Missourians for Fiscal Accountability v. Klahr

• Decision Date: 29 July 2016
• Docket Number: No. 15-2172,15-2172
• Citation: 830 F.3d 789
• Parties: Missourians for Fiscal Accountability, Plaintiff-Appellant v. James Klahr, in his official capacity as Executive Director of the Missouri Ethics Commission, Defendant-Appellee
• Court: U.S. Court of Appeals — Eighth Circuit

830 F.3d 789

Missourians for Fiscal Accountability, Plaintiff-Appellant

v.James Klahr, in his official capacity as Executive Director of the Missouri Ethics Commission, Defendant-Appellee

No. 15-2172

United States Court of Appeals, Eighth Circuit.

Submitted: February 11, 2016

Filed: July 29, 2016

Stephen M. Hoersting, Gober Hilgers PLLC, Austin, TX, argued (Chris K. Gober, Gober Hilgers PLLC, Austin, TX, Caleb M. Jones, Jones and Associates, LLC, Columbia, MO, on the brief), for appellant.

J. Andrew Hirth, Asst. Atty. Gen., Jefferson City, MO, argued (Chris Koster, Atty. Gen., on the brief), for appellee.

Before LOKEN, ARNOLD, and BENTON, Circuit Judges.

BENTON, Circuit Judge.

Missourians for Fiscal Accountability (MFA) formed a campaign committee on October 22, 2014—less than 30 days before the November 4 election—in violation of Missouri law section 130.011(8).¹ MFA sued the executive director of the Missouri Ethics Commission (MEC), in his official capacity, seeking to declare unconstitutional the 30-day formation deadline. The district court granted a temporary restraining order, but after the election, dismissed MFA's suit as not ripe. MFA appeals. Having jurisdiction under 28 U.S.C. § 1291, this court reverses and remands.

I.

Campaign committees are “formed by an individual or group of individuals to receive contributions or make expenditures and whose sole purpose is to support or oppose the qualification and passage of one or more particular ballot measures in an election....” § 130.011(8). These committees “shall be formed no later than thirty days prior to the election” and “shall terminate the later of either thirty days after the general election or upon the satisfaction of all committee debt after the general election....” Id.

“Any person who knowingly accepts or makes a contribution or makes an expenditure in violation of any provision of this chapter [130] ... shall be held liable to the state in civil penalties in an amount equal to any such contribution or expenditure.” § 130.072. “Upon vote of at least four members, the commission may initiate formal judicial proceedings seeking to obtain any of the following orders: ... (2) Pay any civil penalties required by ... chapter 130.” § 105.961.5(2). The MEC has through “reconciliation agreements or civil action, the power to seek fees for violations in an amount not greater than one thousand dollars or double the amount involved in the violation.” § 105.961.4(6). In its verified answer, the MEC says that it negotiates payment of a fee with the treasurer of a campaign committee that forms within 30 days of the election. Consent orders show that the MEC negotiates payment of part of the fee (about 10 percent). The remainder of the fee is then stayed until “any further violation of the campaign finance laws under Chapter 130, RSMo, within the two-year period from the date of this order....”²

Thirteen days before the November 2014 general election, a group of individuals formed MFA as a campaign committee. § 130.011(8). That same day, MFA notified the IRS that it was a political organization under section 527, claiming it was “created to ensure that the finances of the State of Missouri are properly represented and explained to the voting citizens of the State during the legislative process.”³ The next day, MFA filed its Articles of Incorporation of a nonprofit corporation in Missouri, stating its purpose was the “education of general public on issues concerning fiscal responsibility.” MFA listed its duration as “perpetual,” and it remains in good standing with the State. See Missouri Online Business Filing: Search for a Business Entity , available at https://bsd.sos.mo.gov/BusinessEntity/BESearch.aspx?SearchType=0 (last visited July 26, 2016); IRS: Search Political Organization Disclosures , available at https://forms.irs.gov/app/pod/basicSearch/search?execution=e1s1 (last visited July 26, 2016). See generally Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 648 (7th Cir. 2011) (recognizing “the authority of a court to take judicial notice of government websites”).

According to MFA, section 130.011(8) prohibited it from receiving contributions or making expenditures because it formed less than 30 days before the 2014 general election. MFA thus initially refrained from receiving contributions and making expenditures. Eight days after formation, MFA sought declaratory and injunctive relief from the 30-day formation deadline. MFA asserted that the formation deadline unconstitutionally burdened its First Amendment rights to free speech and political association. Two days before the election—on November 2—the district court issued a temporary restraining order. See Missourians for Fiscal Accountability v. Klahr , 2014 WL 5530996 (W.D. Mo. Nov. 2, 2014). MFA then received contributions and spent $525 on robocalls.

