CRG Network v. Barland et al

Filing 28

ORDER DISMISSING CASE signed by Judge Rudolph T. Randa on 10/14/2015 GRANTING 19 Plaintiff's MOTION for Summary Judgment. Contribution limits in Wis. Stats. § 11.26(9) unconstitutional on their face, defendants permanently enjoined from enforcing them. (cc: all counsel)(cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
CRG NETWORK,
Plaintiff,
-vs-

Case No. 14-C-719

THOMAS BARLAND, HAROLD FROELICH,
MICHAEL BRENNAN, ELSA LAMELAS,
GERALD C. NICHOL, and TIMOTHY VOCKE,
each in their official capacity as Board Members
of the WISCONSIN GOVERNMENT ACCOUNTABILITY
BOARD,
Defendants.
DECISION AND ORDER
On September 5, 2014, the Court issued an order that preliminarily
enjoined the defendants, various members of the Wisconsin Government
Accountability Board (the “GAB”), from implementing or enforcing the
aggregate contribution limits in Wisconsin’s campaign finance law. CRG
Network v. Barland, 48 F. Supp. 3d 1191 (E.D. Wis. 2014). The plaintiff,
CRG Network, now moves for summary judgment on its claims for
declaratory and permanent injunctive relief. For the reasons previously
stated and for the reasons that follow, CRG’s motion is granted.
***
CRG Network is an organization whose mission is to help citizens

elect fiscally conservative candidates, assert property rights, and remove
corrupt and/or fiscally irresponsible politicians from office. CRG is a
“committee” as that term is defined in Wis. Stat. § 11.01(4), subject to the
filing requirements set forth in § 11.05. Historically, CRG Network has
made donations to candidates for state office in Wisconsin.
In 2014, CRG Network believed that Dan Knodl, Robyn Vos, John
Nygren, and Dale Kooyenga were excellent candidates for the Wisconsin
Assembly because they share the same fundamental beliefs as CRG with
respect to fiscal conservatism, limited government, property rights,
individual liberty, and clean and ethical government. Thus, CRG sent $250
campaign donations to each of these candidates in early June, 2014, well in
advance of the November 4, 2014 general election. Each candidate returned
the donation, in whole or in part, because each had reached the aggregate
limit on donations set forth in § 11.26(9), Wis. Stats. CRG filed suit, and
the Court issued the aforementioned preliminary injunction, allowing CRG
to make their desired donations. The GAB did not appeal the Court’s
injunction, which remains in place.
On December 16, 2014, the Court granted the parties’ request that
summary judgment briefing be delayed until after the upcoming legislative
session. In that session, the Wisconsin Legislature took no action in
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relation to Wisconsin’s campaign finance law. Accordingly, CRG moved for
summary judgment, and the matter is now fully briefed. This case is
particularly appropriate for summary disposition since all material facts
are undisputed. Fed. R. Civ. P. 56(a) (summary judgment should be
granted if “the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law”).
****
Wisconsin’s campaign finance law

prohibits individuals and

committees, such as CRG, from donating more than $500 to any one
candidate for the State Assembly. Wis. Stat. §§ 11.26(2)(c), (1)(c). The law
also imposes aggregate limits on contributions. Candidates can receive only
65% of the statutorily-defined total disbursement level from “all
committees subject to a filing requirement, including political party and
legislative campaign committees,” § 11.26(9)(a), and only 45% of the total
disbursement level from “all committees other than political party and
legislative campaign committees subject to a filing requirement.”
§ 11.26(9)(b). The total disbursement level for State Assembly candidates is
$17,250, § 11.31(1)(f), 45% of which is $7,763.1 Thus, once a State Assembly

The amounts increase for other state offices. See, e.g., § 11.31(1)(e) (total
disbursement level for state senator is $34,500, 45% of which is $15,525); § 11.31(1)(c)
(total disbursement level for attorney general is $539,000, 45% of which is $242,550).
1

