Pasquale Deon, Sr. v. David Barasch ( 2020 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 18-3325
__________
PASQUALE T. DEON, SR.;
MAGGIE HARDY MAGERKO
v.
DAVID M. BARASCH; KEVIN F. O’TOOLE; RICHARD
G. JEWELL; SEAN LOGAN; KATHY M. MANDERINO;
WILLIAM H. RYAN, JR., Member, PA Gaming Control
Board, in his official capacity; DANTE SANTONI, JR.,
Member, PA Gaming Control Board, in his official capacity;
PAUL MAURO, Director, PA Gaming Control Board’s
Bureau of Investigation and Enforcement, in his official
capacity; CYRUS PITRE, Director, PA Gaming Control
Board’s Office of Enforcement Counsel, in his official
capacity; ATTORNEY GENERAL PENNSYLVANIA;
MERRITT C. REITZEL,
Appellants
__________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(District Court Civil No. 1-17-cv-01454)
District Judge: Honorable Sylvia H. Rambo
Argued June 11, 2019
BEFORE: JORDAN, BIBAS,
and NYGAARD, Circuit Judges
(Filed May 29, 2020)
Howard G. Hopkirk [Argued]
Office of Attorney General of Pennsylvania
Strawberry Square
Harrisburg, PA 17120
Counsel for Appellant, David M. Barasch
Ilana H. Eisenstein
Ben C. Fabens-Lassen
Courtney G. Saleski
DLA Piper
1650 Market Street
One Liberty Place, Suite 5000
Philadelphia, PA 19103
John J. Hamill [Argued]
DLA Piper
444 West Lake Street, Suite 900
Chicago, IL 60606
2
Timothy J. Lowry
DLA Piper
17 Gordon’s Alley
Atlantic City, NJ 08401
Jesse C. Medlong
Amanda L. Morgan
DLA Piper
555 Mission Street, Suite 2400
San Francisco, CA 94105
Counsel for Appellee, Pasquale T. Deon, Sr.
Lee K. Goldfarb
Alexander W. Saksen
Gordon Rees Scully Mansukhani
707 Grant Street, Suite 3800
Pittsburgh, PA 15219
Counsel for Appellee, Maggie Hardy Magerko
William W. Warren, Jr.
Saul Ewing Arnstein & Lehr
2 North Second Street
Penn National Insurance Plaza, 7th Floor
Harrisburg, PA 17101
Counsel for Amicus Appellants, Campaign Legal
Center and Common Cause
Burt M. Rublin
Ballard Spahr
3
1735 Market Street, 51st Floor
Philadelphia, PA 19103
Counsel for Amicus Appellees, Penn National Gaming,
Inc. and Mountainview Thoroughbred Racing
Association, Inc.
Michael M. Miller
Kevin M. Skjoldal
Eckert Seamans Cherin & Mellott
213 Market Street, 8th Floor
Harrisburg, PA 17101
Counsel for Amicus Appellees, Downs Racing,
Greenwood Gaming and Entertainment, and Stadium
Casino, LLC
__________
OPINION OF THE COURT
__________
NYGAARD, Circuit Judge.
Section 1513 of the Pennsylvania Race Horse
Development and Gaming Act1 prevents appellees Pasquale T.
Deon, Sr. (“Deon”) and Maggie Hardy Magerko (“Hardy”)
from making any political contributions because they hold
interests in businesses that have gaming licenses. They sued
1
4 Pa. Cons. Stat. § 1101 et seq. (2010).
4
the Gaming Board2 and the Attorney General of Pennsylvania
(collectively “the Commonwealth”) claiming First
Amendment and Equal Protection violations. The District
Court concluded “that Section 1513 of the Gaming Act furthers
a substantially important state interest” in preventing quid pro
quo corruption.3 But it ruled that the restriction it imposes on
political contributions is unconstitutional because the
Commonwealth did not draw it closely enough. It granted
summary judgment in favor of Deon and Hardy, permanently
enjoining enforcement of this section of the Act.4
2
Deon and Hardy sued Appellants in their official capacities.
Appellant David M. Barasch, Richard G. Jewell, Sean Logan,
Kathy M. Manderino, Merritt C. Reitzel, Obra S. Kernodle, IV
and Dante Santoni Jr. are members of the Gaming Board.
