Court Opinion

ID: 9465212
Source: CourtListenerOpinion
Date Created: 2023-08-05 00:39:15.338362+00
Date Added: 2024-06-11T17:39:02.315763
License: Public Domain

WINTER, Circuit Judge,
concurring and dissenting:
While I agree with the majority both that TWR sufficiently satisfied the organizational test to permit it to litigate the case on its merits and that the first amendment does not require Congress, by favorable tax treatment, to subsidize lobbying activities, I cannot join in the holding that the district court correctly entered summary judgment for the government on the equal protection claim. I respectfully dissent.
I.
This is a first amendment case. It seems conceded by all that lobbying activities— the right of petition — come within the protection of the first amendment. See Eastern R.R. Conference v. Noerr Motor Freight, 365 U.S. 127, 137-38, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); Cammarano v. United States, 358 U.S. 498, 512-13, 79 S.Ct. 524, 3 L.Ed.2d 462 (1959). See also First National Bank of Boston v. Bellotti, 435 U.S. 765, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978). Nor do I think that there is any question but that the granting or withholding of favorable tax treatment of contributions on a selective basis because of the substantiality of lobbying activities on the part of the recipient is a regulation of a first amendment right. See Speiser v. Randall, 357 U.S. 513, 518, 78 S.Ct. 1332, 2 L.Ed.2d 1460 (1958).
Cammarano held valid treasury regulations disallowing the deduction from gross income of sums expended for lobbying purposes and sums spent for the promotion or defeat of legislation as “ordinary and necessary” business expenses. Cammarano did so, however, in the context of a blanket, nondiscriminatory prohibition applicable to all corporations and individuals. “Nondiscriminatory denial of deduction from gross income to sums expended to promote or defeat legislation is plainly not ‘aimed at the suppression of dangerous ideas.’ ” 358 U.S. at 513, 79 S.Ct. at 533 (quoting Speiser v. Randall, 357 U.S. at 519, 78 S.Ct. 1332) (emphasis supplied).
Since Cammarano was decided, Congress has not maintained an attitude of nondiscriminatory tax treatment with respect to lobbying. Congress enacted 26 U.S.C. § 162(e) permitting taxpayers to deduct from gross income as “ordinary and necessary” business expenses certain lobbying expenses, excluding participation in the political campaign of a candidate for public office and efforts to influence the general public with respect to legislative matters, elections and referenda, if those expenses were incurred in the course of trade or business.
The same deduction is afforded to the portion of dues of members of organizations attributable to lobbying expenses. I understand this to be the dues of members of labor unions and trade associations to' the *1225extent that the dues are expended for permitted lobbying activities. More in point, Congress amended 26 U.S.C. § 170 to provide that charitable contributions made to organizations, a substantial part of the activities of which is lobbying, may receive favorable tax treatment if the organization is (a) a nonprofit organization of war veterans or an auxiliary unit, society, trust or foundation for such organization, or (b) a domestic fraternal society, order or association, operating under the lodge system. In the case of a gift to the latter, there is a special restriction that the gift to be deductible by the donor must be made by an individual and the gift must be used by the donee exclusively for religious, charitable, scientific, literary or educational purposes, or for the prevention of cruelty to children or animals.
If we leave aside the favorable tax treatment of the portion of dues of members of organizations attributable to lobbying activities, the question before us thus becomes one of whether it is an unconstitutional discrimination for Congress to subsidize the lobbying activities of veterans’ organizations and domestic fraternal societies while declining to subsidize the lobbying activities of TWR, an otherwise tax-exempt charitable corporation which would qualify to receive tax-exempt gifts but for its desire to press the ideas that it advocates before legislative bodies. The government argues that the answer is in the negative with respect to fraternal organizations because the favorable tax treatment is accorded only to gifts used for charitable purposes. The government argues that the answer is in the negative with respect to veterans’ organizations because they “serve useful societal goals which have been historically, and probably necessarily, dependent in large part on governmental action . [and] the compelling governmental and societal goals and problems dealt with by veterans’ organizations required more leeway for lobbying activities in some cases.” The majority opinion tracks the government’s argument, but I am unpersuaded.
First, the rationale advocated by the government and adopted by the majority is the rational basis test, inappropriate for a case of this nature. As the latest in a long line of decisions, First National Bank of Boston v. Bellotti holds that discriminations of the type with which we are concerned can be sustained only if they survive “exacting scrutiny” and are justified by a “compelling state interest.” 435 U.S. at pp. 786, 787, 98 S.Ct. 1407. Additionally, with respect to fraternal organizations, the government’s argument in essence is that the subsidization of lobbying activities is limited because the lobbying must be for religious, charitable, scientific, literary or educational purposes, etc. The argument is thus as to the quantum of the subsidy; it avoids the justification, if any, for the discrimination between fraternal organizations and TWR. With respect to veterans’ organizations, I find nothing in the record to support the finding that the governmental and societal goals and problems dealt with by veterans’ organizations are more deserving of subsidy than the governmental goals and problems of taxation with which TWR seeks to deal. Even if I assume that there may be differences sufficiently compelling to justify rendering contributions to veterans’ organizations tax deductible, while denying such favorable treatment to contributions to TWR, this record does not disclose them. As a result, I think summary judgment inappropriate. I would vacate the judgment and remand the case in order to put the parties to their proof.
What I fear that Congress has done since Cammarano is to run afoul of the teaching of Police Department of Chicago v. Mosley, 408 U.S. 92, 92 S.Ct. 2286, 33 L.Ed.2d 212 (1972). That case held invalid on equal protection grounds an ordinance that prohibited picketing near a school while the school was in session and for a short period before and after the school session, but .exempted from the prohibition picketing of any school involved in a labor dispute. The theory of decision was that while all picketing may be regulated where necessary, “[b]ecause picketing plainly involves expressive conduct within the protection of the First Amendment . . . , discrimi-*1226nations among pickets must be tailored to serve a substantial governmental interest.” 408 U.S. at 99, 92 S.Ct. at 2292. See also First National Bank of Boston v. Bellotti, 435 U.S. at p. 784, 98 S.Ct. 1407 (slip opinion, pp. 18 — 19). If my premise is correct that the favorable tax treatment afforded to contributions and gifts to fraternal organizations and veterans’ organizations and the unfavorable tax treatment afforded to contributions and gifts to other nonprofit charitable organizations by reason of their lobbying activities is a regulation on the exercise of the right to petition, certainly the government bears a heavy burden to justify encouragement of the right to express the views of one and discouragement of the right to express those of the other. Although I have yet to be persuaded that that burden can be met, I would afford the government the opportunity to meet it.