UNITED STATES CO URT OF APPEALS

FOR THE TENTH CIRCUIT

OKLAHOMA CORRECTIONS PROFESSIONAL ASSOCIATION INC., a not for profit corporation; DAVID RAMSEY, individually; GLEN COLEMAN, Plaintiffs-Appellees,

v. PRESTON DOERFLINGER, Finance Secretary and Director, Oklahoma Department of Human Services, Defendant-Appellant. No. 12-6238 (D.C. No. 5:10-CV-01369-R) (W.D. Okla.)

ORDER AND JUDGMENT *

Before O’BRIEN , McKAY , and BALDOCK , Circuit Judges.

The Oklahoma Corrections Professiona l Association Inc. and two of its members (collectively, the OC PA), brought this 42 U.S.C. § 1983 action to challenge two statutory conditions that together barred OCPA’s participation in a voluntary

* After examining the briefs and appella te record, this pa nel has determined unanimously to grant the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctr ines of law of the case, res judicata, and collateral estoppel. It may be cite d, however, for its persuasi ve value consistent with Fed. R. App. P. 32.1 a nd 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### March 25, 2013

Elisabeth A. Shumaker Clerk of Court- 2 - payroll-deduction program for public employees: particip ating organizations must consist solely of current pub lic employees (exclusivity re quirement) and have at least 2,000 members (numerosity requirement). OCPA filed suit against the Director of the Oklahoma Department of Human Servic es in his official capacity, seeking equitable and declaratory relief forestalling enforcement of these conditions as well as a preliminary injunction to block its imminent removal from the program. The Director moved for summary judgment on the merits. In a single order the district

court denied the Director’s motion and granted OCPA a preliminary injunction precluding the Director’s en forcement of the numerosity requirement and reinstating OCPA in the program from which it had by then been removed. The Director now appeals from the grant of the preliminary injunction. Exercising jurisdiction under 28 U.S.C. § 1292(a)(1), we reverse fo r the reasons explained below. BACKGROUND, SCOPE OF APPEAL , AND DECISION UNDER REVIEW Oklahoma currently enables its employees to use volun tary payroll deductions (VPDs) to pay dues to “the Oklahoma Public Employees Association . . . or any other

statewide association limite d to state employee memb ership with a minimum membership of two thousand (2,000) dues- paying members.” Okla. Stat. tit. 62, § 34.70(B)(5). The Director reads this provision to exempt the Oklahoma Public Employees Association (OPE A) from the exclusivity and numerosity conditions imposed on “any other statewide association.” In addition, the statute grandfathers in “[a]ny statewide association granted a payr oll deduction prior to January 1, 2008,”- 3 - id. , § 34.70(D), when the numerosity th reshold was only 1,000 employees, see id. , § 7.10(B)(5) (2008). 1 This provision preserved par ticipation in the VPD program by the Oklahoma State Troopers Associat ion and the Communication Workers of America/State Employees, both of which ha ve fewer than 2,000 members. But it does not apply to OCPA, which qualified for the VPD program in late 2009 and began participating in 2010, when its membership tempor arily exceeded the 2,000-member threshold. OCPA challenged the VPD program on three grounds: (1) the numerosity and exclusivity conditions precludi ng OCPA’s use of the program burdened its ability to secure funding for political activ ities compared to associations allowed to participate, resulting in discrimination on speech in vi olation of the First Amendment; (2) the exclusivity condition restricti ng the makeup of OCPA’s memb ership (but not that of the exempt OPEA) is a violation of OC PA’s associational rights under the First Amendment; and (3) the operati ve legislative amendments to the VPD program were

enacted in violation of the single-subject rule in Article 5, § 57 of the Oklahoma Constitution. The scope of this appeal, how ever, is more limited in light of the nature and basis for the prel iminary injunction under review . The district court did not enjoin enforcement of th e exclusivity condition, so th e associational-rights claim triggered by that restriction is not before us. Nor is the state constitutional claim,

over which the district court declined to exercise supplemental jurisdiction. The

1 The statute was renumbered from § 7.10 to § 34.70 in 2009.- 4 - preliminary injunction relates solely to the numerosity requireme nt and the alleged speech discrimination it effects. The district court applied the traditiona l test for a preliminary injunction, requiring the movant to show “(1) it is substantially like ly to succeed on the merits; (2) it will suffer irrepa rable injury if the injunction is denied; (3) its th reatened injury outweighs the injury the oppos ing party will suffer under the injunction; and (4) the injunction would not be advers e to the public interest.” Beltronics USA, Inc. v. Midwest Inventory Distrib., LLC , 562 F.3d 1067, 1070 (10th Cir. 2009). 2 The district court did not directly assess the first factor, but tacitly re lied on its preceding analysis of the Director’s summary judg ment motion on the merits.

