Independence Institute v. Federal Election Commission

UNITED STATES DISTRICT COURT

FOR TH]E DISTRICT OF COLUMBIA

)

INDEPENDENCE I.NSTITUTE, )

)

Plaintift`, )

) Case No. l4-cv~1500

V )

)

FEDERAL ELECTION COMMISSION, )

s )

Defendant. )

)

Before: l\/lillett, Ci`rcuit Judge; Kollar-Ketelly and Mehta, District Judges.

Opinion for the Court filed by Cz'rcuit Judge Millett.

MEMORANDUM OPINION

Millett, Circuz`t Judge:

lndependence Institute, a Colorado-based non-profit organization, filed suit

against the Federal Election Comrnission seeking a declaratory judgment that the

Bipartisan Campaign Reform Act’s disclosure provision, 52 U`.S.C § 30104(@, is

unconstitutional as applied to a radio advertisement that it desired to run during the

time leading up to the 2014 and 20l6 general elections Both Independence

Institute and the Federal Election Commission move for summary judgment1 For

the reasons discussed below, We DENY Independence lnstitute’s l\/lotion for

Surninary Judgment and GRANT the Federal Election Cornrnission’s Motion for

Surnrnary Judgrnent.

l lndep. lnst. Mot. for Sumin. J. and Mern. in Supp., ECF No. 36; FEC’s Mot. for Summ. }., ECF

No. 42.

I

Congress passed the Bipartisan Campaign Reform Act of 2002 (“Act”), Pub.

L. No. 107~155, 116 Stat. 81 (codified in various parts of Title 52 of the U.S.

Code), to address “[t]hree important d.eveioprnents” in the role of money in federai

elections: “[T]he increased importance of ‘soft money,’ the proliferation of ‘issue

ads,’ and the disturbing findings of a Senate investigation into campaign practices

related to the 1996 federal elections,” vvhich revealed some “elected officials’

practice of granting special access in return for political contributions.”

McCOnnel[ v. FEC, 540 U.S. 93, 122, 129 (2003), Overruled in part an Other

grounds by Ciri`zens Um'red v. FEC, 558 U.S. 310, 365 (2010) (upholding the Act’s

disclosure provision against Citizens United’s as-applied challenge, but

invalidating other provisions of the Act). Title I of the Act addresses the use of

“soft money”~++ethat is, donations made by individuals through political parties to

benefit candidates See 52 U.S.C. §§30101,30104,30116-30117,30125. Title II,

Which is at issue here, regulates paid communications by outside organizations that

could have the effect of “influencing the outcome of federal elections.” See id. at

132; see also 52 U.S.C. §§ 30101, 30104, 30116_30118,

As relevant here, Section 30104 of the Act imposes a large-donor disclosure

requirement on organizations that engage in candid.ate~referencing communications

in the run up to a federal primary or general election. Specif`ically, the Act

provides that:

Every person Who makes a disbursement for the direct costs of

producing and airing electioneering communications in an aggregate

amount of $10,000 during any calendar year shall, Within 24 hours of

each disclosure date, file With the Commission a statement containing

the information described in paragraph (2).

52 U.S.C. § 30104(f)(1). Paragraph 2, in turn, requires the disclosure of “[t]he

identification of the person making the disbursement”; “[t]he principal place of

business of the person making the disbursement”; “[t]he amount of each

disbursement of more than $200 during the period covered by the statement”; “the

identification of the person to vvhorn th[at] disbursement Was made”; “[t]he

elections to Which the electioneering communications pertain”; “the names (if

2

known) of the candidates identified or to be identified”; and “the names and

addresses of all contributors Who contributed an aggregate amount of $1,000 or

more” for the purpose of disseminating the electioneering communication ]d.

§30104(@(2); see ll C.F.R. §104.20(c)(9) (requiring disclosure of qualifying

donors only if the donation “vvas made for the purpose of furthering electioneering

communications”); see also Van Hollen, J'r. v. FEC, 811 F.3d 486, 501 (D.C. Cir.

2016) (upholding the specific-purpose requirement in 1 l C.F.R. § 104.20(c)(9)).

The Act defines an “electioneering communication” that triggers such donor

disclosure as “any broadcast, cable, or satellite communication” that:

(I) refers to a clearly identified candidate for Federal office;

(II) is made Within-

(aa) 60 days before a general, special, or runoff election

for the office sought by the candidate; or

(bb) 30 days before a primary or preference election, or a

convention or caucus of a political party that has

authority to nominate a candidate, for the office sought

by the candidate; and

(III) in the case of a communication vvhich refers to a candidate

for an office other than President or Vice President, is targeted

to the relevant electorate

52 U.S.C. § 30104(f)(3). When, as here, an electioneering communication refers

to a Senate candidate, it is “targeted to the relevant electorate” if it “can be

received by 50,000 or more persons” in “the State the candidate seeks to

represent[.]” Id. § 30104(@(3)(®.

II

lndependence lnstitute is a non-profit organization that conducts research

and seeks to educate the public on a variety of policy issues, including healthcare,

justice, education, and taxation Indep. Inst.’s Statement of Undisputed Material

Facts, ECF No. 36-2 (“indep. lnst. SUMF”) 11 l.2 The lnstitute is a 501(c)(3) tax-

exempt organization, 26 U.S.C. § 501(c)(3), based in Colorado. Indep. lnst.

SUl\/IF 11 2. As a part of its educational mission, the Institute produces

advertisements that “mention the officeholders who direct” the policies of interest

to the Institute. Compl. 11 2.

United States Senator Mark Udall of Colorado was a candidate for reelection

in the November 4, 2014 general election. ln the sixty days preceding that

eiection, Independence Institute sought to run a radio advertisement that urged

Coloradoans to call Senator Udall, as well as Senator Michael Bennet, to express

support for the Justice Safety Valve Act, S. 619, l 13th Cong. (2013) (reintroduced

as S. 353, ll4th Cong. (2015)). Indep. lnst. SUl\/[F 11113”5. The content of the

advertisement is as follows:

Let the punishment fit the crime.

But for many federal crimes, that’s no longer true.

