Steve Karnowski, Associated Press, Published September 05 2012
Appeals court rejects MN corporate disclosure lawMINNEAPOLIS — A Minnesota law requiring disclosure of independent corporate political spending is “most likely unconstitutional,” a federal appeals court ruled Wednesday.
In a 6-5 decision, the full 8th Circuit Court of Appeals reversed a three-judge appeals panel and backed a challenge filed by the anti-abortion group Minnesota Citizens Concerned for Life, the Taxpayers League of Minnesota and a travel agency. The court backed their argument that the law impermissibly inhibits the freedom of speech of associations and corporations, and it sent the case back to a lower court where it said the groups and agency are "likely to win on their First Amendment claim.
“Minnesota's law hinders associations from participating in the political debate and limits their access to the citizenry and the government. The law manifestly discourages associations, particularly small associations with limited resources, from engaging in protected political speech,” the ruling said.
However, the appeals court also upheld a Minnesota law that bans corporations from directly donating to political candidates. It said the U.S. Supreme Court has drawn a distinction between laws restricting independent political expenditures and laws restricting corporate donations to political candidates.
A lawyer for the groups, James Bopp Jr., called the ruling a “big victory” for the plaintiffs, who object to Minnesota's requirement that corporations conduct all their political speech through political action committees, which are subject to the state's disclosure requirements. Bopp said the court's finding that the law is “most likely unconstitutional” has the same practical effect as formally declaring it unconstitutional.
The state has the option of appealing Wednesday's ruling to the U.S. Supreme Court. Ben Wogsland, a spokesman for Minnesota Attorney General Lori Swanson, said their office is reviewing the ruling.
The decision relieved heavily on the U.S. Supreme Court's Citizens United ruling of 2010, which lifted restrictions on independent political expenditures by corporations and unions, paving the way for a new flood of cash into American campaigns.
“Today's decision takes a bad U.S. Supreme Court ruling and makes it worse,” state Rep. Ryan Winkler, D-Golden Valley, the chief House author of the law, said in a statement. “These courts have degraded our democracy by eliminating rules that provide accountability for politicians and sunlight for the political spending of the richest and most powerful people and organizations in the country.”
Minnesota's disclosure rules impose “onerous” ongoing reporting requirements on corporations and associations regardless of whether they engage in political activity frequently or just occasionally, Chief Judge William Jay Riley wrote for the majority. He noted that the state requires a corporation or association to set up and maintain a political fund if it spends more than $100 on political speech in a given year.
“Under Minnesota's regulatory regime, an association is compelled to decide whether exercising its constitutional right is worth the time and expense of entering a long-term morass of regulatory red tape,” the ruling said.
However, the ruling also suggested the state may be able to achieve its disclosure goals through “less problematic measures” such as requiring reporting only when money is actually spent, as the law currently requires of individuals.
A dissent written by Judge Michael Melloy concurred with upholding Minnesota's ban on direct corporate contributions to candidates, but disputed the majority's view that the state's reporting requirements are too burdensome.
“These issues are typically and best left to Minnesota's democratically elected legislators,” he wrote.
Federal appeals circuits have now split 3-3 on similar cases, Bopp said, making the issue ripe for consideration by the U.S. Supreme Court. The lawyer said he will soon petition the high court to hear one of those cases, another anti-abortion group's challenge to a similar Virginia law.
“This is a really hot topic,” he said.
Bopp said the Minnesota plaintiffs still believe the logic of the Citizens United case should also dictate that they can make direct donations to political candidates subject to contribution limits. He said they haven't decided whether to take that point to the Supreme Court, but they will if the state appeals the rest of the decision.
The decision is at: http://www.ca8.uscourts.gov/opndir/12/09/103126P.pdf