Citizens United, Non-Stock Corp. v. Gessler

• Decision Date: 12 November 2014
• Docket Number: No. 14–1387.,14–1387.
• Citation: 773 F.3d 200
• Parties: CITIZENS UNITED, a Virginia Non–Stock Corporation, Plaintiff–Appellant, v. Scott GESSLER, in his official capacity as Secretary of State of the State of Colorado; Suzanne Staiert, in her official capacity as Deputy Secretary of State of the State of Colorado, Defendants–Appellees, and Colorado Democratic Party; Garold A. Fornander; Lucia Guzman; Dickey Lee Hullinghorst, Intervenors Defendants. Citizens for Responsibility And Ethics In Washington; Colorado Common Cause; Colorado Ethics Watch; Progressive United, Movants.
• Court: U.S. Court of Appeals — Tenth Circuit

773 F.3d 200

CITIZENS UNITED, a Virginia Non–Stock Corporation, Plaintiff–Appellant,

v. Scott GESSLER, in his official capacity as Secretary of State of the State of Colorado; Suzanne Staiert, in her official capacity as Deputy Secretary of State of the State of Colorado, Defendants–Appellees,andColorado Democratic Party; Garold A. Fornander; Lucia Guzman; Dickey Lee Hullinghorst, Intervenors Defendants.Citizens for Responsibility And Ethics In Washington; Colorado Common Cause; Colorado Ethics Watch; Progressive United, Movants.

No. 14–1387.

United States Court of Appeals, Tenth Circuit.

Nov. 12, 2014.

Theodore B. Olson, Gibson, Dunn & Crutcher LLP, (Matthew D. McGill, Amir C. Tayrani, Lucas C. Townsend, Gibson, Dunn & Crutcher LLP, and Michael Boos, Citizens United, with him on the brief), Washington, D.C., for Plaintiff–Appellant.

Matthew D. Grove, Assistant Solicitor General, (Daniel D. Domenico, Solicitor General; Leeann Morrill, First Assistant Attorney General; Kathryn A. Starnella, Assistant Attorney General; with him on the brief), Public Official Unit, State Services Section, Denver, CO, for Defendants–Appellees.

Martha M. Tierney and Edward T. Ramey, Heizer Paul LLP, Denver, CO, filed an Intervenor–Defendants' Brief for Colorado Democratic Party, Garold A. Fornander, Lucía Guzmán, and Dickey Lee Hullinghorst.

David R. Fine and Lino S. Lipinsky de Orlov, McKenna Long & Aldridge LLP, Denver, CO; Luis A. Toro and Margaret G. Perl, Colorado Ethics Watch, Denver, CO, filed an amicus curiae brief for Citizens for Responsibility and Ethics in Washington, Colorado Common Cause, Colorado Ethics Watch, and Progressive United.

Before HARTZ, TYMKOVICH, and PHILLIPS, Circuit Judges.

HARTZ, Circuit Judge.

Citizens United is a nonprofit corporation that has made a name for itself through independent political activity. As noted by the district court, “its principal purpose is to promote social welfare through informing and educating the public on conservative ideas and positions on issues, including national defense, the free enterprise system, belief in God, and the family as the basic unit of society.” J.App. at 155 (internal quotation marks omitted). Since 2004 it has produced and released 24 films on various political and religious topics. Films are produced by Citizens United's in-house unit, Citizens United Productions, and occasionally through affiliated entities. They are distributed through theatrical release, DVDs, television, and online digital streaming and downloading. Citizens United sells its films as DVDs for retail and wholesale bulk purchase; arranges for film showings at movie theaters in exchange for a portion of box-office sales; and licenses its films to television broadcasters and digital-streaming companies in exchange for fees or royalties. In a few instances Citizens United has provided free DVDs inserted in newspapers and allowed its films to be screened free of charge to educational institutions and select members of the public and news media. It generally advertises its films on television, in newspapers, on billboards, by electronic and regular mail, and on the Internet.

Citizens United recently completed production of a film titled Rocky Mountain Heist on the alleged impact of various advocacy groups on Colorado government and public policy. The film is scheduled to be marketed and distributed in Colorado and throughout the United States beginning this month. It is approximately 30 minutes in length. The budget for production and marketing is $773,975. Like other films produced by Citizens United, Rocky Mountain Heist will be distributed through DVD, television broadcast, and online digital streaming and downloading, and it will be advertised on television, radio, and the Internet. Because the film and some of its advertising will unambiguously refer to elected Colorado officials running for office in this year's general election and include footage of events where participants advocate the election or defeat of Colorado candidates, Rocky Mountain Heist comes under provisions of Colorado's campaign-practices laws that require certain disclosures with respect to what are termed “electioneering communications” and “independent expenditures.”

