Tennesseans for Sensible Election Laws v. Tenn. Bureau of Ethics & Campaign Fin.

Decision Date12 December 2019
Docket NumberNo. M2018-01967-COA-R3-CV,M2018-01967-COA-R3-CV
PartiesTENNESSEANS FOR SENSIBLE ELECTION LAWS v. TENNESSEE BUREAU OF ETHICS AND CAMPAIGN FINANCE, REGISTRY OF ELECTION FINANCE, AND DAVIDSON COUNTY DISTRICT ATTORNEY GENERAL
CourtTennessee Court of Appeals

Appeal from the Chancery Court for Davidson County

No. 18-821-III

Ellen H. Lyle, Chancellor

This appeal involves a constitutional challenge to two Tennessee statutes that are part of Tennessee's campaign finance law. Prior to trial, the chancery court granted several motions in limine that effectively excluded all of the testimonial and documentary evidence proffered by the State in defense of the statutes. With no evidence presented by the State, the trial court concluded that the State failed to meet its burden of proof as to the constitutionality of the two statutes. Consequently, the trial court held that Tennessee Code Annotated sections 2-10-117 and 2-10-121 violate the First and Fourteenth Amendments to the United States Constitution and Article I, section 19 of the Tennessee Constitution. The State appeals. The State first argues that the trial court abused its discretion by excluding the State's evidence. Additionally, the State argues that the constitutional challenge to one of the statutes has become moot due to a statutory amendment. Finally, the State argues that the remaining statute is constitutional. For the following reasons, we affirm and remand for further proceedings.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed and Remanded

CARMA DENNIS MCGEE, J., delivered the opinion of the court, in which J. STEVEN STAFFORD, P.J., W.S., and ARNOLD B. GOLDIN, J., joined.

Herbert H. Slatery III, Attorney General and Reporter; Andrée S. Blumstein, Solicitor General; Janet M. Kleinfelter, Deputy Attorney General; Matthew F. Jones, Assistant Attorney General; and Kelley L. Groover, Assistant Attorney General, for the appellant, Tennessee Bureau of Ethics and Campaign Finance, Registry of Election Finance.

Daniel A. Horwitz and Jamie R. Hollin, Nashville, Tennessee, for the appellee, Tennesseans for Sensible Election Laws.

Braden H. Boucek, Nashville, Tennessee, for the Amicus Curiae, Beacon Center of Tennessee.

Brian Kelsey, Chicago, Illinois, and Jacob Huebert, pro hac vice, Phoenix, Arizona, for the Amici Curiae, Liberty Justice Center and Goldwater Institute.

OPINION
I. FACTS & PROCEDURAL HISTORY

Tennesseans for Sensible Election Laws ("TSEL") describes itself as a nonpartisan nonprofit group that engages in substantial advocacy efforts regarding election related issues in Tennessee. To further its objectives, TSEL makes direct monetary contributions to state and local candidates for public office across the State of Tennessee. During 2018, TSEL expended over $3,000 on direct campaign contributions and election expenditures for and against various candidates and measures.

Because of this political activity, TSEL must comply with Tennessee's "Campaign Financial Disclosure Act of 1980," Tenn. Code Ann. § 2-10-101, et seq., in addition to the "Campaign Contribution Limits Act of 1995," Tenn. Code Ann. § 2-10-301, et seq.1 Under these Acts, any group that "receives contributions or makes expenditures to support or oppose any candidate for public office or measure during a calendar year in an aggregate amount exceeding one thousand dollars ($1,000)" meets the definition of a "political campaign committee." Tenn. Code Ann. § 2-10-102(12)(B). There are several types of political campaign committees, including multicandidate political campaign committees, single-candidate political campaign committees, and single-measure political campaign committees. Tenn. Comp. R. & Regs. 0530-01-01-.01(5). TSEL meets the definition of a "[m]ulticandidate political campaign committee" because it is "a political campaign committee to support or oppose two (2) or more candidates for public office or two (2) or more measures."2 Tenn. Code Ann. § 2-10-102(9).

On July 26, 2018, TSEL filed a verified complaint for injunctive and declaratory relief in the chancery court of Davidson County, challenging the constitutionality of two statutes applicable to multicandidate political campaign committees. TSEL alleged that ithad endorsed a certain candidate for state representative and desired to make an immediate contribution of $500 to his campaign prior to the upcoming competitive primary election on August 2, but it was prevented from doing so by Tennessee Code Annotated section 2-10-117, which provides:

No multicandidate political campaign committee other than a committee controlled by a political party on the national, state, or local level or by a caucus of such political party established by members of either house of the general assembly shall make a contribution to any candidate after the tenth day before an election until the day of the election.

