O'Keefe v. Chisholm

• Decision Date: 24 September 2014
• Docket Number: 14–2585.,14–2023,14–2006,14–1888,14–2012,Nos. 14–1822,14–1899,s. 14–1822
• Parties: Eric O'KEEFE and Wisconsin Club for Growth, Inc., Plaintiffs–Appellees, v. John T. CHISHOLM, et al., Defendants–Appellants. Francis Schmitz, Defendant–Appellant/Cross–Appellee. Reporters Committee for Freedom of the Press, et al., Intervenors–Appellants. Unnamed Intervenors No.1 and No.2, Intervenors–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

769 F.3d 936

Eric O'KEEFE and Wisconsin Club for Growth, Inc., Plaintiffs–Appellees

v. John T. CHISHOLM, et al., Defendants–Appellants.Francis Schmitz, Defendant–Appellant/Cross–Appellee.Reporters Committee for Freedom of the Press, et al., Intervenors–Appellants.Unnamed Intervenors No.1 and No.2, Intervenors–Appellees.

Nos. 14–1822

14–1888

14–1899

14–2006

14–2012

14–2023

14–2585.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 9, 2014.

Decided Sept. 24, 2014.

Rehearing and Rehearing En Banc Denied Oc.t 23, 2014.

David Boris Rivkin, Andrew M. Grossman, Lee A. Casey, Mark W. DeLaquil, Richard Bryan Raile, for Plaintiff–Appellee.

Joseph Michael Russell, for Defendant–Appellant.

Before WOOD, Chief Judge, and BAUER and EASTERBROOK, Circuit Judges.

Opinion

EASTERBROOK, Circuit Judge.

A federal district judge issued an injunction that blocks the State of Wisconsin from conducting a judicially supervised criminal investigation into the question whether certain persons have violated the state's campaign-finance laws. The court did this despite 28 U.S.C. § 2283, the Anti–Injunction Act, which provides: “A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” Mitchum v. Foster, 407 U.S. 225, 92 S.Ct. 2151, 32 L.Ed.2d 705 (1972), holds that 42 U.S.C. § 1983 authorizes anti-suit injunctions but adds that principles of “equity, comity, and federalism” (407 U.S. at 243, 92 S.Ct. 2151 ) determine whether they are appropriate. Cf. Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). We hold that this case does not present a situation in which state proceedings may be displaced.

The ongoing criminal investigation is being supervised by a judge, in lieu of a grand jury. Wis. Stat. § 968.26. Prosecutors in Wisconsin can ask the state's courts to conduct these inquiries, which go by the name “John Doe proceedings” because they may begin without any particular target. The District Attorney for Milwaukee County made such a request after concluding that the campaign committee for a political official may have been coordinating fund-raising and expenditures with an “independent” group that was raising and spending money to speak about particular issues. (We put “independent” in quotation marks, which we drop from now on, because the prosecutor suspected that the group's independence is ostensible rather than real. Whether, and if so how, this group and the campaign committee have coordinated their activities is a subject we need not consider.) Wisconsin's Government Accountability Board, which supervises campaigns and conducts elections, likewise called for an investigation. District Attorneys in four other counties made similar requests. Eventually a single John Doe proceeding was established, with Gregory Peterson as the judge and Francis Schmitz as the special prosecutor. Judge Peterson has been recalled to service following his retirement from a post on the state's court of appeals; Schmitz, an attorney in private practice, used to be an Assistant United States Attorney in Milwaukee.

At the behest of special prosecutor Schmitz, the court issued subpoenas requiring their recipients to produce documents. One came to Eric O'Keefe, who manages Wisconsin Club for Growth, Inc., an advocacy group that raises money and engages in speech on issues such as whether Wisconsin should limit collective bargaining in public employment, a subject that has received considerable legislative attention and sparked a recall election for the Governor. (Both the Supreme Court of Wisconsin and this court have held that the legislation promoted by the Club for Growth is valid. Madison Teachers, Inc. v. Walker, 2014 WI 99, 851 N.W.2d 337 (2014) ; Laborers Local 236 v. Walker, 749 F.3d 628 (7th Cir.2014).) The subpoena issued to O'Keefe is extraordinarily broad, covering essentially all of the group's records for several years—including records of contributors that O'Keefe believes are covered by a constitutional right of anonymity.

O'Keefe moved to quash the subpoena, which he maintains is designed to punish his, and the Club's, support for controversial legislation, rather than to investigate a violation of state law. He contended that revealing to the state lists of contributors would harm the organization's ability to raise funds—and this even though all information is covered by a broad secrecy order. Judge Peterson quashed the subpoena, ruling that the evidence is not necessary to the investigation. One of his reasons is that Schmitz has not established any solid reason to believe that a violation of state law has occurred.

