697 F.3d 464 (7th Cir. 2012), 11-3693, Center for Individual Freedom v. Madigan

Docket Nº:11-3693.
Citation:697 F.3d 464
Opinion Judge:HAMILTON, Circuit Judge.
Party Name:CENTER FOR INDIVIDUAL FREEDOM, Plaintiff-Appellant, v. Lisa MADIGAN, Attorney General of the State of Illinois et al., Defendants-Appellees.
Attorney:Thomas W. Kirby (argued), Attorney, Wiley Rein LLP, Washington, DC, for Plaintiff-Appellant. Mary Ellen Welsh (argued), Attorney, Office of the Attorney General, Civil Appeals Division, Chicago, IL, for Defendants-Appellees.
Judge Panel:Before POSNER, ROVNER, and HAMILTON, Circuit Judges. POSNER, Circuit Judge, concurring in part and dissenting in part.
Case Date:September 10, 2012
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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697 F.3d 464 (7th Cir. 2012)

CENTER FOR INDIVIDUAL FREEDOM, Plaintiff-Appellant,

v.

Lisa MADIGAN, Attorney General of the State of Illinois et al., Defendants-Appellees.

No. 11-3693.

United States Court of Appeals, Seventh Circuit.

September 10, 2012

Argued April 10, 2012.

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Thomas W. Kirby (argued), Attorney, Wiley Rein LLP, Washington, DC, for Plaintiff-Appellant.

Mary Ellen Welsh (argued), Attorney, Office of the Attorney General, Civil Appeals Division, Chicago, IL, for Defendants-Appellees.

Before POSNER, ROVNER, and HAMILTON, Circuit Judges.

HAMILTON, Circuit Judge.

The Supreme Court's decision in Citizens United v. FEC, 558 U.S. 310, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010), is best known for striking down as an unconstitutional restriction of free speech the federal law that bans corporations and labor unions from running campaign-related advertisements in the lead-up to an election. That holding largely overshadowed another

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part of the decision upholding the same law's campaign finance disclosure provisions. Those provisions require any outside entity or individual spending significant sums in a federal election to file reports with the Federal Election Commission (FEC) identifying the person or group making the expenditure, its amount, and the names of certain contributors. Describing disclosure requirements as a " less restrictive alternative to more comprehensive regulations of speech," the Citizens United Court wrote that " prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.... The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way." Id. at 916. Despite this holding, in the aftermath of Citizens United a number of suits have been filed challenging federal and state disclosure regulations as facially unconstitutional. Of the federal courts of appeals that have decided these cases, every one has upheld the disclosure regulations against the facial attacks.1

This case involves another such challenge. Plaintiff-appellant Center for Individual Freedom (the Center) seeks to invalidate Illinois disclosure requirements on the grounds that they are facially vague and overbroad restrictions of speech in violation of the First and Fourteenth Amendments. Illinois's disclosure law is modeled on the federal one. It requires groups and individuals that accept " contributions," make " expenditures," or sponsor " electioneering communications" in excess of $3,000 to make regular financial disclosures to the State Board of Elections. See 10 ILCS 5/9-1.8. The Illinois Election Code drew the key definitions of " contribution," " expenditure," and " electioneering communication" from federal law. The only substantive differences are that the Illinois disclosure requirements (1) cover election activity relating to ballot initiatives, which have no federal analog; (2) do not exempt from regulation those groups that lack the " major purpose" of influencing electoral campaigns; and (3) cover campaign-related advertisements that appear on the Internet. The Center argues that these differences, and a few other terms in the Illinois statute, render its disclosure regime unconstitutionally vague and overbroad on its face.

To prevail in such a facial challenge, a plaintiff must cross a high bar. A

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statute is facially overbroad only when " it prohibits a substantial amount of protected speech," United States v. Williams, 553 U.S. 285, 292, 128 S.Ct. 1830, 170 L.Ed.2d 650 (2008), and unconstitutionally vague only when its " deterrent effect on legitimate expression is ... both real and substantial." Young v. American Mini Theatres, Inc., 427 U.S. 50, 60, 96 S.Ct. 2440, 49 L.Ed.2d 310 (1976) (internal quotation marks omitted). The district court granted the state's motion to dismiss, finding that the Center could not meet these standards. We affirm.

