Minnesota Citizens Concerned for Life, Inc. et al v. Swanson et al

Filing 102

MEMORANDUM OPINION AND ORDER. Plaintiffs' Motion for Preliminary Injunction (Doc. No. 8 ) is GRANTED IN PART as follows: Defendants are enjoined from applying Minn. Stat. § 10A.20, subd. 7 to political funds. (Written Opinion). Signed by Judge Donovan W. Frank on 10/12/12. (BJS)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Minnesota Citizens Concerned for Life, Inc.;
The Taxpayers League of Minnesota;
and Coastal Travel Enterprises, LLC,

Civil No. 10-2938 (DWF/JSM)

Plaintiffs,
v.

MEMORANDUM
OPINIONAND ORDER

Bob Milbert, John Scanlon, Terri Ashmore,
Hilda Bettermann, Felicia Boyd, and Greg
McCullough, Minnesota Campaign Finance
and Public Disclosure Board Members,
in their official capacities; and Michael
Freeman, Hennepin County Attorney,
in his official capacity,
Defendants.

Jeffrey P. Gallant, Esq, James Bopp, Jr., Esq., and Richard E. Coleson, Esq., The Bopp
Law Firm; and Erick G. Kaardal, Esq., and James R. Magnuson, Esq., Mohrman &
Kaardal, PA, counsel for Plaintiffs.
Alan I. Gilbert, Solicitor General, and John S. Garry, Kristyn M. Anderson, and
Alethea M. Huyser, Assistant Attorneys General, Minnesota Attorney General’s Office,
counsel for Minnesota Campaign Finance and Public Disclosure Board Member
Defendants; and Daniel P. Rogan and Beth A. Stack, Assistant Hennepin County
Attorneys, Hennepin County Attorney’s Office, counsel for Defendant Michael Freeman,
Hennepin County Attorney.

In this action, Plaintiffs challenge several Minnesota statutes that relate to
campaign finance and disclosure. Plaintiffs allege that the challenged statutes—

Minnesota Statute § 10A.12, subds. 1 and 1a, § 10A.01, subd. 18, § 10A.27, subd. 13, and
§ 211B.15, subds. 2, 3, and 4—are unconstitutional because they violate both the First
and Fourteenth Amendments to the United States Constitution. Plaintiffs seek both a
declaratory judgment that the challenged statutes are unconstitutional and an injunction
enjoining enforcement of the challenged statutes. In a Memorandum Opinion and Order
dated September 20, 2010 (the “September 2010 Order”), this Court denied Plaintiffs’
Motion for Preliminary Injunction. (Doc. No. 59.) In the September 2010 Order, the
Court concluded that Plaintiffs failed to establish a likelihood of success on all counts and
that the remaining Dataphase factors would likely weigh in Defendants’ favor.
On September 22, 2010, Plaintiffs filed a Notice of Appeal. (Doc. No. 60.) In
their appeal, Plaintiffs argued that the Court abused its discretion by denying their motion
for a preliminary injunction because Plaintiffs were likely to succeed on the merits of
their claim that Minnesota’s campaign finance laws unconstitutionally infringe upon their
right to engage in political speech through independent expenditures. On May 16, 2011, a
divided panel of the Eighth Circuit Court of Appeals affirmed the denial of the
preliminary injunction. Minn. Citizens Concerned for Life, Inc. v. Swanson, 640 F.3d
304, 319 (8th Cir. 2011) (“MCCL I”). 1 The Eighth Circuit subsequently granted

1

Chief Judge Riley dissented in the March 16, 2011 panel decision, focusing on
the “potentially perpetual” ongoing reporting requirements under Minn. Stat. § 10A.20,
subd. 7, and determining that Minnesota did not “show a substantial relation between its
ongoing requirement and any important governmental interest.” MCCL I, 640 F.3d at
(Footnote Continued on Next Page)
2

