Rio Grande Found. v. Oliver
| Decision Date | 14 October 2020 |
| Docket Number | No. Civ. 1:19-cv-01174-JCH-JFR,Civ. 1:19-cv-01174-JCH-JFR |
| Parties | RIO GRANDE FOUNDATION and ILLINOIS OPPORTUNITY PROJECT, Plaintiffs, v. MAGGIE TOULOUSE OLIVER, in her official capacity as Secretary of State of New Mexico, Defendant. |
| Court | U.S. District Court — District of New Mexico |
On August 25, 2020, Plaintiffs Rio Grande Foundation ("RGF") and Illinois Opportunity Project ("IOP") (collectively, "Plaintiffs") filed a Motion for Preliminary Injunction and Memorandum of Law in Support Thereof (ECF No. 33). To protect their First Amendment rights, Plaintiffs request a preliminary injunction to enjoin Defendant Secretary of State of State of New Mexico Maggie Toulouse Oliver ("Defendant") from applying 2019 Senate Bill 3 to Plaintiffs by requiring them to disclose certain financial supporters and to expressly state their respective group's sponsorship on the political mailings they intend to send within 60 days of the November 3, 2020 election. For purposes of this motion, Plaintiffs are only seeking "an order protecting their specific organizations (an as-applied challenge)." Pls.' Mot. 6-7, ECF No. 33. The parties indicated that an evidentiary hearing on the motion is not necessary for the Court's resolution of the motion. See Order, ECF No. 34, and Court's Docket Sheet. The Court, having considered the motion, briefs, evidence, and applicable law, concludes that the motion for preliminary injunction should be denied.
Plaintiff IOP is a 501(c)(4) social-welfare organization based in Illinois that engages in issue advocacy, educating the public in Illinois and other states about policy that is driven by the principles of liberty and free enterprise. Decl. of Matthew Besler ¶¶ 1, 3-4, ECF No. 33-1. IOP works on issues that are strongly opposed by public-employee labor unions, including collective-bargaining reform, pension reform, and school choice. Id. ¶ 15. IOP also is directly critical of some public officials, such as the Illinois governor and speaker of the house. Id. ¶ 16. IOP intends to spend over $9,000 on mailings to thousands of New Mexico voters within 60 days of the 2020 general election. Id. ¶ 6. The mailings will mention the upcoming referendum on amending the New Mexico Constitution to end elections for the New Mexico Public Service Commission and provide information about the American tradition of governmental accountability to voters. Id.
According to its 2018 IRS Form 990, IOP has a budget over $3 million.1 IOP receives general-fund support from a variety of sources, including donations over $5,000 in a single contribution or over $5,000 total in a two-year cycle. Id. ¶ 8. IOP protects donor privacy and does not publicly disclose their donors. Id. ¶ 9. IOP fears that disclosure of its members, supporters and donors may subject them to official retaliation or to retaliation and harassment by intolerant elements of society. Id. ¶¶ 10-11. Based on his fundraising experience, Matthew Besler, the president and a board member of IOP, believes that donors will be less likely to contribute to the IOP and he knows of several donors who would discontinue their support if they were subject to disclosure. Id. ¶¶ 2, 12. IOP is concerned that disclosure would change the focus from its messageto the people paying for the message and that it will lose donors. See id. ¶¶ 13-14, 20. Based on the experience of other organizations, including those that have taken on public employee unions and have supported economic-liberty candidates who in turn support traditional marriage, IOP fears its donors may be subject to retaliation by union interests, harassment by activists, and negative responses by government officials who it criticizes and that it will lose donors as a result of the fear of retaliation. See id. ¶¶ 17-20.
Plaintiff RGF is a 501(c)(3) charitable and educational organization based in New Mexico whose mission is to inform New Mexicans of the importance of individual freedom, limited government, and economic opportunity. See Decl. of Paul Gessing ¶ 1, ECF No. 33-2. RGF engages in issue advocacy in New Mexico on issues related to its mission, including collective-bargaining reform, pension reform, school choice, right-to-work legislation, the Second Amendment, opposition to renewable portfolio mandates, and criticism/skepticism of climate change. See id. ¶¶ 14-16. RGF has been critical of the New Mexico governor and New Mexico legislators, including questioning the State's COVID-19 mandates. Id. ¶ 17.
