Missourians for Fiscal Accountability v. Missouri Ethics Commission

Filing 9

ORDER granting 5 motion for TRO. Signed on 11/2/14 by District Judge Ortrie D. Smith. (Wolfe, Steve)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION
MISSOURIANS FOR FISCAL
ACCOUNTABILITY,
Plaintiff,
vs.
JAMES KLAHR, in his official capacity
as Executive Director of the
Missouri Ethics Commission,
Defendants.

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Case No. 14-4287-CV-C-ODS

ORDER AND OPINION GRANTING PLAINTIFF’S MOTION
FOR TEMPORARY RESTRAINING ORDER
I. BACKGROUND

Plaintiff is a “political organization” within the meaning of section 527 of the
Internal Revenue Code. It was formed on October 22, 2014 with the intent of collecting
contributions and expending money to advocate for Proposition 10, a proposed
amendment to the Missouri Constitution that will be voted upon during the November 4,
2014 general election. To that end, Plaintiff endeavored to register as a “campaign
committee” as required by Missouri statutes. However, Missouri statutes preclude
Plaintiff from collecting or spending money to support Proposition 10 because it did not
register as a campaign committee at least thirty days before the election.
Section 130.011 of the Revised Missouri Statutes defines a “campaign
committee” in terms that include limitations on what a campaign committee is and can
do. In pertinent part, the statute provides as follows:
a committee, other than a candidate committee, which shall be formed by
an individual or group of individuals to receive contributions or make
expenditures and whose sole purpose is to support or oppose the
qualification and passage of one or more particular ballot measures in an
election . . . shall be formed no later than thirty days prior to the election for
which the committee receives contributions or makes expenditures . . . .

Section 130.011 thus creates a blackout period during which a campaign committee
cannot collect or expend funds. This blackout period exists for the first thirty days of the
campaign committee’s existence.
On October 30, Plaintiff initiated this lawsuit alleging this restriction on its ability
to collect and expend funds to support Proposition 10 violates the First Amendment and
seeking an injunction to protect itself from the adverse effects of violating section
130.011. Shortly after 11:00 a.m. on October 31, Plaintiff filed a Motion for Temporary
Restraining Order. The Court conducted a telephonic hearing at 3:30 p.m. that same
day; both parties participated.
Any person who violates the provisions of Chapter 130 may be found guilty of a
class A misdemeanor. Mo. Rev. Stat. § 130.081.1. However, Defendant is not
empowered to prosecute criminal violations. Defendant James Klahr has been sued in
his official capacity as Executive Director of the Missouri Ethics Commission (“the
Commission”). During the hearing, Defendant’s counsel conceded Defendant has the
power to conduct investigations and assess fines against campaign committees that
violate Missouri’s election laws, including section 130.011.

II. DISCUSSION

Whether a TRO should be issued “involves consideration of (1) the threat of
irreparable harm to the movant; (2) the state of the balance between this harm and the
injury that granting the injunction will inflict on other parties litigant; (3) the probability
that movant will succeed on the merits; and (4) the public interest.” Dataphase Sys.,
Inc. v. C.L. Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981) (en banc). The most important
of these factors is the plaintiff’s likelihood of success. E.g., S & M Constructors, Inc. v.
Foley Co., 959 F.2d 97, 98 (8th Cir.), cert. denied, 506 U.S. 863 (1992). Consequently,
the Court elects to consider that factor first.

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A. Likelihood of Success on the Merits

The First Amendment protects the right to participate in the political process, and
this includes the right to participate in the political process by making political donations
or spending money to express one’s political views. E.g., McCutcheon v. FEC, 134 S.
Ct. 1434, 1441 (2014). There are, however, a variety of governmental interests (of
varying degrees of importance) that might justify limiting or regulating political
contributions and expenditures. The collision of these interests with the First
Amendment has wrought a long line of Supreme Court decisions (starting, probably,
with Buckley v. Valeo, 424 U.S. 1 (1976)) and corresponding reactions from Congress
and state legislatures attempting to vindicate those interests within the confines of the
First Amendment. The time allotted does not permit the Court to fully explore the many
relevant decisions (and nuances therein). In crude summary, expenditure limits directly
limit speech, and therefore are subject to exacting scrutiny. A limit on expenditures to
support or oppose a candidate or issue must promote a compelling governmental
interest and be the least restrictive means of accomplishing that interest. E.g.,
McCutcheon, 134 S. Ct. at 1444. Limits on contributions receive a lesser, but still
significant, degree of scrutiny. Such limits are valid “if the State demonstrates a
sufficiently important interest and employs means closely drawn to avoid unnecessary
abridgement of associational freedoms.” Id. (quotations omitted).
The Supreme Court has “identified only one legitimate governmental interest for
restricting campaign finances: preventing corruption or the appearance of corruption”
and has “consistently rejected attempts to suppress campaign speech based on other
legislative objectives. . . . The First Amendment prohibits . . . legislative attempts to
fine-tune the electoral process, no matter how well intentioned.” McCutcheon, 134 S.
Ct. at 1450 (quotation omitted). Moreover, the legislature may target only one type of
corruption: quid pro quo corruption. Id. There is no need to delve into the contours of
what quid pro quo corruption is (or is not) for two reasons. First, Defendant did not
contend the blackout period created by section 130.011 is intended to prevent
corruption of any kind. Second, as a matter of logic it is difficult to apprehend any risk of

