Court Opinion

ID: 809801
Source: CourtListenerOpinion
Date Created: 2012-10-09 23:25:39+00
Date Added: 2024-06-11T18:00:35.798069
License: Public Domain

Case: 11-50932   Document: 00512013739   Page: 1   Date Filed: 10/09/2012

          IN THE UNITED STATES COURT OF APPEALS
                   FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                   Fifth Circuit

                                                                   FILED
                                                                 October 9, 2012

                                 No. 11-50932                    Lyle W. Cayce
                                                                      Clerk

DEPARTMENT OF TEXAS, Veterans of Foreign Wars of the United States;
AMVETS DEPARTMENT OF TEXAS, INCORPORATED; AMVETS POST 52,
INCORPORATED; AMVETS POST 52, AUXILIARY, INCORPORATED; THE
GREAT COUNCIL OF TEXAS, Improved Order of Redmen; REDMEN WAR
EAGLE TRIBE NO. 17; REDMEN TRIBE NO. 21 GERONIMO; REDMEN
RAMONA COUNCIL NO. 5; THE INSTITUTE FOR DISABILITY ACCESS,
INCORPORATED, doing business as Adapt of Texas; TEMPLE ELKS LODGE
NO. 138, Benevolent and Protective Order of Elks of The United States of
America, Incorporated; BRYAN LODGE NO. 859, Benevolent and Protective
Order of Elks of The United States of America, Incorporated; AUSTIN LODGE
NO. 201, Benevolent and Protective Order of Elks of The United States of
America, Incorporated; ANNA FIRE AND RESCUE, INCORPORATED,

                                          Plaintiffs - Appellees
v.

TEXAS LOTTERY COMMISSION; GARY GRIEF, Executive Director in His
Official Capacity; PHILLIP SANDERSON, Director of Charitable Bingo in His
Official Capacity; MARY ANN WILLIAMSON, Commissioner in Her Official
Capacity; DAVID J. SCHENCK, Commissioner in his Official Capacity; J,
WINSTON KRAUSE, Commissioner in His Official Capacity,

                                          Defendants - Appellants

                  Appeal from the United States District Court
                       for the Western District of Texas

Before STEWART, Chief Judge, DeMOSS and GRAVES, Circuit Judges.
DeMOSS, Circuit Judge:
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      The Texas Bingo Enabling Act allows qualifying charities to conduct bingo
games in order to raise money for their charitable causes. The Act prohibits
charities from using bingo proceeds for certain types of political advocacy,
including lobbying and supporting or opposing ballot measures. Plaintiffs-
appellees, a group of nonprofit organizations licensed to conduct bingo games,
filed suit challenging those restrictions on First Amendment grounds. The
district court granted summary judgment in favor of Appellees and issued a
permanent injunction preventing enforcement of the challenged statutory
provisions. Defendants-appellants, the commissioners and two executive officers
of the Texas Lottery Commission, timely appealed. We reverse for the following
reasons.
                                 BACKGROUND
      The Texas Constitution has prohibited gambling for most of the State’s
history. See Tex. Const. of 1845, art. VII, § 17 (“No lottery shall be authorized by
this State; and the buying or selling of lottery tickets within this State is
prohibited.”); see also Tex. Const. art. III, § 47 (amended 1980) (“The legislature
shall pass laws prohibiting the establishment of lotteries and gift enterprises in
this State, as well as the sale of tickets in lotteries, gift enterprises or other
evasions involving the lottery principle, established or existing in other States.”);
Hardy v. State, 102 S.W.3d 123, 130 (Tex. 2003). In November 1980, Texas
voters approved an amendment to the Texas Constitution establishing an
exception to the general ban on gambling for charitable bingo. The exception
allows the Texas Legislature to “authorize and regulate bingo games conducted
by a church, synagogue, religious society, volunteer fire department, nonprofit
veterans organization, fraternal organization, or nonprofit organization
supporting medical research or treatment programs.” Tex. Const. art. III,
§ 47(b). The constitution requires that “all proceeds from the [bingo] games are
spent in Texas for charitable purposes of the organizations.” Id. § 47(b)(1).

