Court Opinion

ID: 4464638
Source: CourtListenerOpinion
Date Created: 2019-12-16 19:02:08.472545+00
Date Added: 2024-06-11T09:37:10.608109
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 18-3475
DAN PROFT and LIBERTY PRINCIPLES PAC,
                                                Plaintiffs-Appellants,
                                 v.

KWAME RAOUL, 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.
                     ____________________

  ARGUED SEPTEMBER 6, 2019 — DECIDED DECEMBER 16, 2019
                ____________________

   Before EASTERBROOK, KANNE, and BRENNAN, Circuit
Judges.
    BRENNAN, Circuit Judge. A provision of the Illinois Election
Code limits how much money entities can contribute to polit-
ical campaigns. But in some races, Illinois lifts these limits,
allowing certain entities to make unlimited campaign contri-
butions and coordinate unlimited spending with candidates.
Illinois Liberty PAC, an independent expenditure committee,
is not one of these entities; indeed, Illinois bans all
2                                                     No. 18-3475

independent expenditure committees from making campaign
contributions and from coordinating spending with candi-
dates.
    Plaintiffs Dan Proft and the Illinois Liberty PAC do not at-
tack the entire contribution and coordination ban enforced
against independent expenditure committees. Rather, they
seek to overturn the ban only when unlimited contributions
and unlimited coordinated expenditures are allowed for oth-
ers. 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 violation exists here depends on
if the contribution and coordination ban is closely drawn to
prevent corruption or the appearance of corruption. Because
striking down the ban would increase the risk of corruption
and circumvent other election code sections that work to pre-
vent political corruption, we affirm the district court’s dismis-
sal of this suit and denial of plaintiffs’ motion for a prelimi-
nary injunction.
                                I.
                 A. The Illinois Election Code
    Like many states, Illinois permits political contributions
by individuals, corporations, unions, associations, political
action committees (“PACs”), and political parties. Illinois lim-
its how much money these groups may contribute to a politi-
cal campaign. See 10 ILL. COMP. STAT. 5/9-8.5(b). Individuals
may contribute up to $5,000; corporations, unions, and asso-
ciations may donate up to $10,000; and PACs may provide up
to $50,000. Id. The Illinois Election Code does not limit
No. 18-3475                                                      3

contributions by a political party in a general election, but it
does limit a political party’s contributions in a primary elec-
tion. 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 oﬃce, or $100,000 in any other
race, or if spending by an independent expenditure committee
or individual exceeds either of these limits, the Illinois Elec-
tion Code waives contribution limits for all candidates in that
race. 10 ILL. COMP. STAT. 5/9-8.5(h), (h-5). In short, the code al-
lows individuals and certain entities to contribute to and co-
ordinate with candidates without 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 support
of a candidate or against a candidate, and (3) not made in co-
ordination with a campaign. 10 ILL. COMP. STAT. 5/9-1.15. Be-
fore making political expenditures exceeding $3,000 in a
12-month period, the Illinois Election Code requires any en-
tity (other than an individual) to first register as a political
committee. 10 ILL. COMP. STAT. 5/9-8.6(b).
    An independent expenditure committee is a type of polit-
ical committee that may “accept unlimited contributions from
any source, provided [] the independent expenditure commit-
tee does not make contributions to any candidate … , political
party committee, or [PAC].” 10 ILL. COMP. STAT. 5/9-3(d-5).
The Illinois Election Code never permits independent ex-
penditure committees to contribute to candidates, even when
4                                                         No. 18-3475

contribution limits are lifted for individuals and other enti-
ties.1 If an independent expenditure committee violates the
code by contributing to a candidate, party, or PAC, the Illinois
State Board of Elections assesses a fine on the independent
expenditure committee “equal to the amount of any contribu-
tion received in the preceding 2 years by the independent ex-
penditure committee that exceeded the limits [] a [PAC]” may
accept in an election cycle. 10 ILL. COMP. STAT. 5/9-8.6(d). In
eﬀect, the Illinois Election Code grants independent expendi-
ture committees a trade-oﬀ—they can raise unlimited funds
for independent expenditures, but they risk heavy fines if
those funds are contributed to candidates, parties, or PACs.
         B. Claims by Proft and Illinois Liberty PAC
     Illinois Liberty PAC is an Illinois-based independent ex-
penditure committee that supports Illinois political candi-
dates committed to economic liberty. Proft founded Illinois
Liberty PAC and currently serves as its chairman and treas-
urer. Although the Illinois Election Code bars independent
expenditure committees 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 candidates in races where the code
lifts contribution caps for other entities and individuals. To do
so, plaintiﬀs filed a complaint against the Illinois Attorney