Unfair laws tie the hands of judges, with huge increases in prison

costs that help drive up the debt.

And for what purpose?

Studies show that these laws don’t cut crime.

In fact, the soaring costs from these laws make it harder to prosecute

and lock up violent felons

Fortunately, there is a bipartisan bill to help fix the problem - the

Justice Safety Valve Act, bill number S. 619.

lt would allow judges to keep the public safe, provide rehabilitation,

and deter others from committing crimes

2 Because we are at the summary judgment phase, our ruling construes all demonstrated facts in

favor of the nonmovant See Swanson Grp. Mfg. LLC v. Jewe!l, 790 F.3d 235_, 240 (D.C_ Cir.

2015).

4

Call Senators l\/fichael Bennet and Mark Udall at 202-224-3l2l. Tell

them to support S. 619, the Justice Safety Valve Act.

Tell them it’s time to let the punishment fit the crime.

Paid for by independence 1nstitute, 121 dot org. Not authorized by any

candidate or candidate’s committee lndependence 1nstitute is

responsible for the content of this advertising

Id. 11 5. 1ndependence 1nstitute planned to spend at least $10,000 on the

advertisement, which would have reached at least 50,000 persons in the Denver

metropolitan area. ]d. 11 4.

The lnstitute, however, declined to run the advertisement during the 2014

election cycle because it was concerned that doing so would subject the 1nstitute to

the Bipartisan Campaign Reform Act’s large-donor disclosure provision 1ndep.

1nst. SUl\/I`F 11 3 (noting that the institute “wished to broadcast” the advertisement

during the 2014 election season). instead, in September 2014, the 1nstitute filed

suit against the Federal Eiection Commission asserting that application of the Act’s

disclosure provision to the specific Justice Safety Valve Act advertisement

described above violated the First Amendment. The 1nstitute also asked that its

case be heard by a three-judge district court, as authorized by the Act, 52 U.S.C.

§30l10 note. See l\/lot. to Convene Three-Judge Court, ECF No. 3. A single

district court judge denied that motion on the ground that the 1nstitute’s challenge

did not raise a substantial question, and granted summary judgment on the merits

to the Commission. independence last v. FEC, 70 F. Supp. 3d 502, 506, 516

(D.D.C. 2014).

The court of appeals reversed, holding that the 1nstitute was “entitled to

make its case to a three-judge district court.” Independence last v. FEC, 816 F.3d

il3, 117 (D.C. Cir. 2016); see Shapi'ro v. McManus, l36 S. Ct. 450, 455 (2015)

(°“Constitutional claims will not lightly be found insubstantial for purposes of" the

three-judge-court statute.”) (quoting Washingron v. Confederated Tribes of the

Co[ville ]ndz'an Reservarz`on, 447 U.S. 134, 147-~148 (1980)); See also Shapiro, 136

S. Ct. at 456 (stating that the three-judge-court statute presents a “low bar”). The

court of appeals’ majority did not address the merits of the 1nstitute’s claim. Judge

Wilkins dissented, explaining that he would have affirmed the denial of the

1nstitute’s Motion for a Three-Judge District Court on the ground that the

“immaterial factual distinctions that the 1nstitute offers to distinguish its challenge

from that in Cin`zens United v. FEC” do not present “a substantial constitutional

question.” .[ndependence [nsf., 816 F.3d at 117-118 (Wilkins, J., dissenting).

On remand, this three-judge district court panel was designated to hear the

1nstitute’s as-applied challenge to the Act’s disclosure provision Designation of

Judges to Serve on ’I`hree-Judge District Ct., ECF No. 30. 'i`he parties filed cross-

motions for summary judgment Neither party requested an expedited decision

II`I

A party is entitled to summary judgment “only if ‘there is no genuine dispute

as to any material fact and the movant is entitled to judgment as a matter of law.”’

See, e.g., Johnson v. Perez, 823 F.3d 701, 705 (D.C. Cir. 2016) (quoting Fed. R.

Civ. P. 56(a)). “‘lf material facts are at issue, or, though undisputed, arc

susceptible to divergent inferences, summary judgment is not available.”’ Moore

v. Hortman, 571 F.3d 62, 66 (D.C. Cir. 2009) (quoting Kuo-Yun Tao v. Freeh, 27

F.3d 635, 638 (D.C. Cir. 1994)). The parties have not identified any material

factual disputes 1ndeed the Commission did not even respond to the lnstitute’s

Statement of Undisputed Material Facts. Accordingly, we are tasked only with

determining if the 1nstitute or the Commission is entitled to judgment as a matter

of law.

A. Mootness

The first thing we must decide is whether we can decide this case. Article

111 of the Constitution imposes important limits on the jurisdiction of federal

courts. See, e.g., Arizonansfor O]jicial English v. Arizona, 520 U.S. 43, 64 (1997).

Of most relevance here, Article 111’s case-or-controversy requirement means that,

“[t]o qualify as a case fit for federal-court adjudication, ‘an actual controversy

must be extant at all stages of review, not merely at the time the complaint is

filed.”’ [d. at 67 (quoting Preiser v. Newkz`rk, 422 U.S. 395, 401 (1975)). “There

is thus no case or controversy, and a suit becomes moot, ‘when the issues

presented are no longer ‘live’ or the parties lack a legally cognizable interest in the

outcome.”’ See, e.g., Chofin v. Chojin, 133 S. Ct. 1017, 1023 (2013) (quoting

Already, LLC v. Nike, Inc., 133 S. Ct. 721, 726 (2013)). When, as here, the

complaint seeks only injunctive and declaratory relief, the plaintiff must

demonstrate an enduring dispute or a material risk that the controversy will recur.

“In general, a case becomes moot where the activities for which an injunction is

sought have already occurred and cannot be undone.” Monzz`llo v. Bz`ller, 735 F.2d

1456, 1459 (D.C. Cir. 1984); see Cily ofLos Angeles v. Lyorzs, 461 U.S. 95, 109-

111 (1983) (failure to show that repetition of a past dispute is “realistically

threatened” requires denial of “an injunction in a federal court, whether the

injunction contemplates intrusive structural relief or the cessation of a discrete

practice”); Larsen v. United States Navy, 525 F.3d 1, 4 (D.C. Cir. 2008) (case is

moot when “any injunction or order declaring [the policy] illegal would

accomplish nothing_~ainounting to exactly the type of advisory opinion Article 111

prohibits”).