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      Acting under the authority provided by the charitable bingo exception, the
Texas Legislature passed the Bingo Enabling Act (“Bingo Act”) in 1981. Bingo
Enabling Act, 67th Leg., 1st C.S., ch. 11, 1981 Tex. Gen. Laws 85 (current
version at TEX. OCC. CODE § 2001.001 et seq. (2012)). The Bingo Act allows
qualifying nonprofit organizations to obtain a license to conduct bingo games and
sets forth the rules and regulations that govern the State’s charitable bingo
program, which is administered by the Texas Lottery Commission. See TEX. OCC.
CODE §§ 2001.002(8), 2001.051. These regulations include the Texas
Constitution’s requirement that all bingo proceeds be used for the “charitable
purposes” of the organization. See id. § 2001.454.
      This appeal centers on provisions in the Bingo Act that prohibit charities
from using the money generated by conducting bingo games for lobbying
activities or to support or oppose ballot measures (“political advocacy”).
Specifically, the Act provides:

      A licensed authorized organization may not use the net proceeds
      from bingo directly or indirectly to:

      (1) support or oppose a candidate or slate of candidates for public
      office;

      (2) support or oppose a measure submitted to a vote of the people;
      or

      (3) influence or attempt to influence legislation.

Id. § 2001.456.
      Appellees, thirteen nonprofit organizations licensed to hold bingo games
(“Charities”), have challenged the second and third of the above provisions,
§ 2001.456(2)–(3), arguing they violate their First Amendment right to free
speech. They do not challenge the prohibition on using bingo funds to support or
oppose political candidates. The lead plaintiffs are the Department of Texas

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Veterans of Foreign Wars (“VFW”) and the Institute for Disability Access, d/b/a
ADAPT of Texas (“ADAPT”). Both VFW and ADAPT engage in political advocacy
in furtherance of their charitable mission. They maintain that bingo generates
a substantial portion of their total revenue and that the challenged statutory
provisions restrict their ability “to engage in political advocacy to the degree
that, in the judgment of [their] governing bod[ies], would best further [their]
purposes.”
      The Charities filed suit on June 25, 2010 in the Western District of Texas
naming as defendants, in their official capacities, the commissioners and two
executive officers of the Texas Lottery Commission (collectively the
“Commission”).1 The Charities asserted claims under 42 U.S.C. § 1983 arguing
that the challenged provisions are facially invalid under the First Amendment
because they restrict political speech and fail to satisfy strict scrutiny. They also
alleged that the provisions impermissibly restrict speech on the basis of the
speaker’s identity because they apply to nonprofit organizations and not for-
profit gaming organizations. The Charities sought temporary and permanent
injunctions preventing enforcement of the challenged provisions, a declaration
that the provisions are unconstitutional, and attorneys’ fees.
      On October 29, 2010, the district court issued a preliminary injunction
preventing enforcement of § 2001.456(2)–(3). The court, drawing heavily from
the Supreme Court’s opinion in Citizens United v. Federal Election Commission,
130 S. Ct. 876 (2010), concluded that the challenged provisions are facially
unconstitutional under the First Amendment because they burden political
speech and fail to satisfy strict scrutiny. Shortly after the district court issued
its opinion, the Commission filed an interlocutory appeal in this court. The

      1
        The Texas Lottery Commission was originally named as a defendant, but was
dismissed from the suit by the district court on the basis of Eleventh Amendment immunity.

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Commission also filed motions to stay the preliminary injunction in the district
court and in this court, both of which were denied.
      While the interlocutory appeal was pending, the Charities moved for
summary judgment. On August 30, 2011, the district court issued an opinion
granting the Charities’ motion for summary judgment for the reasons stated in
the opinion granting the preliminary injunction. That same day the district court
entered a final judgment permanently enjoining enforcement of the challenged
provisions and declaring them unconstitutional. The interlocutory appeal was
dismissed as moot and the Commission timely filed a new appeal challenging the
permanent injunction.
                           STANDARD OF REVIEW
      This court reviews the grant of summary judgment de novo, applying the
same standard used by the district court. Hill v. Carroll Cnty., Miss., 587 F.3d
230, 233 (5th Cir. 2009). Summary judgment is appropriate when “there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” FED. R. CIV. P. 56(a).
                                 DISCUSSION
      A. Standing
      Before reaching the merits of this appeal, we must first address the
Commission’s argument that the Charities lack Article III standing because
their claims are not redressable.
      Constitutional standing is a jurisdictional question which we review de
novo. Nat’l Fed’n of the Blind of Tex., Inc. v. Abbott, 647 F.3d 202, 208 (5th Cir.
2011). To establish Article III standing, a plaintiff must show “an injury-in-fact
caused by a defendant’s challenged conduct that is redressable by a court.” K.P.
v. LeBlanc, 627 F.3d 115, 122 (5th Cir. 2010). For a plaintiff’s claim to be
redressable, it must be “likely, as opposed to merely speculative, that a favorable
decision will redress the plaintiff’s injury.” S. Christian Leadership Conference