After the election, MFA filed the required termination statement. See § 130.021.8. Though the district court found MFA's claims not moot, it dismissed MFA's claims on ripeness grounds, without prejudice. See Missourians for Fiscal Accountability v. Klahr , 2015 WL 1893359 (W.D. Mo. Apr. 27, 2015). MFA appeals.

II.

The MEC asserts MFA lacks standing because it faces no actual or imminent threat of a concrete and particularized injury-in-fact.

“Standing is always a ‘threshold question’ in determining whether a federal court may hear a case.” 281 Care Comm. v. Arneson , 638 F.3d 621, 627 (8th Cir. 2011). A party invoking federal jurisdiction has the burden of establishing standing “for each type of relief sought.” Summers v. Earth Island Inst. , 555 U.S. 488, 493, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009). “[A]n actual controversy must be extant at all stages of review, not merely at the time the complaint is filed.” Preiser v. Newkirk , 422 U.S. 395, 401, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975). See also Salazar v. Buono , 559 U.S. 700, 731, 130 S.Ct. 1803, 176 L.Ed.2d 634 (2010) (Scalia, J., concurring) (“A plaintiff cannot sidestep Article III's requirements by combining a request for injunctive relief for which he has standing with a request for injunctive relief for which he lacks standing.”).

[T]o seek injunctive relief, a plaintiff must show that he is under threat of suffering ‘injury in fact’ that is concrete and particularized; the threat must be actual and imminent, not conjectural or hypothetical; it must be fairly traceable to the challenged action of the defendant; and it must be likely that a favorable judicial decision will prevent or redress the injury.

Summers , 555 U.S. at 493, 129 S.Ct. 1142, quoted in Bernbeck v. Gale , 829 F.3d 643, 645–47, 2016 WL 3769481, at *2 (8th Cir. July 14, 2016). To seek declaratory relief, standing must exist “at the time of the hearing....” Golden v. Zwickler , 394 U.S. 103, 108, 89 S.Ct. 956, 22 L.Ed.2d 113 (1969).

In the First Amendment context, “two types of injuries may confer Article III standing to seek prospective relief.” Ward v. Utah , 321 F.3d 1263, 1267 (10th Cir. 2003), citing Mangual v. Rotger – Sabat , 317 F.3d 45, 56 (1st Cir. 2003). First, MFA could establish standing by alleging “an intention to engage in a course of conduct arguably affected with a constitutional interest, but proscribed by a statute, and there exists a credible threat of prosecution thereunder.” Babbitt v. Farm Workers , 442 U.S. 289, 298, 99 S.Ct. 2301, 60 L.Ed.2d 895 (1979). Second, MFA can establish standing by alleging that it self-censored. 281 Care Comm. , 638 F.3d at 627. “[A] First Amendment plaintiff who faces a credible threat of future prosecution suffers from an ongoing injury resulting from the statute's chilling effect on his desire to exercise his First Amendment rights.” Ward , 321 F.3d at 1267 (internal quotations omitted) (emphasis in original). Indeed, “when there is a danger of chilling free speech, the concern that constitutional adjudication be avoided whenever possible may be outweighed by society's interest in having the statute challenged.” Secretary of State of Md. v. Joseph H. Munson Co. , 467 U.S. 947, 956, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984) (applying this principle to the prudential concern with third-party standing), cited by Cooksey v. Futrell , 721 F.3d 226, 235 (4th Cir. 2013) (“The leniency of First Amendment standing manifests itself most commonly in the doctrine's first element: injury-in-fact.”). See also Arizona Right to Life Political Action Committee v. Bayless , 320 F.3d 1002, 1006 (9th Cir. 2003) (“[W]hen the threatened enforcement effort implicates First Amendment rights, the inquiry tilts dramatically toward a finding of standing.”).

In its verified complaint, MFA says it engaged in self-censorship to comply with section 130.011(8). For 11 days—from formation until the entry of the temporary restraining order—MFA did not receive contributions or make expenditures. MFA's treasurer swears he “prohibited any agent of the organization from soliciting and/or accepting contributions or pledges from any corporate entity based on the prohibitions found in Section 130.011 ... of the Missouri Revised Statutes.” And, the verified complaint adds that “[b]ut for the thirty-day blackout period ... and the substantial likelihood of being subjected to a criminal prosecution,” MFA would have “immediately [sought] to raise and expend funds in support of Proposition 10.”

In analyzing a claim of standing through self-censorship, “[t]he relevant inquiry is whether a party's decision to chill his speech in light of the challenged statute was ‘objectively reasonable.’ ” 281 Care Comm. , 638 F.3d at 627. Even when complaints against plaintiffs do not reach “the criminal stage and no criminal prosecution was ever threatened, non-criminal consequences contemplated by a challenged statute can also contribute to the objective reasonableness of alleged chill.” Id. at 630. By Missouri law, “[a]ny person who knowingly accepts or makes a contribution or makes an expenditure in violation of any provision of...