rehearing en banc and vacated the panel decision. On September 5, 2012, the Eighth
Circuit issued an en banc opinion regarding the September 2010 Order. Minn. Citizens
Concerned for Life, Inc. v. Swanson, 692 F.3d 864 (8th Cir. 2012) (“MCCL II”).
In MCCL II, the Eighth Circuit, in a 6-5 decision written by Chief Judge Riley,
affirmed in part and reversed in part the September 2010 Order and remanded the action
for further proceedings consistent with their opinion. MCCL II, 692 F.3d at 880. The
Eighth Circuit explained:
Minnesota’s independent expenditure law almost certainly fails [the
exacting scrutiny test] because its ongoing reporting requirement—which is
initiated upon a $100 aggregate expenditure, and is untethered from
continued speech—does not match any sufficiently important disclosure
interests—providing the electorate and shareholders information concerning
the source of corporate political speech, deterring corruption, and detecting
violations of campaign finance laws—through less problematic measures,
such as requiring reporting whenever money is spent, as the law already
requires of individuals.
Id. at 876-77 (internal citations and quotations omitted). The Eighth Circuit further
stated:
Accordingly, we reverse the district court’s denial of the appellants’ motion
for a preliminary injunction to the extent it requires ongoing reporting
requirements from associations not otherwise qualifying as PACs under
(Footnote Continued From Previous Page)
320, 322.
Minn. Stat. § 10A.20 is entitled “Campaign Reports” and subdivision 7 pertains to
the “statement of inactivity.” Specifically, subdivision 7 provides: “If a reporting entity
has no receipts or expenditures during a reporting period, the treasurer must file with the
board at the time required by this section a statement to that effect.” Minn. Stat.
§ 10A.20, subd. 7.
3

Minnesota law. At this early stage of the litigation, we express no opinion
as to whether any of the other obligations Minnesota imposed upon
associations speaking through political funds would, by themselves or
collectively, survive exacting scrutiny. Neither do we have occasion at this
point to decide whether it is appropriate to remedy any constitutional
infirmity . . . by severing Minn. Stat. § 10A.20, subdiv. 7 to remove the
likely unconstitutional ongoing reporting obligations.
Id. at 877 (internal citations omitted). 2
On September 11, 2012, Minnesota State Defendants filed a letter requesting that
the Court modify its September 2010 Order to preliminarily enjoin the application of
Minn. Stat. § 10A.20, subd. 7 to political funds. (Doc. No. 92.) Defendant Hennepin
County Attorney Michael Freeman joined the request. (Doc. No. 93.) 3 In a letter dated
September 25, 2012, Plaintiffs explained their position regarding the Eighth Circuit’s
opinion in MCCL II, namely that they disagree with the scope of the preliminary
injunction as proposed by Defendants. Instead, Plaintiffs assert that the en banc opinion
requires a preliminary injunction against the entirety of Minnesota’s independent
expenditure political fund law as it applies to associations (including corporations). (Doc.
No. 99.)

2

In MCCL II, the Eighth Circuit also explained that its holding does not affect
Minnesota’s regulation of political committees. MCCL II, 692 F.3d 877 n.11.

3

The Minnesota Campaign Finance and Disclosure Board issued a bulletin advising
political funds that the Board will not require them to file a report if no campaign activity
occurred during the pertinent reporting period. (Doc. No. 92-1 ¶ 2, Ex. 2.)

4

In support of its position, Plaintiffs submit that the Eighth Circuit’s statement that
the preliminary injunction should be entered “to the extent it requires ongoing reporting
requirements from associations not otherwise qualifying as PACs under Minnesota law”
does not mean that the Eighth Circuit intended only to enjoin Minn. Stat. § 10A.20,
subd. 7. Plaintiffs also contend that the Eighth Circuit’s decision not to reach the issue of
severability demonstrates the Eighth Circuit’s intention to enjoin the entirety of
Minnesota’s independent expenditure political fund law.
The Court disagrees with Plaintiffs’ position on the appropriate scope of an
injunction. First, the majority in MCCL II explicitly limits its reversal to the ongoing
reporting of political fund inactivity required by Minn. Stat. § 10A.20, subd. 7.
Specifically, the majority states: “[W]e reverse the district court’s denial of the
appellants’ motion for a preliminary injunction to the extent it requires ongoing reporting
requirements from associations not otherwise qualifying as PACs under Minnesota law.”
MCCL II, 692 F.3d at 877. 4 Further, in explaining that it would not reach the issue of