Citizens United brought the present action against the Colorado Secretary of State (the Secretary) in the United States District Court for the District of Colorado to challenge under the First Amendment the disclosure provisions both on their face and as applied to Citizens United because it is treated differently from various media that are exempted from the provisions (the exempted media). It sought a preliminary injunction against enforcing the provisions that do not apply to exempted media. The district court denied relief, and Citizens United appeals.¹

Although we agree with much of what the district court said, we must reverse. We do not address the facial challenge to the disclosure provisions, because we afford Citizens United the relief it requested through its as-applied challenge. We hold that on the record before us Citizens United would likely prevail on the merits and therefore is entitled to a preliminary injunction. In light of (1) the Colorado disclosure exemptions for printed periodicals, cable and over-the-air broadcasters, and Internet periodicals and blogs, (2) the rationale presented for these exemptions, and (3) Citizen United's history of producing and distributing two dozen documentary films over the course of a decade, the Secretary has not shown a substantial relation between a sufficiently important governmental interest and the disclosure requirements that follow from treating Rocky Mountain Heist as an “electioneering communication” or treating the costs of producing and distributing the film as an “expenditure” under Colorado's campaign laws. Citizens United has also sought to have its advertising for Rocky Mountain Heist exempted from the disclosure provisions. But it has not demonstrated that the Secretary would exempt advertising placed by the exempted media if the advertisements mentioned a candidate or advocated for the election or defeat of a candidate. Having failed to show that in this respect it would be treated differently from the exempted media, Citizens United is not entitled to relief regarding advertising. To explain our holding, we begin by describing the pertinent disclosure provisions of Colorado law.

I. COLORADO DISCLOSURE PROVISIONS

Under the Colorado Constitution and the state's Fair Campaign Practices Act (FCPA), speakers who engage in “electioneering communications” and “independent expenditures” are subject to various reporting and disclosure requirements. See J.App. at 156. Electioneering communications are statements about candidates made shortly before an election. Article XXVIII of the Colorado Constitution and the FCPA define electioneering communication as:

any communication broadcasted by television or radio, printed in a newspaper or on a billboard, directly mailed or delivered by hand to personal residences or otherwise distributed that:

(I) Unambiguously refers to any candidate; and

(II) Is broadcasted, printed, mailed, delivered, or distributed within thirty days before a primary election or sixty days before a general election; and

(III) Is broadcasted to, printed in a newspaper distributed to, mailed to, delivered by hand to, or otherwise distributed to an audience that includes members of the electorate for such public office.

Colo. Const. art. XXVIII, § 2(7)(a); seeColo.Rev.Stat. § 1–45–103(9) (2011). Expenditures include money spent to endorse or oppose a candidate. An expenditure is:

any purchase, payment, distribution, loan, advance, deposit, or gift of money by any person for the purpose of expressly advocating the election or defeat of a candidate or supporting or opposing a ballot issue or ballot question. An expenditure is made when the actual spending occurs or when there is a contractual agreement requiring such spending and the amount is determined.

Colo. Const. art. XXVIII, § 2(8)(a); seeColo.Rev.Stat. § 1–45–103(10). Article XXVIII and the FCPA define independent expenditure as “an expenditure that is not controlled by or coordinated with any candidate or agent of such candidate.” Colo. Const. art. XXVIII, § 2(9); seeColo.Rev.Stat. § 1–45–103(11). When Colorado election law uses the term candidate, it is referring only to candidates for office in Colorado. SeeColo. Const. art. XXVIII, § 2(2).

Under § 6 of Article XXVIII, any person (natural or artificial) expending $1000 or more per calendar year on electioneering communications must submit reports to the Secretary including the amounts spent on the electioneering communication; the name of the candidate referenced in the communication; and the name, address, occupation, and employer of anyone donating more than $250 per year to the person for the communication. See id. § 6(1); 8 Colo.Code Regs. § 1505–6:11.5 (2012). Reports are due biweekly in the two months before the general election, with a final report due 30 days after the election. See Colo.Rev.Stat. § l–45–108(2)(a)(I)(D)–(E) (2012).

At oral argument the Secretary (through counsel) informed this court about oversight of the disclosure requirements. First, he does not require disclosure of the amount spent to produce an electioneering communication because there is no communicative aspect to production. For example, even if Rocky Mountain Heist is an electioneering communication, the regulations governing electioneering communications would not require Citizens United to report the cost of producing it or the identities of those who donated to the production. Also, a donor must be disclosed only if the donation was earmarked for an electioneering communication. See Colo.Code Regs. 1505–6:11–1. The Secretary emphasized the precision with which the earmarking must be made. If a donor permits the recipient to use the donation for electioneering...