692 F.3d 864 (8th Cir. 2012), 10-3126, Minnesota Citizens Concerned for Life, Inc. v. Swanson

• Citation: 692 F.3d 864
• Opinion Judge: RILEY, Chief Judge.
• Party Name: MINNESOTA CITIZENS CONCERNED FOR LIFE, INC.; The Taxpayers League of Minnesota; Coastal Travel Enterprises, LLC, Plaintiffs-Appellants, v. Lori SWANSON, Minnesota Attorney General, in her official capacity; Bob Milbert; John Scanlon; Terri Ashmore; Hilda Bettermann; Felicia Boyd; Greg McCullough, Minnesota Campaign Finance and Public Disclosure Boa
• Attorney: James Bopp, Jr., argued, Richard Eugene Coleson and Randy Elf, Terre Haute, IN, for Appellants. Alan Gilbert, Solicitor General, argued, St. Paul, MN, for Appellees.
• Judge Panel: Before RILEY, Chief Judge, WOLLMAN, LOKEN, MURPHY, BYE, MELLOY, SMITH, COLLOTON, GRUENDER, BENTON, and SHEPHERD, Circuit Judges, En Banc. RILEY, Chief Judge, with whom WOLLMAN, LOKEN, GRUENDER, BENTON and SHEPHERD, Circuit Judges, join. MELLOY, Circuit Judge, with whom MURPHY, BYE and SMITH, Circ...
• Case Date: September 05, 2012
• Court: United States Courts of Appeals, U.S. Court of Appeals — Eighth Circuit

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692 F.3d 864 (8th Cir. 2012)

MINNESOTA CITIZENS CONCERNED FOR LIFE, INC.; The Taxpayers League of Minnesota; Coastal Travel Enterprises, LLC, Plaintiffs-Appellants,

v.

Lori SWANSON, Minnesota Attorney General, in her official capacity; Bob Milbert; John Scanlon; Terri Ashmore; Hilda Bettermann; Felicia Boyd; Greg McCullough, Minnesota Campaign Finance and Public Disclosure Board Members, in their official capacities; Raymond Krause, Chief Administrative Law Judge of the Minnesota Office of Administrative Hearings, in his official capacity; Eric Lipman, Assistant Chief Administrative Law Judge of the Minnesota Office of Administrative Hearings, in his official capacity; Manuel Cervantes; Beverly Heydinger; Richard Luis; Steve Mihalchick; Barbara Neilson; Kathleen Sheehy, Administrative Law Judges of the Minnesota Office of Administrative Hearings, in their official capacities; Michael Freeman, Hennepin County Attorney, in his official capacity, Defendants-Appellees,

Campaign Legal Center; Democracy 21; The Brennan Center for Justice, NYU School of Law, Amici on Behalf of Appellees.

No. 10-3126.

United States Court of Appeals, Eighth Circuit.

September 5, 2012

Submitted: Sept. 21, 2011.

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[Copyrighted Material Omitted]

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James Bopp, Jr., argued, Richard Eugene Coleson and Randy Elf, Terre Haute, IN, for Appellants.

Alan Gilbert, Solicitor General, argued, St. Paul, MN, for Appellees.

Before RILEY, Chief Judge, WOLLMAN, LOKEN, MURPHY, BYE, MELLOY, SMITH, COLLOTON, GRUENDER, BENTON, and SHEPHERD, Circuit Judges, En Banc.

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RILEY, Chief Judge, with whom WOLLMAN, LOKEN, GRUENDER, BENTON and SHEPHERD, Circuit Judges, join.

RILEY, Chief Judge.

Minnesota Citizens Concerned for Life, Inc. (Minnesota Citizens), The Taxpayers League of Minnesota (Taxpayers League), and Coastal Travel Enterprises, LLC (Coastal Travel) (collectively, appellants), sued various Minnesota state officials (collectively, Minnesota),¹ challenging the constitutionality of certain Minnesota campaign finance laws. The district court denied the appellants' motion for a preliminary injunction. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

I. BACKGROUND

The appellants are Minnesota business entities. Minnesota Citizens and Taxpayers League are nonprofit corporations and claim to be tax exempt under 26 U.S.C. § 501(c)(4), which requires they be " primarily engaged in promoting in some way the common good and general welfare of the people of the community," not to include " direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office." 26 C.F.R. § 1.501(c)(4)-1(a)(2). Coastal Travel is a for-profit Minnesota limited liability company in the travel services industry.

The appellants challenge certain provisions of Minnesota's campaign finance laws, claiming the provisions violate their free speech and association rights under the First and Fourteenth Amendments, as well as their equal protection rights under the Fourteenth Amendment. Specifically, the appellants claim Minnesota's law impermissibly violates their rights to make (1) contributions to candidates and political parties, and (2) independent expenditures advocating the election or defeat of a candidate.

