Western Tradition P'ship, Inc. v. Attorney Gen. of Maotana

• Citation: 363 Mont. 220,271 P.3d 1,192 L.R.R.M. (BNA) 2372,2011 MT 328
• Decision Date: 30 December 2011
• Docket Number: No. DA 11–0081.,DA 11–0081.
• Parties: WESTERN TRADITION PARTNERSHIP, INC., a corporation registered in the State of Montana, and Champion Painting, Inc., a Montana corporation, Montana Shooting Sports Association, Inc., a Montana corporation, Plaintiffs, Appellees and Cross–Appellants, v. ATTORNEY GENERAL of the STATE of Montana, and Commissioner of the Commission for Political Practices, Defendants and Appellants.
• Court: United States State Supreme Court of Montana

192 L.R.R.M. (BNA) 2372

2011 MT 328

271 P.3d 1

363 Mont. 220

WESTERN TRADITION PARTNERSHIP, INC., a corporation registered in the State of Montana, and Champion Painting, Inc., a Montana corporation, Montana Shooting Sports Association, Inc., a Montana corporation, Plaintiffs, Appellees and Cross–Appellants,

v.ATTORNEY GENERAL of the STATE of Montana, and Commissioner of the Commission for Political Practices, Defendants and Appellants.

No. DA 11–0081.

Supreme Court of Montana.

Argued and Submitted Sept. 21, 2011.Decided Dec. 30, 2011.

West Codenotes

Negative Treatment Reconsidered

MCA 13–35–227(1).

For Appellants: Steve Bullock (argued), Montana Attorney General; Anthony Johnstone, Solicitor, James P. Molloy, Assistant Attorney General, Helena, Montana.

For Appellees: Margot E. Barg (argued); Wittich Law Firm, P.C., Bozeman, Montana.For Amici Curiae: Amy Poehling Eddy; Bottomly, Eddy & Sandler, Kalispell, Montana (for former Montana Supreme Court Justices William E. Hunt, Sr., W. William Leaphart, James M. Regnier, Terry N. Trieweiler and John Warner).Lawrence A. Anderson, Attorney at Law, Great Falls, Montana (for MTLA, Montana Conservation Voters, Montanans for Corporate Accountability, and Montana League of Rural Voters).Elizabeth L. Griffing, Attorney at Law; Erin Kraft, Clinic Student, University of Montana, Missoula, Montana (for ACLU of Montana Foundation).Jonathan Motl; Morrison Motl & Sherwood, Helena, Montana Jeffrey D. Clements, Clements Law Office, LLC, Concord, Massachusetts (for Free Speech for People; American Sustainable Business Council; Novak and Novack, Inc., d/b/a Mike's Thriftway; Home Resource, Inc., and The American Independent Business Alliance).Mark Mackin, Attorney at Law, Helena, Montana (for Montana Public Interest Research Group and Peoples Power League).Karl J. Englund, Karl J. Englund, P.C., Missoula, Montana; Karl J. Sandstrom, Perkins Coie LLP, Washington, D.C. Michael T. Liburdi, James A. Ahlers, Jerica L. Peters, Perkins Coie LLP, Phoenix, Arizona (for Domini Social Investments LLC; Trillium Asset Management Corporation; Newground Social Investment; Interfaith Center On Corporate Responsibility; Harrington Investments, Inc.; The Sustainability Group of Loring, Wolcott & Coolidge; Calvert Asset Management Company, Inc.; The Christopher Reynolds Foundation, Inc.; and Walden Asset Management, a Division of Boston Trust & Investment Management Company).Lee Bruner, Attorney at Law, Butte, Montana Allen Dickerson, Attorney at Law, Alexandria, Virginia (for Center for Competitive Politics).Chief Justice MIKE McGRATH delivered the Opinion of the Court.

[363 Mont. 222] ¶ 1 The Attorney General of Montana and the Commissioner of Political Practices appeal from the District Court's Order on Cross–Motions for Summary Judgment filed October 18, 2010. We reverse.

PROCEDURAL AND FACTUAL BACKGROUND

¶ 2 Western Tradition Partnership (WTP), Champion Painting and Montana Shooting Sports Foundation (MSSF) sued the Montana Attorney General and the Commissioner of Political Practices seeking a declaration that § 13–35–227(1), MCA, violated their freedom of speech protected by the United States and Montana Constitutions by prohibiting political expenditures by corporations on behalf of or opposing candidates for public office. The parties filed cross-motions for summary judgment along with briefs and supporting materials. The District Court declared the statute unconstitutional, granted summary judgment for the plaintiffs and denied summary judgment to the State defendants. The District Court enjoined enforcement of the statute and denied the motion of Champion and MSSF for an award of attorney fees. The State appeals the order of summary judgment in favor of the plaintiffs, and Champion and MSSF cross-appeal from the denial of their request for attorney fees.