Appellant Kevin F. O’Toole is the Executive Director of the
Board. Appellant Paul Mauro is the Director of the Board’s
Bureau of Investigation and Enforcement. Appellant Cyrus
Pitre is the Director of the Board’s Office of Enforcement
Counsel. Appellant Josh Shapiro is the Attorney General of the
Commonwealth of Pennsylvania. The appellants are charged
with enforcing Section 1513 of the Gaming Act. See 4 Pa.
Cons. Stat. §§ 1202, 1517(a.1), 1517(a.2), 1517(c.1).
3
Deon v. Barasch, 341 F. Supp. 3d 438, 454 (M.D. Pa. 2018).
But, referencing Nixon v. Shrink Missouri Gov’t. PAC, 528
U.S. 377 (2000), it recognized that “there may be cause for
some increased scrutiny of the legislature’s determination,”
and concluded that the Commonwealth “failed to show a
heightened justification for political contribution restrictions
analogous to the government contracting and lobbying
industries.” Id. at 443-44.
4
Id. at 454. We must also pause here to note and complement
the District Judge on her thorough examination of the evidence
5
The Commonwealth says the District Court erred
because Section 1513 is a critical element of a robust effort to
prevent well-documented corruption in the gaming industry
from taking root in Pennsylvania. They contend that the
District Court’s order will make it impossible to take proactive
steps to protect against a known threat to its integrity.
It is axiomatic that a democratic government must make
every effort to fight corruption, and the perception of it, to
protect the integrity of its electoral, legislative, and regulatory
processes. But when it acts it must be mindful of the
fundamental speech and associational rights guaranteed by the
First Amendment of the United States Constitution at stake.5
We conclude that the District Court did not err and we will
affirm the order.
I.
A.
The Contribution Restriction. In 2004, the Gaming Act
legalized casinos and racehorse tracks in Pennsylvania. It also
established the Gaming Control Board, tasking it with
regulating the industry and issuing slot machine licenses.
Section 1513 imposes a political contribution restriction.
presented, and the scholarship with which she developed and
applied the law.
5
See McCutcheon v. Federal Election Comm’n, 572 U.S. 185,
218 (2014).
6
The following persons shall be
prohibited from contributing any
money or in-kind contribution to a
candidate for nomination or
election to any public office in this
Commonwealth, or to any political
party committee or other political
committee in this Commonwealth
or to any group, committee or
association organized in support of
a candidate, political party
committee or other political
committee in this Commonwealth:
(1) An applicant for a slot machine
license, manufacturer license,
supplier license, principal license,
key employee license, interactive
gaming license or horse or harness
racing license. (2) A slot machine
licensee, licensed manufacturer,
licensed supplier, interactive
gaming operator or licensed racing
entity. (3) A licensed principal or
licensed key employee of a slot
machine licensee, licensed
manufacturer, licensed supplier,
interactive gaming operator or
licensed racing entity. (4) An
affiliate, intermediary, subsidiary
or holding company of a slot
machine licensee, licensed
manufacturer, licensed supplier,
interactive gaming operator or
7
licensed racing entity. (5) A
licensed principal or licensed key
employee of an affiliate,
intermediary, subsidiary or
holding company of a slot machine
licensee, licensed manufacturer,
licensed supplier, interactive
gaming operator or licensed racing
entity. (6) A person who holds a
similar gaming license in another
jurisdiction and the affiliates,
intermediaries, subsidiaries,
holding companies, principals or
key employees thereof.6
The Commonwealth intended the political contribution
restriction in Section 1513 (in the original language of the Act)
to “prevent the actual or appearance of corruption that may
result from large campaign contributions; ensure the bipartisan
administration of this part; and avoid actions that may erode
public confidence in the system of representative
government.”7 But a casino owner sued and successfully
argued that this restriction violated Free Speech rights
guaranteed by the Pennsylvania Constitution.8 The
Pennsylvania Supreme Court ruled:
Here, we have found a wholesale
banning of political contributions
6
4 Pa. Con. Stat. § 1513 (2010).
7
4 Pa. Con. Stat. § 1102 (2004).
8
DePaul v. Commonwealth, 969 A.2d 536 (Pa. 2009); Pa.
Const. art. 1, § 7.
8
to be impermissible when read in
light of the legislative purpose of
addressing the impact of large
contributions on public confidence
and trust. In this context, it is
apparent that the scope of the
impermissible effects, i.e., the
banning of small contributions
and/or contributions unlikely to
affect public confidence, is quite
substantial.9
So Pennsylvania lawmakers amended the Act to read as
follows:
The General Assembly has a
compelling interest in protecting
the integrity of both the electoral
process and the legislative process
by preventing corruption and the
appearance of corruption which
may arise through permitting any
type of political campaign
contributions by certain persons
involved in the gaming industry
and regulated under this part.
