### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No. 18-3475
D AN P ROFT and L IBERTY P RINCIPLES PAC
, Plaintiffs-Appellants ,

v.

K WAME R AOUL , Attorney General of Illinois, et al. , Defendants-Appellees

.

____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:18-cv-04947 — Virginia M. Kendall , Judge

.

____________________
A RGUED S EPTEMBER 6, 2019

— D ECIDED D ECEMBER 16, 2019

____________________

Before E ASTERBROOK , K ANNE , and B RENNAN , Circuit Judges

. B RENNAN , Circuit Judge . A provision of the Illinois ElectionCode limits how much money entities can contribute to political campaigns. But in some races, Illinois lifts these limits,allowing certain entities to make unlimited campaign contributions and coordinate unlimited spending with candidates. Illinois Liberty PAC, an independent expenditure committee, is not one of these entities; indeed, Illinois bans all2 No. 18-3475

independent expenditure committees from making campaign contributions and from coordi nating spending with candidates.
Plaintiffs Dan Proft and the I llinois Liberty PAC do not attack the entire contribution and coordination ban enforced against independent expenditure committees. Rather, they seek to overturn the ban only when unlimited contributionsand unlimited coordinated expenditures are allowed for others. Otherwise, plaintiffs claim, Illinois’s ban violates the First Amendment rights of free speech and free association and the Fourteenth Amendment right of equal protection.
Whether a constitutional violat ion exists here depends on if the contribution and coordina tion ban is closely drawn to prevent corruption or the appearance of corruption. Because striking down the ban would in crease the risk of corruptionand circumvent other election code sections that work to prevent political corruption, we affirm the district court’s dismissal of this suit and denial of plaintiffs’ motion for a preliminary injunction.
I.
A. The Illinois Election Code Like many states, Illinois pe rmits political contributions by individuals, corporations, unions, associations, political action commi tt ees (“PACs”), and political parties. Illinois limits how much money these groups may contribute to a political campaign. See 10 I LL

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. S TAT . 5/9-8.5(b). Individualsmay contribute up to $5,000; corporations, unions, and associations may donate up to $10,000; and PACs may provide up to $50,000. Id . The Illinois Election Code does not limitNo. 18-3475 3

contributions by a political party in a general election, but it does limit a political party’s co ntributions in a primary election. Id. Unlike many other states, Illinois lifts these contribution limits in some races. If a candidate’s self-funding exceeds $250,000 in a race for statewide o ffi ce, or $100,000 in any other
race, orif spending by an independent expenditure commi tt ee or individual exceeds either ofthese limits, the Illinois Election Code waives contribution limits for all candidates in that race. 10 I LL

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. S TAT . 5/9-8.5(h), (h-5). In short, the code allows individuals and certain enti ties to contribute to and coordinate with candidates with out limits when self-funding or independent expenditures exceed a threshold amount. In addition to regulating contributions to candidates, the Illinois Election Code regulates independent expenditures. Those expenditures are (1) “any payment, gift, donation, or expenditure of funds,” (2) used “for the purpose of making electioneering communications” or for advocating in supportof a candidate or against a candidate, and (3) not made in coordination with a campaign. 10 I LL

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. S TAT . 5/9-1.15. Before making political expend itures exceeding $3,000 in a12-month period, the Illinois Election Code requires any entity (other than an individual) to fi rst register as a political commi tt ee. 10 I LL

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. S TAT . 5/9-8.6(b). An independent expenditure commi tt ee is a type of political commi tt ee that may “accept unlimited contributions fromany source, provided [] the independent expenditure committee does not make contributions to any candidate ... , political party commi tt ee, or [PAC].” 10 I LL

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. S TAT . 5/9-3(d-5).The Illinois Election Code never permits independent expenditure commi tt ees to contribute to candidates, even when4 No. 18-3475

contribution limits are lifted for individuals and other entities. 1 If an independent expenditure commi tt ee violates the code by contributing to a candidate, party, or PAC, the Illinois State Board of Elections assesses a fi ne on the independent expenditure commi tt ee “equal to the amount of any contribution received in the preceding 2 years by the independent expenditure commi tt ee that exceeded the limits [] a [PAC]” may accept in an election cycle. 10 I LL

