TYMKOVICH, Circuit Judge.
This case requires us to consider state campaign finance regulations in light of the Supreme Court's ruling in Citizens United v. FEC, 558 U.S. 310, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010). Citizens United held that federal election law violated the First Amendment by restricting independent political spending because the speaker was a corporation — the holding allowed corporate entities to make unlimited independent expenditures supporting or opposing issues or candidates as long as the expenditures were not coordinated with a candidate for federal office.
Before the Court's decision in Citizens United in 2010, however, New Mexico had introduced a new state campaign finance law that imposed a host of contribution and other limitations on political parties, political action committees, and donors to such entities. In particular for purposes of this appeal, the state limited the amount an individual may contribute to a political committee. Potential donors, political parties, and political committees mounted an as-applied challenge to the law in federal district court, contending several of its provisions violated the First Amendment.
The district court agreed and issued a preliminary injunction, enjoining the enforcement of two provisions: (1) limits on contributions to political committees for use in federal campaigns, and (2) limits on contributions to political committees that
As we explain below, the district court was correct that the challenged provision cannot be reconciled with Citizens United and, as a result, did not err in entering a preliminary injunction.
New Mexico enacted in 2009 a measure that imposed campaign contribution limits for statewide and nonstatewide elections. New Mexico's law, N.M. Stat. § 1-19-34.7, targets contributions to political committees and candidates in several ways.
The statute caps contributions from individuals to political committees at $5,000, contributions to candidates for nonstatewide office at $2,300, and contributions to candidates for statewide office at $5,000. Id. § 1-19-34.7(A)(1).
The Plaintiffs — an assortment of state and local political parties, political action committees (PACs), and individuals — contend that these campaign finance provisions are unconstitutional as applied to them. The challengers include both state and local party organizations: the Republican Party of New Mexico (NM-GOP), the Republican Party of Dona Ana County, and the Republican Party of Bernalillo County. The PACs include the New Mexicans for Economic Recovery Political Action Committee (NMER) and New Mexico Turn Around (NMTA), two entities organized to engage in express advocacy. NMER is registered as a political committee with the New Mexico Secretary of State. Its stated purpose is to make independent expenditures but not contributions to candidates' campaigns. NMTA has a broader purpose: to make both independent expenditures and contributions to candidates' campaigns.
Claiming an infringement on their First Amendment right to engage in protected political speech, the organizations sought in district court a preliminary injunction. The district court ultimately enjoined two provisions but only one is on appeal: a
New Mexico timely appealed the district court's grant of the preliminary injunction, and we exercise jurisdiction under 28 U.S.C. § 1292(a)(1).
To obtain a preliminary injunction the moving party must demonstrate: (1) a likelihood of success on the merits; (2) a likelihood that the moving party will suffer irreparable harm if the injunction is not granted; (3) the balance of equities is in the moving party's favor; and (4) the preliminary injunction is in the public interest. Winter v. NRDC, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). We review the grant of a preliminary injunction for abuse of discretion. RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir.2009).
This appeal centers on the first prong, the plaintiffs' likelihood of success on the merits.
The First Amendment "has its fullest and most urgent application to speech uttered during a campaign for political office." Ariz. Free Enter. Club's Freedom Club PAC v. Bennett, ___ U.S. ___, 131 S.Ct. 2806, 2817, 180 L.Ed.2d 664 (2011) (internal quotation marks omitted). A "major purpose of the First Amendment was to protect the free discussion of governmental affairs" especially of candidates and their beliefs and performance. Id. at 2828. And as the Supreme Court explained in its seminal campaign regulation decision, Buckley v. Valeo, 424 U.S. 1, 14, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam), political speech is the lifeblood of democracy — it is the means by which citizens learn about candidates, hold their leaders accountable, and debate the issues of the day.