STANDARDS OF REVIEW

¶ 3 This Court reviews a district court's decision on summary judgment using the same standards as the district court under M.R. Civ. P. 56. Where there are cross-motions for summary judgment and the district court is not called upon to resolve factual issues, but only to draw conclusions of law, we review to determine whether those conclusions are correct. Bud–Kal v. City of Kalispell, 2009 MT 93, ¶ 15, 350 Mont. 25, 204 P.3d 738. Accordingly, a moving party is entitled to summary judgment when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Town & Country Foods v. City of Bozeman, 2009 MT 72, ¶ 12, 349 Mont. 453, 203 P.3d 1283. Statutes enjoy a presumption of constitutionality, and a decision on the constitutionality of a statute is subject to plenary review. City of Billings v. Albert, 2009 MT 63, ¶ 11, 349 Mont. 400, 203 P.3d 828.

DISCUSSION

¶ 4 Section 13–35–227, MCA, was originally enacted as an initiative by the Montana voters in 1912. It provides:

(1) A corporation may not make a contribution or an expenditure in connection with a candidate or a political committee that supports or opposes a candidate or a political party.

(2) A person, candidate, or political committee may not accept or receive a corporate contribution described in subsection (1).

(3) This section does not prohibit the establishment or administration of a separate, segregated fund to be used for making political contributions or expenditures if the fund consists only of voluntary contributions solicited from an individual who is a shareholder, employee, or member of the corporation.

(4) A person who violates this section is subject to the civil penalty provisions of 13–37–128.

Section 13–37–128, MCA, provides the sanction for a violation of § 13–35–227, MCA, and allows the Commissioner of Political Practices to recover a civil penalty up to $500 or triple the amount of the unlawful expenditure. A corporation may establish a separate segregated fund called a political committee or PAC to make political expenditures “if the fund consists of only voluntary contributions solicited from an individual who is a shareholder, employee, or member of the corporation.” Section 13–35–227(3), MCA. Montana law requires that all political communications must include the name and address of the person or entity that paid for the communication. Section 13–35–225, MCA.

¶ 5 Champion Painting, Inc., is incorporated under the laws of Montana. It is a single proprietor painting and drywall business with no employees or members, and its sole shareholder is Kenneth Champion. It is the only business corporation in this action. Mr. Champion is personally active in county and state politics, supporting and opposing candidates through blogs, letters to the editor, and speeches. Champion states that he wants to speak on political issues as a spokesman for his corporation and wants to spend corporation funds to independently support or oppose candidates. He believes that doing so would be prohibited by § 13–35–227(1), MCA.

¶ 6 MSSA is a voluntary association of persons who support and promote firearm safety, shooting sports, education, shooting facilities and Second Amendment rights. It was incorporated in 1990 to provide liability shelter for its officers and directors. It has no employees or shareholders and its funding comes primarily from member dues and donations from other organizations. MSSA is led by its founder Gary Marbut, who is active in Montana politics on behalf of the Association. He and the MSSA have operated a political committee under Montana law for over ten years and publicize its grading and endorsements of political candidates in state and national elections. Marbut believes that the MSSA “has a political presence in Montana, and a political reputation that carries some weight with the Montana public by virtue of our long history of activism in Montana.” Nonetheless Marbut wants to use MSSA member dues to support or oppose candidates and believes that § 13–35–227(1), MCA, prohibits MSSA from doing so.

¶ 7 Western Tradition Partnership is an entity incorporated in Colorado in 2008 and registered to do business in Montana. WTP reveals no more than that about itself in this case. Evidence presented by the State in District Court and not refuted by WTP is that its purpose is to act as a conduit of funds for persons and entities including corporations who want to spend money anonymously to influence Montana elections. WTP seeks to make unlimited expenditures in Montana elections from these anonymous funding sources. WTP's operation is premised on the fact, or at least the assumption, that its independent expenditures have a determinative influence on the outcome of elections in Montana.

¶ 8 Upon the plaintiffs' motion for summary judgment, the District Court considered whether § 13–35–227(1), MCA, violates the First Amendment to the United States Constitution to the extent that it restricts WTP, MSSA or Champion from making independent corporate expenditures on behalf of candidates.¹ The District Court applied Citizens United v. F.E.C., ––– U.S. ––––, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010) and determined that § 13–35–227(1), MCA, impacts the corporations' political speech protected by the United States Constitution. The District Court then considered whether the State had demonstrated a compelling interest for the restriction on speech, and whether the restriction is narrowly tailored to achieve that interest. While it answered both questions in the negative, the District Court did not conduct a detailed analysis of the compelling interest question. Instead, it concluded that “ Citizens United is unequivocal: the government may not prohibit independent and indirect corporate expenditures on political speech.” (Quoting Minn. Chamber of Comm. v. Gaertner, 710 F.Supp.2d 868 (D.Minn.2010)). The District Court specifically did not address whether § 13–35–227, MCA, violated the Montana Constitution, and further noted that the decision had “no effect on direct corporate contributions to...