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a quid pro quo corruption: while a candidate could theoretically promise “governmental
rewards” in exchange for campaign contributions, a ballot issue cannot.
Instead, Defendant contends the blackout period promotes the State’s interest in
informing voters of the sources of election-related spending. This interest has been
recognized as valid and has most often been posited as justifying disclosure
requirements. In fact, this issue was addressed in Buckley. See Citizens United v.
FEC, 558 U.S. 310, 367 (2010) (discussing Buckley). “Disclaimer and disclosure
requirements may burden the ability to speak, but they impose no ceiling on campaignrelated activities and do not prevent anyone from speaking. The Court has subjected
these requirements to exacting scrutiny, which requires a substantial relation between
the disclosure requirement and a “sufficiently important” governmental interest.” Id. at
366-67.
The difficulty is that the blackout period is not a disclosure requirement. It does
not require those collecting or expending funds to say anything to anyone, much less to
the electorate. To the contrary, the blackout period forbids communication by
preventing the committee from expending solicited funds. Therefore, the cases
upholding disclosure requirements provide little aid to Defendant’s position.
Analyzed independently, the blackout period does not appear defensible as a
means of promoting the State’s interest in informing the voters. The primary reason has
already been identified: section 130.011 does not tell voters anything. During the
hearing, counsel for Defendant suggested that the blackout period accomplishes the
State’s objective by making sure a campaign committee is registered and existing for
thirty days before it engages in political activity. However, knowing the mere fact that a
campaign committee exists imparts no knowledge. Knowing a committee exists does
not tell the electorate what issue or issues the committee is interested in, much less
what position the committee plans to take. Consider the Plaintiff, and assume that it
registered as a campaign committee on April 1, 2014. Further assume that it complied
with the blackout period and did not collect or expend funds for the ensuing thirty days.
At the end of the thirty days, what would the voters know? At best, they would know
that an entity called Missourians for Fiscal Accountability was created on April 1. The
voters would not know that the committee planned to collect and expend funds to take a
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position with respect to Proposition 10, nor would they know that the committee planned
to support its passage. A committee could even comply with the statute by registering
more than thirty days before the election, then wait until the days before the election to
begin collecting and spending money; in such a case, the electorate would have just as
much (or just as little) information as the electorate will have about Plaintiff. The
blackout period simply does not accomplish its objective as a voter education tool, and
thus does not withstand exacting scrutiny.
If the State wants to educate the voters, it can employ more effective means that
are less violative of First Amendment rights – that is, disclosure requirements. Catholic
Leadership Coal. of Texas v. Reisman, 764 F.3d 409, 428-29 (5th Cir. 2014); see also
Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290, 298-99 (1981) (“The
public interest allegedly advanced by [a contribution limitation] – identifying the sources
of support for and opposition to ballot measures – is insubstantial because voters may
identify those sources under the provisions [establishing disclosure requirements].”). If
Missouri does not have a disclosure requirement, then enforcing the blackout period
does nothing to inform the voters. If Missouri has a disclosure requirement, then the
blackout period does nothing to further inform the voters. For these reasons, the Court
concludes Plaintiff is likely to prevail on its claim that section 130.011’s blackout period
violates its First Amendment rights.

B. Threat of Irreparable Harm

The threatened loss of First Amendment rights qualifies as an irreparable harm in
its own right. E.g., Child Evangelism Fellowship of MN v. Minneapolis Special Sch. Dist.
No. 1, 690 F.3d 996, 1000 (8th Cir. 2012) (quoting Lowry ex rel. Crow v. Watson Chapel
Sch. Dist., 540 F.3d 752, 762 (8th Cir. 2008)). The circumstances of this case heighten
the risk: delaying all relief until the conclusion of the case would preclude any possibility
of Plaintiff exercising its First Amendment rights because the election will certainly be
over before this litigation ends.

