Missourians for Fiscal, etc. v. James Klahr , 892 F.3d 944 ( 2018 )

United States Court of Appeals
For the Eighth Circuit
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No. 17-1314
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Missourians for Fiscal Accountability
lllllllllllllllllllllPlaintiff - Appellee
v.
James Klahr, in his official capacity as Executive Director of the Missouri Ethics Commission
lllllllllllllllllllllDefendant - Appellant
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Appeal from United States District Court
for the Western District of Missouri - Jefferson City
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Submitted: February 13, 2018
Filed: June 12, 2018
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Before LOKEN, BENTON, and ERICKSON, Circuit Judges.
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BENTON, Circuit Judge.
James Klahr, in his official capacity as Executive Director of the Missouri
Ethics Commission (MEC), appeals the order of the district court1 declaring
unconstitutional and enjoining enforcement of Missouri’s 30-day formation deadline
1
The Honorable Ortrie D. Smith, United States District Judge for the Western
District of Missouri.
for campaign committees, Missouri law section 130.011(8).2 See Missourians for
Fiscal Accountability v. Klahr, No. 14-4287-CV-ODS, 2017 WL 58588 (W.D. Mo.
Jan. 5, 2017). Having jurisdiction under 28 U.S.C. § 1291, this court affirms.
I.
Under Missouri campaign finance law, chapter 130, a “committee” is “a person
or any combination of persons, who accepts contributions or makes expenditures for
the primary or incidental purpose of influencing or attempting to influence the action
of voters for or against” candidates or ballot measures. § 130.011(7). Exempt are
those not crossing thresholds, such as: (1) any non-candidate individual “who accepts
no contributions and . . . deals only with the individual’s own funds or property;” and
(2) any “person or combination of persons, if neither the aggregate of expenditures
made nor the aggregate of contributions received during a calendar year exceeds five
hundred dollars and if no single contributor has contributed two hundred fifty dollars
of such aggregate contributions.” § 130.011(7)(a).
Chapter 130 distinguishes committees by the political activity they engage in.
At issue here are “campaign committees”:
a committee, other than a candidate committee, which shall be formed
by an individual or group of individuals to receive contributions or make
expenditures and whose sole purpose is to support or oppose the
qualification and passage of one or more particular ballot measures in an
election . . . , such committee shall be formed no later than thirty days
prior to the election for which the committee receives contributions or
makes expenditures, and which shall terminate the later of either thirty
days after the general election or upon the satisfaction of all committee
debt after the general election . . . .
§ 130.011(8).
2
All statutory citations are to RSMo Supp. 2013, unless otherwise indicated.
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Committees must have a treasurer, maintain an “official depository account,”
and keep accurate records. §§ 130.021.1, 130.021.4(1), 130.036.1. Committees “shall
file a statement of organization . . . within twenty days after the person or organization
becomes a committee but no later than the date for filing the first [disclosure] report
. . . .” § 130.021.5. The statement includes, among other things, the committee’s
name and address, the kind of committee, and the candidate or ballot measure
supported or opposed. Id.
Committees must file “disclosure report[s] of receipts and expenditures.” §
130.041.1. Disclosure reports are due: (1) “Not later than the eighth day before an
election for the period closing on the twelfth day before the election if the committee
has made any contribution or expenditure either in support or opposition to any
candidate or ballot measure;” (2) “Not later than the thirtieth day after an election for
a period closing on the twenty-fifth day after the election, if the committee has made
any contribution or expenditure either in support of or opposition to any candidate or
ballot measure . . . ;” and (3) “Not later than the fifteenth day following the close of
each calendar quarter.” § 130.046.1. The Missouri Ethics Commission (MEC) makes
statements of organization and disclosure reports available to the public on its website
in accordance with section 130.057.
“Any person who purposely violates the provisions of [chapter 130] is guilty
of a class A misdemeanor.” § 130.081.1. However, failure “to file any report or
statement . . . within the time periods specified in [chapter 130]” is “an infraction.”
§ 130.081.2. See § 556.021.2 (“An infraction does not constitute a crime . . . .”).
“Any person who knowingly accepts or makes a contribution or makes an expenditure
in violation of any provision of this chapter . . . shall be held liable to the state in civil
penalties in an amount equal to any such contribution or expenditure.” § 130.072.
Individuals may file complaints with the MEC alleging chapter 130 violations.
