” Goosby, 409 U.S. at 519
(quoting Ex parte Poresky, 290 U.S. 30, 32 (1933), quoting in
turn from Hannis Distilling Co. v. Baltimore, 216 U.S. 285,
288 (1910)).
There is an important difference between a plaintiff who
offers a novel argument seeking to extend a holding, dictum,
or even a suggestion from a previous majority or separate
opinion, and a plaintiff who repackages an already foreclosed
legal theory. The substantial federal question standard
charges us with distinguishing between the two. The majority
opinion evades the question of whether the “unambiguously
campaign related” argument is insubstantial, and focuses
instead on the factual distinction of the Institute’s tax status.
Majority Op. at 6-8. But what the Institute has never
explained in its briefing, and what the majority does not
explain in its opinion, is how the Institute can prevail on
either of its causes of action without prevailing on its core
contention that electioneering communications under the
BCRA must be limited to speech that is “unambiguously
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campaign related.” Without such an explanation, the factual
distinctions being raised are of no consequence, and the
claims remain “frivolous or immaterial.” Steel Co. v. Citizens
for Better Environment, 523 U.S. 83, 89 (1998).
I would dismiss this case for lack of jurisdiction. I
dissent.