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v. Supreme Court of the State of La., 252 F.3d 781, 788 (5th Cir. 2001). “[A]
plaintiff satisfies the redressability requirement when he shows that a favorable
decision will relieve a discrete injury to himself. He need not show that a
favorable decision will relieve his every injury.” LeBlanc, 627 F.3d at 123
(alteration in original) (quoting Larson v. Valente, 456 U.S. 228, 243 n.15 (1982)).
      The Commission argues that the Charities’ claims are not redressable
because the relief they seek—the ability to use bingo proceeds for political
advocacy—is independently foreclosed by the requirement in the Texas
Constitution and the Bingo Act that bingo proceeds be used only for an
organization’s charitable purpose. See Tex. Const. art. III, § 47(b)(1); TEX. OCC.
CODE § 2001.454. According to the Commission, even if we affirm the lower
court’s injunction, the charitable purpose requirement, which the Charities have
not challenged, would still prohibit the Charities from using bingo proceeds for
lobbying or to support or oppose ballot measures. As support, the Commission
argues: (1) that by enacting the speech provisions challenged by the Charities,
the legislature made clear that an organization’s charitable purpose cannot
include political advocacy, and (2) that the Commission’s interpretation of the
charitable purpose requirement is reasonable and entitled to deference.
      The Commission’s argument requires that we interpret the charitable
purpose requirement as prohibiting the use of bingo proceeds for both lobbying
and supporting or opposing ballot measures. While the term “charitable purpose”
is not defined in the Texas Constitution, it is defined in the Bingo Act. See
Owens v. State, 19 S.W.3d 480, 484 (Tex. App.—Amarillo 2000, no pet.) (“The
[Texas] Legislature may define terms which are not defined in the Constitution
itself . . . .”). We interpret Texas statutes the way we believe the Texas Supreme
Court would do so. See United States v. Escalante, 239 F.3d 678, 681 n.12 (5th
Cir. 2001); see also Lipscomb v. Columbus Mun. Separate Sch. Dist., 269 F.3d

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494, 508 n.72 (5th Cir. 2001). The Bingo Act defines “charitable purpose” as
follows:

       Except as otherwise provided by law, the net proceeds derived from
       bingo and any rental of premises are dedicated to the charitable
       purposes of the organization only if directed to a cause, deed, or
       activity that is consistent with the federal tax exemption the
       organization obtained under 26 U.S.C. Section 501 and under which
       the organization qualifies as a nonprofit organization as defined by
       Section 2001.002. If the organization is not required to obtain a
       federal tax exemption under 26 U.S.C. Section 501, the
       organization’s net proceeds are dedicated to the charitable purposes
       of the organization only if directed to a cause, deed, or activity that
       is consistent with the purposes and objectives for which the
       organization qualifies as an authorized organization under Section
       2001.002.

TEX. OCC. CODE §2001.454(b); see also id. § 2001.002(7).
       A plain reading of the above definition, which is obviously quite broad,
does not support the Commission’s assertion that an organization’s use of bingo
proceeds for political advocacy is inherently inconsistent with the charitable
purpose requirement. Cf. R.R. Comm’n of Tex. v. Tex. Citizens for a Safe Future
and Clean Water, 336 S.W.3d 619, 628 (Tex. 2011) (“We ordinarily construe a
statute so as to give effect to the Legislature’s intent as expressed in its plain
language.”). The definition shows that the requirement is satisfied so long as
bingo proceeds are used for a “cause, deed, or activity that is consistent with” the
purpose for which an organization received its federal tax exemption and
qualified as a charitable organization under state law. TEX. OCC. CODE
§ 2001.454(b) (emphasis added). It is easy to imagine scenarios where a charity
could use political advocacy to advance its charitable purpose in a way that
satisfies this definition.2 As the Charities point out, the VFW lobbies in support

       2
         The court is aware that 26 U.S.C. § 501 restricts the amount of political advocacy
certain nonprofit organizations may engage in to remain eligible for a federal tax exemption.

