10

far from being a “vintage relic” as a result of Citizens
United, the number of separate segregated funds has
gone up since that decision. Id. Connected PACs
constitute a robust and increasing share of political
activity precisely because it is often essential for
individuals to speak collectively to have their voices
heard—a right this Court has recognized often Thus,
even if the D.C. Circuit is correct that this is “the
hard way” to engage in political speech—and
especially when it is the necessary way for any
meaningful opportunity to be heard—that does not
somehow decrease the organizers’ entitlement to
associate and speak as a group on political issues
important to them in a non-corrupting manner.

The government does not address (1) the number
of connected PACs, (2) the increase in PACs since
Citizens United, (3) the fact that people are not
subject to greater speech restrictions just because
they choose “the hard way” to associate as speakers,
or (4) the simple fact that “[w]ithout the Court’s
intervention, there is no clear answer as to whether
laws that burden the non-contribution activities of . .
. hybrid PACs are constitutional,” Pet. 33. The
Court’s intervention is needed immediately, so that
fewer speakers are chilled by federal and state laws
limiting speakers’ ability to make independent
expenditures as a group.

The government ironically raises the Court’s
admonition in Citizens United that disclosure
requirements “impose[] no ceiling on campaign-
related activities,” while touting a regime that does
just that, as applied. Opp. 12, quoting Citizens
United, 558 U.S. at 366. At bottom, the government
claims the lack of a disclosure requirement gives the
government a right to restrict speech. That is far


1

INTRODUCTION

The petition presents two questions that have
divided courts all over the country: whether the
government can restrict independent expenditures
by organizations that also engage in more heavily
regulated campaign and candidate contributions,
and whether the disclosure interest can justify a
prohibition on speech for some forms of organization.
But the government has elected to simply not
address these questions, and focus on a question no
one asked.

The Fifth Circuit spoke directly to these issues,
rejecting Texas’s effort to do exactly what the
government succeeded at in the decision below:
turning a restriction on speech into a disclosure
issue. And the Tenth Circuit has plainly rejected the
notion that additional restrictions on independent
expenditures can be justified by the mere fact that
an organization also engages in regulated campaign
and candidate contributions as well.

Rather than address these conflicts, the
government inverts this Court’s settled First
Amendment analysis by asserting that Petitioner
Stop This Insanity, Inc. Employee Leadership Fund’s
(“ELF”)  non-contribution activities can be
restricted—unlike with any other PAC, corporation,
labor union, non-profit, or individual—because
Congress granted connected PACs a modest and
sensible disclosure exemption. If Congress chooses
to require connected PACs to make the same
disclosures as non-connected PACs, it may do so, Pet.
29-30, but the government may not suppress speech
based on the white elephant gift of a minor
disclosure exemption, Pet. 30. The right to engage in


14

CONCLUSION

For the foregoing reasons, the petition should be
granted and the judgment below reversed.

Respectfully submitted,

PATRICIA E. ROBERTS TILLMAN J. BRECKENRIDGE*
WILLIAM & MARY LAW TARA A, BRENNAN
SCHOOL APPELLATE AND REED SMITH LLP
SUPREME COURT CLINIC 1301 K Street, NW

P.O. Box 8795 Washington, DC 20005

Williamsburg, VA 23187 Telephone: 202-414-9200

Telephone: 757-221-3821 Facsimile: 202-414-9299
tbreckenridge@reedsmith.com

DAN BACKER

DB CAPITOL STRATEGIES

PLLC

203 South Union Street

Suite 300

Alexandria, VA 22314
Telephone: 202-210-5431

*Counsel of Record Counsel for Petitioner


6

The cases have enough in common that the Fifth
Circuit panel felt the need to directly distinguish the
opinion below on a ground that turns out to be no
distinction at all. As addressed in the petition, and
in Section II of this brief, connected PACs organized
under the Act retain a real and important role in
campaign speech since Citizens United, and they
deserve to be heard on the unconstitutional denial of
their speech rights.

The Tenth Circuit also adopted legal reasoning
incongruent with the decision below in Republican
Party of New Mexico v. King, 741 F.3d 1089, 1097
(10th Cir. 2013). There, the court considered a PAC
that made “both independent expenditures and
campaign contributions.” Id. That PAC maintained
separate bank accounts, and “adhere[d] to
contribution limits for donations to its candidate
account.” Jd. The court recognized that, given the
safeguards against commingling in place, restrictions
on contributions to the PAC for use on independent
expenditures were unconstitutional as applied. Id.