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. S TAT . 5/9-8.6(d). In

e ff ect, the Illinois Election Code grants independent expenditure commi tt ees a trade-o ff —they can raise unlimited funds for independent expenditures, but they risk heavy fi nes if those funds are contributed to candidates, parties, or PACs. B. Claims by Proft and Illinois Liberty PAC Illinois Liberty PAC is an I llinois-based independent expenditure commi tt ee that supports Illinois political candidates commi tt ed to economic liberty. Proft founded IllinoisLiberty PAC and currently serves as its chairman and treasurer. Although the Illinois Elec tion Code bars independent expenditure commi tt ees from contributing to or coordinating with candidates, Proft, through Illinois Liberty PAC, wants to make unlimited contributions directly to political candidates and coordinate with those candid ates in races where the code lifts contribution caps for other entities and individuals. To do so, plainti ff s fi led a complaint against the Illinois A tt orney

1 Federal law imposes a similar ba n on independent expenditure committees contributing to federal candid ates or coordinating with federal candidates. See McCutcheon v. FEC, 572 U.S. 185, 193 n.2 (2014) (“A socalled ‘Super PAC’ is a PAC that makes only independent expenditures and cannot contribute to candidates.”). But because Illinois Liberty PAC is regulated by Illinois campaign finance law, federal campaign finance regulations do not apply here.No. 18-3475 5

General and the members of the Illinois State Board of Elections to obtain declaratory and injunctive relief permi tt ing such contributions and coordinated spending. Plainti ff s argue that by excluding independent expenditure commi tt ees frommaking these contributions and coordinated expenditures, Illinois has violated their First Amendment rights to free speech and free association and their Fourteenth Amendment rights under the Equal Protection Clause.
Plainti ff s raised these arguments in a motion to enjoin the Illinois A tt orney General from enforcing the Illinois Election Code in the 2018 election. The Illinois defendants opposed plainti ff s’ preliminary injunction request and moved to dismiss plainti ff s’ complaint. The district court looked to whether the code’s ban on cont ributions and coordination by independent expenditure commi tt ees satis fi ed the Supreme Court’s requirement that contribution limits serve “a su ffi

ciently important interest and employ means closely drawn to avoid unnecessary abridgment of associational freedoms.” Buckley v. Valeo , 424 U.S. 1, 25 (1976) (citations omi tt ed). The court found that the Illinois Elec tion Code’s “suppression of independent expenditure commi tt ee[] contributions to candidates” satis fi ed the standard for constitutionality set by the Supreme Court because the ban “prevent[ed] corruption or its appearance” through “closely drawn means.” After fi ndingthe contribution and coordination ban constitutional, the district court granted defendants’ motion to dismiss and denied plainti ff s’ motion for a preliminary injunction. Plainti ff s appeal those decisions.6 No. 18-3475

II.
A. Standards of Review
We review a dismissal order under Federal Rule of Civil Procedure 12(b)(6) de novo. Tagami v. City of Chicago , 875 F.3d 375, 377 (7th Cir. 2017) (citation omi tt ed). To survive a Rule12(b)(6) motion to dismiss, a claim for relief must be “plausible on its face.” Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007). When reviewing the distri ct court’s grant of a 12(b)(6) motion to dismiss, “[w]e constr ue the complaint in the light most favorable to the plainti ff, accepting as true all wellpleaded facts alleged, and drawing all possible inferences in [the plainti ff ’s] favor.” Tamayo v. Blagojevich , 526 F.3d 1074, 1081 (7th Cir. 2008) (citations omi tt ed).
Plainti ff s urge this court to apply a strict scrutiny standard when reviewing the contribution and coordination ban under the First Amendment because “the ban discriminates against certain political speakers ... and in favor of others.” Although “[m]ost laws that burden political speech are subject to strict scrutiny[,] ... the Supreme Court has adopted a form of intermediate scrutiny” when contribution limits are at issue. Ill. Liberty PAC v. Madigan , 904 F.3d 463, 469 (7th Cir. 2018) (citation omi tt ed). Under this intermediate scrutiny standard ofreview, “[c]ampaign contribution limits are generally permissible if the government can establish that they are ‘closely drawn’ to serve a ‘su ffi ciently important interest.’” Wis. Right to Life State PAC v. Barland , 664 F.3d 139, 152 (7th Cir. 2011) (quoting Buckley , 424 U.S. at 25). And because coordinated expenditures “are as useful to [] candidate[s] as cash,” coordinated expenditures are subject to the same closely drawn standard as contribution limits. See FEC v. Colo. Republican Federal Campaign Commi tt ee , 533 U.S. 431, 446 (2001) (citingNo. 18-3475 7

