Butcher v. Knudsen

• Court: U.S. Court of Appeals — Ninth Circuit
• Writing for the Court: BRESS, Circuit Judge
• Citation: Butcher v. Knudsen, 38 F.4th 1163 (9th Cir. 2022)
• Decision Date: 06 July 2022
• Docket Number: 21-35010
• Parties: Ed BUTCHER ; Lonny Bergstrom, Plaintiffs-Appellants, v. Austin KNUDSEN, in his official capacity as Attorney General of Montana ; Jeffrey Mangan, in his official capacity as Montana Commissioner of Political Practices, Defendants-Appellees.

38 F.4th 1163

Ed BUTCHER ; Lonny Bergstrom, Plaintiffs-Appellants,

v.Austin KNUDSEN,^* in his official capacity as Attorney General of Montana ; Jeffrey Mangan, in his official capacity as Montana Commissioner of Political Practices, Defendants-Appellees.

No. 21-35010

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 8, 2021 Portland, Oregon

Filed July 6, 2022

Matthew G. Monforton (argued), Monforton Law Offices PLLC, Bozeman, Montana, for Plaintiffs-Appellants.

Jeremiah Langston (argued), Assistant Attorney General; J. Stuart Segrest, Chief, Civil Bureau; Austin Knudsen, Attorney General; Office of the Attorney General, Helena, Montana; for Defendants-Appellees.

Before: William A. Fletcher, Sandra S. Ikuta, and Daniel A. Bress, Circuit Judges.

Opinion by Judge Bress ;

Dissent by Judge W. Fletcher

BRESS, Circuit Judge:

Two retirees, Ed Butcher and Lonny Bergstrom, operate a website that tracks the voting records of Republican state legislators in Montana. Several local Republican groups in Montana took an interest in the website and invited Butcher and Bergstrom to speak on their findings. Based on the travel expenses they incurred in giving these presentations—such as for gas, meals at McDonald's, and a night at a La Quinta Inn—Montana's Commissioner of Political Practices determined that Butcher and Bergstrom had formed a "political committee" under Montana law. Because Butcher and Bergstrom had neither registered their alleged political committee with the state nor complied with numerous reporting obligations, the Commissioner concluded they were subject to a civil fine and civil prosecution. Butcher and Bergstrom argue, however, that Montana law is impermissibly vague because they lacked fair notice that their conduct would not be treated as "de minimis," and thus exempt, under Montana Administrative Rule 44.11.603.

We hold that Rule 44.11.603 is unconstitutionally vague as applied to Butcher and Bergstrom. Butcher and Bergstrom were engaged in core political speech that lies at the heart of the First Amendment. The protections against impermissibly vague laws, rooted here in the Due Process Clause of the Fourteenth Amendment, are at their maximum in this most sensitive area, in which insufficiently defined legal regimes can discourage valuable speech and invite unbalanced government regulation of less popular views. In this case, Montana law did not give Butcher and Bergstrom fair notice that the travel expenses associated with their hobbyist speaking engagements transformed them into a two-person political committee subject to demanding disclosure and reporting requirements. We therefore reverse the district court's judgment to the contrary.

I

A

Ed Butcher is a 78-year-old retired Republican state senator from Montana. His late son Trevis created a website called Legistats. Legistats analyzes how individual Republican state legislators in Montana vote on what Legistats terms "partisan bills," that is, bills in which the Republican and Democratic state caucuses usually vote in opposition to each other. Legistats then ranks the lawmakers according to how often they vote with the rest of the Republican Party. Each legislator is given a grade, ranging from "A," which means "exception[al] party loyalty," to "F," meaning "basically a Republican that Democrats can consistently count on to swing partisan votes." After Trevis passed away in 2017, Butcher took over operation of the website.

Local Republican groups around Montana were intrigued and invited Butcher to give presentations on Legistats. Butcher's friend Lonny Bergstrom, who is also retired, accompanied him to these presentations. Bergstrom helped by preparing the PowerPoint presentations and projecting the slides while Butcher spoke. Butcher primarily aimed to be "informative and educational" in his remarks, but sometimes he would make statements supporting or criticizing candidates for office.

From January 2019 to May 2020, Butcher and Bergstrom gave eight presentations to Republican groups in various towns across Montana. In doing so, they incurred ordinary travel expenses. They spent between $100 and $400 on gas each time. For food, they stopped at McDonald's, purchased snacks at a gas station, or brought sack lunches. They stayed overnight once, at the La Quinta Inn in Glendive, Montana, a small town near the North Dakota border. The room rate was approximately $75. Butcher and Bergstrom never received compensation for the presentations, nor were they reimbursed for their expenses.