At bottom, that is the issue here: is there a
compelling governmental interest to support FEC
restricting ELF from forming a separate bank
account and engaging in independent expenditures.
The Fifth and Tenth Circuits plainly say no such
interest exists. “A hybrid PAC’s direct contribution
does not alter the unconnected nature of its
independent expenditures; there still must be some
attendant coordination with the candidate or
political party to make corruption real or apparent.”
Id. at 1101.

That is the correct conclusion, particularly in
light of the undisputed fact that connected PACs


3

event, the questions presented here apply well
beyond the connected PAC context. That much is
evident in the fact that the decisions below were
addressed by both the Fifth and Tenth Circuits when
deciding similar issues. This Court should intervene
now and provide guidance on whether the
government may restrict independent expenditures
in the name of protecting its interest in regulating
unrelated campaign and candidate contributions, or
silence such speech purportedly in the interest of
disclosure.

REASONS FOR GRANTING THE WRIT

I. THE CIRCUITS ARE DIVIDED ON BOTH
OF THE QUESTIONS PRESENTED.

The circuits are divided on fundamental
questions of whether hybrid PACs, like ELF’s
intended form, may be prohibited consistent with the
First Amendment, and what role the disclosure
interest plays in that analysis.

In Catholic Leadership Coalition v. Reisman, 764
F.3d 409 (5th Cir. 2014), plaintiff advocacy
organizations challenged a Texas law limiting
independent expenditures for 60 days after a type of
PAC was formed. The lead plaintiff was a regulated
PAC formed by a 501(c)(4) non-profit advocacy
organization—just like ELF. Id. at 426. And just as
here, the Texas government sought to cast the
restriction on speech as a disclosure regulation. The
court rejected that notion because “provisions that
put a ceiling on speech even if a party is willing to
provide all of the information that the government
requests constitutes something more than a simple


2

political speech is not a boon to be awarded or
restricted at the grace of the FEC or Congress.
Rather, it is a fundamental right of every person and
association. It may not be limited, unless the
government demonstrates that the restriction is
narrowly tailored to avoid unnecessary abridgement
of First Amendment rights in furthering a
governmental interest that outweighs the burden on
speech. Thus, Petitioners Stop This Insanity Inc.
(‘STII’), ELF, and Glengary Inc. all have a vested
interest in ensuring their rights to come together and
speak through ELF. And the government cannot
satisfy its burden to prohibit their speech.

The government also musters no response to
Petitioners’ point that the decision below conflicts
with this Court’s decision in Citizens United v. FEC,
558 U.S. 310 (2010), nor does it address the petition’s
discussion of the importance of the questions
presented. It fails to acknowledge that this case
asserts the free speech rights of a multitude of
individuals that make up the over 3,000 existing
connected PACs organized under the Act as of July 1,
2014. Those connected PACs are connected to not-
for-profit corporations, for-profit corporations, labor
unions, and other organizations. They often are
separate entities with their own leadership and
speech rights. Most notably, the number of
connected PACs under the Act has gone up since the
Court decided Citizens United.

The petition raised these facts, and the
government whistles past them without a mention,
on its way to adopting the D.C. Circuit’s unsupported
conjecture that connected PACs “are ‘a vintage—yet
still operable—relic.” The numerous connected PACs
formed after Citizens United beg to differ. In any


5

limited to being an informational interest in
compelling more speech to be brought into the
marketplace of ideas. App. 13-14a.

This new breed of disclosure interest ignores
ELF’s independent speech rights, and it also fails to
recognize the practical effect on speech by its
connected corporation, STII. The government claims
that the potential non-disclosure of administrative
costs compels it to force the communications that
would be made by the very transparent PAC to be
made by the corporation itself, which lacks many of
the disclosure requirements applicable to connected
PACs.3 As a result, the D.C. Circuit and
government’s reasoning paradoxically would yield
less disclosure, not more of it. Indeed, the
constitutionality problem could be resolved in a way
that leaves disclosure untouched by simply limiting
the scope of the disclosure exemption—and all of the
speech restrictions the government claims must
come with it—to the hard dollar account. That
would be consistent with the Fifth and Tenth
Circuit’s rulings, which hewed to this Court’s
precedents. See, e.g., FEC v. Wisc. Right to Life, 551
U.S. 449, 469 (2007) (the courts “must give the
benefit of any doubt to protecting rather than stifling
speech”).

That the Fifth Circuit accepted the D.C. Circuit’s
inaccurate statement that separate segregated funds

are no longer needed, and distinguished its decision
on that ground, further underscores the division.