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of property tax exemptions for disabled veterans and for veteran entitlement
programs offered through the Veterans Administration. We see no reason why
these projects violate the charitable purpose requirement as defined above, and
the Commission provides no basis to conclude otherwise.
       Nor does it appear that the Commission’s interpretation of the charitable
purpose requirement is entitled to deference. The Texas Supreme Court has
explained that it will “generally uphold an agency’s interpretation of a statute
it is charged . . . with enforcing, ‘so long as the construction is reasonable and
does not contradict the plain language of the statute.’” Citizens for a Safe Future
and Clean Water, 336 S.W.3d at 625 (quoting First Am. Title Ins. Co. v. Combs,
258 S.W.3d 627, 632 (Tex. 2008)). However, that deference is “tempered by
several considerations.” Id.

       It is true that courts give some deference to an agency regulation
       containing a reasonable interpretation of an ambiguous statute. But
       there are several qualifiers in that statement. First, it applies to
       formal opinions adopted after formal proceedings, not isolated
       comments during a hearing or opinions [in a court brief]. Second,
       the language at issue must be ambiguous; an agency’s opinion
       cannot change plain language. Third, the agency’s construction
       must be reasonable; alternative unreasonable constructions do not
       make a policy ambiguous.

Id. (alteration in original) (quoting Fiess v. State Farm Lloyds, 202 S.W.3d 744,
747–48 (Tex. 2006)). The Commission has not pointed to any formal opinion in
which it has interpreted the charitable purpose requirement as establishing a
wholesale prohibition on political advocacy. And while the Bingo Act certainly
defines the term “charitable purpose” very broadly, the definition is not
ambiguous.

See, e.g., 26 U.S.C. §§ 501(c)(3), (h). Nevertheless, we find no support for the Commission’s
broad assertion that any expenditure by a charity for political advocacy is inherently
inconsistent with a tax exemption granted under 26 U.S.C. § 501.

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      The relief sought by the Charities is not independently foreclosed by the
charitable purpose requirement, which means that the Charities have standing
to bring their claims.
      B. Do the Challenged Provisions Penalize Speech?
      Relying heavily on the Supreme Court’s opinion in Citizens United, 130 S.
Ct. 876, the district court concluded that the challenged provisions violate the
First Amendment because they burden political speech and fail to satisfy strict
scrutiny. The court also concluded that the provisions violate the
unconstitutional conditions doctrine because they require, as a condition of
participating in the State’s charitable bingo program, that charities not exercise
their right to engage in political speech.
      The Commission argues that the challenged provisions do not penalize
speech at all. It contends that the charitable bingo program is a state subsidy
provided for the benefit of qualifying charities and that the challenged provisions
simply represent a decision by the State not to subsidize political speech. The
Supreme Court has made clear, the Commission argues, that a decision not to
subsidize speech does not equate to a penalty on speech. The Commission
maintains that the challenged provisions do not violate the unconstitutional
conditions doctrine because they apply only to bingo proceeds, and therefore only
restrict speech within the confines of the State’s charitable bingo program. It
notes that charities can participate in the bingo program and still engage in
political advocacy; they must simply use funds other than those generated from
bingo.
      We begin by noting that the Charities have challenged the facial validity
of the Bingo Act’s speech restrictions. “A facial challenge to a legislative Act is,
of course, the most difficult challenge to mount successfully, since the challenger
must establish that no set of circumstances exist under which the Act would be
valid.” United States v. Salerno, 481 U.S. 739, 745 (1987). That the challenged

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provisions “might operate unconstitutionally under some conceivable set of
circumstances is insufficient to render [them] wholly invalid.”3 Id. We briefly
review the principles underlying the unconstitutional conditions doctrine as well
as the related concept that government can subsidize some activities to the
exclusion of others.4
       “In the most general sense, the unconstitutional-conditions doctrine
examines the extent to which government benefits may be conditioned or
distributed in ways that burden constitutional rights or principles.” Pace v.
Bogalusa City Sch. Bd., 403 F.3d 272, 286 (5th Cir. 2005). One of the most
frequently cited cases discussing the doctrine is Perry v. Sindermann, 408 U.S.
593 (1972). That case involved a claim by a professor at a state university
alleging that his right to free speech was violated because he was discharged for
publicly criticizing the university’s administrative policies. Id. at 594–96. The
Court held that the denial of a government benefit (in that case a teaching
position) cannot be predicated on the exercise of a constitutional right. The Court
explained:

       For at least a quarter-century, this Court has made clear that even
       though a person has no “right” to a valuable government benefit and
       even though the government may deny him the benefit for any
       number of reasons, there are some reasons upon which the
       government may not rely. It may not deny a benefit to a person on
       a basis that infringes his constitutionally protected
       interests—especially, his interest in freedom of speech. For if the
       government could deny a benefit to a person because of his
       constitutionally protected speech or associations, his exercise of

       3
        Considering that the political advocacy restrictions have been present in the Bingo
Act since 1983, we would have anticipated an as applied challenge.
       4
        We acknowledge that these principles are sometimes difficult to reconcile. See ERWIN
CHEMERINSKY, CONSTITUTIONAL LAW: PRINCIPLES AND POLICIES 1013 (4th ed. 2011) (discussing
the intersection of the unconstitutional conditions doctrine and the notion that government
can subsidize some activities to the exclusion of others).

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      those freedoms would in effect be penalized and inhibited. This
      would allow the government to produce a result which it could not
      command directly. Such interference with constitutional rights is
      impermissible.

Id. at 597 (internal citation and quotation marks omitted). The Supreme Court
has repeatedly reaffirmed the basic premise of this doctrine. See Rumsfeld v.
Forum for Academic and Institutional Rights, Inc., 547 U.S. 47, 59 (2006) (“[T]he
government may not deny a benefit to a person on a basis that infringes his
constitutionally protected . . . freedom of speech even if he has no entitlement to
that benefit.” (internal quotation marks omitted)); Bd. of Cnty. Comm’rs v.
Umbehr, 518 U.S. 668, 674 (1996); Dolan v. City of Tigard, 512 U.S. 374, 385
(1994) (“Under the well-settled doctrine of ‘unconstitutional conditions,’ the
government may not require a person to give up a constitutional right . . . in
exchange for a discretionary benefit conferred by the government . . . .”).
      As the Charities acknowledge, however, the Supreme Court has also held
that when government provides a subsidy it is entitled to define the parameters
of the subsidized program, even if that means excluding certain types of speech.
The Supreme Court explained this principle in Rust v. Sullivan, 500 U.S. 173
(1991). That case involved a federal program providing funding for family
planning services. Id. at 178. The legislation that established the program made
clear that abortion was not an approved method of family planning. Id. The
Department of Health and Human Services promulgated regulations that
required, as a condition of participating in the program, that service providers
not advocate for abortion (including lobbying) or provide abortion counseling
within the scope of the program. Id. at 179–81. The service providers challenged
those restrictions, arguing that they violated the unconstitutional conditions
doctrine because they conditioned receipt of a government benefit (participation

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in the program) on the relinquishment of their First Amendment right to
advocate for abortion. Id. at 196.
      The Court held that the unconstitutional conditions doctrine did not apply
because “the Government is not denying a benefit to anyone, but is instead
simply insisting that public funds be spent for the purposes for which they were
authorized. The . . . regulations do not force the . . . grantee to give up abortion-
related speech; they merely require that the grantee keep such activities
separate and distinct from [program] activities.” Id. at 196. Responding to the
service providers’ argument that the speech restrictions constituted
impermissible viewpoint discrimination, the Court expounded on the concept
that government may subsidize certain activities and not others:

      The Government can, without violating the Constitution, selectively
      fund a program to encourage certain activities it believes to be in
      the public interest, without at the same time funding an alternative
      program which seeks to deal with the problem in another way. In so
      doing, the Government has not discriminated on the basis of
      viewpoint; it has merely chosen to fund one activity to the exclusion
      of another. A legislature’s decision not to subsidize the exercise of a
      fundamental right does not infringe the right. A refusal to fund
      protected activity, without more, cannot be equated with the
      imposition of a penalty on that activity. There is a basic difference
      between direct state interference with a protected activity and state
      encouragement of an alternative activity consonant with legislative
      policy.