Banning all types of political
campaign contributions by certain
persons subject to this part is
necessary to prevent corruption
and the appearance of corruption
9
DePaul, 969 A.2d. at 553.
9
that may arise when political
campaign contributions and
gaming regulated under this part
are intermingled. It is necessary to
maintain the integrity of the
regulatory control and legislative
oversight over the operation and
play of slot machines, table games
and interactive gaming in this
Commonwealth; to ensure the
bipartisan administration of this
part; and avoid actions that may
erode public confidence in the
system of representative
10
government.
Lawmakers left the restriction in Section 1513 intact, changing
instead the focus of the statement of legislative intent from
“large contributions” to “all types of political contributions.”
That language remains today.
B.
Applicability. Deon is a shareholder of Sands
Pennsylvania Inc., and it owns 90 percent of privately held
Sands Bethworks Gaming LLC (“Sands”). Section 1513
imposes political contribution restrictions on an array of people
and entities with financial interests in gaming industry
operations.11 The portion of Section 1513 relevant to Deon is
10
4 Pa. Cons. Stat. § 1102 (amended 2010, Jan. 7, P.L. 1, No.
1, § 1, imd.) (emphases added).
11
§ 1513(a).
10
the application of the restriction to a “licensed principal . . . of
a slot machine licensee.”12 The term “principal”13 is defined
as “[a]n officer; director; person who directly holds a beneficial
interest in or ownership of the securities of an applicant or
licensee; person who has a controlling interest in an applicant
or licensee, or has the ability to elect a majority of the board of
directors of a licensee or to otherwise control a licensee. . . .”14
Sands has held a “Category 2” slot machine license since
2005.15 Deon has a “controlling interest” in Sands under the
Act and has been licensed as a principal since it obtained its
license.
As for Hardy, Section 1325(d)(1) of the Gaming Act
states the following: “No trust or similar business entity shall
be eligible to hold any beneficial interest in a licensed entity
under this part unless each trustee, grantor and beneficiary of
the trust, including a minor child beneficiary, qualifies for and
is granted a license as a principal.”16 Hardy is the beneficiary
of a trust that owns Nemacolin Woodlands, Inc.
(“Nemacolin”) Nemacolin owns the privately held Woodlands
12
Id.
13
Consistent with the District Court we refer to Deon and
Hardy as “principals” and not “key employee qualifier,” a title
previously used in reference to them. See Deon, 341 F. Supp.
3d at 440 n. 1 (citing 2006 Pa. Legis. Serv. Act 2006-135 (S.B.
862) (Nov. 1, 2006); 37 Pa. Bull. 2808 (June 23, 2007)).
14
§ 1103.
15
A Category 2 license authorizes operation of slot machines
in a stand-alone facility. § 1513(a)(2); see Riverwalk Casino,
LP v. Pennsylvania Gaming Control Bd., 926 A.2d 926, 930
(Pa. 2007).
16
4 Pa. Cons. Stat. § 1325(d)(1).
11
Fayette, LLC. which has a “Category 3” slot machine license.17
Hardy has been licensed as a principal since the Pennsylvania
Supreme Court confirmed approval of Nemacolin’s license.
No one disputes that Section 1513 applies to either Deon or
Hardy.
C.
The Constitutional Harm. Deon and Hardy claim the
Section 1513 restriction on political contributions significantly
infringes on their political speech. Deon portrays himself as a
politically engaged citizen and says he regularly contributed to
candidates from 1978 until the Gaming Act in 2004 became
law, preventing him from continuing to do so.18 Similarly,
Hardy made political contributions up through the time she
obtained a Gaming Act license. She has made none since then.
If either violates Section 1513 they can be charged with a third-
degree misdemeanor, causing a fine of no less than $100,000
and a suspension of their license. The suspension lengthens
with each violation up to and revocation of the license.19
Because of this Deon and Hardy requested declaratory
and injunctive relief. They say Section 1513 infringes their
associational rights (and the right of similarly situated gaming-
17
A Category 3 license authorizes operation of slot machines
in a hotel or resort. § 1513(a)(5); see Riverwalk Casino, LP.,
926 A.2d at 930.
18
Deon made a political contribution in 2009, after the
Pennsylvania Supreme Court enjoined § 1513. He has made
no contributions since the Commonwealth amended the
Gaming Act in 2010.