The question of mootness arises in this case because the 1nstitute’s

complaint expressly seeks only to run a single advertisement during the 2014

general election season when Mark Udall was a candidate for the United States

Senate from Colorado. The complaint, moreover, is quite explicit that the only

constitutional challenge it raises and the only relief it seeks is with respect to the

particular Justice Safety Valve Act advertisement See Compl. 11 3 (“The

1ndependence 1nstitute plans to produce an issue advertisement, to be aired on

broadcast radio, which will discuss federal sentencing guidelines The

advertisement will mention Senators Mark Udall and Michael Bennet and ask that

they support the Justice Safety Valve Act.”) (emphasis added); id. 111130~38

(describing the content of the communication under the heading “[t]he

advertisement”); id. 1130 (“As part of its mission, the 1ndependence 1nstitute

wishes to run an advertisement discussing federal sentencing guidelines.”); id.

1111 30~35 (detailing the proposed Justice Safety Valve advertisement); id. 111 36-37

(alleging that the 1nstitute wants to raise funds for “this specific advertisement”);

id. 11105 (“In this case, the 1ndependence 1nstitute presents a genuine issue

advertisement[.]”) (emphasis added); id.1111 1054111, 113, 116-117, ll9, l28-l29

(alleging causes of action in terms of °‘this specific advertisement,” “the proposed

advertisement,” and the “advertisernent”); id. (Prayers for Relief) (seeking relief

only as to the 1nstitute’s “proposed advertisement”) (emphasis added).

7

Needless to say, the 2014 election is long since over. l\/lark Udall lost, and is

no longer a candidate whose naming in the advertisement could trigger the Act’s

disclosure requirement Nevertheless, it is well settled that a case is not moot if the

alleged harm is “capable of repetition, yet evading review,” in that ‘°(1) the

challenged action 1is] in its duration too short to be fully litigated prior to its

cessation or expiration, and (2) there [is_1 a reasonable expectation that the same

complaining party would be subjected to the same action again.” Tumer v.

Rogers, 564 U.S. 431, 440 (2011) (quoting Weinsrein v. Bradford, 423 U.S. 147,

149 (1975)).

With respect to the first prong of that test, a case or controversy generally is

considered “too short to be fully litigated prior to its cessation or expiration” if the

lifespan of the dispute is less than two years See, e.g., Kingdomware

Technologi`es, lnc. v. United States, 136 S. Ct. 1969, 1976 (2016) (“We have

previously held that a period of two years is too short to complete judicial

review[.]”); cf. Turner, 564 U.S. at 440 (twelve months is a sufficiently short

duration).

With respect to the second prong, the expectation that the same litigant will

come before the court with the same issue again must be more than theoretical or a

mere possibility; it must be “reasonable” to expect See lllinois Srore Bd. of

Elections v. Socialist Workers Party, 440 U.S. 173, 187_188 (1979) (case was

moot because there was “no evidence creating a reasonable expectation that the

Chicago Board w[ould] repeat its purportedly unauthorized actions in subsequent

elections”); see also Amerlcan Bar Ass’n`v. FTC, 636 F.3d 641, 645~647 (D.C.

Cir. 2011) (holding a case moot because an intervening legislative change made

the prospect of the issues arising again “nothing more than possibilities regarding

regulations and enforcement policies that do not presently exist”).

The Supreme Couit, moreover, has found that challenges to campaign-

f_`mance and electoral-communication regulations can often fit the capable-of-

repetition mold given the generally time-sensitive nature of both the desired

communications and the governmental limitations 1n particular, in FEC v.

Wisconsi`n Right to Life, lno., 551 U.S. 449 (2007), the Supreme Court held that,

even though the election had passed, Wisconsin Right to Life’s challenge to the

Bipartisan Campaign Reform Act’s restrictions on corporate speech was not moot

8

because the group “credibly claimed that it planned on running ‘materially similar’

future targeted broadcast ads mentioning a candidate within the blackout period,”

id. at 463; see also ld. at 459~460 (specifically discussing a series of similar

advertisements that Wisconsin Right to Life sought to run during the blackout

period).3

ln response to the court’s order for briefing on the question of mootness in

this case, see Scheduling Order, ECF No. 35 at 2, the 1nstitute submitted a

declaration that says simply that it “inten[ds] in future years to run substantively

similar advertisements to the one at issue here,” 1ndep. inst SUMF 11 6. See also

id. (citing a pre-2014 election declaration and press release, and a 2015 declaration

submitted to the D.C. Circuit that simply described and quoted the 20l4 press

release). The 1nstitute did not attempt to amend or to supplement its complaint

Nor did it seek to clarify the contours of its as-applied constitutional challenge to

the extent it went beyond the specific Justice Safety Valve Act advertisement on

which the complaint exclusively focused.

The 1nstitute argues that its single, unelaborated allegation precludes a

determination of mootness under Wlsconsin Right lo Li'fe. That may be. But it

bears noting that this case differs from Wisconsin Right to Life in some potentially

material respects First, unlike the complaint in Wisconsin Right to Life, the

1nstitute deliberately confined its complaint, its prayer for relief, and its

constitutional arguments to the single question of whether applying the Act’s large-

donor disclosure rule to the Justice Safety Valve Act violated the First

Amendment. Despite having ample opportunity to amend its complaint to add

allegations identifying the additional speech to which its as-applied challenge

should be applied or to request some form of relief that goes beyond the one single

advertisement, the 1nstitute has steadfastly declined to do so. 1ndeed, comparing

the complaint in Wisconsz`n Right to Life to the 1nstitute’s complaint here reveals

3 See also Norman v. Reed, 502 U.S. 279, 288 (1992) (passage of election did not moot the case

because “[t}herc would be every reason to expect the same parties to generate a similar, future

controversy subject to identical time constraints if we should fail to resolve the constitutional

issues that arose in 1990”); Fz`rsl' Nat’l Banlc ofBosl'on v. Bellotn', 435 U.S. 765, 774-775 (1978)

(case was not moot even though the election had passed because there was no “scrious doubt that

there [was] a ‘reasonable expectation”’ that appellants would be “subject to the threat of

prosecution” again).

how narrowly the 1nstitute framed its as-applied claim in this case. Compare Am.