But speech comes in many forms, and the Supreme Court in Buckley recognized that the financing and spending necessary to enable political speech receives substantial constitutional protection. See id. at 19, 96 S.Ct. 612. In fact, the Court observed that restrictions on money spent on speech are the equivalent of restrictions on speech itself: "A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached." Id. For these reasons, laws that burden political speech are subject to careful judicial review.
Buckley was careful to draw a distinction between limitations on expenditures
By contrast, contribution limitations that restrict "the amount that any one person or group may contribute to a candidate or political committee entail[] only a marginal restriction upon the contributor's ability to engage in free communication." Buckley, 424 U.S. at 20-21, 96 S.Ct. 612. A contribution only "serves as a general expression of support for the candidate and his views," and the quantity of the contribution does not significantly affect this political communication. Id. But such limitations still implicate core First Amendment rights. See Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290, 299, 102 S.Ct. 434, 70 L.Ed.2d 492 (1981) ("Placing limits on contributions which in turn limit expenditures plainly impairs freedom of expression."). Thus, while not subject to strict scrutiny, contribution limits still involve a "significant interference with associational rights" and "must be closely drawn to serve a sufficiently important interest." Davis v. FEC, 554 U.S. 724, 740 n. 7, 128 S.Ct. 2759, 171 L.Ed.2d 737 (2008); Buckley, 424 U.S. at 25, 96 S.Ct. 612.
Contributions can come in several forms. In addition to direct contributions to candidates, for example, expenditures coordinated with a candidate are seen as indirect contributions, since they amount to nothing more than spending by the candidate himself. Id. at 46 n. 53, 96 S.Ct. 612. The Court has also upheld limits on contributions to political committees that make multiple contributions to candidates, limits on contributions to political parties, and restrictions on political parties' coordinated expenditures with their candidates. See Cal. Med. Ass'n v. FEC, 453 U.S. 182, 101 S.Ct. 2712, 69 L.Ed.2d 567 (1981) (Cal-Med) (multi-candidate political committees); McConnell v. FEC, 540 U.S. 93, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003) (contributions to political parties), overruled in part by Citizens United, 558 U.S. at 365-66, 130 S.Ct. 876; Colorado II, 533 U.S. at 465, 121 S.Ct. 2351 (coordinated expenditures by political parties).
But ever since Buckley, the Court has struck down limits on independent expenditures, i.e., those that are not coordinated with candidates. The Court's rationale has been that independent expenditures by individuals do not pose the same risks as direct contributions. 424 U.S. at 47-48, 96 S.Ct. 612. And in a series of cases since Buckley the Court has repeatedly struck down limits on the independent expenditures by political parties, political action
The Buckley framework, importantly, recognizes only a narrow governmental interest in regulating political speech — preventing corruption or the appearance of corruption. When Buckley "identified a sufficiently important governmental interest in preventing corruption or the appearance of corruption, that interest was limited to quid pro quo corruption." Citizens United, 558 U.S. at 359, 130 S.Ct. 876. "The hallmark of corruption is the financial quid pro quo: dollars for political favors." NCPAC, 470 U.S. at 497, 105 S.Ct. 1459.
Citizens United stepped into a long-running debate over what other governmental interests might satisfy the government's regulatory interest in political speech. In that case, Citizens United, a non-profit corporation, produced a documentary highly critical of Hillary Clinton, then a presidential candidate in the 2008 Democratic primaries. 558 U.S. at 319-20, 130 S.Ct. 876. Because of the movie's strong criticism of Clinton's candidacy, Citizens United worried the FEC might deem the movie an "electioneering communication," which, under 2 U.S.C. § 441b, corporations and unions were prohibited from making. An electioneering communication was defined by federal law as "any broadcast, cable, or satellite communication" that "refers to a clearly identified candidate for Federal office" and was made within sixty days of a general election or thirty days of a primary election. 2 U.S.C. § 434(f)(3)(A). The FEC regulation further defined an "electioneering communication" as one that was "publicly distributed." 11 C.F.R. § 100.29. Citizens United sought declaratory and injunctive relief against the FEC, arguing that § 441b was unconstitutional as applied to its movie.