§ 105.957.1(3). “When the commission concludes . . . that there are reasonable
grounds to believe that a violation of any criminal law has occurred, and if the
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commission believes that criminal prosecution would be appropriate . . . the
commission shall refer the report” for criminal prosecution. § 105.961.2. The MEC
may also “initiate formal judicial proceedings seeking to obtain” an order to “[c]ease
and desist violation of . . . chapter 130” or “[p]ay any civil penalties required by . . .
chapter 130.” § 105.961.5. Finally, the MEC has, “[t]hrough reconciliation
agreements or civil action, the power to seek fees for violations in an amount not
greater than one thousand dollars or double the amount involved in the violation.” §
105.961.4(6).
II.
Thirteen days before the November 2014 general election, a group formed
Missourians for Fiscal Accountability (MFA) as a campaign committee, wanting to
accept contributions and make expenditures in support of Proposition 10. MFA sued
to enjoin enforcement of the formation deadline, arguing that it violated the First
Amendment. The district court granted MFA a temporary restraining order. MFA
then received contributions and made expenditures in the days before the election.
After the election, MFA terminated as a campaign committee. The district court
dismissed the suit on ripeness grounds. This court reversed and remanded, finding
standing, ripeness, and no mootness. See Missourians for Fiscal Accountability v.
Klahr, 830 F.3d 789, 793-97 (8th Cir. 2016).
On remand, the district court granted summary judgment to MFA. According
to the court, the formation deadline created a “blackout period” that Missouri could
not justify under strict or exacting scrutiny. Missourians for Fiscal Accountability,
2017 WL 58588, at *2-4. The MEC appeals.
“This court reviews de novo the district court’s grant of summary judgment.”
MCC Iowa, LLC v. City of Iowa City, 887 F.3d 370, 372 (8th Cir. 2018). Because
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MFA seeks declaratory and injunctive relief that would “reach beyond the particular
circumstances” here, it brings a facial challenge. See John Doe No. 1 v. Reed, 561
U.S. 186, 194 (2010). To succeed, MFA must “establish that no set of circumstances
exists under which [the formation deadline] would be valid;” “that [the formation
deadline] lacks any plainly legitimate sweep;” or that it is “overbroad” because “a
substantial number of its applications are unconstitutional, judged in relation to [its]
plainly legitimate sweep.” Phelps-Roper v. Ricketts, 867 F.3d 883, 891-92 (8th Cir.
2017) (last alteration in original), citing United States v. Stevens, 559 U.S. 460, 472
(2010).
III.
“Independent expenditures are indisputably political speech, and any
restrictions on those expenditures strike ‘at the core of our electoral process and of the
First Amendment freedoms.’” Minnesota Citizens Concerned for Life v. Swanson,
692 F.3d 864, 870 (8th Cir. 2012) (en banc), quoting Buckley v. Valeo, 424 U.S. 1,
39 (1976). “Because political [s]peech is an essential mechanism of democracy, the
means to hold officials accountable to the people, a precondition of enlightened self-
government and a necessary means to protect it, political speech must prevail against
laws that would suppress it, whether by design or inadvertence.” Id. at 871 (internal
quotation marks omitted) (alteration in original), quoting Citizens United v. FEC, 558
U.S. 310, 339-40 (2010).
The formation deadline makes it unlawful to form a campaign committee within
30 days of the election. See § 130.011(8) (a campaign committee “shall be formed no
later than thirty days prior to the election”). An individual or group must form a
campaign committee3 to speak in support of or opposition to a particular ballot
3
“Continuing committees” may also support or oppose ballot measures. See §
130.011(10). But for present purposes, continuing committees are not an adequate
alternative, because they must be formed 60 days before the election. See id.
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measure. See §§ 130.011(7) (“a person or combination of persons, who accepts
contributions or makes expenditures” to influence the action of voters is a
“committee”); 130.011(8) (a “campaign committee” is a “committee” that “shall be
formed . . . to receive contributions or make expenditures . . . to support or oppose .
. . one or more particular ballot measures”); 130.072 (contributions or expenditures
in violation of chapter 130 are subject to civil penalties). Thus, the formation deadline
prohibits those who do not form a campaign committee 30 days before the election
from speaking.
“When [a state] restricts speech, [it] bears the burden of proving the
constitutionality of its actions.” McCutcheon v. FEC, 134 S. Ct. 1434, 1452 (2014)
(plurality opinion), quoting United States v. Playboy Entm’t Grp., Inc., 529 U.S. 803,
816 (2000). “Generally, [l]aws that burden political speech are subject to strict
scrutiny . . . .” Minnesota Citizens Concerned, 692 F.3d at 874 (internal quotation
marks omitted) (alteration in original), quoting Citizens United, 558 U.S. at 340.