Compl. Prayer for Relief, Wisconsin Right to Life v. FEC, 466 F. Supp. 2d 195

(D.D.C. 2006) (No. 04-1260) (seeking declaratory judgment as to any

“electioneering communications by WRTL that constitute grass-roots lobbying”),

with 1ndep. 1nst. Compl. Prayer for Relief (seeking declaratory and injunctive relief

only for the 1nstitute’s single “proposed r.tdvertisement”).lIL Given that the mootness

question has arisen at the earliest stages of this case in district court-»~and not after

entry of a final district court judgment as occurred in Wlsconsln Right lo Ll`fe-the

lnstitute’s unwillingness to amend its complaint to avoid a potential Article 111

problem, or even to clarify what its as-applied challenge is applied to, seems to be

a deliberate choice.

Second, there is a substantial question whether the constitutional dispute

over the 1nstitute’s Justice Safety Valve Act advertisement will evade review. The

1nstitute acknowledges that, after the 2016 election cycle concludes, neither of the

Colorado Senators that its advertisement targets will be up for election before the

2020 primary season, and thus that the Act will not apply to this advertisement for

roughly another four years li` our years would provide the 1nstitute with sufficient

time to litigate its challenge before the next election

Fortunately, we need not decide whether the 1nstitute’s decision not to

amend its complaint or otherwise to seek relief for its as-applied claim to any

anticipated communications beyond this single advertisement renders this case

4 Co)npare also Am. Compl. 11 6, Wisconsz`n Right 10 L:°fe (“This case challenges the prohibition

as applied to grass-roots lobbying on the facts of this case, which involves broadcast

advertisements (true and accurate transcripts of current versions of the ads are attached as

Exhibit[s] A, B, and C) that are paid for by WRTL and that encourage Wisconsin listeners to

contact their U.S. Senators (Sen. Russell Feingold and Sen. Herb Kohl)”), with 1ndep. 1nst.

Compl. 11 3 (“The 1ndependence 1nstitute plans to produce an issue advertisen;rent, to be aired on

broadcast radio, which Will discuss federal sentencing guidelines The advertisement will

mention Senators Mark Udall and Michael Bennet and ask that they support the Justice Safety

Valve Act.”) (emphasis added); and compare Arn. Compl. 11 14, Wiseonsin Right to Life (during

the Act’s large-donor disclosure periodJ “the current ads (Exhibits A, B, and C) and materially

similar ads will become electioneering communications as to Wisconsin Senatorial candidate

Russell Feingold, and WRTL will be prohibited from running these ads”), with 1ndep. 1nst.

Compl. 1111 105~111, 113, 1164117, 119, 128~129 (alleging causes of action in terms of “this

specific advertisement,” “thc proposed advertisement,” and the “advertisement”).

10

moot. That is because the other Senator referenced in the advertisement-Senator

Michael Bennet-~is up for election this Fall, and the 1nstitute made clear at oral

argument that it still desires to run this particular advertisement during the 2016

general election cycle (notwithstanding its failure to seek expedition):

Court: You’re telling us you’re going to run this ad again, even

though you didn’t say that in your declaration? That’s now the

representation on the record?

Mr. Dickerson: Yes, that’s the representation on the record.

See Oral Arg. Tr. 22117-22. Accordingly, the case before us is not moot.

B. Merits

There is no dispute that the institute’s advertisement meets the statutory

definition of an electioneering communication under the Act. The advertisement

mentions a Senate candidate by name; it would air within the sixty days preceding

a general election; it is targeted to reach at least 50,000 persons in Colorado; and it

would cost at least $10,000. See 52 U.S.C. §30104(1‘,). Accordingly, if the

1nstitute were to run the advertisement as intended, the 1nstitute would have to

disclose the names of those donors that contributed at least $l,000 for the purpose

of funding the advertisement See ll C.F.R. § 104.20(0)(7) & (9); Van Hollen, Jr.,

81lF.3d at 50l-502.

r1`he 1nstitute argues that the Act’s large-donor disclosure requirement, as

applied to this particular advertisement, violates its First Amendment right to free

speech in two ways First, the 1nstitute argues that the Justice Safety Valve Act

advertisement is “genuine issue advocacy” that the Constitution mandates must be

exempted from the disclosure of large donors. See 1nst. Mot. for Summ. J. at 26-

39. Second, the 1nstitute contends that, because its status as a non-prolit under

Section 501(c)(3) of the internal Revenue Code precludes it from engaging in

political activity, this advertisement on a legislative matter must constitutionally be

exempted from the large-donor disclosure requirement See id. at 19-~26. Both

arguments founder on Suprerne Court precedent, and the lnstitute’s proffered

distinctions make no constitutional difference

ll

]. lssue Advocacy

The Supreme Court has twice considered and twice upheld the Bipartisan

Campaign Reform Act’s large-donor disclosure provision, and in doing so has

rejected the very type of issue~centered exception for which the 1nstitute argues 1n

McConne[l, the Court first addressed the Act’s restrictions on corporate speech

and, in So doing, specifically “rejected the notion that the First Amendment

requires Congress to treat so-called issue advocacy differently from express

advocacy.” 540 U.S. at 196. Turning to the large~donor disclosure provision that

is at issue in this case, the Supreme Court rejected the plaintiffs’ facial challenge

on the ground that that drawing a line between express advocacy and issue

advocacy was just as untenable for the Act’s disclosure provision as it was for the

Act’s other provisions See ial at 195. The Supreme Court also ruled that the

disclosure provision serves “important state interests,” such as “providing the

electorate with information, deterring actual corruption and avoiding any

appearance thereof, and gathering the data necessary to enforce more substantive

electioneering restrictions[.]” ]a’. at 196.