The Supreme Court struck down § 441b. The Court held that independent expenditures could not be restricted merely because of the corporate identity of the speaker. In doing so, the Court overruled Austin v. Michigan Chamber of Commerce, 494 U.S. 652, 110 S.Ct. 1391, 108 L.Ed.2d 652 (1990), a plurality opinion which had held that restrictions on political speech by corporations furthered a permissible governmental interest in reducing the distorting financial influence of business corporations on the political process. The Court rejected Austin's application of a broad anti-distortion rationale to support campaign finance restrictions and held that the only valid interest for restricting political speech was preventing quid pro quo corruption. Citizens United, 558 U.S. at 359, 130 S.Ct. 876. "The absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate." Id. at 357, 130 S.Ct. 876 (quoting Buckley, 424 U.S. at 47, 96 S.Ct. 612).
Citizens United thus resolved a longstanding debate over whether other governmental interests could support restrictions on campaign financing.
Citizens United also opened the playing field for independent expenditures by non-profit corporations. After Citizens United, the Court no longer perceives a "threat of quid pro quo corruption"
Id. at 153 (internal quotation marks omitted).
It is worth repeating: the Court firmly rejected the contention that independent expenditures give rise to corruption or the appearance of corruption. "The appearance of influence or access ... will not cause the electorate to lose faith in our democracy. By definition, an independent expenditure is political speech ... not coordinated with a candidate." Citizens United, 558 U.S. at 360, 130 S.Ct. 876. And, in any event, as the Court saw it, "[i]ngratiation and access ... are not corruption," id., since "[f]avoritism and influence are not ... avoidable in representative politics. It is in the nature of an elected representative to favor certain policies, and, by necessary corollary, to favor the voters and contributors who support those policies." Id. at 359, 130 S.Ct. 876 (quoting McConnell, 540 U.S. at 297, 124 S.Ct. 619 (Kennedy, J., concurring in part and dissenting in part)).
In sum, Citizens United resolved the right of a non-profit corporation to make independent expenditures without limits as to their source and amount. In its wake, the circuit courts have also uniformly struck down limitations on contributions to entities engaged in independent expenditures. Those cases are relevant to our conclusion here.
In the first decision analyzing contribution limitations following Citizens United, the D.C. Circuit found unconstitutional the Bipartisan Campaign Reform Act's contribution limits as applied to an independent expenditure-only group. SpeechNow.org v. FEC, 599 F.3d 686 (D.C.Cir.2010). Recognizing the government's anti-corruption interest as the only legitimate basis for limiting contributions, the D.C. Circuit reasoned that "because Citizens United
Five other circuits have also struck down contribution limits to independent expenditure groups. See N.Y. Progress & Prot. PAC v. Walsh, 733 F.3d 483, 487 (2d Cir.2013) (holding that an aggregate limit on an individual's contributions is unconstitutional as applied to contributions to groups for independent expenditures); Texans for Free Enter. v. Tex. Ethics Comm'n, 732 F.3d 535, 538 (5th Cir.2013) (holding that a state law ban on corporate contributions cannot be applied to independent expenditure committees); Farris v. Seabrook, 677 F.3d 858, 867 (9th Cir.2012) (concluding there was no state interest limiting contributions to independent recall committees at $800); Thalheimer v. City of San Diego, 645 F.3d 1109, 1121 (9th Cir.2011) (concluding, in affirming grant of preliminary injunction, that local ordinance capping contributions to independent expenditure committees at $500 violated First Amendment); Long Beach Area Chamber of Commerce v. City of Long Beach, 603 F.3d 684, 698-99 (9th Cir.2010) (holding that local ordinance restricting contributions cannot be applied to political action committee seeking to use funds for independent expenditures); Barland, 664 F.3d at 155 (holding that state law restricting contributions at $10,000 cannot be applied to independent expenditure committees); N.C. Right to Life, Inc. v. Leake, 525 F.3d 274, 293 (4th Cir.2008) (holding unconstitutional a state law limiting contributions to $4,000 as applied to independent expenditure committees).