    1 Federal law imposes a similar ban on independent expenditure com-

mittees contributing to federal candidates or coordinating with federal
candidates. See McCutcheon v. FEC, 572 U.S. 185, 193 n.2 (2014) (“A so-
called ‘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 Elec-
tions to obtain declaratory and injunctive relief permitting
such contributions and coordinated spending. Plaintiﬀs argue
that by excluding independent expenditure committees from
making these contributions and coordinated expenditures, Il-
linois has violated their First Amendment rights to free
speech and free association and their Fourteenth Amendment
rights under the Equal Protection Clause.
    Plaintiﬀs raised these arguments in a motion to enjoin the
Illinois Attorney General from enforcing the Illinois Election
Code in the 2018 election. The Illinois defendants opposed
plaintiﬀs’ preliminary injunction request and moved to dis-
miss plaintiﬀs’ complaint. The district court looked to
whether the code’s ban on contributions and coordination by
independent expenditure committees satisfied the Supreme
Court’s requirement that contribution limits serve “a suﬃ-
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 omitted). The
court found that the Illinois Election Code’s “suppression of
independent expenditure committee[] contributions to candi-
dates” satisfied the standard for constitutionality set by the
Supreme Court because the ban “prevent[ed] corruption or its
appearance” through “closely drawn means.” After finding
the contribution and coordination ban constitutional, the dis-
trict court granted defendants’ motion to dismiss and denied
plaintiﬀs’ motion for a preliminary injunction. Plaintiﬀs ap-
peal 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 omitted). To survive a Rule
12(b)(6) motion to dismiss, a claim for relief must be “plausi-
ble on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). When reviewing the district court’s grant of a 12(b)(6)
motion to dismiss, “[w]e construe the complaint in the light
most favorable to the plaintiﬀ, accepting as true all well-
pleaded facts alleged, and drawing all possible inferences in
[the plaintiﬀ’s] favor.” Tamayo v. Blagojevich, 526 F.3d 1074,
1081 (7th Cir. 2008) (citations omitted).
    Plaintiﬀs 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 inter-
mediate scrutiny” when contribution limits are at issue. Ill.
Liberty PAC v. Madigan, 904 F.3d 463, 469 (7th Cir. 2018) (cita-
tion omitted). Under this intermediate scrutiny standard of
review, “[c]ampaign contribution limits are generally permis-
sible if the government can establish that they are ‘closely
drawn’ to serve a ‘suﬃciently 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 ex-
penditures “are as useful to [] candidate[s] as cash,” coordi-
nated expenditures are subject to the same closely drawn
standard as contribution limits. See FEC v. Colo. Republican
Federal Campaign Committee, 533 U.S. 431, 446 (2001) (citing
No. 18-3475                                                    7