19
§ 1513(c).
12
license applicants, licensees and principles of licensees),
protected by the First Amendment of the United States
Constitution.20 They also claim that Section 1513 violates the
Equal Protection Clause of the Fourteenth Amendment.21 The
District Court granted summary judgment in their favor on the
First Amendment claim, enjoining Section 1513.
II.
A.22
Participating in the election of our governmental
representatives is the essence of our democracy, and so
political expression enjoys broad protection under the First
Amendment “to assure [the] unfettered interchange of ideas for
the bringing about of political and social changes desired by
the people.”23 The protection of free expression through
speech and political association under the First Amendment
extends to “[s]pending for political ends and contributing to
20
U.S. Const. amend. I.
21
U.S. Const. amend. XIV, § 1.
22
The District Court had jurisdiction under 28 U.S.C. § 1331
and we have jurisdiction under 28 U.S.C. § 1291. We review
orders granting summary judgment de novo. Adams Outdoor
Advert. Ltd. P’ship by Adams Outdoor GP, LLC v.
Pennsylvania Dep’t of Transp., 930 F.3d 199, 205 (3d Cir.
2019). As for the injunction, we review the District Court’s
“fashioning of a remedy according to an abuse of discretion
standard.” Anderson v. Davila, 125 F.3d 148, 159 (3d Cir.
1997).
23
Buckley v. Valeo, 424 U.S. 1, 14 (1976) (quoting Roth v.
United States, 354 U.S. 476, 484 (1957)).
13
political candidates.”24 As a result, when government restricts
political contributions to fulfill another obligation—in this
case, its sacred duty to protect our democratic institutions from
corruption—it has a corresponding burden to prove the
constitutionality of those measures.25 But there are some
distinctions.
Limitations on campaign expenditures are subject to
strict scrutiny—meaning the government must prove that the
regulations promote a “compelling interest” and are the “least
restrictive means to further the articulated interest.”26 But
restricting a person’s contributions to a candidate or political
committee “impose[s] a lesser restraint on political speech.”27
“Contributions lie closer to the edges than to the core of
political expression.”28 As a result, we apply intermediate
scrutiny to political contribution restrictions: a “lesser but ‘still
rigorous standard of review.’”29 With that said, “[e]ven a
‘significant interference with protected rights of political
association’ may be sustained if the State demonstrates a
24
Fed. Election Comm’n. v. Colorado Republican Fed.
Campaign Comm’n., 533 U.S. 431, 440 (2001).
25
See McCutcheon, 572 U.S. at 210.
26
Id. at 197.
27
Id.
28
Fed. Election Comm’n. v. Beaumont, 539 U.S. 146, 161
(2003).
29
McCutcheon, 572 U.S. at 197 (quoting Buckley, 424 U.S. at
29). But see Beaumont, 539 U.S. at 147-48 (“[R]estrictions on
political contributions have long been treated as marginal
speech restrictions subject to relatively complaisant First
Amendment review.”); see also Corren v. Condos, 898 F.3d
209, 222–23 (2d Cir. 2018).
14
sufficiently important interest and employs means closely
drawn to avoid unnecessary abridgment of associational
freedoms.”30
B.
Traditionally, courts have “not second-guess[ed] a
legislative determination as to the need for prophylactic
measures where corruption is the evil feared.”31 It was over
forty years ago that the Buckley court examined restrictions on
large political contributions in the Federal Election Campaign
Act (FECA)32 and held this is “the narrow aspect of political
association where the actuality and potential for corruption
have been identified.”33 Buckley’s finding—that the threat
posed by corrupt political contributions was “not an illusory
one”34—has endured. Twenty years after Buckley the Court
said that lawmakers’ suspicions about corrupt intent behind
30
Buckley, 424 U.S. at 25 (quoting, Cousins v. Wigoda, 419
U.S. 477, 488 (1975) (internal quotation marks excluded)); see
also McCutcheon, 572 U.S. at 197.
31
Fed. Election Comm’n. v. Nat’l. Right to Work Comm., 459
U.S. 197, 210 (1982).
32
52 U.S.C. §§ 30101-126.
33
Buckley, 424 U.S. at 28. The Court reflected on the “deeply
disturbing examples” of political campaign corruption,
detailed by the Court of Appeals for the District of Columbia,
that surfaced after the 1972 election. Id. at 27. And it decided
from this that “the weighty interests served by restricting the
size of financial contributions to political candidates are
sufficient to justify the limited effect upon First Amendment
freedoms caused by the . . . contribution ceiling.” Id. at 29.