ln Citr'zens United, the Supreme Court found no merit in Citizens United’s

cts-applied challenge to the large*donor disclosure requirement 558 U.S. 310,

366~371. Citizens United argued that the provision was unconstitutional as

applied to both a movie about Hillary Clinton and three advertisements for the

movie because such speech was not a form of “express advocacy.” Id. at 368. In

language that speaks directly to the 1nstitute’s proposed issue-advocacy exception,

the Supreme Court ruled that the First Amendment does not require limiting the

Act’s large~donor disclosure requirements to “speech that is the functional

equivalent of express advocacy.” Ial. at 369. The Supreme Court explained that its

holding in Wz`sconsin Right to Lz`fe, 551 U.S. at 469~476, which limited restrictions

on independent expenditures to express advocacy and its functional equivalent,

cannot be imported into the Act’s disclosure requirements Cirizens United, 558

U.S. at 368e369. That is so, the Court reasoned, because “disclosure is a less

restrictive alternative to more comprehensive regulations of speech.” [d. at 369.

The Court also emphasized that its precedents have consistently upheld the

constitutionality of disclosure requirements even while calling into question other

campaign finance-related restrictions See Cin`zens United, 558 U`.S. at 369

l2

(describing Back[ey v. Valeo, 424 U.S. l (1976), where “the Court upheld a

disclosure requirement for independent expenditures even though it invalidated a

provision that imposed a ceiling on those expenditures;” McCohhell, where “three

Justices who would have found § 441b to be unconstitutional nonetheless voted to

uphold lthe Act’s] disclosure and disclaimer requirements”; and United States v.

Harriss, 347 U.S. 612, 625 (l954), where “the Court * ’*‘ * upheld registration and

disclosure requirements on lobbyists, even though Congress has no power to ban

lobbying itself”). The Court concluded by underscoring the constitutionally

permissible reach of the Act’s disclosure provision, explaining that, “[e]ven if the

ads only pertain[ed] to a commercial transaction, the public ha[d] an interest in

knowing who is speaking about a candidate shortly before an election.” Ial.5

The 1nstitute nevertheless contends that the constitutional rules demand a

different result in this case because its advertisement identifies specific political

candidates as part of “issue” advocacy focused on pending legislation

Before addressing the 1nstitute’s specific arguments the First Amendment

issue it raises must be set in context i`he Bipartisan Campaign Reform Act’s

disclosure provision does not purport to regulate issue advocacy per se. lt only

regulates those communications that (i) clearly identify an electoral candidate (ii)

in the sixty days preceding a general election and the thirty days preceding a

primary election. See 52 U.S.C. § 30104(1"). The 1nstitute thus is free to run its

advertisement outside that electioneering window. And it may speak freely

through its advertisement during the election cycle as well, as long as it does not

either clearly identify a candidate for office in the process or rely upon donations

5 Unlike Citizens United, the 1nstitute does not claim that disclosure could expose its donors to

threats, harassment, or reprisals and it does not argue that we should overturn the disclosure

requirement on that basis Compare Cilr`zens Unirea’, 558 U.S. at 370 (“ln McConnell, the Court

recognized that § 201 would be unconstitutional as applied to an organization if there were a

reasonable probability that the group's members would face threats, harassment, or reprisals if

their names were disclosed.”), with Joint Stipulation and ()rder, ECF No. 14 (“The independence

l`nstitute’s challenge does not rely upon the probability that its donors will be subject to threats,

harassments, or reprisals as a result of the 1nstitute’s filing of an Electioneering Communications

statements pursuant to 52 U.S.C. § 30104(@(1)»(2)[.]”). See also Cr'tl`zehs Unirea.', 558 U.S. at

370 (“Citizens United argues that disclosure requirements can chill donations to an organization

by exposing donors to retaliation.”).

13

of over $l000 that are specifically dedicated to running that candidate-referencing

advertisement, see Vah Holleh, Jr., s'apra.6

The constitutional question then is whether the First Amendment immunizes

from large-donor disclosure the 1nstitute’s issue advertisement that explicitly

references an electoral candidate by name in the run up to an election The answer

is “no” for three reasons

Fz'rst‘, the Supreme Court and every court of appeals to consider the question

have already largely, if not completely, closed the door to the lnstitute’s argument

that the constitutionality of a disclosure provision turns on the content of the

advocacy accompanying an explicit reference to an electoral candidate ln

McCohhelZ, the Supreme Court concluded that First Amendment precedent ‘“amply

supports application of [the Act’s] disclosure requirements to the entire range of

electioneering commanicariohs.”’ 540 U.S. at 196 (emphasis added). ln so doing,

the Court specifically “rejected the notion that the First Amendment requires

Congress to treat so-called issue advocacy differently from express advocacy[.]”

Ia’. at l94. Likewise, in Cirizehs United, the Supreme Court ruled that advocacy-

even if it takes the form of commercial speech-falls within the constitutional

bounds of the donor~disclosure rule precisely because that advocacy points a finger

at an electoral candidate See Cirz`zehs Um`red, 558 U.S. at 369.7

6 Although the Justice Safety Valve Act has remained under legislative consideration for the last

three years, the 1nstitute has chosen for its own reasons not to run its proposed advertisement at

all, even during the many months unregulated by the Act’s electioneering restriction See Justice

Safety Valve Act, S. 619, ll3th Cong. (2013) (reintroduced as S. 353, 114th Cong. (20l5)).

7 See also Cehler for Ihdfvia'ual Freea'om v. Maalfgah, 697 F.3d 464, 484 (7th Cir. 2012)

(“Cr`lz`zehs United made clear that the wooden distinction between express advocacy and issue

discussion does not apply in the disclosure context.”); Nalional Org. for Marrfage v. McKee, 649

F.Bd 34, 54-55 (lst Cir. 2011) (“We find it reasonably clear, in light cf Cirz`zens Uhileal, that the

distinction between issue discussion and express advocacy has no place in First Amendment

review of these sorts of disclosure-oriented laws.”); Haman L`r`fe of Wash. Inc. v. Bramsl'ckle, 624

F.3d 990, 1016 (9th Cir. 2010) (“Given the Court’s analysis in Cilz`zens United and its holding

that the government may impose disclosure requirements on speech, the position that disclosure

requirements cannot constitutionally reach issue advocacy is unsupportabl.e.”). (§)‘.` ]ho.'epehdence

1nstitute v. Wilh'ams, 812 F.3d '787, 795 (lOth Cir. 2016) (“It follows from Citizens United that

disclosure requirements can, if cabined within the bounds of exacting scrutiny, reach beyond

express advocacy to at least some forms of issue speech.”).

