Minn. Citizens Concerned For Life Inc. v. Swanson

• Decision Date: 20 September 2010
• Docket Number: Civil No. 10–2938 (DWF/JSM).
• Citation: 741 F.Supp.2d 1115
• Parties: MINNESOTA CITIZENS CONCERNED FOR LIFE, INC.; The Taxpayers League of Minnesota; and Coastal Travel Enterprises, LLC, Plaintiffs,v.Lori SWANSON, Minnesota Attorney General, in her official capacity; Bob Milbert, John Scanlon, Terri Ashmore, Hilda Bettermann, Felicia Boyd, and 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, and Kathleen Sheehy, Administrative Law Judges of the Minnesota Office of Administrative Hearings, in their official capacities; and Michael Freeman, Hennepin County Attorney, in his official capacity, Defendants.
• Court: U.S. District Court — District of Minnesota

741 F.Supp.2d 1115

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

v.Lori SWANSON, Minnesota Attorney General, in her official capacity; Bob Milbert, John Scanlon, Terri Ashmore, Hilda Bettermann, Felicia Boyd, and 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, and Kathleen Sheehy, Administrative Law Judges of the Minnesota Office of Administrative Hearings, in their official capacities; and Michael Freeman, Hennepin County Attorney, in his official capacity, Defendants.

Civil No. 10–2938 (DWF/JSM).

United States District Court, D. Minnesota.

Sept. 20, 2010.

OPINION TEXT STARTS HEREWest CodenotesRecognized as Unconstitutional2 U.S.C.A. § 441bPrior Version Recognized as UnconstitutionalM.S.A. § 211B.15(2, 3) James R. Magnuson, Esq., and Erik G. Kaardal, Esq., Mohrman & Kaardal, P.A.; and James Bopp, Jr., Esq., Joseph E. La Rue, Esq., Kaylan L. Phillips, Esq., and Richard E. Coleson, Esq., Bopp, Coleson & Bostrom, for Plaintiffs.Alan I. Gilbert, Solicitor General, John S. Garry and Kristyn M. Anderson, Assistant Attorney General, Minnesota Attorney General's Office, counsel for Defendants Lori Swanson, Bob Milbert, John Scanlon, Terri Ashmore, Hilda Bettermann, Felicia Boyd, Greg McCullough, Raymond Krause, Eric Lipman, Manuel Cervantes, Beverly Heydinger, Richard Luis, Steve Mihalchick, Barbara Neilson, and Kathleen Sheehy. Daniel P. Rogan and Beth A. Stack, Assistant Hennepin County Attorneys, Hennepin County Attorney's Office, counsel for Defendant Michael Freeman.

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, District Judge.

INTRODUCTION

The Supreme Court of the United States recently ruled that the government may not prohibit corporations from making independent expenditures for political speech that expressly advocates for or against the election of candidates for political office. Citizens United v. Fed. Election Comm'n, ––– U.S. ––––, 130 S.Ct. 876, 882, 175 L.Ed.2d 753 (2010). In response to that ruling, the Minnesota legislature amended Minnesota law, which formerly prohibited corporations from making independent expenditures, to expressly allow for corporate independent expenditures. Plaintiffs now move for a preliminary injunction striking down Minnesota's recently amended campaign finance laws.¹

In their Verified Complaint for Declaratory and Injunctive Relief, Plaintiffs challenge several Minnesota statutes that relate to campaign finance and disclosure. Plaintiffs allege that the challenged statutes are unconstitutional because they violate First Amendment free speech and association guarantees as well as Fourteenth Amendment equal protection guarantees. Specifically, Plaintiffs seek a declaratory judgment that the following statutes are unconstitutional: Minnesota Statute § 10A.12, subds. 1 and 1a; § 10A.01, subd. 18; § 10A.27, subd. 13; and § 211B.15, subds. 2, 3, and 4. Plaintiffs also seek an injunction enjoining the enforcement of the challenged statutes. For the reasons discussed below, the Court denies Plaintiffs' Motion for Preliminary Injunction.

BACKGROUND

I. The Parties

Plaintiff Minnesota Citizens Concerned for Life (“MCCL”) is a Minnesota nonprofit corporation whose mission is to “secure protections for innocent human life from conception until natural death through effective education, legislation, and political action.” (Compl. ¶¶ 13, 22.) The Taxpayers League of Minnesota (“Taxpayers League”) is a Minnesota non-profit corporation that advocates for “lower taxes, limited government, and full empowerment of taxpaying citizens in accordance with constitutional principles.” ( Id. ¶¶ 14, 29.) Both MCCL and Taxpayers League state that they are exempt from federal income taxes as social welfare organizations under 26 U.S.C. § 501(c)(4). ( Id. ¶¶ 13–14, 23 & 30.) Section 501(c)(4) organizations must be “primarily engaged in promoting in some way the common good and general welfare of the people of the community”—not including “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. Coastal Travel Enterprises, LLC (“Coastal Travel”) is a for-profit Minnesota limited liability company in the business of providing retail travel industry services. (Compl. ¶ ¶ 15, 35.)