34
Id. at 27.
15
large political contributions “is neither novel nor
implausible.”35 More recently, the Court rejected aggregate
contribution limits in FECA36 but noted: FECA’s “base limits
. . . [serve] the permissible objective of combatting
corruption.”37
But though the path blazed by Buckley legitimizing
these restrictions is long, it is not very broad. The only anti-
corruption interest identified by the Court thus far as sufficient
to justify political contributions restrictions is the fight against
financial quid pro quo—“dollars for political favors”—or the
public perception of it.38 Buckley does not extend to
restrictions that just “limit the appearance of mere influence or
access.”39 So when a restriction on political contributions
enacted to fight corruption is challenged, part of the
government’s burden to justify the law is to show that it
35
Shrink Missouri Gov’t. PAC, 528 U.S. at 391. To the extent
that Shrink Missouri refers to influence-based corruption, it is
no longer good law. See SpeechNow.org v. Fed. Election
Comm’n., 599 F.3d 686 (D.C. Cir. 2010) (en banc).
36
52 U.S.C. § 30117(a)(1) (formerly 2 U.S.C. § 441(a)(1)).
37
McCutcheon, 572 U.S. at 192. “[B]ase limits [restrict] how
much money a donor may contribute to a particular candidate
or committee.” Id. (citing § 441(a)(1)).
38
See id. at 192 (quoting Fed. Election Commn. v. Nat’l.
Conservative Political Action Comm’n., 470 U.S. 480, 497
(1985)); Citizens United v. Fed. Election Commn., 558 U.S.
310, 359 (2010) (“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.”).
39
McCutcheon, 572 U.S. at 208.
16
addresses quid pro quo corruption, or the appearance of it.40
And it must do so with more than “mere conjecture.”41
The Commonwealth argues that Section 1513 is
designed to address quid pro quo corruption. But we need not
decide whether it has shown this sufficiently important interest
because, even if it has, we conclude that Section 1513 is not
closely drawn to achieve that interest.
C.
While recognizing that combatting corruption is a
sufficiently important interest, the District Court aptly said that
this interest “does not license the legislature to enact any
palliative measure, regardless of its restrictiveness.”42 “[A]
statute that seeks to regulate campaign contributions could
itself prove an obstacle to the very electoral fairness it seeks to
promote.”43 Thus, courts have to “exercise . . . independent
judicial judgment” when “danger signs” arise that a restriction
reaches an “outer limit[].”44 In such cases we “must review the
record independently and carefully with an eye toward
assessing the statute’s ‘tailoring.’”45
40
See Shrink Missouri, 528 U.S. at 391–92; see also Citizens
United, 558 U.S. at 359.
41
McCutcheon, 572 U.S. at 210 (quoting Shrink Missouri, 528
U.S. at 392).
42
Deon, 341 F. Supp. 3d at 451.
43
Randall v. Sorrell, 548 U.S. 230, 249 (2006).
44
Id.
45
Id.
17
The parties dispute whether strict or intermediate
scrutiny applies here. But even if we apply a “lesser but still
‘rigorous’”46 intermediate threshold by examining whether the
statute is “closely drawn” the Commonwealth still does not
meet its burden. Under that standard, the law need not be the
least restrictive means available.47 We ask, instead, whether
the government has made its case that the scope of the
provision is “‘in proportion to the interest served.’”48 “Fit
matters.”49
The McCutcheon court examined assertions that
aggregate contribution limits were necessary to prevent
circumvention of base limits. In its analysis of “fit” it said the
following:
[T]he cited sources do not provide
any real-world examples of
circumvention of the base limits
along the lines of the various
hypotheticals. The dearth of FEC
46
McCutcheon, 572 U.S. at 197 (quoting Buckley, 424 U.S. at
29).
47
See McCutcheon, 572 U.S. at 218.
48
Id. at 218 (quoting Board of Trs of State Univ. of N.Y. v. Fox,
492 U.S. 469, 480 (1989) and In re R.M.J., 455 U.S. 191
(1982)); see Fox, 492 U.S. at 480 (“[A] fit that is not
necessarily perfect, but reasonable; that represents not
necessarily the single best disposition but one whose scope is
‘in proportion to the interest served,’ ... that employs not
necessarily the least restrictive means but . . . a means narrowly
tailored to achieve the desired objective.”).