TSEL alleged that its proposed contribution would be illegal because it is a nonpartisan multicandidate political campaign committee, while a partisan or party-controlled political campaign committee would be permitted to contribute under the exception provided in the statute. TSEL claimed that a violation of the statute could subject it to criminal prosecution with a sentence of up to thirty days and/or a civil penalty up to $10,000. See Tenn. Code Ann. §§ 2-19-102, 40-35-111(e)(3), 2-10-110(a)(2).

TSEL sought a preliminary injunction prohibiting the State (through the Registry and/or the District Attorney General) "from prosecuting [it] either criminally or civilly" for contributing to the aforementioned candidate. TSEL also sought a declaratory judgment and a permanent injunction prohibiting enforcement of the statute on the basis that it was unconstitutional "for multiple reasons." TSEL alleged that the statute contained an impermissible speaker preference, permitting only groups controlled by political parties or caucuses to contribute during the final ten-day period, discriminating on the basis of identity and political affiliation. TSEL asserted that the statute imposed a content-based restriction on disfavored political speech and association. It also alleged that this blanket ban on political speech during the most critical phase of an election was a severe burden that was not sufficiently tailored to a compelling state interest. TSEL claimed that the ten-day blackout period had not only prevented it from making contributions but also caused it to make contributions at such an early stage that it was not advantageous, as one candidate it supported had withdrawn from the race prior to the election and another returned a mailed donation because it was not received before the blackout period began.

Additionally, TSEL alleged that Tennessee Code Annotated section 2-10-121 was unconstitutional, because, at the time, it imposed a $100 annual fee exclusively on nonpartisan multicandidate political action committees:

No later than January 31 of each year, each multicandidate political campaign committee registered with the registry of election finance shall pay a registration fee to be determined by rule promulgated pursuant to § 4-55-103(1). . . . All fees collected under this section shall be retained andused for expenses related to maintaining an electronic filing system. This section shall not apply to any statewide political party as defined in § 2-1-104 or subsidiaries of the political party.

Tenn. Code Ann. § 2-10-121 (2018). TSEL emphasized that the fee is assessed exclusively against nonpartisan multicandidate political campaign committees, but not party-controlled political campaign committees or individual contributors. It alleged that this assessment against "disfavored political speakers" was unconstitutional, as it expressly discriminated based on political association, charging only "disfavored non-party political speakers" the $100 fee while charging partisan speakers nothing. TSEL asserted that section 121 was unconstitutional both facially and as applied because it discriminated on the basis of political association by exempting both political parties and individual political speakers. It sought a declaratory judgment and a permanent injunction prohibiting enforcement of section 121.

In summary, TSEL asserted that Tennessee Code Annotated sections 2-10-117 and -121 were unconstitutional, both facially and as applied, violating the First and Fourteenth Amendments to the United States Constitution and Article I section 19 of the Tennessee Constitution. Along with the filing of its complaint, TSEL also filed a motion for preliminary injunction. "Barring objection from Defendants," TSEL moved that the trial on the merits be advanced and consolidated with the preliminary injunction hearing pursuant to Tennessee Rule of Civil Procedure 65.04(7).3

The Attorney General and Reporter for the State of Tennessee filed a response on behalf of the Registry and District Attorney General. The State asserted that the General Assembly added Tennessee Code Annotated section 2-10-117 and its contribution ban to the statutory scheme in 1995 as part of its effort to place limits on campaign contributions and expand reporting requirements. See 1995 Pub. Acts, c. 531, § 10, eff. Jan. 1, 1996, "Campaign Contribution Limits Act of 1995." The State explained that political campaign committees are required to file disclosure reports detailing their contributions to candidates pursuant to Tennessee Code Annotated section 2-10-105(c) and (d). These disclosure reports are due at various intervals, and one particular pre-election report is due seven days before an election. Tenn. Code Ann. § 2-10-105(c)(1). The pre-election report must detail contributions "through the tenth day" before the election. Id. Thus, the State argued that the contribution ban in section 117 was "directly tied to" the pre-election disclosure statements and "a crucial part of the disclosure scheme." It suggested that the statute...

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