Defendants include the Minnesota Attorney General, six members of the Minnesota Campaign Finance and Public Disclosure Board (the “Board”), eight administrative law judges of the Office of Administrative Hearings (“OAH Judges”), and the Hennepin County Attorney.

II. Citizens United and Related Legal Background

In January 2010, the United States Supreme Court issued its decision in Citizens United. In Citizens United, the Court considered the constitutionality of a federal law that prohibited corporations from using general treasury funds to make independent expenditures for speech that directly advocated the election or defeat of a candidate through any form of media, or from making “electioneering communications.” 130 S.Ct. at 887, 900.² The Supreme Court considered the validity of a portion of a federal law, 2 U.S.C. § 441b, that was amended by the Bipartisan Campaign Reform Act of 2002 (“BCRA”), in the context of a challenge brought by a nonprofit corporation that sought to air a documentary film via video-on-demand that was critical of then-Senator Hillary Clinton, who was a candidate in the Democratic Party's 2008 Presidential primary elections. Id. at 887. Under the challenged federal law, corporations and unions were barred from using general treasury funds for express advocacy or for electioneering communications but were allowed to establish a “separate segregated fund” known as a political action committee or PAC. Id. at 887. The segregated fund, or PAC, could only receive donations from stockholders and employees of the corporation. Id. at 888.

The Supreme Court explained that the law before it in Citizens United was an “outright ban, backed by criminal sanctions” that made it a “felony for all corporations—including nonprofit advocacy corporations—either to expressly advocate the election or defeat of candidates or to broadcast electioneering communications within 30 days of a primary election and 60 days of a general election.” Id. at 897. In a 5–4 decision, the Supreme Court held that corporations have a First Amendment right to make independent corporate expenditures to expressly advocate for or against the nomination or election of a candidate for political office.³

After Citizens United was decided, the Minnesota Chamber of Commerce filed suit challenging a Minnesota law that prohibited corporations from directly or indirectly spending corporate funds “to promote or defeat the candidacy” of an individual running for public office. Chamber of Commerce v. Gaertner, 710 F.Supp.2d 868, 870–72 (D.Minn.2010) (“ Chamber ”) ⁴ Relying on Citizens United, the Court in Chamber held that the Minnesota provisions' prohibition on indirect corporate expenditures is unconstitutional, explaining that “[t]he Supreme Court's decision in Citizens United is unequivocal: the government may not prohibit independent and indirect corporate expenditures on political speech.” Chamber, 710 F.Supp.2d at 873–74.

III. Minnesota Campaign Finance Laws

This lawsuit involves Minnesota Statutes Chapter 10A, the Campaign Finance and Public Disclosure Act (the “Act”) and Chapter 211B, the Fair Campaign Practices Act (the “FCPA”).⁵ The Act is administered by the Board. Minn. Stat. § 10A.02, subd. 11. The Board is made up of six members appointed by the Governor with the advice and consent of three-fifths of the members of both the senate and the house of representatives of the Minnesota Legislature. Minn. Stat. § 10A.02, subd. 1. The Board is responsible for investigating alleged violations of the Act and may publicly determine whether probable cause exists to demonstrate that a violation occurred. In addition, the Board may impose civil penalties or enter into conciliation agreements. Id. The Board may bring an action to recover fees and penalties imposed, or it may seek an injunction to enforce the Act. Minn. Stat. § 10A.34, subds. 1a, 2. The Board also issues advisory opinions on the requirements of the Act and adopts rules to carry out the purposes of the Act. Minn. Stat. § 10A.02, subds. 12–13.

In response to Citizens United and Chamber, the Minnesota Legislature amended Minnesota's campaign finance laws. In particular, changes were made to Chapter 10A so as to allow for corporate independent expenditures. The relevant portions of Chapter 10A, as amended, read as follows:

When required for independent expenditures. An association other than a political committee that makes only independent expenditures and disbursements permitted under section 10A.121, subdivision 1, must do so by forming and registering an independent expenditure political fund if the expenditure is in excess of $100 or by contributing to an existing independent expenditure political committee or political fund.

Minn. Stat. § 10A.12, subd. 1a.

INDEPENDENT EXPENDITURE POLITICAL COMMITTEES AND INDEPENDENT EXPENDITURE POLITICAL FUNDS.

Subdivision 1. Permitted disbursements. An independent expenditure political committee or an independent expenditure political fund, in addition to making independent expenditures, may:

...

(3) make contributions to other independent expenditure political committees or independent expenditure political funds.

Minn. Stat. § 10A.121, subd. 1.⁶ Minnesota law provides that...