49
McCutcheon, 572 U.S. at 218.
18
prosecutions, according to the
dissent, proves only that people are
getting away with it. And the
violations that surely must be out
there elude detection “because in
the real world, the methods of
achieving circumvention are more
subtle and more complex” than the
hypothetical examples. This sort of
speculation, however, cannot
justify the substantial intrusion on
First Amendment rights at issue in
this case.50
From this it concluded:
Based on what we can discern
from experience, the
indiscriminate ban on all
contributions above the aggregate
limits is disproportionate to the
Government’s interest in
preventing circumvention. The
Government has not given us any
reason to believe that parties or
candidates would dramatically
shift their priorities if the
aggregate limits were lifted.”51
50
Id. at 217–18.
51
Id. at 220.
19
The phrases “real-world” and “[b]ased on what we can discern
from experience” provide a window into the nature of this step
in the analysis. The government cannot meet its burden at
either step by asserting mere conjecture. But the Court in
McCutcheon demonstrated a strong interest in linking, at this
second step, the law under review to the practical
circumstances it is designed to impact. For that reason, we are
assessing “fit” here by taking a much closer look at Section
1513 in the context of the “real world” that it addresses.
The Court noted in Randall that “[a]s compared with . .
. contribution limits upheld by the Court in the past, and with
those in force in other States, [the Act’s political contribution]
limits are sufficiently low as to generate suspicion that they are
not closely drawn.”52 Notably, the breadth of the prohibition
imposed here goes far beyond that considered in Randall.
Section 1513 imposes a flat ban on all types of contributions,
no matter how small. It forbids any form of contribution, not
just money, but also contracts, loans, or “any valuable thing.”53
And it has no de minimis threshold for contribution amount.
Unlike in Buckley, contributors in the Commonwealth cannot
make even symbolic expressions of support “through a small
contribution” under Section 1513.54 Moreover, the ban applies
to all beneficiaries of a trust that holds “any beneficial interest”
in a gaming licensee.55 As the District Court noted “a
contribution of a single dollar from the beneficiary of a trust
that owns a minority stake in a holding company that, in turn,
owns a gaming licensee” is prevented under Section 1513. The
52
Id.
53
4 Cons. Stat § 1513(a).
54
Buckley, 424 U.S. at 24.
55
4 Pa. Cons. Stat §1325(d)(1).
20
same is true for banks that underwrite licensees and out-of-
state gaming licensees.56 Finally, the ban applies to all
politicians, public officials, and political organizations in the
Commonwealth.
Such a far-reaching restriction may prevent political
contributions from being a source of quid-pro-quo corruption.
And we respect all legislative determinations on measures to
address this critical problem. But the burden these restrictions
impose on First Amendment rights demands that we have some
way to “exercise . . . independent judicial judgment” to
determine whether Section 1513 is closely drawn to be a
proportional response. 57
The record the Commonwealth created directs us to the
corruption memorialized in two cases from New Jersey and
Louisiana to understand the “real world” that Section 1513
addresses.58 The record in these cases, the Commonwealth’s
logic goes, will inexorably lead us to the same conclusions that
those courts reached: that it is “necessary to distance gaming
56
4 Pa. Cons. Stat. §§ 1103, 1513(a)(5) and (6).
57
Randall, 548 U.S. at 249.
58
Petition of Soto, 565 A.2d 1088. 1093 (N.J. Super. App. Div.
1989); Ass’n of Louisiana v. State ex rel. Foster, 820 So. 2d 494
(LA. 2002). One indication that the history in New Jersey
factored into the enactment of Section 1513 is that State
Representative Schroder read a portion of the DePaul opinion
(quoted above), which quoted Petition of Soto, into the
legislative record as lawmakers debated the amendment to the
Gaming Act in 2009. Pennsylvania House Journals, 2009 Reg.
Sess. No. 103 (10/5/2009) at 2102-03 (quoting DePaul v.
Com., 969 A.2d at 545 and Petition of Soto, 565 A.2d at 1093).
21
interests from the ability to contribute to candidates and
political committees which support candidates,”59 and that
“there is no viable alternative [to restricting all political
contributions] to prevent the appearance of, or actual,
corruption of the political process.”60 The Commonwealth
contends this is the inevitable upshot because gaming-industry-
related “pay for play” is a function of “human nature,”61
making the necessity of prohibiting even de minimis
contributions “common sense.”62
There are a couple of problems with this. The
Commonwealth presumes that the records developed in
Petition of Soto and State ex rel. Foster support a judgment that
a total prohibition of political contributions is a proportional
response. But even if they could support it, other states with
legalized gaming similar to Pennsylvania—beyond New
Jersey and Louisiana—have taken a much different approach.