The MEC argues that strict scrutiny does not apply, because the formation
deadline is a disclosure law. “[D]isclosure laws are subject to exacting scrutiny,
because they ‘impose no ceiling on campaign-related activities and do not prevent
anyone from speaking.’” Iowa Right to Life Comm., Inc. v. Tooker, 717 F.3d 576,
589-90 (8th Cir. 2013), quoting Citizens United, 558 U.S. at 366. “To determine
whether a rule is a disclosure requirement, or something more, [this court looks] to see
the effect of the provision.” Catholic Leadership Coalition of Texas v. Reisman, 764
F.3d 409, 426 (5th Cir. 2014). “Allowing states to sidestep strict scrutiny by simply
placing a ‘disclosure’ label on laws . . . risks transforming First Amendment
jurisprudence into a legislative labeling exercise.” Minnesota Citizens Concerned,
692 F.3d at 875.
Disclosure laws generally require registration, reporting information, or keeping
necessary records. See John Doe, 561 U.S. at 194 (requiring “disclosure of signatory
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information on referendum petitions”); Citizens United, 558 U.S. at 366 (requiring a
“disclaimer” and a “disclosure statement”); Davis v. FEC, 554 U.S. 724, 730-31
(2008) (requiring a “declaration of intent,” and “notifications”); Buckley v. Am.
Constitutional Law Found., Inc., 525 U.S. 182, 204 (1999) (requiring the “[l]isting
[of] paid circulators and their income from circulation”); Buckley, 424 U.S. at 60-63(requiring registration, recordkeeping, and reporting). See also Catholic Leadership
Coalition, 764 F.3d at 426 (“Disclosure and disclaimer rules require the provision of
information, and only incidentally prevent speech when the speaker is unwilling to
provide the additional required information.”); Vermont Right to Life Comm., Inc.
v. Sorrell, 758 F.3d 118, 137 (2nd Cir. 2014) (“[R]egistration, recordkeeping
necessary for reporting, and reporting requirements . . . amount to the establishment
of a disclosure regime.”).
Laws requiring committees to take organizational steps are also generally
treated as disclosure laws. See Catholic Leadership Coalition, 764 F.3d at 439
(“[T]he treasurer-appointment requirement is a disclosure requirement: all that the
provision requires is that a general-purpose committee take simple steps to formalize
its organizational structure and divulge additional information to the government.”
(emphasis in original)); Worley v. Florida Secretary of State, 717 F.3d 1238, 1241-45
(11th Cir. 2013) (regulations requiring committees to “appoint a treasurer and
establish a campaign depository” are subject to exacting scrutiny); The Real Truth
About Abortion, Inc. v. FEC, 681 F.3d 544, 548-49 (4th Cir. 2012) (“disclosure and
organizational requirements” are “not as burdensome on speech as are limits imposed
on campaign activities or limits imposed on contributions to and expenditures by
campaigns”), SpeechNow.org v. FEC, 599 F.3d 686, 697 (D.C. Cir. 2010) (en banc)
(“the requirement to organize as a political committee as soon as it receives $1000”
is subject to exacting scrutiny). Cf. Minnesota Citizens Concerned, 692 F.3d at 875
n.9 (questioning whether exacting scrutiny applied, but applying it to “disclosure
laws” and “[o]ther requirements, such as requiring a treasurer, segregated funds, and
record-keeping” that are “related to disclosure”).
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The MEC argues that the formation deadline is a disclosure law because it
merely requires formation. To the contrary, the unchallenged language of section
130.011(8) requires that if a committee’s “sole purpose is to support or oppose . . . one
or more particular ballot measures,” a campaign committee “shall be formed . . . to
receive contributions or make expenditures.” In addition to requiring formation, the
formation deadline prohibits formation—the precondition to speak—within 30 days
of the election. Thus, the formation deadline is not a disclosure law because it
prohibits speech even if the individual or group is willing to register, report
information, keep necessary records, and take organizational steps. See Pursuing
America’s Greatness v. FEC, 831 F.3d 500, 507-08 (D.C. Cir. 2016) (a rule about
what a committee may name itself is not a disclosure requirement, because it
“prevent[s] [the speaker] from conveying information to the public,” even though the
speaker “has provided all the information that the [laws] require”); Catholic
Leadership Coalition, 764 F.3d at 427 (“The 60-day, 500-dollar limit [is not a
disclosure requirement, because it] places a ceiling on speech for sixty days even if
a committee is willing to comply with all disclosure/disclaimer requirements . . . .”);
Family PAC v. McKenna, 685 F.3d 800, 811-12 (9th Cir. 2012) (“$5,000 limit on
contributions during the 21 days preceding a general election” is subject to greater
than exacting scrutiny). Cf. Citizens United, 558 U.S. at 319 (“The Government may
regulate corporate political speech through disclaimer and disclosure requirements,
but it may not suppress that speech altogether.”).