Buckley , 424 U.S. at 47). Because the Illinois Election Code bans contributions and coordinated expenditures by independent expenditure commi tt ees but not independent expenditures, we apply the “closely drawn” standard to plainti ff s’ First Amendment claim. See McCutcheon , 572 U.S. at 197 (citing Buckley , 424 U.S. at 21, 25).
Plainti ff s also contend the contri bution and coordination ban violates the Equal Protection Clause. When, as here, a plainti ffalleges equal protection challenges in a case involving First Amendment rights, the Supreme Court has applied strict scrutiny to equal protection challenges only “when a First Amendment analysis would itself have required such scrutiny.” Wagner v. FEC, 793 F.3d 1, 32 (D.C. Cir. 2015). Because, in the context of contribution limits, “it makes no difference whether a challenge to the disparate treatment of speakers or speech is framed under the First Amendment or the Equal Protection Clause,” Ill. Liberty PAC v. Madigan , 902 F. Supp. 2d 1113, 1126 (N.D. I ll. 2012) (citations omi tt ed), a ff

’d 904 F.3d 463 (7th Cir. 2018), this court will apply the same standard of review to plainti ff s’ Equal Protection Clause claim as to plainti ff s’ First Amendment claim. Thus, whether the district court correctly dismissed the complaint turns onwhether the Illinois Election Code’s contribution and coordination ban serves “a su ffi ciently important interest and employs means closely drawn.” Buckley , 424 U.S. at 25 (citations omi tt ed).
B. Discussion “Preventing actual or apparent quid pro quo corruption is the only interest the Supreme Court has recognized as su ffi

cient to justify campaign- fi nance restrictions” under the “closely drawn” standard. Wis. Right to Life State PAC , 6648 No. 18-3475

F.3d at 153. See also FEC v. Nat’l Conservative PAC , 470 U.S. 480, 496–97 (1985) (“We held in Buckley and rea ffi rmed in Citizens Against Rent Control that preventing corruption or the appearance of corruption are the only legitimate and compelling government interests thus far identi fi ed for restricting campaign fi nances.”). Here, if the contribution and coordination ban on independent expenditure commi tt ees is lifted in races where contribution caps are removed, a substantial risk of actual or apparent corruption would arise. Lifting the ban in these races would allow independent expenditure commi tt ees to use “unlimited contributions from any source” to contributeunlimited sums of money to candidates and to coordinate unlimited spending wi th candidates. 10 I LL

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. S TAT

. 5/9-3(d-5). Allowing such large contributions to candidates would create manifest opportunities for corruption. See Buckley , 424 U.S. at 46 (“[I]ndependent advocacy ... does not [] appear to pose dangers of real or apparent corruption comparable to those identi fi ed with large campai gn contributions.”). Plainti ff s discount these dangers and argue that contributions and coordinated expenditures by independent expenditure commi tt ees “would [not] pose a grea ter threat of corruption than contributions or coordinati on by anyone else.” But striking down the coordination and contribution ban would permit independent expenditure commi tt ees to circumvent key sections of the Illinois Election Code that work to prevent political corruption. Unlike independent expenditure commi tt ees, which are permi tt ed to “accept unlimited contributions from any source,” 10 I LL