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Defendant is sued in his official capacity as the Commission’s Director;1 while the
Defendant cannot prosecute Plaintiff criminally for violating section 130.011, Defendant
can initiate non-criminal proceedings that result in fines. The specter of financial
penalties for engaging in First Amendment conduct – and the corresponding
disincentive imposed for Plaintiff’s exercise of its rights – is sufficient to qualify as
irreparable harm.
Defendant argues there is no irreparable harm because Plaintiff waited until
approximately two weeks before the election to try to comply with Missouri’s law, and its
late entry into the political fray (and the late filing of this suit) demonstrates
disingenuousness. The Court shares these views; in fact, the Court expressed these
views on the Record near the conclusion of the hearing. The Court believes Plaintiff
has deliberately waited until the last possible moment before inundating the electorate
with a series of political advertisements, lulling those on the other side of the issue into
complacency – which does not serve the higher purpose of fairly and accurately
debating issues or educating the voters. The Court also believes the eleventh-hour
effort was designed to deprive Defendant of an opportunity to meaningfully defend the
statute. However . . . regardless of the correctness of these views and regardless of the
reason Plaintiff (1) did not exist until October 22, (2) waited to file this lawsuit until
October 30, or (3) waited to ask for a temporary restraining order until October 31,
Plaintiff still has First Amendment rights. It is not for Defendant or the undersigned to
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Defendant raised an issue as to whether suing Defendant alone could be
construed as a suit against the entire Commission, or whether Plaintiff had to sue each
of the Commission’s members in their official capacity in order to sue the Commission
as a whole. Neither side proffered a definitive answer to this question. The Court’s
independent and necessarily time-abbreviated review reveals that it is customary to sue
each of the members of a commission or board in their official capacities when seeking
to assert an Ex Parte Young style claim. Whether this is a requirement or merely
custom is uncertain, although the Court is inclined to think it is the former.
Regardless, the Court intends to enter a TRO against the party named in the
Complaint. Plaintiff will have to decide whether the TRO it sought is sufficient to provide
the assurances it truly desires; similarly, the Commission will have to decide whether
the TRO applies to it. Depending on these decisions, a definitive answer may never be
necessary.
One thing is clear, however: Plaintiff has not sued anybody with authority to
prosecute crimes. Therefore, this TRO has no effect on any state or local official
empowered to bring criminal charges for violating section 130.011.
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evaluate a speaker’s motives for speaking or for choosing when he, she, or it wants to
speak. The fact remains: regardless of when it came into existence or why it waited so
long to speak, Plaintiff has the right to speak. And the threatened repercussions for
exercising that right constitute a threat of irreparable harm.

C. Balance of Interests

The Court’s conclusion regarding this factor is largely foretold by the discussion
to this point. Plaintiff has a First Amendment right to collect and expend funds so it can
express its political views. The state’s legitimate interest in informing the electorate as
to the source of those funds is ill-served by enforcing the blackout period. Thus, the
Court sees little threat of harm to legitimate interests by granting the TRO. While the
TRO may not provide Plaintiff the succor it desires (see footnote 1, supra), it may.
Moreover, the minimal State interest is easily outweighed by the importance in
vindicating First Amendment interests to the extent Plaintiff seeks.

D. Public Interest

The public interest was addressed in the preceding section because Defendant
proffered the public’s interest as his own. The Court’s prior discussion applies here as
well.

E. Miscellaneous

Plaintiff’s motion, and its Proposed Order, sought additional relief. To clarify
matters, the Court is not granting this additional relief. This is a Temporary Restraining
Order. It is not a final judgment. Therefore,


The Court is not entering a preliminary injunction or a permanent injunction.



The Court is not issuing a final declaration that the blackout period imposed by
section 130.011 violates the First and Fourteenth Amendments.



The Court is not awarding Plaintiff its attorney fees and costs.
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However, the Court does hold that there is no need for Plaintiff to post a bond because
there does not appear to be any risk of financial harm to Defendant.

III. CONCLUSION

The Motion for Temporary Restraining Order (Doc. # 5) is granted. The Court
temporarily enjoins Defendant James Klahr, acting in his official capacity as Executive
Director of the Missouri Ethics Commission, from enforcing the thirty-day blackout
period imposed by Section 130.011 of the Missouri Revised Statutes. This means
Plaintiff may take actions that violate the blackout period while this TRO is in effect and
that Defendant may not investigate or sanction Plaintiff for taking those actions.
IT IS SO ORDERED.

/s/ Ortrie D. Smith
ORTRIE D. SMITH, SENIOR JUDGE
UNITED STATES DISTRICT COURT

DATE: November 2, 2014

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