Opinion ID: 807897
Heading Depth: 2
Heading Rank: 3

Heading: Contribution Ban

Text: We next address the appellants’ challenge to Minnesota’s prohibition against corporate political contributions. See Minn. Stat. § 211B.15, subdiv. 2. The appellants contend the district court erred in denying its motion for a preliminary injunction against Minnesota’s ban on such contributions because it violates their rights of speech and association guaranteed by the First and Fourteenth Amendments, as well as their equal protection rights under the Fourteenth Amendment. We detect no abuse of discretion. We first address the appellants’ First Amendment argument. The appellants argue they are likely to enjoy merits success on their free speech and association claim against the contribution ban because Minnesota’s law conflicts with Citizens United’s instruction that outright bans on political speech are impermissible. See Citizens United, 558 U.S. at ___, 130 S. Ct. at 913. We disagree. The crux of appellants’ argument is advanced under the following reasoning. Contributing to a political campaign is a form of political speech, as well as association. See, e.g., Buckley, 424 U.S. at 20-21 (“A contribution serves as a general expression of support for the candidate and his views.”). Constitutionally, a corporation cannot be required to speak through a PAC. See Citizens United, 558 U.S. at ___, 130 S. Ct. at 897 (reasoning a PAC exemption to a prohibition against corporate independent expenditures “does not allow [a] corporation[] to speak” because “[a] PAC is a separate association from the corporation”). Under Minnesota’s law, the only means for corporations to contribute to a political candidate or committee is through an “[e]mployee political fund,” see Minn. Stat. § 211B.15, subdiv. 16, which the appellants claim is a PAC. Therefore, Minnesota’s law bans -21- corporate political speech, a result that is contrary to the holding in Citizens United, 558 U.S. at ___, 130 S. Ct. at 911. The appellants’ syllogism fails to recognize the significant distinction the Supreme Court made in its review of laws restricting independent expenditures and laws restricting contributions. Put simply, “restrictions on contributions require less compelling justification than restrictions on independent spending.” FEC v. Beaumont, 539 U.S. 146, 158-59 (2003) (quoting MCFL, 479 U.S. at 259-60)) (internal quotation marks omitted). The Supreme Court deemed “restrictions on political contributions . . . as merely ‘marginal’ speech restrictions subject to relatively complaisant review under the First Amendment, because contributions lie closer to the edges than to the core of political expression.” Id. at 161. Thus, “a contribution limit involving significant interference with associational rights passes muster if it satisfies the lesser demand of being closely drawn to match a sufficiently important interest.” Id. at 162 (quoting Nixon v. Shrink Mo. Gov’t PAC, 528 U.S. 377, 387-88 (2000)) (internal quotation marks omitted). The Supreme Court in Citizens United recognized the variance in the rigor of scrutiny used to review independent expenditures and contributions, see Citizens United, 558 U.S. at ___, 130 S. Ct. at 901-02, and neither endorsed nor condemned the distinction, see id. at ___, 130 S. Ct. at 909 (explaining it was not asked to “reconsider whether contribution limits should be subjected to rigorous First Amendment scrutiny”); see also United States v. Danielczyk, 683 F.3d 611, 617 (4th Cir. 2012) (recognizing that in Citizens United, the Supreme Court “did not discuss Beaumont and explicitly declined to address the constitutionality of the ban on direct contributions”); Ognibene v. Parkes, 671 F.3d 174, 183-84 (2d Cir. 2012) (similar); Thalheimer v. City of San Diego, 645 F.3d 1109, 1124-26 (9th Cir. 2011) (similar); Green Party of Conn. v. Garfield, 616 F.3d 189, 199 (2d Cir. 2010) (similar). Using the “closely drawn” test, the Supreme Court in Beaumont upheld a federal law banning direct corporate campaign contributions against an as-applied -22- First Amendment challenge by a non-profit corporation. See Beaumont, 539 U.S. at 149, 162-63 (upholding 2 U.S.C. § 441b). Like Minnesota’s law, the challenged provision in Beaumont prohibited corporations from making election-related contributions, but allowed corporations to establish, administer, and control a PAC, through which the corporation could solicit contributions. See id. at 149. The Supreme Court rejected the contention “the law violated the First Amendment in allowing contributions to be made only through [the corporation’s] PAC and subject to a PAC’s administrative burdens,” stating The PAC option allows corporate political participation without the temptation to use corporate funds for political influence, quite possibly at odds with the sentiments of some shareholders or members, and it lets the Government regulate campaign activity through registration and disclosure, without jeopardizing the associational rights of advocacy organizations’ members. Id. at 163 (internal citation omitted). -23- Rightly or wrongly decided,12 Beaumont dictates the level of scrutiny and the potential legitimacy of the interests Minnesota advances by prohibiting corporate contributions to political candidates and committees. See, e.g., Agostini v. Felton, 521 U.S. 203, 237 (1997) (“We reaffirm that ‘if precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions.’” (quoting Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484 (1989))). In light of Beaumont, the district court did not abuse its discretion in denying the preliminary injunction. Finally, we address the appellants’ argument that Minnesota’s ban on direct corporate contributions violates the Equal Protection Clause of the Fourteenth Amendment because no legitimate governmental interest exists to justify imposing more stringent regulations on corporations than unions. At this early stage of the litigation, we are not prepared to hold the district court abused its discretion in denying the preliminary injunction. We agree with the district court’s determination 12 Citizens United’s outright rejection of the government’s anti-distortion rationale, see Citizens United, 558 U.S. at ___, 130 S. Ct. at 904, as well as the Court’s admonition “that the State cannot exact as the price of [state-conferred corporate] advantages the forfeiture of First Amendment rights,” id. at ___, 130 S. Ct. at 905 (quoting Austin v. Mich. Chamber of Commerce, 494 U.S. 652, 680 (1990) (Scalia, J., dissenting)) (internal quotation marks omitted), casts doubt on Beaumont, leaving its precedential value on shaky ground. See also Beaumont, 539 U.S. at 16465 (Thomas, J., dissenting) (explaining his belief that all campaign finance laws are subject to strict scrutiny and the federal ban on corporate contributions was “not narrowly tailored to meet any relevant compelling interest”); id. at 164 (Kennedy, J., concurring) (“Were we presented with a case in which the distinction between contributions and expenditures under the whole scheme of campaign finance regulation were under review, I might join Justice Thomas’ dissenting opinion.”). -24- that Citizens United did not explicitly overrule the Supreme Court’s equal protection analysis in Austin, 494 U.S. at 666-68. This does not mean, however, that Austin controls the ultimate outcome of the appellants’ challenge. Under Austin, “statutory classifications impinging upon [the fundamental right to engage in political expression] must be narrowly tailored to serve a compelling governmental interest.” Id. at 666; see also Dallman v. Ritter, 225 P.3d 610, 634-35 (Colo. 2010) (holding a state law allowing corporations to contribute to candidates, but forbidding labor unions from doing the same, violated the Equal Protection Clause of the Fourteenth Amendment). We express no opinion as to the likelihood Minnesota will meet this heavy burden in light of the Supreme Court’s rejection of the so-called anti-distortion rationale relied upon in Austin. See Citizens United, 558 U.S. at ___, ___, 130 S. Ct. at 903-08, 912-13.