The MEC insists that it allows late formation and enforces the formation
deadline by imposing only a $1,000 fee (part of which will be stayed pending further
violations). See Missourians for Fiscal Accountability, 830 F.3d at 797 (describing
the MEC’s policy of accepting late formation and imposing only a fee). According
to the MEC, a late-formed campaign committee can then speak without further
violating chapter 130. The MEC invokes the canon of constitutional avoidance in
favor of its interpretation. See McFadden v. United States, 135 S. Ct. 2298, 2307
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(2015) (“[T]his canon is a tool for chosing between competing plausible
interpretations of a provision.” (internal quotation marks omitted)).
First, the MEC is not required to allow late formation or limited to imposing
fees. Forming within 30 days of the election violates the formation deadline’s
command that a campaign committee “shall be formed no later than thirty days prior
to the election.” § 130.011(8). The MEC admits this by imposing fees under its
“power to seek fees for violations . . . .” See § 105.961.4(6) (emphasis added).
Purposeful violations of chapter 130 are class A misdemeanors. § 130.081. The MEC
could refer the matter for criminal prosecution or seek a cease-and-desist order. See
§ 105.961.2, .5. This court does not expect individuals or groups “to rely on [the
MEC’s] informal assurance that it would not enforce the plain meaning of the statute.”
See Minnesota Citizens Concerned, 692 F.3d at 873 n.8.
Second, even assuming late-formers can expect only the fee, this does not make
the formation deadline a disclosure requirement. A $1,000 fee is a significant burden,
considering that a group must form a committee if its expenditures exceed $500. See
§ 130.011(7)(a). Also, the fee is issued in a Consent Order finding probable cause
that the committee and its treasurer violated chapter 130. See Missourians for Fiscal
Accountability, 830 F.3d at 797 (public links to past Consent Orders). This public
reprimand could damage a campaign committee’s speech and denigrate its officers
and members. Under the MEC’s interpretation, while the formation deadline may not
flatly prohibit speech within 30 days, it gives individuals or groups a choice: (1)
speak, violating the law and incurring a fee and public reprimand; or (2) limit speech
below the thresholds. The Supreme Court applies greater than exacting scrutiny in
similar situations. See Davis, 554 U.S. at 738-40 (applying strict scrutiny to a law that
“does not impose a cap on a candidate’s expenditure of personal funds,” because it
gives candidates “two choices: abide by a limit on personal expenditures or endure the
burden that is placed on that right by the activation of a scheme of discriminatory
contribution limits”); Arizona Free Enterprise Club v. Bennett, 564 U.S. 721, 740-43
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(2011) (applying Davis to a similar law and rejecting the argument that “any burden
. . . is . . . analogous to the burden placed on speakers by the disclosure and disclaimer
requirements . . . upheld in Citizens United” as “not even close”). The fact that some
may choose to speak despite the formation deadline “does not make [it] any less
burdensome.” See Arizona Free Enterprise, 564 U.S. at 745 (“If the state made
privately funded candidates pay a $500 fine to run as such, the fact that candidates
might choose to pay it does not make the fine any less burdensome.”); Davis, 554 U.S.
at 739 (“Many candidates . . . may choose to do so despite [the rule], but they must
shoulder a special and potentially significant burden if they make that choice”).
The MEC invokes this court’s opinion in National Right to Life Political Action
Committee v. Connor. There, this court held that a similar deadline for continuing
committees “does not, on its face, limit issue or express advocacy within thirty days
of an election; it merely states a registration deadline.” 323 F.3d 684, 693 (8th Cir.
2003). But Connor addresses only ripeness and says nothing about the merits or
proper level of scrutiny. Id. See Missourians for Fiscal Accountability, 830 F.3d at
797 (“This court [in Connor] concluded that a continuing committee’s claim was not
ripe because it presented neither evidence ‘on the issue of fees’ nor pursued an
advisory opinion from the MEC or a temporary restraining order.”). In any event, the
fact that a statute does not limit speech on its face does not mean that it is a disclosure
requirement. While a formation deadline by itself might not expressly limit speech,
the formation deadline here is more than a disclosure requirement because it prohibits
(or significantly burdens) formation of a campaign committee, a requisite for legally
engaging in speech, even if the individual or group is willing to comply with
organizational and disclosure requirements.