2 The district court correctly left this test unmodified by collateral rules we have developed to heighten or re lax the movant’s burden under certain circumstances. In particular, the district court properly deemed this a case of preserving rather than disturbing the status quo, so that critical consideration did not require enhancement of the standard. See generally O Centro Espirita Beneficie nte Uniao Do Vegetal v. Ashcroft , 389 F.3d 973, 977 (10th Cir. 2004) (en banc) (“[A] movant seeking a preliminary injunction which upsets the status quo must sati sfy a heightened burden”), aff’d and remanded , 546 U.S. 418 (2006). “An injunction disturbs the status quo when it changes the last peaceab le uncontested status existing between the parties before the dispute developed.” Beltronics , 562 F.3d at 1070-71 (internal quotation marks omitted). When the presen t dispute developed, OCPA had been an ongoing participant in the VPD program si nce early 2010, although it was terminated from the program before its motion for pre liminary injunction was finally resolved. Thus, the injunction at issue simply returned the parties to the pre-litigation status quo. On the other hand, OCPA concedes it is not entitled to any relaxation of the preliminary injunction standard , because it is seeking to enjoin governmental action taken pursuant to a statutory scheme. See Aid for Women v. Foulston , 441 F.3d 1101, 1115 (10th Cir. 2006).- 5 - It began that analysis by acknowledgi ng “[t]he First Amendment prohibits government from abridging the freedom of speech; it does not confer an affirmative right to use government payroll mechanisms for the purpose of obtaining funds for expression.” Ysursa v. Pocatello Educ. Ass’n , 555 U.S. 353, 129 S. Ct. 1093, 1096 (2009) (emphasis added and inte rnal quotation marks omitted). Ysursa held a ban on payroll deductions for union political act ion committees did not infringe First Amendment rights and hence was not subject to strict scrutiny. 129 S. Ct. at 1098.

But the district court noted the ban in Ysursa was applied evenhandedly to all unions,

see id. at 1099 n.3, while selective restri ctions on speech implicate heightened scrutiny under the First Amendment, see, e.g. , Sorrell v. IMS Health Inc. , 131 S. Ct. 2653, 2663-64 (2011); Citizens United v. Fed. Election Comm’n , 558 U.S. 310, 130 S. Ct. 876, 898-99 (2010); Randall v. Sorrell , 548 U.S. 230, 246-47 (2006). As discussed above, Oklahoma’s VPD program is selectively denied to public-employee associations based on size of membership . While it is tr ue this numerosity requirement generally applies to all associ ations, some are exem pted by a grandfather provision and OPEA is favored with its own particularized exemption. The district court consequently held the program was s ubject to heightened scrutiny, which the

court went on to conclude was not satisf ied by the justifications offered by the Director for the numerosity requirement. 3

3 The district court did not decide whet her the appropriate le vel of scrutiny was strict scrutiny—requiring a law to be “n arrowly tailored” to achieve a “compelling (continued)- 6 - The district court’s assessment of the other injunction factors followed largely

from this conclusion. The c ourt found irreparable harm based on the presumption of

such harm when Firs t Amendment rights have been infringed, see Pac. Frontier v. Pleasant Grove City , 414 F.3d 1221, 1235-36 (10th Ci r. 2005), bolstered by evidence submitted by OCPA regarding the vital role VP Ds play in raising association funds. As for harm to the State, the court found the administrati ve burden of reinstating the VPD program for OCPA would be de minimus and noted the Director had not offered any evidence of other damage the injunc tion would occasion. Finally, the court concluded the injunction would not be adverse to the pub lic interest, particularly as “it is always in the public interest to prevent the viola tion of a party’s constitutional rights.” Awad v. Ziriax , 670 F.3d 1111, 1132 (10th Ci r. 2012) (internal quotation marks omitted). ANALYSIS The merit of OCPA’s challenge to th e numerosity requirement is the lynchpin of this appeal. And the crux of that inquiry is the presence vel non of a cognizable