14

Under McCohnell and Cirizehs United, then, it is the tying of an identified

candidate to an issue or message that justifies the Bipartisan Campaign Reform

Act’s tailored disclosure requirement because that linkage gives rise to the voting

public’s informational interest in knowing “who is speaking about a candidate

shortly before an election.” Cirizens United, 558 U.S. at 369; See McCohhell, 540

U.S. at 197 (“‘Plaintiffs’ argument for striking down BCRA’s disclosure

provisions * * * ignores the competing First Amendment interests of individual

citizens seeking to make informed choices in the political marketplace ) (quoting

McCohhell v. FEC, 25l F. Supp. 2d l76, 237 (D.D.C. 2003)). lndeed, it is telling

that, in defining a “genuine issue ad” in Wisconsin Right to Lz`fe, the Suprerne

Court stated that such an advertisement would hot “mention[] * * * candidacy” or

a “challenger.” 551 U.S. at 470. Accordingly, it is hard to see any constitutional

daylight between the 1nstitute’s issue advertisement and the issue advocacy to

which the Supreme Court has already held that the Act’s disclosure requirements

can permissibly be applied.

531

Second, the 1nstitute’s proposed constitutional exception for “genuine” issue

advocacy is entirely unworkable as a constitutional rule l`he institute itself has

offered no administrable rule or definition that Would distinguish which types of

advocacy specifically referencing electoral candidates would fall on which side of

the constitutional disclosure line, or how the Commission could neutrally police it.

The institute emphasizes that the advertisement at issue here focuses on pending

legislation, not candidates Yet it would blink reality to try and divorce speech

about legislative candidates from speech about the legislative issues for which they

will be responsible After all, the 1nstitute’s advertisement discusses a proposed

bill designed to address inequities in the criminal justice system, which is a topic of

substantial debate and interest in this electoral cycle And it takes little

imagination to envision the electoral impact that could arise from linking

candidates with proposed legislation in others areas of 1nstitute interest, such as

healthcare, educational programs and taxes

The 1nstitute further contends that its advertisement does not take a position

for or against the identified Senate candidate That is debatable After all, the

advertisement plainly seeks to persuade listeners that the Justice Safety Valve Act

addresses an issue of such preeminent importance that prospective voters should

15

inquire into the candidate’s position on the legislation during the critical thirty~ or

sixty~day period leading up to an election. See 1ndep. 1nst. SUMF 11 5 (“Call

Senators Michael Bennet and l\/lark Udall at 202-224-3121. Tell them to support

S. 619, the Justice Safety Valve Act. Tell them it’s time to let the punishment fit

the crime.”). The advertisement also at least implies that the Senate candidate is

not already on board as a committed supporter of the bill. Otherwise there would

be no reason to ask Coloradoans to solicit the electoral candidate’s support for the

proposed law. See Oral Argument at 23:50, 1ndependence 1nstitute v. FEC, 816

F.3d 113 (D.C. Cir. 2016) (No. 14-5249) (Judge Wilkins’ raises the question

whether the advertisement impliedly communicates that the Colorado Senators do

not currently support the Justice Safety Valve Act). And if the Senate candidate

has already taken a position against the bill, the advertisement could very well be

understood by Coloradoans as criticizing the Senate candidate’s position See

1ndependence Ihsri`rare v. Wil[t`ams, 812 F.3d. 787 (10th Cir. 2016) (“The

advertisement here does not say much about Governor I~Iickenlooper, but it does

insinuate, at minimum, that he has failed to take action on an issue that the 1nstitute

considers important That could bear on his character or merits as a candidate.”).

ln any event, the First Arnendment is not so tight-fisted as to permit large-

donor disclosure only when the speaker invokes magic words of explicit

endorsement That would make the constitutional balancing of interests turn on

form not substance The 1nstitute in fact, exposed the untenability of its proposed

‘°genuine” issue advocacy line when it acknowledged that a similarly designed

1nstitute advertisement addressing health insurance “suggested [the candidate’s]

position On the issue being discussed.” lndep. 1nst. Reply 'Br. at 7. In

]hdepehdehce 1nstitute v. Williams, the 1nstitute challenged as unconstitutional a

Colorado state law donor~disclosure requirement (which is virtually identical to the

Bipartisan Campaign Reform Act’s large~donor disclosure rule) as applied to

“pure[]” issue advocacy 812 F.3d at 7 89.8 The 1nstitute advertisement at issue

there stated:

8 See 1ndependence [nsri'tare, 812 F.Zd at 789»790 (“Colorado requires any person who spends at

least 81000 per year on ‘electioneering communications’ to disclose the name, address, and

occupation of any person who donates 8250 or more for such communications,” and defines

“‘electioneering communication”’ as “‘any communication broadcasted by television or radio’

that ‘unambigously refers to any candidate" ‘sixty days before a general election’ and targets ‘an

16

Doctors recommend a regular check up to ensure good health.

Yet thousands of Coloradoans lost their health insurance due to the

new federal law.

l\/lany had to use the state’s government-run health exchange to find

new insurance

Now there’s talk of a new 813 million fee on your insurance

lt’s time for a check up for Colorado’s health care exchange

Call Governor Hickenlooper and tell him to support legislation to

audit the state’s health care exchange

1ndependence institute is responsible for the content of this

advertising

]d. at 790.

As noted, the 1nstitute’s briefing and argument in this court now

acknowledge that its advertisement that (i) discusses a legislative issue of concern

to the 1nstitute and (ii) asks constituents to contact a candidate about supporting

the legislation can “suggest [the candidate’s] position on the issue being

discussed,” 1ndep. 1nst. Reply Br. at 7. Yet that implication triggers the exact same

concerns for voter information that the Supreme Court held sustained the Act’s

disclosure provisions in McConhe[l and Cirizehs United.