With this framework, we turn to New Mexico's regulations.
Citizens United governs the outcome in this case. Because there is no
The district court also found in favor of NMTA, which would like to make both candidate contributions and independent expenditures. New Mexico's arguments require more consideration. But in the end, as we explain, the difference does not materially change our conclusions in light of Citizens United. Any anti-corruption interest posed by candidate contributions are resolved by the limitation on those contributions — NMTA's direct contributions to candidates are limited to $10,000 per election cycle. No such interest is met by limitations on its independent expenditures as long as there is no coordination with candidates. In short, New Mexico should be satisfied that its $10,000 per election cycle limitation averts corruption or its appearance, and thus has no further interest in limiting contributions intended for independent expenditures.
In an instructive case, the D.C. Circuit addressed the situation where a PAC made independent expenditures and contributed to individual candidates. Emily's List v. FEC, 581 F.3d 1 (D.C.Cir.2009). The court explained that a PAC that makes independent expenditures "does not suddenly forfeit its First Amendment rights when it decides also to make direct contributions to parties or candidates." Id. at 12. The court noted the PAC merely needs to ensure that its contributions to parties or candidates come from an account set up for that purpose, not one used for independent expenditures. Id. Applying these principles, the court found unconstitutional regulations requiring Emily's List to use a portion of its limited "hard-money" funds (those given directly to candidates) for advertisements, get-out-the-vote efforts, and voter registration drives. Id. at 16. In other words, the PAC had the right to raise unlimited funds for independent spending and could not be forced to fund portions of their independent activities from their hard-money accounts (for which contributions were limited to $5,000). Id. The FEC did not petition the Supreme Court for certiorari and ultimately withdrew the challenged regulations. See 11 C.F.R. § 106.6(c), (f), reversed by 75 Fed.Reg. 13223 (Mar. 19, 2010).
In this case, NMTA is similarly situated. It makes both independent expenditures and candidate contributions. It maintains separate accounts for these purposes and, under the record we have, adheres to contribution limits for donations to its candidate account. In these circumstances, under the logic of Citizens United, no anti-corruption interest is furthered as long as the NMTA maintains an account segregated from its candidate contributions. See Carey v. FEC, 791 F.Supp.2d 121, 131-32 (D.D.C.2011) (concluding that maintaining separate accounts for direct contributions and for independent expenditures satisfies federal law). Because NMTA maintains such a segregated account, it does not run afoul of candidate contribution restrictions.
In support of its first argument, New Mexico points to Buckley, Cal-Med, Colorado I, and McConnell. Yet every one of those cases concerns contributions to entities different than those at issue here, and none supports its argument.
In Buckley, the Court upheld contribution limits to candidates but struck down limits on expenditures. One of the contribution limits the Court upheld was the $25,000 aggregate limit on contributions to candidates and political committees. 424 U.S. at 38, 96 S.Ct. 612. But the Court was not addressing contributions to political committees for independent expenditures, only contributions to "political committees likely to contribute to [a particular] candidate." Id. The concern was that the absence of an aggregate cap would facilitate "evasion of the $1,000 contribution limitation." Id. In other words, a donor could make numerous contributions to different PACs likely to make contributions to the favored candidate and thereby evade the individual limits on contributions to candidates. The aggregate limitation served a justifiable limit on a donor's ability to contribute dollars directly to a candidate, either personally or through a PAC.
Similarly, in Cal-Med, the Supreme Court reaffirmed contribution limits to multi-candidate political committees, i.e., PACs that made campaign contributions to multiple candidates. The Court reasoned, as in Buckley, Congress could restrict contributions to such committees or else individuals could circumvent the $1,000 limit on individual contributions and the $25,000 aggregate limit. 453 U.S. at 197-99, 101 S.Ct. 2712. In the opinion, however, there was no discussion, let alone approval, of contribution restrictions for independent expenditures. In fact, Justice Blackmun, in his concurring (and controlling) opinion, underscored that "a different result would follow if [the restrictions] were applied to contributions to a political committee established for the purpose of making independent expenditures, rather than contributions to candidates." Id. at 203, 101 S.Ct. 2712 (Blackmun, J., concurring) (emphasis added).