The Commonwealth never addresses this.
At present, a total of twenty-five states (including
Pennsylvania) have some form of legalized commercial, non-
tribal casino gambling (including so-called “racinos” and
riverboats).63 The District Court found in its own review, as
59
State ex rel. Foster, 820 So. 2d at 508.
60
Petition of Soto, 565 A.2d at 1098.
61
Reply Brief p. 6.
62
Reply Brief p. 12.
63
See Arkansas (AR. Const. Amend. 100, §§ 1 to 11; Ark.
Code §§ 23-113-101 to 113-604); Colorado (Colo. Rev. Stat.
§§ 44-30-101 to 836); Delaware (Del. Code tit. 29, §§ 4801 to
4838); Florida (Fla. Stat. §§ 849.01 to .46); Illinois (230 Ill.
Comp. Stat. Ann. 40/1 to 40/85); Indiana (Ind. Code Ann. § 4-
22
the Pennsylvania Supreme Court did eight years earlier, that
bans with the scope and breadth of Section 1513 are not
common among these states.64 We have reached the same
conclusion. In fact, the overwhelming majority of states with
commercial, non-tribal casino gambling like Pennsylvania do
not have any political contribution restrictions that apply
specifically to gaming industry-related parties.65 In these
33-10-2.1); Iowa (Iowa Code Ann. § 99F.6); Kansas (Kan.
Stat. Ann. §§ 74-8701 to 8780); Louisiana (La. Stat. §§ 27:1 to
:502); Maine (Me. Rev. Stat. tit. 8, §§ 1001 to 1072); Maryland
(Md. State Gov’t Code. § 9-1A-01 to 38); Massachusetts
(Mass. Gen. Laws ch. 23K, §§ to 71; 205 Code Mass. Regs.
108.01); Michigan (Mich. Comp. Laws §§ 432.1 to 516; Mich.
Comp. Laws § 432.207b (Repealed by P.A.2019, No. 158, § 1,
Imd. Eff. Dec. 20, 2019));Mississippi (Miss. Code §§ 75-76-1
to 325); Missouri (Mo. Rev. Stat. Ann. §§ 313.004 to 313.850);
Nevada (Nev. Rev. Stat. Ann. §§ 462 to 467); New Jersey (N.J.
Stat. Ann. § 5:12-138); New Mexico (N.M. Stat. Ann. §§ 60-
2E-1 to 60-2E-62); New York (N.Y. Rac. Pari-Mut. Wag. &
Breed. Law §§ 100 to 1410 (McKinney)); Ohio (Ohio Rev.
Code §§ 3772.01 to 3772.99); Oklahoma (Okla. Stat. Ann. tit.
3A, §§ 200 to 20); Pennsylvania, (4 Pa. Cons. Stat. §§ 1101 to
1904, § 1513); Rhode Island (42 R.I. Gen. Laws Ann. §§ 42-
61-1 to 17); South Dakota (S.D. Codified Laws §§ 42-7B-1 to
42-7B-75); West Virginia (W. Va. Code Ann. §§ 29-22A-1 to
22E).
64
Deon, 341 F. Supp. 3d at 445 n. 2.
65
These states do have laws applying to the general population
that prohibit political contributions over a particular threshold.
In our own review we found that, of the twenty-five states with
legalized casino gambling (including racinos and riverboats),
nineteen do not impose any special restrictions on the political
23
contributions of gaming industry-related parties. Instead, they
have generally applicable political contributions limits. See
Alabama (Ala. Code § 17-5-1 to 21 ); Colorado, (Colo. Const.
Art. XXVIII; 8 Colo. Code Regs. § 1505-6); Delaware (Del.
Code Ann. tit. 15, §§ 8001, 8010 and 8012); Florida (Fla. Stat.
§§ 106.011 and 106.08); Illinois (10 Ill. Comp. Stat. 5/9-8.5);
Kansas (Kan. Stat. Ann. §§ 25- 4143 and 25-4153); Maine
(Me. Rev. Stat. tit. 21-A, § 1015); Maryland (Md. Code Ann.,
Elec. Law §§ 13-226 and 13-227); Michigan (Mich. Comp.