That was in January 2014. Schmitz asked the Wisconsin Court of Appeals for a supervisory writ. Two other people involved in the investigation asked the Supreme Court of Wisconsin to grant review, bypassing the Court of Appeals. Before either the Court of Appeals or the Supreme Court could act, however, O'Keefe and the Club filed this federal suit, asking for an injunction that would halt the investigation permanently, whether or not the prosecutor could establish a violation of Wisconsin law. O'Keefe also requested damages against five defendants: Schmitz plus the District Attorney for Milwaukee County, two of his assistants, and an investigator. (Judge Peterson is the sixth defendant.)

The district court held that the First Amendment to the Constitution (applied to the states through the Fourteenth) forbids not only penalties for coordination between political committees and groups that engage in issue advocacy, but also any attempt by the state to learn just what kind of coordination has occurred. ––– F.Supp.2d ––––, 2014 WL 1795139 (E.D.Wis. May 6, 2014). It issued this injunction:

The Defendants must cease all activities related to the investigation, return all property seized in the investigation from any individual or organization, and permanently destroy all copies of information and other materials obtained through the investigation. Plaintiffs and others are hereby relieved of any and every duty under Wisconsin law to cooperate further with Defendants' investigation. Any attempt to obtain compliance by any Defendant or John Doe Judge Gregory Peterson is grounds for a contempt finding by this Court.

Id. at 875, 2014 WL 1795139 at *12. The court scheduled proceedings on plaintiffs' request for damages and rejected defendants' argument that they enjoy qualified, if not absolute, immunity. We immediately stayed the portion of the injunction requiring documents to be returned or destroyed and set the case for expedited briefing and argument.

The issuance of injunctive relief directly against Judge Peterson is hard to justify in light of the Anti–Injunction Act, and the district court did not try to do so. The Anti–Injunction Act embodies a fundamental principle of federalism: state courts are free to conduct their own litigation, without ongoing supervision by federal judges, let alone threats by federal judges to hold state judges in contempt. The scope given to state litigation is especially great in the realm of criminal investigations and prosecutions, a principle that led to Younger, which requires a federal court to abstain even if an injunction would be justified under normal principles, except in rare situations. See Sprint Communications, Inc. v. Jacobs, ––– U.S. ––––, 134 S.Ct. 584, 187 L.Ed.2d 505 (2013), which discusses the current state of Younger 's abstention doctrine.

Courts of appeals have disagreed about the extent to which Younger compels abstention when states are conducting grand-jury investigations (which John Doe proceedings are like). Compare Craig v. Barney, 678 F.2d 1200, 1202 (4th Cir.1982), and Texas Association of Business v. Earle, 388 F.3d 515, 519–20 (5th Cir.2004), with Monaghan v. Deakins, 798 F.2d 632, 637–38 (3d Cir.1986), vacated in part on other grounds, 484 U.S. 193, 108 S.Ct. 523, 98 L.Ed.2d 529 (1988), and with Kaylor v. Fields, 661 F.2d 1177, 1182 (8th Cir.1981). We need not take sides, because principles of equity, comity, and federalism (Mitchum, 407 U.S. at 243, 92 S.Ct. 2151 ) counsel against a federal role here. See also Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) (standards for preliminary injunction).

One important question is whether the plaintiff suffers irreparable injury. O'Keefe and the Club say yes, because donations have dried up, but that's not the right temporal perspective. We must ask whether the injury would be irreparable if the federal court were to stay its hand. And it is hard to see that kind of injury, because plaintiffs obtained effective relief from Judge Peterson before the federal judge acted—indeed, before filing this suit. True, uncertainty will continue pending appellate review within the Wisconsin judiciary, and this may well affect donations, but the commencement of this federal suit also produces uncertainty, because it entails review by a district judge, three or more appellate judges, and potentially the Supreme Court of the United States. The state case might be over today had the district judge allowed it to take its course.

A second important question is whether the plaintiff has adequate remedies at law (which is to say, without the need for an injunction). That Judge Peterson entertained and granted the motion to quash shows that the answer is yes.

A third important question is whether federal relief is appropriate in light of normal jurisprudential principles, such as the rule against unnecessary constitutional adjudication. Courts must strive to resolve cases on statutory rather than constitutional grounds. See, e.g., New York City Transit Authority v. Beazer, 440 U.S. 568, 582, 99 S.Ct. 1355, 59 L.Ed.2d 587 (1979). Yet the district court waded into a vexed field of constitutional law needlessly. Judge P...