B

Since the 1970s, Montana has required political committees to register with the state, report election-related expenditures, and comply with additional requirements. See Mont. Code Ann. §§ 13-37-201 et seq. ; Canyon Ferry Baptist Church v. Unsworth , 556 F.3d 1021, 1026 (9th Cir. 2009). Montana law broadly defines a "political committee," in relevant part, as "a combination of two or more individuals ... who receives a contribution or makes an expenditure" to "support or oppose" a candidate or a ballot issue. Mont. Code Ann. § 13-1-101(32)(a).

As pertinent here, whether a group of two or more persons is a political committee turns on Montana's definition of a qualifying expenditure. An "expenditure" is "a purchase, payment, distribution, loan, advance, promise, pledge, or gift of money or anything of value ... made by a candidate or political committee to support or oppose a candidate or a ballot issue." Id. § 13-1-101(19)(a)(i).

An expenditure of $250 or less will not create a political committee. Id. § 13-1-101(32)(d). Nor will expenditures that qualify as "de minimis act[s]," which do not count towards the $250 threshold. See id. § 13-1-101(11) ; Mont. Admin. R. 44.11.202(3)(c) ("A political committee is not formed by ... a de minimis activity."); Vargas v. Hoffman , Mont. Comm'r Pol. Prac. Advisory Op. 4–5 (Oct. 20, 2017). A "de minimis act" means "an action, contribution, or expenditure that is so small that it does not trigger registration, reporting, disclaimer, or disclosure obligations ... or warrant enforcement as a campaign practices violation." Mont. Code Ann. § 13-1-101(11). Thus, "de minimis acts" do not create political committees or require reporting. See id.

The statute delegates to Montana's Commissioner of Political Practices the authority to further define "de minimis acts." Id. § 13-37-114. In Montana Administrative Rule 44.11.603, the Commissioner has attempted to provide guidance on this point. In subsection (1), the Commissioner has identified five factors that he "may consider" in determining whether an expenditure is de minimis:

The commissioner may consider the following factors in determining whether specific acts, contributions, or expenditures are de minimis and therefore do not trigger registration, reporting, attribution, or disclosure requirements, or warrant enforcement as a campaign practices violation:

(a) whether the act, contribution, or expenditure has an ascertainable fair market value, and if so the amount of that value;

(b) in the case of an act that results in the provision of services, whether the act results in either a detriment to the provider of the services, such as an out-of-pocket expense or the preclusion of other activities;

(c) whether the act, contribution, or expenditure at issue is a single, one-time event or occurrence or multiple events or occurrences;

(d) the extent to which a particular campaign practices violation deprives the public of disclosure;

(e) other factors and circumstances similarly showing limited value or minimal harm.

Mont. Admin. R. 44.11.603(1).

Then, in subsection (2), the Commissioner's rule provides seven examples of expenditures "that may, depending on the circumstances, be considered de minimis":

Acts, contributions, or expenditures that may, depending on the circumstances, be considered de minimis include:

(a) the creation of electronic or written communications or digital photos or video, on a voluntary (unpaid) basis by an individual, including the creation and outgoing content development and delivery of social media on the internet or by telephone;

(b) the provision by an individual or political committee of personal property, food, or services with a cumulative fair market value of less than $35 in the aggregate for any single election;

(c) the location value of the display of lawn or yard signs on real property, but only if the property owner does not normally and does not in fact charge a fee for [the] display of signs;

(d) any value attributable to the display of campaign bumper stickers or signs on a vehicle, but only if the vehicle owner does not normally and does not in fact charge a fee for [the] display of bumper stickers or signs;

(e) typographical errors or incomplete or erroneous information on a campaign finance report that is determined not to be misleading or that does not substantially affect disclosure;

(f) any failure to comply with the attribution requirements of 13-35-225, MCA, that is determined to nevertheless provide sufficient disclosure regarding who made or financed the communication;

(g) expenses associated with volunteer services or efforts, including the cost of gas, parking, and meals.

Id. 44.11.603(2). We will return to Rule 44.11.603 in greater detail below.

Montana political committees are subject to elaborate registration, disclosure, and reporting obligations. See Mont. Code Ann. §§ 13-37-201 et seq. Within five days of making a qualifying expenditure that forms a political committee, the committee must register with the state. Id. § 13-37-201(2)(b). Then, political committees must generally file reports on "the 30th day of March, April, May, June, August, September, October, and November in the year of an election in which the political committee ... participates." Id. § 13-37-226(2)(b). Other reports must be filed quarterly, id. §§ 13-37-226(2)(a), (e), or, in some instances, within two days of receiving a contribution or making an expenditure above...