3 This line of argument also ignores the fact that some
connected organizations, like STII, which is a 501(c)(4)
corporation remain limited in the amount of political speech
they may make. 26 C.F.R. 1.501(c)(4)-1(a)(2)Gi).


No. 14-391

IN THE

Supreme Court of the United States

STOP THIS INSANITY, INC., et al.,
Petitioners,
v.

FEDERAL ELECTION COMMISSION,
Respondent.

On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the District of Columbia Circuit

REPLY IN SUPPORT OF
PETITION FOR A WRIT OF CERTIORARI

PATRICIA E. ROBERTS TILLMAN J. BRECKENRIDGE*
WILLIAM & MARY LAW TARA A, BRENNAN
SCHOOL APPELLATE AND REED SMITH LLP
SUPREME COURT CLINIC 1301 K Street, NW

P.O. Box 8795 Washington, DC 20005

Williamsburg, VA 23187 Telephone: 202-414-9200

Telephone: 757-221-3821 Facsimile: 202-414-9299
tbreckenridge@reedsmith.com

DAN BACKER

DB CAPITOL STRATEGIES

PLLC

203 South Union Street

Suite 300

Alexandria, VA 22314
Telephone: 202-210-5431

*Counsel of Record Counsel for Petitioners


8

Commission similarly has consented to non-
connected PACs making both restricted direct
contributions and unrestricted non-contribution
expenditures from separate segregated accounts.

Further, given (1) the conflict between the
decision below and Citizens United—as established
in the petition at 25-31 and left unaddressed by the
government and (2) the case’s importance to
thousands of separate segregated funds, see § II,
post, this case is appropriate for review by the Court
regardless of whether there is a division among the
circuits.

The government further asserts that “neither [of
the decisions] suggests that another circuit would
have decided this case differently.” Opp. 13. That is
untrue. As noted in the petition, the legal reasoning
applied in both cases conflicts with the D.C. Circuit’s
legal reasoning here. Indeed, the Fifth Circuit’s
decision expressly questions the opinion below.
Catholic Leadership Coalition, 764 F.3d at 429 &
n.26 (questioning whether the decision below’s
argument linking disclosure requirements to the
anticorruption interest “is permissible at all,” and
then noting that “disclosure laws are generally
meant to be an alternative to, and not necessarily a
justification for, the firm limits on political speech
set by expenditure limits”).

Moreover, the court “reject[ed] Texas’s argument
that because it grants special privileges to certain
types of political committees, it may regulate the
committees as it pleases.” Id. at 430 n.27
(Notwithstanding Texas’s choice to grant certain

Dakota, Oregon, Utah, and Virginia.


7

already can and do make independent expenditures,
out of their hard dollar accounts, and the restrictions
here limit the scope of potential independent
expenditures by PACs connected to smaller
organizations because such PACs are restricted to
fund raising from only a small number of donors.
Indeed, long-standing FEC regulations ensure the
operational independence of independent
expenditures when made by either connected or non-
connected PACs, and there is no reason to believe
such rules would not serve their purposes just as
effectively when applied to a non-contribution
expenditures account. See, e.g., 11 C.F.R. 100.16,
100.17, & 100.22. The Fifth and Tenth Circuits’
legal reasoning recognizes the First Amendment
structure underlying all of these facts.

Yet, the government asserts that the circuits are
not divided because neither the Fifth Circuit nor the
Tenth  Circuit’s “decisions addressed the
constitutionality of FECA’s regulation of separate
segregated funds.” Opp. 13. Of course they did not—
those cases concerned challenges to state laws and
not FECA. Regardless, this point unnecessarily
narrows the issues here to FECA, when other
circuits’ decisions address similar regimes that
require the same legal analysis, as noted above. The
decision below is part of a growing division among
the circuits regarding the government’s ability to
limit independent expenditures of PACs that also
engage in highly-regulated campaign contributions.
And this divide will only deepen as at least 15 states
allow some form of a hybrid PAC,4 and the

4 Texas, New Mexico, Alabama, California, Delaware, Maine,
Minnesota, Mississippi, Missouri, Montana, New Jersey, North


4

disclosure requirement.” Id. at 426-27.1 The court
ruled that the restrictions “may very well help to
improve the transparency of Texas politics, but that
does not make it a disclosure regulation.” Id. at 427.