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candidate receives $7,763 in contributions from CRG-like committees (i.e.,
committees

other

than

political

party

and

legislative

campaign

committees), the candidate must return all subsequent contributions to the
donor, which is exactly what happened in the instant case. § 11.26(11). Put
another way, CRG could not donate to the candidates it wanted to support
because other committees previously made donations to the same
candidates.
Accordingly, this case involves a challenge to the amount of money
that may be contributed to candidates for political office in Wisconsin.
Contribution limits “impose a lesser restraint on political speech” than
expenditure limits because they “‘permit[] the symbolic expression of
support evidenced by a contribution but do[] not in any way infringe the
contributor’s freedom to discuss candidates and issues.’” McCutcheon v.
Fed. Election Comm’n, --- U.S. ----, 134 S. Ct. 1434, 1444 (2014) (quoting
Buckley v. Valeo, 424 U.S. 1, 21 (1976)). Thus, while expenditure limits are
subject to “exacting scrutiny,” contribution limits are subject to a lesser but
“still rigorous” standard of review. McCutcheon, 134 S. Ct. at 1444. Under
this standard, even a “significant interference with protected rights of
political association may be sustained if the State demonstrates a
The base contribution levels are also higher for such positions. See §§ 11.26(1), (2).

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sufficiently important interest and employs means closely drawn to avoid
unnecessary abridgement of associational freedoms.” Id.
Preventing quid pro quo corruption, or the appearance thereof, is a
“compelling” or “sufficiently important interest” for either level of scrutiny;
in fact, it is the “only public interest strong enough to justify restricting
election-related speech …” Wis. Right to Life, Inc. v. Barland, 751 F.3d 804,
823 (7th Cir. 2014) (citing Citizens United v. Fed. Election Comm’n, 558
U.S. 310 (2010)) (emphasis added). In a “series of cases over the past 40
years,” the Supreme Court has
spelled out how to draw the constitutional line between the
permissible goal of avoiding corruption in the political process
and the impermissible desire simply to limit political speech.
We have said that government regulation may not target the
general gratitude a candidate may feel toward those who
support him or his allies, or the political access such support
may afford. ‘Ingratiation and access … are not corruption.’
They embody a central feature of democracy – that
constituents support candidates who share their beliefs and
interests, and candidates who are elected can be expected to
be responsive to those concerns.
Any regulation must instead target what we have called “quid
pro quo” corruption or its appearance. That Latin phrase
captures the notion of a direct exchange or an official act for
money. ‘The hallmark of corruption is the financial quid pro
quo: dollars for political favors.’ Campaign finance restrictions
that pursue other objectives, we have explained,
impermissibly inject the Government ‘into the debate over who
should govern.’ And those who govern should be the last
people to help decide who should govern.
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McCutcheon, 134 S. Ct. at 1441-42 (emphasis in original) (internal citations
omitted). In other words, spending “large sums of money in connection with
elections, but not in connection with an effort to control the exercise of an
officeholder’s official duties, does not give rise to such quid quo pro
corruption. Nor does the possibility that an individual who spends large
sums may garner ‘influence over or access to’ elected officials or political
parties.” Id. at 1450-51. And “because the Government’s interest in
preventing the appearance of corruption is equally confined to the
appearance of quid pro quo corruption, the Government may not seek to
limit the appearance of mere influence or access.” Id. at 1451 (citing
Citizens United, 558 U.S., at 360).
This Court’s grant of preliminary injunctive relief was based on
McCutcheon, wherein the Supreme Court considered the aggregate
contribution limits in the Federal Election Campaign Act of 1971 (FECA),
as amended by the Bipartisan Campaign Reform Act of 2002 (BCRA).
Under that regime, the base limit for individual contributions was $2,600
per election per candidate ($5,200 total for the primary and general
elections), and the aggregate limit (for the election cycle at issue) was