In the next case New Mexico identifies, Colorado I, the Supreme Court addressed independent expenditure limits on political parties. The Court held that Congress could not limit the uncoordinated expenditures of political parties, but the principal opinion noted that contributions to parties may pose a threat of corruption because they enable independent party expenditures to benefit a particular candidate. Colorado I, 518 U.S. at 617, 116 S.Ct. 2309.
The Court made clear in McConnell, however, that the government could limit contributions to parties because of their inherent connection to and close affiliation with their candidate standard-bearers. In McConnell, the Court upheld limits on soft-money contributions to political parties — funds used for issue advocacy and get-out-the-vote efforts. The Court held that "contributions to a federal candidate's party in aid of that candidate's campaign threaten to create — no less than would a direct contribution to the candidate — a sense of obligation." McConnell, 540 U.S.
McConnell demonstrates the Court's belief that political parties are so inherently affiliated with candidates to justify a presumption that money a contributor might give to a party will be spent on that candidate, thereby evading the candidate contribution limits. But neither Colorado I nor McConnell has anything to say about contributions to political entities unaffiliated with candidates or parties. And given Citizens United, there can be no similar concern with contributions for independent expenditures by an entity unaffiliated with a candidate.
Drilling deeply into McConnell, New Mexico further argues that one footnote — footnote 48 — should be read as justifying restrictions on contributions to non-party political committees. The footnote discusses the Court's holding in Cal-Med, which as we have explained, upheld contributions limitations to multi-candidate PACs to implement the $1,000 cap on contributions to particular candidates and the $25,000 combined cap on contributions to all candidates.
Yet there is good reason this interpretation is misplaced. As noted above, Justice Blackmun in his concurring opinion in Cal-Med stated that his decision to uphold the limit on contributions would be different if the restrictions "were applied to contributions to a political committee established for the purpose of making independent expenditures, rather than contributions to candidates." Cal-Med, 453 U.S. at 203, 101 S.Ct. 2712 (Blackmun, J., concurring). In other words, Justice Blackmun concluded "that contributions to political committees can be limited only if those contributions implicate the governmental interest in preventing actual or potential corruption." Id. (emphasis added). And Justice Blackmun was the fifth vote upholding the statute, and thus his more narrow view of the Court's holding is controlling. See Marks v. United States, 430 U.S. 188, 193, 97 S.Ct. 990, 51 L.Ed.2d 260 (1977) ("[T]he holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds."). Absent strong evidence to the contrary, it is unlikely that the McConnell Court meant to expand the narrow holding of Cal-Med.
New Mexico's reading of footnote 48 is also inconsistent with the holding of Citizens United. The holding in McConnell suggested that it is proper to evaluate a donation or expenditure's "potential impact on a candidate's election" or "value to the candidate" when assessing the potential for actual or apparent corruption. 540 U.S. at 152, 124 S.Ct. 619. This discussion and footnote 48 were responses to Justice Kennedy's narrower and "crabbed view of corruption," id. — a view that the Supreme Court (per Justice Kennedy now in the majority) expressly adopted in Citizens United as the only justification for campaign finance restrictions. Citizens United affirmed that government can restrict campaign financing only to prevent actual or apparent quid pro quo corruption. To the extent that footnote 48 rests on the assumption that the government may restrict speech for any reason besides the prevention of actual or apparent quid pro quo corruption, New Mexico's reading is foreclosed by Citizens United.