The court then evaluated the restrictions based
on this Court’s prior rulings establishing that the
government must show that a restriction on political
speech advances its interest against preventing
actual or perceived quid pro quo corruption. Id. at
428. It held that Texas could not show that the
provision combatted corruption. Id. “And once
Texas is shorn of a direct anticorruption justification
for its temporal limitation on independent
expenditures, then the state lacks a constitutionally
sufficient justification for limiting a general purpose
committee’s independent expenditures.” Id.

This stands in direct contrast to the decision
below. Here, the government was able to
successfully recast a restriction on speech as a
disclosure regulation.2 App. 12-13a. The court then
created a new breed of disclosure interest that could
be used to justify a restriction on speech, rather than
apply the traditional disclosure interest that is

1 The government oddly claims that ELF can simply start
disclosing contributions made by its connected organization,
and it would no longer be subject to the limits the Act imposes
on connected PACs. Opp. 11 n.3. That is not true. ELF is
registered as a connected PAC, and would remain subject to
solicitation and contribution restraints, no matter how much
information it provided about itself.

2 Notably, the disclosure exemption here is an exception to the
definition of “contribution” that allows connected PACs not to
report certain administrative expenses, such as electricity and
rent, 2 U.S.C. § 441b(b)(2)(C), the fractional share of which
would be difficult and expensive to determine.


iii

TABLE OF AUTHORITIES
(CONTINUED)

Other Authorities

FEC, PAC Count — 1974 to Present,
http://www.fec.gov/
press/resources/paccount.shtml (last
visited Sept. 28, 2014) ....cccccccsssseseseeteseeeeeneeeeees


11

from the disclosure concept the Court considered
constitutionally tolerable in Citizens United. The
mere lack of one disclosure requirement does not
license the government to restrict speech with
impugnity.

The D.C. Circuit and government’s solution that
ELF and all other connected PACs must destroy
themselves and re-form as other organizations is no
solution at all. “Just as we do not permit the
government to silence the New York Times because
the reporters could shout-out their stories in Central
Park or publish them on the internet, we do not
permit the government to silence various political
organizations simply because their component parts
have other opportunities for speech.” Catholic
Leadership Coalition, 704 F.3d at 430-31; see also
McConnell v. FEC, 540 U.S. 98, 256 (2008) (Scalia,
J., dissenting) (banning newspapers’ use of the
partnership form “would be an obvious violation of
the First Amendment, and it is incomprehensible
why the conclusion should change when what is at
issue is the pooling of funds for the most important
(and most perennially threatened) category of
speech: electoral speech”).6

6 This purported solution also suggests that it is appropriate to
analyze the ban on ELF’s speech as a time, place, and manner
restriction, but this Court has rejected that such analysis
applies to political speech restrictions. E.g., Nixon v. Shrink
Mo. Gov't PAC, 528 U.S. 377, 386 (2000) (noting Buckley’s
rejection of time, place, and manner restriction analysis. See
also Spence v. Washington, 418 U.S. 405, 411, n.4 (1974) (per
curiam) (Although a prohibition’s effect may be “minuscule and
trifling,” a person “is not to have the exercise of his liberty of
expression in appropriate places abridged on the plea that it
may be exercised in some other place”) (quotation omitted).


13

active conservative PACs jn America.” 558 U.S. at
419 (Stevens, J., dissenting).7

Moreover, if Congress determines that connected
PACs in the form of a separate segregated fund
should no longer exist in light of Citizens United, it
may amend the Act. But in more than four years
since Citizens United, it has not done so. It is not
then incumbent upon the Executive to legislate on
behalf of Congress by denying the organizations their
free speech rights recognized in Citizens United,
based upon its plainly wrong theory that no one
needs connected PACs any more.

7 Following the government’s logic, Congress could easily create
a form of PAC with disclosure requirements so onerous that no
one but the largest corporations and unions could use it
effectively, and then restrict the speech of non-connected PACs,
and all others, on the claim that they have certain “disclosure
exemptions” as compared to this new form of PAC. That cannot
possibly be a correct interpretation of the First Amendment
right to free speech.


ii
TABLE OF AUTHORITIES
Page(s)
Cases

Austin v. Michigan Chamber of
Commerce, 494 U.S. 652 (1990).......cccessssesseseesseee 12

Catholic Leadership Coalition v.
Reisman,764 F.3d 409 (5th Cir. 2014)......3, 4, 8, 11

Citizens United v. FEC, 558 U.S. 310

(2010)... eeesesseeeeeseeseseceseeesesesesesseseecsescseeseee passim
FEC v. Massachusetts Citizens for Life,
Inc. (“MCFL”), 479 U.S. 238 (1986).....cccccesceeeee 12

FEC v. Wisc. Right to Life, 551 U.S. 449

McConnell v. FEC, 540 U.S. 98 (2008).
Nixon v. Shrink Mo. Gov't PAC, 528 U.S.