Laws §§ 169.241, 169.252 and 169.254); Mississippi (Miss.
Code Ann. §§ 23-15-1021 and 97-13-15); Missouri (Mo. Rev.
Stat. § 130.029 and 130.031); Nevada (Nev. Const. art. 2 § 10;
Nev. Rev. Stat. § 294A.100); New Mexico (N.M. Stat. Ann. §
1-19-34); New York (N.Y. Elec. Law § 14-114); Ohio (Ohio
Rev. Code Ann. §§ 3517.102, 3517.104 and 3599.03);
Oklahoma (Okla. St. Ethics Commission, Rule 2.17) Rhode
Island (R.I. Gen. Laws §§ 17-25-10.1 and 17-25-12); South
Dakota (S.D. Codified Laws §§ 12-27-7 and 12-27-8); West
Virginia (W. Va. Code §§ 3-8-5c, 3-8-8 – 3-8-12). The
remaining six states (Indiana, Iowa, Louisiana, Massachusetts,
New Jersey and Pennsylvania) impose political contribution
bans on gaming industry-related parties. But just three of these
states (Louisiana, Massachusetts and New Jersey) have
implemented a ban of comparable scope to Pennsylvania.
Iowa restricts “qualified sponsoring” organizations from
making contributions, (Iowa Code Ann. § 99F.6). Indiana
imposes a ban on a “licensee or a person with an interest in a
licensee” from contributing to “a member of a precinct
committee” to induce the member of the precinct committee to
do any act or refrain from doing any act with respect to the
approval of a local public question under IC 4-33-6-19 or IC 4-
24
nineteen states, even accounting for political contribution laws
that apply to their entire populations,66 none ban all political
contributions by such parties. This fatally undermines the
Commonwealth’s central premise that the nature of gaming-
industry-related corruption creates a “common sense” need to
adopt measures of the breadth of Section 1513. This is the
result because, even if we assume arguendo that findings like
those in Petition of Soto and/or State ex rel. Foster could
support a judgment that Section 1513 is closely drawn, the
Commonwealth would need to show far more than it has done
here to meet its burden.
These nineteen states, combined with the
Commonwealth, create a tautology: all things being equal,
allowing some political contribution (even a symbolic de
minimis one) is less burdensome on First Amendment rights
than allowing no political contribution at all. And although the
Commonwealth need not adopt the least restrictive means to
address gaming-related corruption, it must prove that it has
created a proportional, closely drawn scheme to address the
issue.
Perhaps the Commonwealth is accurately asserting that,
like New Jersey and Louisiana, the presence of the gaming
industry within its borders creates the need for a law with the
breadth of Section 1513. But the inescapable fact here is that
the experience of nineteen other states with commercial, non-
tribal casinos has not generated a similar legislative judgment.
And because these schemes place less of a burden on First
33-6-19.3.” Ind. Code Ann. § 4-33-10-2.5. These bans are
more limited in scope.
66
Id.
25
Amendment rights, the Commonwealth—at a minimum—had
the burden of showing why the experiences of New Jersey and
Louisiana provide a better basis to assess the proportionality of
Section 1513 than one of these other states. It relies on the
histories and legislative judgments of two states with similar
laws to make its case here. But it does so without reference to
states that have taken different approaches less burdensome to
First Amendment rights.
The Commonwealth’s implicit appeal to “common
sense” as a surrogate for evidence in support of its far-reaching
regulatory scheme is noteworthy in this evidence-based
inquiry, particularly in light of the approach taken by most
other similarly situated states. Our assessment of fit is
meaningless unless we can be sure that it is fixed to a
reasonable understanding of the real world that Pennsylvania
faces. Ultimately, this dearth of evidence is why the
Commonwealth falls well short of its burden to show that
Section 1513 is closely drawn. Like the District Court, we do
not conclude that it is impossible for the Commonwealth to
defend the proportionality of its law. We only conclude that it
has failed to give us enough information to assess it here. This
failure is dispositive.67
D.
For all of these reasons we conclude that the
Commonwealth has not met its burden of proving that Section
67
Deon and Hardy also claim that Section 1513
unconstitutionally bans contributions to independent
expenditure groups. As we conclude that the law is
unconstitutional on other grounds, we do not reach this issue.
26
1513 is a closely drawn, proportional response consistent with
an important anti-corruption interest. Accordingly, we will
affirm the order of the District Court.
27