First Amendment interest and the attendant le vel of scrutiny applied to the legislative

interest”—applied in Citizens United to a ban on corporate expenditures for political speech, 130 S. Ct. at 898 (int ernal quotation marks omitted) , or the somewhat laxer exacting scrutiny—requiring a law to be “clo sely drawn” to achieve a “sufficiently important interest”—applied in Randall to limits on political campaign contributions, 548 U.S. at 247-48, or the intermediate sc rutiny—requiring a law to be “drawn to achieve” a “substantial governme nt interest”—applied in Sorrell to restrictions on commercial speech, 131 S. Ct. at 2667-68. The court concluded the VPD program could not be justified under any of these heightened standards.- 7 - judgment behind the requirement, i.e., if “t he State has not infringed [OCPA’s] First Amendment rights, the State need only demons trate a rational basis to justify the ban on [association] payroll deductions,” Ysursa , 129 S. Ct. at 1098. The district court recognized the First Amendment inquiry is affected but not controlled by Ysursa ’s holding that a VPD program is effectively a subsidy for participants’ activities (i ncluding speech), which the State has no constitutional obligation to provide. In doing so, the cour t drew a salient distinction between VPD benefits evenhandedly a nd selectively bestowed, citing precedent applying heightened scrutiny to laws discriminately affecting speech. But there is a second

distinction—between diffe rential treatment of speakers and discrimination based on viewpoint —which moderates the force of the first in the context of speech subsidies. That is, while viewpoint discriminati on always implicates First Amendment constraints, “ speaker -based distinctions are pe rmissible when the state subsidizes speech.” Wis. Educ. Ass’n Council v. Walker , 705 F.3d 640, 646 (7th Cir. 2013) (emphasis added). As the Seventh Circ uit explained in uph olding a VPD program much like the program at issue here: Nothing in the Constitution require s the government to subsidize all speech equally. A government s ubsidy “that discriminates among speakers does not implicate the Firs t Amendment unless it discriminates on the basis of ideas.” Leathers v. Medlock , 499 U.S. 439, 450 (1991); see also Nat’l Endowment for the Arts v. Finley , 524 U.S. 569, 557-58 (1998) . . . . As Regan [ v. Taxation with Representation of Wash. , 461 U.S. 540 (1983)] expl ained, legislative “sel ection of particular entities or persons for entit lement to this sort of largesse is obviously a matter of policy and discretion no t [ordinarily] open to judicial review[.]” 461 U.S. at 549 (interna l quotations omitted). Indeed, the- 8 - speech subsidy upheld in Regan discriminated on the basis of speaker— veterans’ groups who e ngaged in lobbying coul d claim [tax exempt] status but other lobbyi ng groups could not. Id. at 548-49; see also [ S. C. Educ. Ass’n v. ] Campbell , 883 F.2d [1251,] 1255-56 [4th Cir. (1989)] (no First Amendment implicati ons to statute that discriminated on the basis of speaker in author izing payroll deductions for some public employee organizations but not ot hers). Thus, that the state gave one category of public employees th e benefit of payroll dues deduction does not run afoul of the First Amendment.

Id. at 646-47 (parallel citations omitted) (third and fourth alterations in original). The particular combination of differential treatment based on speaker (as opposed to viewpoint) in connection with a subsi dy for (as opposed to burden on) speech

activities was not considered by the district court. The Supreme Court decisions it cited for heightened scruti ny involved burdens on speech, 4 which of course trigger such scrutiny—in point ed contrast to the Regan decision relied on by Walker , which upheld a speech subsidy by ap plying rational-basis scrutiny. 5 And, of course,

4 Citizens United involved a law prohibiting expe nditures for political speech, see 130 S. Ct. at 886, Randall addressed a law limiti ng campaign contributions, 548 U.S. at 236, 247-48, and Sorrell concerned a law restric ting commercial speech, 131 S. Ct. at 2663-64.