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. S TAT . 5/9-3(d-5), PACs are subject to restrictions on the amount of contributions they may receiveNo. 18-3475 9

from any one individual or entity. 10 I LL

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. 5/9-8.5(d). Because the Illinois El ection Code limits contributions to PACs, donors are less likely to use PACs as conduits for contributing money to candidates in corrupt dealings. For example, in a race where the cont ribution cap is lifted, an individual could enter into a qu id pro quo agreement with a candidate, contribute up to $10,000 to a PAC, id. , and then request the PAC donate the money to the candidate. Although PACs can contribute to candidates without limits in races where the contribution cap is lifted, an individual donor could contribute up to $10,000 through PACs to a candidate in an election cycle. This $10,000 contribution limit reduces the risk of quid pro quo corruption. See generally Buckley, 424 U.S. at 38 (holding contributions to PACs can be limited to prevent the actuality and appearance of corruption). But if the contribution and coordination ban was struck down, donors could avoid the statutory safeguards that apply to PACs and instead use independent expenditure commi tt ees to donate unlimited sums of money to polit ical candidates or coordinate with political candidates without limits in races where the contribution cap is lifted. Partially lifting the contributi on and coordination ban on independent expenditure commi tt ees also would permit individuals to circumvent Illinois’ s disclosure regime. Currently, an individual can donate unlim ited sums of money directly to a candidate in a race wher e the contribution limits are lifted. 10 I LL

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. S TAT . 5/9-8.5(h), (h-5). But under the disclosure regime imposed by Illinois’s Election Code, candidates receiving contributions must disclose the “full name and mailing address” of any individual who contributed more than $150 to his or her campaign. 10 I LL

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. S TAT . 5/9- 10(b); 10 I LL

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. S TAT . 5/9-11(a)(4). This disclosure—10 No. 18-3475

linking the individuals making contributions to the candidates receiving those contributions—reduces the risk of corrupt dealings. See Buckley , 424 U.S. at 67 (“A public armed with information about a candid ate’s most generous supporters is be tt er able to detect any post-election special favors that may be given in return.”).
If the contribution and coordina tion ban were lifted, an individual could make unlimited contributions to an independent expenditure commi tt ee and then request that commi tt ee donate those funds to a candidate. Independent expenditure commi tt ees would still be required to disclose the name and mailing address of that individual if he contributes more than $150, 10 I LL

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. S TAT . 5/9-10(b); 10 I LL

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.5/9-11(a)(4), and the candidate and the independent expenditure commi tt ee would still have to disclose any contribution from the independent expenditure commi tt ee to the candidate that amounts to more than $150, 10 I LL

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. 5/9-10(b); 10 I LL

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. S TAT . 5/9-11(a)(6). But, despite these provisions, an individual could obscure his identity as a donor by funneling his contributions through an independent expenditure commi tt ee. And passing contributions in this manner may be a particularly e ff ective way of hiding quid proquo transactions. Funds may commingle within an independent expenditure commi tt ee, and these commi tt ees may even transfer funds back and forth to one another without penalty under 10 I LL

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. S TAT . § 5/9-8.6(d), further concealing thesource of contributions to a candidate. Striking down the contribution and coordination ban for independent expenditure commi tt ees could thus permit corrupt actors to avoid Illinois’s disclosure system and public oversight. See Buckley , 424 U.S. at 67 (“[D]isclosure requirements deter actual corruption and avoid the appearance of corruption by exposing largeNo. 18-3475 11

contributions and expenditures to the light of publicity.”). This court has heeded “[t]he need for an e ff ective and comprehensive disclosure system” in the past, and we do so again here. Ctr. For Individual Freedom v. Madigan , 697 F.3d 464, 490 (7th Cir. 2012).
Plainti ff s’ request would turn Illinois Liberty PAC into a quasi-independent expenditure commi tt ee that can contribute to and coordinate with candidates. 2 Because contributions and coordinated spending are at issue, we look to whether the contribution and coordination ban satis fi es “a su ffi ciently important interest and empl oys means closely drawn.” Buckley , 424 U.S. at 25. The ban serves a su ffi ciently important interest—the prevention of actual or apparent corruption—by ensuring independent expenditure commi tt ees cannot circumvent key Illinois Election Co de provisions that prevent corruption, such as 10 I LL