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$48,600 to federal candidates.2 The Court explained:
To put it in the simplest terms, the aggregate limits prohibit
an individual from fully contributing to the primary and
general election campaigns of ten or more candidates, even if
all contributions fall within the base limits Congress views as
adequate to protect against corruption. The individual may
give up to $5,200 each to nine candidates, but the aggregate
limits constitute an outright ban on further contributions to
any other candidate (beyond the additional $1,800 that may be
spent before reaching the $48,600 aggregate limit). At that
point, the limits deny the individual all ability to exercise his
expressive and associational rights by contributing to someone
who will advocate for his policy preferences. A donor must
limit the number of candidates he supports, and may have to
choose which of several policy concerns he will advance – clear
First Amendment harms the dissent never acknowledges.
McCutcheon, 134 S. Ct. at 1448-49. The Court rejected the government’s
argument that the aggregate limits furthered the permissible objective of
preventing quid pro quo corruption:
The difficulty is that once the aggregate limits kick in, they
ban all contributions of any amount. But Congress’s selection
of a $5,200 base limit indicates its belief that contributions of
that amount or less do not create a cognizable risk of
corruption. If there is no corruption concern in giving nine
candidates up to $5,200 each, it is difficult to understand how
a tenth candidate can be regarded as corruptible if given
$1,801, and all others corruptible if given a dime.
Id. at 1452 (emphasis in original). “Similarly here,” as the Court already
explained, “if another committee’s single donation of up to $500 to a
This mechanics of this regime are slightly different than the one at issue here
because it places an aggregate limit on individual contributions, not candidate receipts.
This distinction is constitutionally irrelevant.
2

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particular candidate carries no risk of quid pro quo corruption, how can
CRG’s $250 donation to the same candidate be deemed corrupting?
Moreover, how could the same $250 donation be non-corrupting when given
before the aggregate limit is reached, but carry the potential for corruption
if given thereafter?” CRG Network, 48 F. Supp. 3d at 1194-95; see also
Catholic Leadership Coalition of Texas v. Reisman, 764 F.3d 409, 432 (5th
Cir. 2014) (striking down a Texas statute that placed an aggregate limit of
$500 on the amount of contributions that a political action committee could
make within its first 60 days, post-McCutcheon: “if a single $500
contribution does not risk corruption, it is hard to see how three $167
contributions hold out such a significant risk of corruption that the former
is permitted and the latter is not”); Seaton v. Weiner, 22 F. Supp. 3d 945,
950 (D. Minn. 2014) (post-McCutcheon decision granting preliminary
injunction against Minnesota’s “special sources” limit: “One would assume
that the thirteenth contribution to a legislative candidate in the amount of
$1,000 causes no more concern of corruption than the first twelve $1,000
donations”).3
Because there is “no risk” that candidates will be corrupted by
Unlike Wisconsin, Minnesota subsequently repealed this provision. 2015 Minn.
Laws Chapter 3, Section 15. Massachusetts and Maryland stopped enforcing aggregate
limits in light of McCutcheon. Marc E. Elias, Jonathan S. Berkon, After McCutcheon,
127 Harv. L. Rev. F. 373, 379 (June 20, 2014).
3

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donations of up to $500 after the aggregate limit has been reached, the
GAB must “defend the aggregate limits by demonstrating that they
prevent circumvention of the base limits.” McCutcheon at 1452.
McCutcheon engaged in a lengthy discussion regarding “various statutes
and regulations currently in effect” at the federal level to demonstrate that
the danger of circumvention – i.e., the possibility that an individual might
contribute “massive amounts of money to a particular candidate through
the use of unearmarked contributions” to entities likely to support the
candidate – is “far too speculative.” Id. Instead of preventing corruption or
its appearance, the “improbability of circumvention indicates that the
aggregate limits … further the impermissible objective of simply limiting
the amount of money in political campaigns.” Id. at 1456.
Accordingly, the GAB argues that McCutcheon is distinguishable
because certain laws exist at the federal level to prevent circumvention
that have not been enacted in Wisconsin. See id. at 1446-47 (citing 2 U.S.C.
§ 441a(a)(5),4 an anti-proliferation rule that “eliminates a donor’s ability to
create and use his own political committees to direct funds in excess of the
individual base limits”). Again, this argument represents a “fundamental
misreading” of McCutcheon. 48 F. Supp. 3d at 1195. McCutcheon’s
4

This provision is now located at 52 U.S.C. § 30116(a)(5).