5 Regan upheld a law selectively subsid izing political speech by veterans organizations, whose tax-exem pt status was preserved ev en if they engaged in lobbying efforts that would disqualify other charitable organizations. 461 U.S. at 542, 550. The Court noted the permissibilit y of selective subsid ies is “scarcely [a] novel principle[]. We have held in several contexts that a legislature’s decision not to subsidize the exercise of a fundamental right does not infringe the right, and thus is not subject to strict sc rutiny,” even if the subsidy is not uniformly denied. Id. at 549 (discussing cases rejecting constitutional challenges to other se lective subsidies); see also United States v. Am. Library Ass’n , 539 U.S. 194, 212 (2003) (quoting Regan and upholding law subsid izing provision of filtered internet access but not unfiltered internet access to library patrons); Lyng v. Int’l Union, UAW , 485 U.S. 360, 368 (1988) (quoting Regan and upholding Congress’ refusal to extend food (continued)- 9 - “ Ysursa requires us to analyze [VPD pr ograms] under First Amendment cases involving speech subsidies.” Walker , 705 F.3d at 648.

We find Walker , which is the only recent circu it case addressing a similar VPD

program, 6 to be well-reasoned and persuasive on this point. The contrary district court cases relied on by the district court here fail to consid er the role of the speaker/viewpoint distinction in the context of a speech subsidy. 7 We follow

Walker ’s guidance in this cr itical respect. That is not, however, the end of the Fi rst Amendment inquiry. For one thing, the speaker/viewpoint distinction may as a practical matter be illusory: “Speech restrictions based on the identity of the sp eaker are all too often simply a means to

control content.” Citizens United , 130 S. Ct. at 899; cf. Walker , 705 F.3d at 649-52 (considering, but rejecting on the facts, contention that selectivity in allowing public-safety employees’ union access to VP D program was façade for viewpoint

stamp benefits to workers who have lost income by striking, notwithstanding the undeniable effect on associ ational rights involved).

6 The Fourth Circuit’s Campbell decision cited in the passage from Walker quoted above, as well as th e Sixth Circuit’s decision in Brown v. Alexander , 718 F.2d 1417, 1421-23 (6th Cir. 1983), also held somewhat similar VPD programs did not violate the First Amendment ri ghts of associations not a llowed to participate, but Walker ’s thorough and contemporary discussi on of the constitutional issues draws our particular reliance.

7 Actually, one of the cases—the distri ct court decision reve rsed by the Seventh Circuit in Walker —did acknowledge this distinction and held it negated heightened First Amendment scrutiny, but went on to invalidate the VPD program under rational basis review. See Wis. Educ. Ass’n Council v. Walker , 824 F. Supp. 2d 856, 874-76 (W.D. Wis. 2012), aff’d in part , rev’d in part , 705 F.3d 640 (7th Cir. 2013).- 10 - discrimination). There is no indication of this in connection with the numerosity requirement itself, which appears to be a facially neutral crite rion—though given the failure of the parties and district court to focus on the speaker/vie wpoint distinction, there may be evidence or argumen t on this point thus far not fa irly aired. The same is true of the grandfather exemption from th e numerosity requirement. And while the singular exemption granted specifically to OPEA is potentially more problematic, viewpoint-discrimination-by-pro xy has not been adequately explored in this regard either. Thus, while we reverse the prel iminary injunction improperly granted on the basis of speaker selectivity alone, we do not foreclose the possibility of OCPA justifying injunctive relief on the basi s of viewpoint discrimination. Furthermore, even if heightened sc rutiny does not apply, the numerosity requirement of the VPD program could be invalidated under rati onal-basis scrutiny. But for that to happen, OCPA must satisf y a heavy burden: OC PA must “negative any reasonably conceivable state of facts th at could provide a rational basis for the [selective] classification” effect ed by the challenged statute. Cohon ex rel. Bass v. N.M. Dep’t of Health , 646 F.3d 717, 730 (10th Cir. 2011) (internal quotation marks omitted). The district court has not addressed this question. Rather, it concluded that (1) the Director had not shown the numerosity requirement of the VPD program was (2) supported by state interests substantial enough to satisfy heightened scrutiny and (3) drawn to achieve such interests in a manner comm ensurate with such scrutiny. Aplt. App. at 832-33. All three points differ entiate the district court’s analysis from- 11 - that directed by rational-basis scrutiny. We do not preemptively gainsay the possibility of a successful rational-basi s challenge to the VPD program, but an affirmance of the existing injunction on this basis would be inappropriate. We leave any further development of this potential rati onale for injunctive re lief to the district

court. The preliminary injunction issued by the district court is reversed.

Entered for the Court

Terrence L. O’Brien Circuit Judge