Finally, the MEC argues that the formation deadline is a disclosure requirement
because it prevents “circumvent[ion]” of, or encourages compliance with, chapter
130’s disclosure regime. But as the Fifth Circuit says, this does not make it a
disclosure requirement: “A complete ban on political speech would certainly prevent
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circumvention of [the] disclosure regime, but no one would suggest that it is a
disclosure regulation.” See Catholic Leadership Coalition, 764 F.3d at 427.
IV.
Strict scrutiny “requires the [g]overnment to prove that the restriction furthers
a compelling interest and is narrowly tailored to achieve that interest.” Minnesota
Citizens Concerned, 692 F.3d at 874 (internal quotation marks omitted) (alteration in
original), quoting Citizens United, 558 U.S. at 340. The Supreme Court “has
identified only one legitimate governmental interest for restricting campaign finances:
preventing corruption or the appearance of corruption.” McCutcheon, 134 S. Ct. at
1450. The MEC does not assert this interest. Cf. First National Bank of Boston v.
Bellotti, 435 U.S. 765, 790 (1978) (“The risk of corruption perceived in cases
involving candidate elections . . . simply is not present in a popular vote on a public
issue.” (internal citations omitted)). Instead, the MEC asserts an interest in preventing
circumvention of chapter 130’s disclosure regime.
Assuming, without deciding, that this interest is compelling, the formation
deadline is unconstitutional because it is not narrowly tailored. The formation
deadline indiscriminately prohibits (or significantly burdens) speech by individuals
or groups who did not form a campaign committee by the 30-day deadline. This
would be less burdensome if all individuals and groups knew well in advance that they
would eventually want to speak. But as the Supreme Court has recognized, this is not
the case:
[T]he public begins to concentrate on elections only in the weeks
immediately before they are held. There are short timeframes in which
speech can have influence. The need or relevance of the speech will
often first be apparent at this stage in the campaign. The decision to
speak is made in the heat of political campaigns, when speakers react to
messages conveyed by others.
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Citizens United, 558 U.S. at 334. See FEC v. Wisconsin Right to Life, 551 U.S. 449,
462 (2007) (“groups . . . cannot predict what issues will be matters of public concern
. . . .”); Family PAC, 685 F.3d at 812 (“Washington’s limit [] imposes a significant
burden, because it limits contributions during the critical three-week period before the
election, when political committees may want to respond to developing events.”).
In Missouri, individuals may not learn of ballot measures until days before the
election. Once the ballot is finalized, the secretary of state sends election authorities
the notice of the measures to be voted on. See § 116.240. The local election authority
publishes the notice in local newspapers, with the first publication generally occurring
less than 30 days before the election. See §§ 116.250-60, 115.127.2.
True, an effect of the 30-day formation deadline is that campaign committees’
statements of organization are generally due 10 days before the election. See §
130.046 (statements of organization due 20 days after “becom[ing] a committee”).
The MEC argues this is important, because it ensures that voters know who is
speaking before the election. But even without the formation deadline, all campaign
committees active 12 days before the election must file a statement of organization
(and a disclosure report) eight days before the election. See §§ 130.046.1(2),
130.021.5. See also § 130.044.1 (campaign committees that receive a $5,000 donation
from any single contributor must “electronically report [that contribution] to the
[MEC] within forty-eight hours,” regardless when it is received).
Due to its burden on speech and its modest effect on preventing circumvention
of the disclosure regime, the formation deadline is not narrowly tailored. See Catholic
Leadership Coalition, 764 F.3d at 433 (60-day, 500-dollar limit is not closely drawn
to “prevent[] circumvention of its disclosure requirements”); Family PAC, 685 F.3d
at 813 (prohibition on contributions above $5,000 within 21 days of a general election
“is not closely drawn to provide voters with information they need to make informed
choices”). Thus, it is facially unconstitutional as at least “overbroad.” See Phelps-
Roper, 867 F.3d at 892
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No other part of section 130.011(8) or chapter 130 need be invalidated here,
because the formation deadline is severable. This court “look[s] to state law to
determine the severability of a state statute.” Phelps-Roper v. Koster, 713 F.3d 942,
953 (8th Cir. 2013). Missouri statutes generally—and chapter 130 specifically—are
severable unless “the valid provisions . . . are so essentially and inseparably connected
with, and so dependent upon, the void provision that it cannot be presumed the
legislature would have enacted the valid provisions without the void one; or unless .
. . the valid provisions, standing alone, are incomplete and are incapable of being
executed in accordance with the legislative intent.” § 1.140. See § 130.096 (“[T]he
provisions of [chapter 130] are declared severable.”). No exception applies here.
The district court did not err in granting summary judgment for MFA.
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The judgment is affirmed.
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