I. Factual and Procedural Background

The Center is a Virginia-based § 501(c)(4) nonprofit organization whose stated mission is " to protect and defend individual freedoms and individual rights guaranteed by the U.S. Constitution." To that end, it broadcasts advertisements, maintains a website, publishes a weekly e-mail newsletter, produces a bi-weekly radio show, and engages in other forms of mass media communications. Its tax exempt status under § 501(c)(4) is incompatible with partisan political activity, so the Center cannot endorse candidates or urge the public to " vote for so-and-so." But apart from a need to avoid such " express advocacy," in the lingo of campaign finance law, the Center and other § 501(c)(4) groups enjoy fairly wide latitude from the IRS. During election seasons, the Center runs advertisements that refer to the positions of candidates or to ballot issues and call on the audience to take actions such as contacting candidates.2

The Center wished to engage in similar advocacy during the 2010 elections in Illinois and made plans to address " legal reform and other justice-related issues" in advertisements referring to incumbent officeholders who were candidates. But the Center feared that Illinois's newly-amended campaign finance laws would require it to register as a " political committee" and to disclose its election-related expenditures and its significant contributors. According to the Center, its donors require assurances that their identities will not be disclosed, and this anonymity is a condition of their support. The Center says it had no choice but to forbear from its Illinois " issue advocacy" in 2010, so its political speech was chilled by Illinois's disclosure laws.

These laws are codified in Article 9 of the Illinois Election Code. Article 9 is long and filled with the jargon of contemporary U.S. campaign finance law— " electioneering communications," " independent expenditures," etc.— which we detail in Part IV of this opinion. But Article 9's basic provisions are fairly easy to summarize. Each political committee in Illinois must register with the Board of Elections, maintain records of every contribution received and expenditure made " in connection with" an election, 10 ILCS 5/9-7, and file a report of all such transactions each quarter, 10 ILCS 5/9-10(b). This quarterly report

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must include the total sums of contributions received and expenditures made in the covered period; accountings of the committee's funds on-hand and investment assets held; and the name and address of each contributor who gave more than $150 that quarter. 10 ILCS 5/9-11(a). In addition to the quarterly report, a political committee must disclose any contribution of $1,000 or more (along with the name and address of the contributor) within five days of its receipt, or within two days if received 30 or fewer days before an election. 10 ILCS 5/9-10(c). For reporting violations, the Board may issue civil fines of no more than $5,000 for any one group (except in the case of " willful and wanton" violations), or seek to enjoin violators' campaign activities in state court. 10 ILCS 5/9-10. 3

Candidates' campaign organizations and political parties of course must register as political committees. 10 ILCS 5/9-1.8(b), (c). But so too must outside groups and private individuals if, within any 12-month period, they accept contributions or make expenditures in excess of $3,000 " on behalf of or in opposition to" any candidate or ballot question. 10 ILCS 5/9-1.8(d), (e). Any entity other than a natural person must also register as a political committee if it makes " independent expenditures" of more than $3,000 within one year. 10 ILCS 5/9-8.6(b). Illinois has largely borrowed from federal law its definition of " electioneering communication," which means a radio, television, or Internet broadcast that (1) refers to a " clearly identified" candidate, political party, or ballot issue; (2) is made within two months of a general election or one month of a primary election, (3) is " targeted to the relevant electorate," and (4) is unambiguously an " appeal to vote" for or against a candidate, party, or ballot issue. 10 ILCS 5/9-1.14. 4 Funds spent on electioneering communications that are coordinated with a political committee are treated as contributions to that committee, while uncoordinated electioneering communications are considered independent expenditures. See 10 ILCS 5/9-1.15.

The Center argues that five of Article 9's definitions— " electioneering communications," " political committee," " contribution," " expenditure," and " independent expenditure" — are facially vague and overbroad. In July 2010, the Center brought suit against the Illinois Attorney General and members of the Illinois State Board of Elections in their official capacities, see Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), seeking to invalidate and enjoin Article 9's disclosure requirements as unconstitutional restrictions of free speech. After the district court denied the Center's motion for a preliminary injunction, 735 F.Supp.2d 994 (N.D.Ill.2010), and this court denied its request for an injunction pending appeal, the Center's appeal was dismissed by agreement without prejudice. In January 2011, the Center filed an amended complaint containing the same allegations but taking into account changes to Article 9 that took effect on January 1, 2011. The state moved to dismiss, and the Center

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moved for summary judgment. The parties did not dispute any material facts. The district court denied the Center's motion for summary judgment and granted the state's motion to dismiss....

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