Buckley, 424 U.S. at 47). Because the Illinois Election Code bans
contributions and coordinated expenditures by independent
expenditure committees but not independent expenditures,
we apply the “closely drawn” standard to plaintiﬀs’ First
Amendment claim. See McCutcheon, 572 U.S. at 197 (citing
Buckley, 424 U.S. at 21, 25).
    Plaintiﬀs also contend the contribution and coordination
ban violates the Equal Protection Clause. When, as here, a
plaintiﬀ alleges equal protection challenges in a case involv-
ing 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). Be-
cause, in the context of contribution limits, “it makes no dif-
ference 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. Ill. 2012) (citations omitted), aﬀ’d
904 F.3d 463 (7th Cir. 2018), this court will apply the same
standard of review to plaintiﬀs’ Equal Protection Clause claim
as to plaintiﬀs’ First Amendment claim. Thus, whether the
district court correctly dismissed the complaint turns on
whether the Illinois Election Code’s contribution and coordi-
nation ban serves “a suﬃciently important interest and em-
ploys means closely drawn.” Buckley, 424 U.S. at 25 (citations
omitted).
                          B. Discussion
   “Preventing actual or apparent quid pro quo corruption is
the only interest the Supreme Court has recognized as suﬃ-
cient to justify campaign-finance restrictions” under the
“closely drawn” standard. Wis. Right to Life State PAC, 664
8                                                    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 reaﬃrmed in Citizens
Against Rent Control that preventing corruption or the appear-
ance of corruption are the only legitimate and compelling
government interests thus far identified for restricting cam-
paign finances.”).
    Here, if the contribution and coordination ban on
independent expenditure committees 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 committees to
use “unlimited contributions from any source” to contribute
unlimited sums of money to candidates and to coordinate un-
limited spending with candidates. 10 ILL. COMP. STAT.
5/9-3(d-5). Allowing such large contributions to candidates
would create manifest opportunities for corruption. See Buck-
ley, 424 U.S. at 46 (“[I]ndependent advocacy … does not [] ap-
pear to pose dangers of real or apparent corruption compara-
ble to those identified with large campaign contributions.”).
Plaintiﬀs discount these dangers and argue that contributions
and coordinated expenditures by independent expenditure
committees “would [not] pose a greater threat of corruption
than contributions or coordination by anyone else.” But strik-
ing down the coordination and contribution ban would
permit independent expenditure committees to circumvent
key sections of the Illinois Election Code that work to prevent
political corruption.
    Unlike independent expenditure committees, which are
permitted to “accept unlimited contributions from any
source,” 10 ILL. COMP. STAT. 5/9-3(d-5), PACs are subject to re-
strictions on the amount of contributions they may receive
No. 18-3475                                                    9

from any one individual or entity. 10 ILL. COMP. STAT.
5/9-8.5(d). Because the Illinois Election Code limits contribu-
tions 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 contribution cap is lifted, an in-
dividual could enter into a quid pro quo agreement with a
candidate, contribute up to $10,000 to a PAC, id., and then re-
quest 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 committees to donate
unlimited sums of money to political candidates or coordinate
with political candidates without limits in races where the
contribution cap is lifted.
     Partially lifting the contribution and coordination ban on
independent expenditure committees also would permit indi-
viduals to circumvent Illinois’s disclosure regime. Currently,
an individual can donate unlimited sums of money directly
to a candidate in a race where the contribution limits are
lifted. 10 ILL. COMP. STAT. 5/9-8.5(h), (h-5). But under the dis-
closure regime imposed by Illinois’s Election Code, candi-
dates receiving contributions must disclose the “full name
and mailing address” of any individual who contributed
more than $150 to his or her campaign. 10 ILL. COMP. STAT. 5/9-
10(b); 10 ILL. COMP. STAT. 5/9-11(a)(4). This disclosure—
10                                                   No. 18-3475

linking the individuals making contributions to the candi-
dates receiving those contributions—reduces the risk of cor-
rupt dealings. See Buckley, 424 U.S. at 67 (“A public armed
with information about a candidate’s most generous support-
ers is better able to detect any post-election special favors that
may be given in return.”).
    If the contribution and coordination ban were lifted, an in-
dividual could make unlimited contributions to an independ-
ent expenditure committee and then request that committee
donate those funds to a candidate. Independent expenditure
committees would still be required to disclose the name and
mailing address of that individual if he contributes more than
$150, 10 ILL. COMP. STAT. 5/9-10(b); 10 ILL. COMP. STAT.
5/9-11(a)(4), and the candidate and the independent expendi-
ture committee would still have to disclose any contribution
from the independent expenditure committee to the candi-
date that amounts to more than $150, 10 ILL. COMP. STAT.
5/9-10(b); 10 ILL. COMP. STAT. 5/9-11(a)(6). But, despite these
provisions, an individual could obscure his identity as a do-
nor by funneling his contributions through an independent
expenditure committee. And passing contributions in this
manner may be a particularly eﬀective way of hiding quid pro
quo transactions. Funds may commingle within an independ-
ent expenditure committee, and these committees may even
transfer funds back and forth to one another without penalty
under 10 ILL. COMP. STAT. § 5/9-8.6(d), further concealing the
source of contributions to a candidate. Striking down the con-
tribution and coordination ban for independent expenditure
committees could thus permit corrupt actors to avoid Illi-
nois’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 large
No. 18-3475                                                            11