377 (2000)... .esececccseeseseseseeeescceeesesceeeeeseeeseeteeeesees 11
Republican Party of New Mexico v. King,

741 F.3d 1089 (10th Cir. 2018).......ccceeeeees 6, 9,10

Statute
2 U.S.C. § 4415 (b)(2)(C) oeecseeecssseccsseessssstecsssneeceennensns 4
Regulations

11 CPLR. 100.16 voce eeecceeteseeseseceseseseeseessesesesescsesesees 7
11 CAPLR. 100.17 oie eceseeseseseeeeeeesestenssssesesssceteeeeeees 7

11 C.F.R. 100.22
26 C.F.R. 1.501(c)(4)-1(a)(2)(Gii) ...



i

TABLE OF CONTENTS

INTRODUCTION. .....c.cccccccessesesesssssseseeeetenenenenenenensees 1
REASONS FOR GRANTING THE WRIT
I. THE CIRCUITS ARE DIVIDED ON

BOTH OF THE QUESTIONS

PRESENTED. ........ssesssssesessesessesseeeseneeneneeneaeenenees 3
Il. THE QUESTIONS PRESENTED RAISE

ISSUES OF EXCEPTIONAL

IMPORTANCE. o....scssesessesesseseesesseeenteenteneneseenenees 9

CONCLUSION ........cscssssssereseseeeseeeeeneneseneeneneeetenenenes 14


9

privileges to certain types of committees, any
restrictions on those committees’ political speech . . .
must still withstand constitutional scrutiny”). And
the Tenth Circuit’s decision expressly disagreed with
the district court’s opinion using a rationale that
remains applicable now that the D.C. Circuit
affirmed. Republican Party of New Mexico, 741 F.3d
at 1101 (the opinion in “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 Fifth and Tenth Circuits more than
“suggested” they disagreed with the decisions
below—they flat out said as much. Indeed, even the
Commission could not reach a decision on this issue,
splitting evenly in its vote. Compl. Ex. D at 1 (filed
July 10, 2012). This case clearly presents issues that
have divided the courts, and even the Commission
itself. And this Court’s guidance is needed to resolve
the conflicts and protect vital political speech.

II. THE QUESTIONS PRESENTED RAISE
ISSUES OF EXCEPTIONAL IMPORTANCE.

The government does not address any of the
points raised by the petition that establish the
importance of the issues raised here. It only offers a
one-paragraph recitation of the D.C. Circuit’s
unsupported view that connected PACs are an
anachronism. The petition established they are not.

The questions presented here affect all of the
3,042 separate segregated funds in existence.5 And

5 See FEC, PAC Count — 1974 to Present, http://www.fec.gov/
press/resources/paccount.shtml (last visited Sept. 28, 2014).


12

Neither is their suggestion that ELF can, with no
greater burden, clone itself to make independent
expenditures rather than use a non-contribution
account. The availability of avenues “more
burdensome than the one foreclosed is ‘sufficient to
characterize [a regulatory interpretation] as an
infringement on First Amendment activities.”
Austin v. Michigan Chamber of Commerce, 494 U.S.
652, 708 (1990) (Kennedy, J., dissenting) (quotation
omitted); MCFL, 479 U.S. at 263 (“While the burden
on MCFL’s_ speech [establishing a _ political
committee] is not insurmountable, we cannot permit
it to be imposed without a constitutionally adequate
justification.”). And establishing a second PAC is a
burdensome alternative. Citizens United, 558 U.S.at
387; see FEC v. Massachusetts Citizens for Life, Inc.
(“MCFL”), 479 U.S. 238, 255 (1986) (creating a PAC
“may create a disincentive for [plaintiffs] to engage
in political speech”).

Indeed, if the onerous ability to disband and
reform or create a second more _ favored
organizational structure is all that justifies
restricting speech absent a compelling interest, it is
surprising that this Court in Citizens United did not
uphold the corporate independent expenditure bans
because the individuals forming the corporation
could merely disband it and engage in the same
speech as individuals. Further, at the time Citizens
United was decided, the Citizens United organization
operated a connected PAC for a decade and made
candidate contributions. But this did not prevent the
Court from implicitly rejecting Justice Stevens’
position that if Citizens United wanted to speak
right before the primary, all it needed to do was
“abjure business contributions or use the funds in its
PAC, which by its own account is ‘one of the most