Id. at 193 (emphasis added) (internal quotations and citations omitted).
      The Court also applied this principle in Regan v. Taxation with
Representation, 461 U.S. 540 (1983), which involved restrictions similar to those
at issue here. In that case, a nonprofit organization challenged a federal statute
prohibiting tax exemptions for organizations whose activities include a
substantial amount of lobbying. Id. at 542 & n.1. The organization argued that
the statute violated the unconstitutional conditions doctrine because it

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conditioned a government benefit (a tax exemption) on the recipient giving up
its right to engage in political speech. Id. at 545. The Court disagreed. As in
Rust, it noted that the plaintiff remained free to exercise its speech rights (lobby)
outside the scope of the government tax exemption program. Id. at 544–45. The
Court equated the tax exemption to a government subsidy and held that the
restrictions were simply a choice by the government not to subsidize lobbying.
Id. at 544, 545–46. The Court made clear that government’s decision not to
subsidize the exercise of a constitutional right does not equate to a penalty on
the right. See id. at 546 (“Congress has not infringed any First Amendment
rights or regulated any First Amendment activity. Congress has simply chosen
not to pay for [plaintiff’s] lobbying.”); id. at 549 (“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 . . . .”); see also United States v.
Am. Library Ass’n, Inc., 539 U.S. 194, 210–12 (2003) (rejecting an argument that
libraries’ speech rights were violated by requiring that they restrict internet
access in order to receive a federal subsidy because “[a] refusal to fund protected
activity, without more, cannot be equated with the imposition of a ‘penalty’ on
that activity” (quoting Rust, 500 U.S. at 193)).
      We agree that the Bingo Act’s political advocacy restrictions fall within
government’s power to subsidize some activities to the exclusion of others and
therefore do not penalize political speech. This case is distinguishable from
Citizens United in two key respects. Citizens United involved a challenge to a
federal statute prohibiting corporations from making expenditures for speech
relating to federal elections. Citizens United, 130 S. Ct. at 887–88. Unlike this
case, Citizens United did not involve speech restrictions in the context of a
government subsidy. Here, the State has created a subsidy program allowing
qualifying charities to raise extra money for their charitable causes. As a
condition of participating in the program, and receiving the extra money, the

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state requires that the money not be used for political advocacy. This
requirement does not penalize political speech; it simply represents a decision
by the State not to subsidize that activity. See Rust, 500 U.S. at 193 (“A
legislature’s decision not to subsidize the exercise of a fundamental right does
not infringe the right.” (quoting Regan, 461 U.S. at 549)); see also Am. Library
Ass’n, 539 U.S. at 211–12.
      The Charities argue that the State’s bingo program cannot be construed
as a subsidy because it is based on a licensing scheme instead of cash payments
or tax exemptions. They contend that principles set forth in Rust and Regan
apply only to subsidy programs where “the government is providing funds from
its treasury to the beneficiary.” These arguments, however, put form over
substance. In creating the bingo program, the State established a narrow
exception to the general ban on gambling allowing charities to conduct bingo
games, free of competition, to generate extra income for their charitable causes.
That this supplemental income stream is accessible by way of a license, instead
of cash payments or a tax exemption, does not change the fact that the bingo
program constitutes a government subsidy for participating charities. We see no
constitutional principle that would be served by allowing the challenged
provisions if the State conducts the bingo games and then distributes the money
to the charities, but disallowing the restrictions if the Charities conduct the
games themselves.
      Citizens United is also distinguishable in that it involved a statute that
imposed an “outright ban” on specific types of political speech. Citizens United,
130 S. Ct. at 897–98. In other words, the challenged statute completely
foreclosed any way for corporations to engage in the prohibited political speech.
Id. The provisions at issue in this case, however, only prohibit the use of bingo
proceeds for political advocacy and therefore only restrict speech within the scope
of the State’s charitable bingo program. As explained in Rust, the

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unconstitutional conditions doctrine is implicated when government requires,
as a condition of participating in a government program, that the participant not
exercise a constitutional right outside the scope of the program. See Rust, 500
U.S. at 197 (“[O]ur ‘unconstitutional conditions’ cases involve situations in which
the Government has placed a condition on the recipient of the subsidy rather
than on a particular program or service, thus effectively prohibiting the recipient
from engaging in the protected conduct outside the scope of the federally funded
program.”). The challenged provisions in this case do nothing to restrict speech
outside the scope of the State’s bingo program. Charities are free to participate
in the bingo program and engage in political advocacy; they simply must not use
bingo proceeds to do so.
                                  CONCLUSION
      The Bingo Act’s restrictions on the use of bingo proceeds for political
advocacy are permissible conditions on a government subsidy and do not operate
to penalize speech. Accordingly, we REVERSE the judgment of the district court
and all relief granted therein.

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