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. S TAT . § 5/9-8.5(d), which limits political contributions, and 10 I LL

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. S TAT . 5/9-10(b), which requires fi nancial disclosures. And, by prohibiting independent expenditure commi tt ees from making

2 If independent expenditure committees could make contributions to candidates and coordinate with candidates as plaintiffs wish, Illinois could then restrict contributions to independent expenditure committees. Independent expenditure committees are only able to avoid limits on the contributions they receive because th ose committees are limited to making independent expenditures. See SpeechNow.org v. FEC , 599 F.3d 686, 696 (D.C. Cir. 2010) (“[B]ecause Citizens United holds that independent expenditures do not corrupt or give th e appearance of corruption as a matterof law, then the government can have no anti-corruption interest in limiting contributions to independent expe nditure-only orga nizations.”). In that sense, should plaintiffs have succeeded in this case, Illinois couldhave subjected Illinois Liberty PAC to the same regulations as PACs, including contribution limits.12 No. 18-3475

contributions to or coordinating spending with candidates, Illinois employs means closely drawn. Illinois’s statutoryscheme leaves ample room for independent expenditure commi tt ees to participate in Illinois politics. The ban regulates only contributions and coordi nated spending by these commi tt ees—the activities most likely to give rise to the prospect of corruption.
III. Next, plainti ff s argue the district court erred when it denied their motion for a preliminary injunction. That motion sought to enjoin the “Defendant s from enforcing Illinois‘[s]ban on coordinated expenditures and contributions to candidates by independent expenditure commi tt ees in any race where contribution limits have otherwise been eliminated.” To obtain a preliminary inju nction, “the moving party must establish that (1) withou t preliminary relief, it will su ff er irreparable harm before fi nal resolution of its claims; (2) legal remedies are inadequate; and (3 ) its claim has some likelihood of success on the merits.” Eli Lilly & Co. v. Arla Foods, Inc. , 893 F.3d 375, 381 (7th Cir. 2018) (citation omi tt ed). If the moving party fails to make this showing, the court does not have to proceed to balancing the resulting harms. Id. (citation omitted). When reviewing a district court’s grant or denial of a preliminary injunction, “[w]e review the district court’s fi ndings of fact for clear error, its legal conclusions de novo , and its balancing of the factors for a preliminary injunction for abuse of discretion.” D.U. v. Rhoades , 825 F.3d 331, 335 (7th Cir. 2016) (citations omi tt ed). Here, the district court denied plainti ff s’ motion for a preliminary injunction after fi nding that plainti ff s were unlikelyNo. 18-3475 13

to succeed on the merits of thei r claims and that Illinois’s interest in enforcing democratically enacted statutes and maintaining the integrity of the el ectoral process outweighs the harms imposed on plainti ff s by the challenged provision. Because plainti ff s have not demonstrated any likelihood of success on the merits, the di strict court correctly denied their motion for a preliminary injunction. As mentioned above, the contribution and coor dination ban is necessary to prevent corruption or its appearance and is closely tailored to that purpose. Se tt ing aside plainti ff s’ inability to succeed on the merits, plainti ff s have also failed to establish that they deserve equitable relief because th eir legal remedies are inadequate. If Proft wishes to make contributions to candidates orcoordinate with candidates, he may reorganize Illinois Liberty PAC as a political action commi tt ee. And if Proft wishes to contribute to candidates, coordinate with candidates, andmake independent expenditures, he may instead form a political action commi tt ee while continuing to manage Illinois Liberty PAC. 10 I LL

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. S TAT . 5/9-2(d).
IV.The district court did not err by granting defendants’ motion to dismiss and denying plainti ff s’ motion for a preliminary injunction. Accordingly, its judgment is A FFIRMED

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