One district court suggested that even if limits on contributions to independent expenditure-only PACs are unconstitutional, hybrid PACs that make both independent expenditures and contributions to candidates may implicate the government's anti-corruption interest. In Stop This Insanity, Inc. Employee Leadership Fund v. FEC, 902 F.Supp.2d 23 (D.D.C.2012), the court held that a hybrid PAC's use of separate bank accounts for campaign contributions and independent expenditures
Stop This Insanity does not offer a compelling rationale why combining two activities, neither of which by itself is corrupting, into a single entity suddenly increases the risk of real or apparent quid pro quo corruption. The court asserted that a PAC's direct contribution compromises, or at least appears to compromise, the independence of its express advocacy. See id. But a direct contribution is not an example of the type of coordination that implicates a PAC's independent advocacy. In Citizens United, the Court held that independent expenditures are by definition uncoordinated with candidates and cannot lead to the appearance of quid pro quo corruption. 558 U.S. at 360, 130 S.Ct. 876.
As a fallback argument, New Mexico has suggested both here and below that NMER and NMTA are not really independent of the Republican Party of New Mexico, due to overlapping membership between the leadership of the PACs and that of the state and local branches of the Republican Party. See Aplt. Br. at 9; Aplt.App. 129-30. The district court rejected these concerns: "Since political parties legally can make independent expenditures, the mere fact that NMER and NMTA are closely related to political parties does not affect the analysis regarding their ability to make independent expenditures." Aplt.App. 299.
We agree, but with this caveat. While it is true that political parties can make unlimited independent expenditures, see Colorado I, 518 U.S. at 618, 116 S.Ct. 2309, the Supreme Court in McConnell upheld restrictions on soft-money contributions to political parties — funds not passed along to candidates' campaigns but used for a party's general operating costs, get-out-the-vote drives, and issue advocacy. And McConnell supports limits like those in BCRA that restrict soft-money contributions to political parties. See McConnell, 540 U.S. at 145, 124 S.Ct. 619 (noting that an "ample record in these cases" supported the congressional finding that soft-money contributions to national party committees have "a corrupting influence").
The difference between this case and McConnell, however, is that New Mexico's definition of a "political committee" includes both political parties and nonparty political committees. N.M. Stat. § 1-19-26(L). A state political party, due to McConnell, is much less likely to bring a successful as-applied challenge to a limitation
While the record suggests that there is some overlapping leadership,
If the political committees are indirectly controlled by political parties, that would raise a separate issue — coordination. Though this question is not before us, we note that the Supreme Court has long upheld provisions which designate coordinated expenditures as indirect contributions. See Colorado II, 533 U.S. at 464-65, 121 S.Ct. 2351; Buckley, 424 U.S. at 46 & n. 53, 96 S.Ct. 612. If a PAC were making expenditures that were coordinated with a political party, then such expenditures could be deemed contributions to a political party. And those contributions would be subject to whatever limitations that are still valid under McConnell. If New Mexico believes that there is improper coordination between a PAC and a state or local political party, then it could bring an enforcement action. But the record at the preliminary injunction stage does not disclose any unlawful coordination, nor did the parties adequately brief the issue on appeal or below.
In sum, contribution limits must be "closely drawn" to serve "a sufficiently important interest," namely, the prevention of corruption or the appearance of corruption. The Supreme Court has held that independent expenditures do not invoke the anti-corruption rationale, and New Mexico does not differentiate between contributions for independent expenditures and contributions for candidate contributions. We therefore conclude that NMER and NMTA have satisfied their showing of likelihood of success that N.M. Stat. § 1-19-34.7(A)(1) is unconstitutional as applied to contributions to those organizations to be used solely for independent expenditures.
Because NMER and NMTA are likely to prevail on the merits in their challenge against New Mexico's law, we AFFIRM the district court's grant of a preliminary injunction enjoining the law's enforcement.
540 U.S. at 152 n. 48, 124 S.Ct. 619.
11 C.F.R. § 100.16 (2013).
FEC Statement on Carey v. FEC, Reporting Guidance for Political Committees that Maintain a Non-Contribution Account (Oct. 5, 2011), http://www.fec.gov/press/Press2011/20111006postcarey.shtml.