4

Plaintiffs argue that this specific holding must be considered along with the Eighth
Circuit’s more general statement—“we conclude Minnesota’s requirement that all
associations make independent expenditures through an independent expenditure political
fund . . . is most likely unconstitutional.” MCCL II, 692 F.3d at 877. The Court agrees
that the statements must be read together, but notes that the general statement relied upon
by Plaintiffs is immediately preceded by the explanation that “Minnesota has not
advanced any relevant correlation between its identified interests and ongoing reporting
requirements.” Id. (emphasis added.) Read together, it is clear to this Court that the
Eighth Circuit’s opinion is limited to the constitutionality of the ongoing reporting
requirements.
5

whether it is appropriate to remedy any constitutional infirmity “by severing Minn. Stat.
§ 10A.20, subd. 7 to remove the likely unconstitutional ongoing reporting obligations,”
the majority clearly indicates that it was specifically invalidating Minn. Stat. §10A.20,
subd. 7. Id. 5 The majority expressed no opinion as to whether any of the challenged
statutory requirements imposed on associations speaking through political funds would
survive constitutional scrutiny. Id. In addition, the dissent in MCCL II sheds light on the
appropriate scope of an injunction, noting that the majority opinion acknowledges that
“Minnesota can impose ongoing disclosure requirements on corporations and associations
that actually make contributions in a reporting period,” and pointing out that “the
majority’s conclusion of a likely constitutional violation solely centers on the reporting
requirements to those associations that choose not to terminate the fund but conduct no
activity during the reporting period.” Id. at 885 (citing MCCL II, 692 F.3d at 876-77).
Based on the clear language in the opinion, the Court concludes that the appropriate scope
of a preliminary injunction is limited to enjoining the application of Minn. Stat. § 10A.20,
subd. 7 to political funds.
Plaintiffs argue that the Eighth Circuit’s decision not to reach the issue of
severability demonstrates that the Eighth Circuit concluded that Minnesota’s entire

5

That the majority focuses on the constitutionality of the ongoing reporting of
political fund inactivity is underscored by Chief Judge Riley’s dissent in the
March 16, 2012 panel decision, which also focuses on the constitutionality of requiring
registered political funds to file a statement of inactivity. MCCL I, 640 F.3d at 320.
6

independent expenditure law should be enjoined. The Court disagrees. First, such a
conclusion is directly contrary to the majority opinion’s explicit explanation that only
Minn. Stat. § 10A.20, subd. 7 as applied to political funds is unconstitutional and must be
enjoined. Second, the Court disagrees that the Eighth Circuit’s decision to decline to
consider the issue of severability somehow indicates that it was assuming that the law, by
default, was not severable. In declining to reach the issue, the Eighth Circuit cited to
Neighborhood Enterprises v. City of St. Louis, 644 F.3d 728, 738-39 (8th Cir. 2011) with
the following parenthetical citation— “remanding to the district court to decide in the first
instance the question of whether an unconstitutional state provision was severable from
the remainder of the statute.” MCCL II, 692 F.3d at 877. This citation demonstrates that
the Eighth Circuit simply declined to reach the issue and was not otherwise suggesting an
opinion on the issue of severability. Finally, the Court concludes on a preliminary basis
that a limited preliminary injunction directed only at the statement of inactivity is
consistent with Minnesota law on severability. Under Minnesota law, statutory
provisions are presumed to be severable:
Unless there is a provision in the law that the provisions shall not be
severable, the provisions of all laws shall be severable. If any provision of
a law is found to be unconstitutional and void, the remaining provisions of
the law shall remain valid, unless the court finds the valid provisions of the
law are so essentially and inseparably connected with, and so dependent
upon, the void provisions that the court cannot presume the legislature
would have enacted the remaining valid provisions without the void one; or
unless the court finds the remaining valid provisions, standing alone, are
incomplete and are incapable of being executed in accordance with the
legislative intent.
7

Minn. Stat. § 645.20. Here, there has been no showing that the invalidated provision of
Minnesota’s independent expenditure law is inseparably connected to the remaining
provisions, or that the legislature would not have enacted the remaining provisions
without Minn. Stat. § 10A.20, sub. 7.
For the reasons stated above, the Court concludes that it is appropriate to modify
the September 2010 Order to preliminarily enjoin the application of Minn. Stat. § 10A.20,
subd. 7 to political funds.
ORDER
For the reasons stated, IT IS HEREBY ORDERED that Plaintiffs’ Motion for
Preliminary Injunction (Doc. No. [8]) is GRANTED IN PART as follows: Defendants
are enjoined from applying Minn. Stat. § 10A.20, subd. 7 to political funds.

Dated: October 12, 2012

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge

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