The challenged provisions are part of Minnesota's Campaign Finance and Public Disclosure law, see Minn.Stat. § 10A.01 et seq. , and Fair Campaign Practices law, see Minn.Stat. § 211B.01 et seq. These laws were amended in 2010, see 2010 Minn. Sess. Law Serv. ch. 397, at 2001-08, after the Supreme Court held " the [g]overnment may not suppress political speech on the basis of the speaker's corporate identity" whether by " nonprofit or for-profit corporations," Citizens United v. FEC, 558 U.S. 310, ----, 130 S.Ct. 876, 913, 175 L.Ed.2d 753 (2010), and a federal district court determined certain of Minnesota's campaign finance laws were unconstitutional under Citizens United. See Minn. Chamber of Commerce v. Gaertner, 710 F.Supp.2d 868, 870-73 (D.Minn.2010).

Minnesota prohibits corporations and limited liability companies from directly or indirectly contributing " to a major political party, organization, committee, or individual to promote or defeat the candidacy of an individual for nomination, election, or appointment to a political office." Minn.Stat. § 211B.15, subdivs. 1 and 2. Corporations and limited liability companies may, however, make an independent expenditure, see id. at subdivs. 2 and 3, defined as " an expenditure expressly advocating the election or defeat of a clearly identified candidate, if the expenditure is made without

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the express or implied consent, authorization, or cooperation of, and not in concert with or at the request or suggestion of, any candidate or any candidate's principal campaign committee or agent." Minn.Stat. § 10A.01, subdiv. 18.

Minnesota's law provides two options for corporations and limited liability companies to participate in making independent expenditures. See Minn.Stat. § 10A.12, subdiv. 1a. Both options require compliance with certain organizational, record-keeping, and reporting requirements. Importantly, these laws reach not just corporations and limited liability companies, but nearly all associations, see Minn.Stat. § 10A.12, subdiv. 1a, regulating even the smallest partnership. See Minn.Stat. § 10A.01, subdiv. 6 (" ‘ Association’ means a group of two or more persons, who are not all members of an immediate family, acting in concert." ).

First, an association may indirectly make an independent expenditure " by contributing to an existing independent expenditure political committee or political fund." Id. An independent expenditure political committee— commonly referred to as a PAC— is an association, other than a principal campaign committee or political party unit, " whose major purpose is to influence the nomination or election of a candidate or to promote or defeat a ballot question," Minn.Stat. § 10A.01, subdiv. 27, and that only makes independent expenditures and other specified permissible disbursements. See Minn Stat. § 10A.01, subdivs. 18a and 27; Minn.Stat. § 10A.121, subdiv. 1. An independent expenditure political fund is " an accumulation of dues or voluntary contributions by an association ... collected or expended to influence the nomination or election of a candidate or to promote or defeat a ballot question," Minn.Stat. § 10A.01, subdiv. 28, exclusively used to make independent expenditures and statutorily-specified related expenses. See Minn.Stat. §§ 10A.01, subdiv. 18b; 10A.121, subdiv. 1.

The Board is responsible for administrating and enforcing Minnesota's disclosure laws and has the power to audit and investigate compliance issues. See Minn.Stat. § 10A.02. According to the affidavit of Gary Goldsmith, the executive director of the Board, a business corporation contributing its own money to an existing independent expenditure political committee or fund typically would have to disclose only its name and address to the recipient fund. See Minn.Stat. § 10A.27, subdivs. 13 and 14. Goldsmith further explained a non-profit corporation that has donated $5,000 or more to independent expenditure political committees or funds must disclose additional information related to the underlying source of the money.² Id. at subdiv. 15.

For an association directly to make an independent expenditure, it must create and register its own independent expenditure political fund (political fund). See Minn.Stat. § 10A.12, subdiv. 1a. Once an association forms a political fund, it must elect or appoint a treasurer and ensure the contents of the fund are not commingled with other funds. See id. subdivs. 2 and 3. According to Goldsmith, a political fund is simply an " account," and unless the association accepts contributions from others, it need not use a separate " bank or depository account." Instead, the association may track the funds used for independent expenditures using " an internal bookkeeping device, or something as simple as a spreadsheet."

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The treasurer must register the political fund " by filing a statement of organization" with the Board. See Minn.Stat. § 10A.14, subdiv. 1. This filing must occur " no later than 14 days after the ... [political] fund ... has made a contribution, received contributions, or made expenditures in excess of $100." ³ Id. The filing must include the contact information for the association, the political fund, and the treasurer, as well as a list of all depositories or safe deposit boxes used. See id. at subdiv. 2.

For the life of the political fund, the treasurer must file annual reports detailing the political fund's activity. See Minn.Stat. § 10A.20, subdiv. 2. During general election years— which occur every other year— the treasurer must file four additional reports; twenty-eight and fifteen days before a primary, and forty-two and ten days before a general election. See id. As the district court explained,

The report must disclose the amount of liquid assets at the beginning of a reporting period; the name and address of each individual or association whose contributions within the year exceed $100; the amount and date of such contributions; the sum of contributions during the reporting period; each loan made or received that exceeds $100; the name and address of the lender; receipts over $100 during the reporting period not otherwise listed; the sum of those receipts; the name and address of each individual or association to whom the reporting entity made expenditures within the year exceeding $100; the sum of all expenditures made by the reporting entity during the reporting period; the name and address of each political committee, political fund, principal campaign committee, or party unit to which contributions in excess of $100 were made; the...