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extended discussion of the federal regulatory scheme was meant only to
demonstrate that the government’s concerns about circumvention were
overwrought, not that the aggregate limits would be upheld if those
regulations were absent. “Quite apart from the foregoing, the aggregate
limits violate the First Amendment because they are not ‘closely drawn to
avoid unnecessary abridgement of associational freedoms.’” McCutcheon at
1456 (quoting Buckley, 424 U.S. at 25) (emphasis added).
Indeed by making this argument, the GAB implicitly gives up the
game by conceding that there are narrower, more closely-drawn measures
to achieve their anti-corruptive purposes. The GAB complains that such
measures would be difficult to pass. This is no excuse for continued
infringement of fundamental First Amendment constitutional rights.
This attitude reflects a GAB mindset of treating circumvention as an
end in itself, divorced from its justification as a preventative of quid pro
quo corruption. However, circumvention is not an end in itself but is only
relevant in relation to the corrupting influence of donations that exceed
base contribution limits. See Fed. Election Comm’n v. Colo. Republican
Fed. Campaign Comm., 533 U.S. 431, 456 (2001) (“all members of the
Court agree that circumvention is a valid theory of corruption”) (emphasis
added). The government can target evasive attempts to exceed base
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contribution limits, but only because excess contributions raise the specter
of quid pro quo corruption – at least presumably. “It is worth keeping in
mind that the base limits themselves are a prophylactic measure. As we
have explained, ‘restrictions on direct contributions are preventative,
because few if any contributions to candidates will involve quid pro quo
arrangements.’” McCutcheon at 1458 (quoting Citizens United, 558 U.S. at
357) (emphasis in original).
In McCutcheon, as here, the “indiscriminate ban on all contributions
above the aggregate limits is disproportionate to the Government’s interest
in preventing corruption.” 134 S. Ct. at 1458. This is so because § 11.26(9)
is over-inclusive and under-inclusive. It is over-inclusive because the
aggregate limit prevents all contributions once a candidate’s receipts meet
a certain threshold. It is under-inclusive because § 11.26(9) does not
prevent an individual from setting up multiple committees, giving $500 to
each committee, and then directing each committee to give $500 to a
specific candidate, so long as the candidate has yet to reach the aggregate
contribution limit. City of Ladue v. Gilleo, 512 U.S. 43, 51 (1994) (“The
notion that a regulation of speech may be impermissibly underinclusive is
firmly grounded in basic First Amendment principles”) (emphasis in
original). Thus, the aggregate limit does not even prevent the type of
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circumvention that the GAB is crying foul about.
Finally, the Court finds it telling that the GAB persists in relying
upon Gard v. Wis. State Elections Bd., 456 N.W.2d 809 (Wis. 1990), an
outdated case that upheld § 11.26(9) against a previous constitutional
challenge. In Gard, the Wisconsin Supreme Court reasoned that the
purpose of § 11.26(9) is to “limit the impact of huge special interest
contributions on a candidate and to encourage a broad and diverse base of
support in order to prevent either actual corruption or the appearance of
corruption.” 456 N.W.2d at 823 (emphasis added). These justifications are
no longer valid in light of McCutcheon, Citizens United, and other cases
handed down by the United States Supreme Court. “Our cases have held
that Congress may regulate campaign contributions to protect against
corruption or the appearance of corruption. At the same time, we have
made clear that Congress may not regulate contributions simply to reduce
the amount of money in politics, or to restrict the political participation of
some in order to enhance the relative influence of others.” McCutcheon at
1441 (emphasis added). The GAB’s viewpoint on this issue seems to be that
to prevent corruption in politics it must use the electoral process to keep
money out of politics. That view is obsolete. The greatest guarantee against
corruption in politics is an enlightened, educated, and engaged electorate,
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which is achieved by preserving and protecting that electorate’s First
Amendment political speech freedoms.
*****
CRG Network’s motion for summary judgment [ECF No. 19] is
GRANTED. The contribution limits in Section 11.26(9), Wis. Stats., are
unconstitutional on their face, and the defendants are permanently
enjoined from enforcing them.
Dated at Milwaukee, Wisconsin, this 14th day of October, 2015.

SO ORDERED:
__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

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