RGF publishes a "Freedom Index" that tracks New Mexico state legislators' floor votes on bills important to RGF. Id. ¶ 5. RGF posted on its website its "Freedom Index" scorecards from 2015-20. See Rio Grande Foundation, http://riograndefoundation.org/legislative-scorecard/#/ (last visited Oct. 8, 2020). Prior to the November 3, 2020 election, RGF plans to publicize the results of its "Freedom Index" using mailings that will mention the name of incumbent legislators and provide information about his or her votes and score on the Freedom Index. Gessing Decl. ¶ 5,ECF No. 33-2. RGF will spend over $3,000 in individual legislative districts for paid communications by mail to thousands of New Mexico voters within 60 days of the election. Id.2
RGF receives general-fund support from multiple sources, including donations over $5,000 in a single contribution or over $5,000 total in a two-year cycle. Id. ¶ 7. With one exception, RGF's list of members, supporters, and donors is private. Id. ¶ 8. Like IOP, RGF fears that if it must disclose its donors, they may be subject to official retaliation or to retaliation and harassment by intolerant elements of society, including boycotts, online harassment, and social ostracism. See id. ¶¶ 9-10. RGF particularly fears retaliation by union interests, harassment by activists who oppose the issues RGF supports, and negative responses by government officials. See id. ¶¶ 18-21. According to Paul Gessing, RGF's president and chief executive officer, he is aware of at least one past instance where individuals or organizations affiliated with certain causes or candidates in New Mexico were threatened with or experienced retaliation from other public leaders. Id. ¶¶ 2, 9. Based on his fundraising experience, Mr. Gessing believes that some donors would not continue to do so if subject to disclosure. Id. ¶¶ 11, 22.
In 2019, Senate Bill 3 became law, expanding the definition of "independent expenditure" to include an expenditure "made to pay for an advertisement that ... refers to a clearly identified candidate or ballot question and is published and disseminated to the relevant electorate in New Mexico within thirty days before the primary election or sixty days before the general election at which the candidate or ballot question is on the ballot." N.M. Stat. Ann. § 1-19-26(N)(3)(c).3Senate Bill 3 also enacted a new section of the Campaign Reporting Act that added reporting requirements for independent expenditures not otherwise required to be reported. See id. § 1-19-27.3(A); 2019 New Mexico Laws Ch. 262 (S.B. 3), Sec. 1(A). A person who makes independent expenditures of more than $9,000 in a statewide election or more than $3,000 in a non-statewide election "exclusively from a segregated bank account consisting only of funds contributed to the account by individuals to be used for making independent expenditures" must report the name, address, and amount of each contribution made by each contributor who gave more than $200 to the segregated bank account in the election cycle. N.M. Stat. Ann. § 1-19-27.3(D)(1). If the expenditures were made from a general fund (not a segregated bank account), a person who makes independent expenditures of more than $9,000 in a statewide election or more than $3,000 in a non-statewide election must report the name, address, and amount of each contribution made by each contributor who gave more than $5,000 to the person during an election cycle. See id. § 1-19-27.3(D)(2). For contributors of more than $5,000 to a general fund, the disclosure rules do not apply "if the contributor requested in writing that the contribution not be used to fund independent or coordinated expenditures or to make contributions to a candidate, campaign committee or political committee." Id.
Further, Senate Bill 3 added another new section to the Campaign Reporting Act regarding disclaimers in advertisements. See 2019 New Mexico Laws Ch. 262 (S.B. 3), Sec. 2. A person making an independent expenditure for an advertisement exceeding $1,000 must include in the advertisement "the name of the candidate, committee, or other person who authorized and paid for the advertisement." N.M. Stat. Ann. § 1-19-26.4. The disclosures are searchable on the Secretary of State's website by the public. See Secretary of State, Independent Expenditure,https://portal.sos.state.nm.us/IESearch/ (last visited Oct. 8, 2020). A person who violates the Campaign Reporting Act may be punished by a fine of not more than $1,000 or by imprisonment for not more than a year or both. N.M. Stat. Ann. § 1-19-36(A).
Consequently, IOP and RGF, groups that intend engage in issue advocacy within 60 days of the November 3, 2020 general election and who intend to spend, respectively, more than $9,000 on statewide and $3,000 on non-statewide mailings to New Mexico voters, are subject to the disclosure and disclaimer requirements of the Campaign Reporting Act. Plaintiffs assert that, by requiring them to disclose their financial supporters and identify themselves in their mailings, Defendant violates their First and Fourteenth Amendment rights. See Am. Compl. ¶¶ 37-44, ECF No. 13. Plaintiffs move the Court for a preliminary injunction, arguing...
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