contributions and expenditures to the light of publicity.”).
This court has heeded “[t]he need for an eﬀective and com-
prehensive 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).
    Plaintiﬀs’ request would turn Illinois Liberty PAC into a
quasi-independent expenditure committee that can contrib-
ute to and coordinate with candidates.2 Because contributions
and coordinated spending are at issue, we look to whether the
contribution and coordination ban satisfies “a suﬃciently im-
portant interest and employs means closely drawn.” Buckley,
424 U.S. at 25. The ban serves a suﬃciently important inter-
est—the prevention of actual or apparent corruption—by
ensuring independent expenditure committees cannot cir-
cumvent key Illinois Election Code provisions that prevent
corruption, such as 10 ILL. COMP. STAT. § 5/9-8.5(d), which lim-
its political contributions, and 10 ILL. COMP. STAT. 5/9-10(b),
which requires financial disclosures. And, by prohibiting in-
dependent       expenditure     committees     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 those 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 ex-
penditures do not corrupt or give the appearance of corruption as a matter
of law, then the government can have no anti-corruption interest in limit-
ing contributions to independent expenditure-only organizations.”). In
that sense, should plaintiffs have succeeded in this case, Illinois could
have subjected Illinois Liberty PAC to the same regulations as PACs, in-
cluding contribution limits.
12                                                    No. 18-3475

contributions to or coordinating spending with candidates, Il-
linois employs means closely drawn. Illinois’s statutory
scheme leaves ample room for independent expenditure com-
mittees to participate in Illinois politics. The ban regulates
only contributions and coordinated spending by these com-
mittees—the activities most likely to give rise to the prospect
of corruption.
                                III.
   Next, plaintiﬀs argue the district court erred when it de-
nied their motion for a preliminary injunction. That motion
sought to enjoin the “Defendants from enforcing Illinois‘[s]
ban on coordinated expenditures and contributions to candi-
dates by independent expenditure committees in any race
where contribution limits have otherwise been eliminated.”
    To obtain a preliminary injunction, “the moving party
must establish that (1) without preliminary relief, it will suﬀer
irreparable harm before final 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 omitted). If the moving
party fails to make this showing, the court does not have to
proceed to balancing the resulting harms. Id. (citation omit-
ted). When reviewing a district court’s grant or denial of a
preliminary injunction, “[w]e review the district court’s find-
ings 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 omitted).
   Here, the district court denied plaintiﬀs’ motion for a pre-
liminary injunction after finding that plaintiﬀs were unlikely
No. 18-3475                                                   13

to succeed on the merits of their claims and that Illinois’s in-
terest in enforcing democratically enacted statutes and main-
taining the integrity of the electoral process outweighs the
harms imposed on plaintiﬀs by the challenged provision.
     Because plaintiﬀs have not demonstrated any likelihood
of success on the merits, the district court correctly denied
their motion for a preliminary injunction. As mentioned
above, the contribution and coordination ban is necessary to
prevent corruption or its appearance and is closely tailored to
that purpose. Setting aside plaintiﬀs’ inability to succeed on
the merits, plaintiﬀs have also failed to establish that they de-
serve equitable relief because their legal remedies are inade-
quate. If Proft wishes to make contributions to candidates or
coordinate with candidates, he may reorganize Illinois Lib-
erty PAC as a political action committee. And if Proft wishes
to contribute to candidates, coordinate with candidates, and
make independent expenditures, he may instead form a po-
litical action committee while continuing to manage Illinois
Liberty PAC. 10 ILL. COMP. STAT. 5/9-2(d).
                              IV.
    The district court did not err by granting defendants’ mo-
tion to dismiss and denying plaintiﬀs’ motion for a prelimi-
nary injunction. Accordingly, its judgment is AFFIRMED.