'l`he 1nstitute nonetheless argues that the particular advertisement at issue

here is constitutionally different because both Senators are mentioned in the Justice

Safety Valve advertisement (only one of whom was running for office), and not

just “a single candidate” as in the health insurance advertisement See 1ndep. 1nst.

Reply Br. at 7. The 1nstitute also suggests that advertisements addressing “a

general category of executive power,” rather than “a specific bill being advanced in

audience that includes members of the electorate for such public office.”’) (quoting l COLO.

CoNsT. Art. XXVIII, § 2('7)(a)).

17

the legislative body,” should receive different constitutional treatment Oral Arg

rr. 24;3-5.9

Neither of the lnstitute’s proposed distinctions makes constitutional sense

The voting public’s interest in information about electioneering communications

applies with equal force to candidates for multi-member bodies as to single

officeholders. Either way, disclosure “permits citizens * * * to react to the speech

* * * in a proper way,” and such “transparency enables the electorate to make `

informed decisions and give proper weight to different speakers and messages.”

Cii‘izens United, 558 U.S. at 371. Nor does the institute’s attempted distinction

between pending and proposed legislation hold up. Promises to introduce

legislation or executive regulations are as common a form of appeal to voters as

commitments to support existing bills and regulatory programs.m

ln short, whatever difference the 1nstitute may discern between express

candidate advocacy and the lnstitute’s proposed candidate~referencing issue

advertisement, it is not a distinction of constitutional magnitude

Thz'rd, and in any event, application of the large-donor disclosure

requirement to the lnstitute’s proposed Justice Safety Valve Act advertisement

passes constitutional muster. The Supreme Court subjects regulatory burdens

§

imposed on campaign~related speech to “exacting scrutiny,’ which requires a

‘substantial relation’ between the disclosure requirement and a ‘sufficiently

9 The Institute’s finer drawn distinctions underscore the difficulty that could accompany any

effort to determine the as-applied constitutionality of the donor disclosure provision to other

unidentified institute advertisements See Section lll.A, supra (discussing mootness).

10 See, e.g., Republican Party Platform of 1860, THE AMER[CAN PREsIDENcY PROJECT, ‘|] 8,

http://www.presidency.ucsb.edu/ws/?pid:29620 (“That the normal condition of ali the territory

of the United States is that of freedom: That, as our Republican fathers, when they had abolished

slavery in all our national territory, ordained that ‘no persons should be deprived of life, liberty

or property without due process of law,’ it becomes our duty, by legislation whenever such

legislation is necessary, to maintain this provision of the Constitution against all attempts to

violate it; and we deny the authority of Congress, of a territorial legislature or of any

individuals, to give legal existence to slavery in any territory of the United States.”) (emphasis

added).

18

important’ governmental interest.” Cifr`zens United, 558 U.S. at 366-367 (quoting

Buckley, 424 U.S. at 74.).

The Supreme Court has already held that the Bipartisan Campaign Reform

Act’s large~donor disclosure rule advances substantial and important governmental

interests in “providing the electorate with information, deterring actual corruption

and avoiding any appearance thereof, and gathering the data necessary to enforce

more substantive electioneering restrictions.” McConnell, 540 U.S. at 196; see

Ciz‘izens United, 558 U.S. at 369 (upholding the disclosure provision against

Citizens United’s as-applied challenge based on the government’s important

informational interest). The Institute’s advertisement triggers those same

informational interests because it links an electoral candidate to a political issuemm

pending federal legislation addressing unjust sentencing of criminal defendants-m

and solicits voters to press the legislative candidate for his position on the

legislation in the run up to an election. See Citizens United, 558 U.S. at 369

(concluding that such would “help viewers make informed choices in the political

marketplace”); McConnell, 540 U.S. at 196 (“The factual record demonstrates that

the abuse of the present law not only permits corporations and labor unions to fund

broadcast advertisements designed to influence federal elections, but permits them

to do so while concealing their identities from the public.”) (quoting McConnel[,

251 F. Supp. 2d at 237); see also SpeechNow.org v. FEC, 599 F.3d 686, 698 (D.C.

Cir. 2010) (en banc) (“But the public has an interest in knowing who is speaking

about a candidate and who is funding that speech, no matter whether the

contributions were made towards administrative expenses or independent

expenditures.”). Providing the electorate with information about the source of the

advertisement will allow voters to evaluate the message more critically and to

more fairly determine the Weight it should carry in their electoral judgments

Moreover, the large-donor disclosure requirement is tailored to substantially

advance those interests it “‘impose[s] no ceiling on campaign related activities,’

* * ’*‘ and ‘do[es] not prevent anyone from speaking.”’ Cirizens United, 558 U.S. at

366 (quoting MeConnell, 540 U.S. at 201). ln addition, disclosure is limited to

only those substantial donors who contribute 81000 or more, and do so for the

specific purpose of supporting the advertisement See ll C.F.R. § 104.20(c)(9);

Van Hol[en, Jr., 811 F.3d at 501.

19

As in Citizens United, that informational interest alone is sufficient to

uphold the disclosure provisions against the 1nstitute’s as-applied challenge See

558 U.S. at 369 (“[T]he informational interest alone is sufficient to justify

application of § 201 to these ads[.]”). That the Act’s disclosure provisions advance

additional governmental interests simply reinforces the constitutionality of the

Act’s application to the institute’s advertisement For instance, disclosure will

assist the public, the Federal Election Commission, and Congress in monitoring

those who seek to influence the issues debated during peak election season and to

link candidates in the voters’ eyes with specific policy matters See McConnell,

540 U.S. at 129~133. Additionally, large-donor disclosures help the Commission

to enforce existing regulations and to ensure that foreign nationals or foreign

governments do not seek to influence United States’ elections See Buck[ey, 424

U.S. at 67-68 (“[R]ecordk'eeping, reporting, and disclosure requirements are an

essential means of gathering the data necessary to detect violations of the

contribution limitations[.]”); 52 U.S.C. § 30121(a)(1)(C) (°‘lt shall be unlawful for

a foreign national, directly or indirectly to make an expenditure independent

expenditure or disbursement for an electioneering communication[.]”);

SpeechNow, 599 F.3d at 698 (“[R]equiring disclosure of such information deters

and helps expose violations of other campaign finance restrictions such as those

barring contributions from foreign corporations or individuals.”).ll

Disclosure will also “deter actual corruption and avoid the appearance of

corruption by exposing large contributions and expenditures to the light of

publicity.” Buckley, 424 U.S. at 67. Arming voters with information about “a

candidate’s most generous supporters,” whether direct or indirect, makes it easier

“to detect any post-election special favors that may be given in return.” ]d.

Indeed, given the information that the ]nstitute’s advertisement can convey to

voters, a challenger’s supporters could embrace the advertisement as a means of

ll The vital importance of determining if foreign nationals are supporting candidates has been

underscored in this election See Joint Statement from the Departrnent of llomeland Security

and Oflice of the Director of National lntelligence on Election Security, Director of National

Intelligence (OCt. 7, 2016), https://www.dnigov/index.php/newsroom/press-releases/2l5~press»

releases~2016/1423 -joint-dhs-odni-election-security~statement (“'l`he U.S. intelligence

Comrnunity (USIC) is confident that the Russian Government directed the recent compromises

of e-mails from US persons and institutions including from US political organizations”).

20

highlighting a point of difference with the incumbent or criticizing the incumbent’s

stance on or lassitude concerning an issue

2. Section 501(€) (3) Status

The 1nstitute’s argument that its status as a Section 50l(c)(3) tax-exempt

non~profit makes a constitutional difference fares no better. T he First Amendment

permits disclosure provisions that, as the Act does, regulate speech based on its

reference to electoral candidates, and not on the speaker’s identity or taxpaying

status See McConnell, 540 U.S. at 194 (explaining that the Act’s definition of

electioneering communications is constitutionally permissible in part because the

term, and its regulations “appl[y] only (1) to a broadcast (2) clearly idenri?j§)ing a

candidate for federal o]jtice, (3) aired within a specific time period, and (4) targeted

to an identified audience of at least 50,000 viewers or listeners.”) (emphasis

added). Indeed, it is the 1nstitute’s proposed speaker-specific exemption that could

stir up constitutional trouble See Simon & Schuster, Inc. v. Members ofNew York

State Crz`me Vr`ctims Bcl., 502 U.S. 105, 117 (1991) (“The government’s power to

impose content~based financial disincentives on speech does not vary with the

identity of the speaker.”); Pacz`fz`c Gas & Elec. Co. v. Publlc Utz`lilies Comm ’n of

Cal., 475 U.S. l, 8 (1986) (“The identity of the speaker is not decisive in

determining whether speech is protected.”).

The 1nstitute notes that the Commission once considered an exemption for

501(c)(3) organizations 1ndep. 1nst. Mot. for Summ. J. at 21 n. 12. But that

attempted distinction was struck down as arbitrary and capricious which

underscores the frailty of the lnstitute’s argument See Shays v. FEC, 337 F. Supp.

2d 28, 124-128 (D.D.C. 2004), aff’d on other grounds 414 F.3d 76 (D.C. Cir.

2005); See also Delaware Strong Familz`es v. Artorney Gen. ofDel., 793 F.3d 304,

308~309 (3d Cir. 2015) (rejecting a 501(0)(3) organization’s challenge to

Delaware’s BCRA analogue, and holding that “it is the conduct of an organization,

rather than an organization’s status with the l`nternal Revenue Service, that

determines whether it makes communications subject to the [Delaware] Act”);

Cenler for rlncllvidual Freeclom, ]nc. v. Tennanl, 706 F.3d 270, 289e290 (4th Cir.

20l3) (invalidating the 501(0)(3) exemption in West Virginia’s BCRA analogue

because that exemption materially undermined the government’s asserted “interest

in informing the electorate”).

21

Lastly, the institute cites to the D.C. Circuit’s decision striking down as void

for vagueness a disclosure provision in the Federal Election Campaign Act

Amendments of l974, Pub. L. No. 93~443, Title ll, § 208(a), 88 Stat. 1279

repealed by Federal Election Campaign Act Amendments of l976, Pub. L. No. 94-

283, 'i`itle l, § 105, 90 Stat. 48l (1976). See Buckley v. Voleo, 519 F.2d 821, 870~

879 (D.C. Cir. 1975), rev ’a.’ orr other grounds 424 U.S. 1 (1976). That disclosure

provision, however, was materially different from the one at issue here because it

(i) did not limit disclosure to large donors, and (ii) applied to publications and not

just broadcasting Icl. at 869. Nailing the coffin shut on the lnstitute’s argument,

the Supreme Court specifically held in McConnell that the definition of

electioneering communications in the Bipartisan Campaign Reform Act, and the

disclosure provision to which those communications are subject, “raise[] none of

the vagueness concerns that drove our analysis in Bnckley.” McConnell, 540 U.S.

at 194.

IV

ln conclusion, the lnstitute’s arguments that the Act’s large-donor disclosure

provisions are unconstitutional as applied to its Justice Safety Valve Act

advertisement all fail. lf the institute chooses to run that advertisement during the

balance of this election cycle or in future elections, it will have to comply with the

Bipartisan Campaign Reform Act’s disclosure provision, 52 U.S.C. § 30104(f).

A final, appealable order DENYING the lnstitute’s Motion for Summary

Judgment and GRANTING the Federal Election Commission’s l\/Iotion for

Summary Judgment accompanies this Opinion.

Signed on this 3rd day of November, 2016.

22

C©rss)\\eé>e

P§iricia/AYi\/nuee

United States Court of Appeals for the District of Colurnbia Circuit

j ,

Ce’飣&.) K}r)’@OA/‘r )[(@

Hon. Colleen Kollar-Kotelly

United States District Court for the District of Colurnbia

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I~I/on. A ` . Mehta

Un' d States District Court for the District of Columbia

23