SMITH V. HELZER, No. 22-35612 (9th Cir. 2024)
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In this case, a group of individual donors and two independent-expenditure organizations challenged certain campaign finance regulations enacted in Alaska after voters passed Ballot Measure 2, aimed at shedding light on "dark money" in the state's elections. The plaintiffs argued that these regulations violated their First Amendment rights. The two regulations at issue were: (1) a requirement for individual donors to report contributions exceeding an annual aggregate of $2,000 to an entity making expenditures for a candidate in prior or current election cycles, and (2) a requirement for political advertisements to disclose certain identifying information about donors in any communications intended to influence the election of a candidate.
Applying exacting scrutiny, the United States Court of Appeals for the Ninth Circuit held that both regulations were substantially related and narrowly tailored to the government's interest in providing the electorate with accurate, real-time information. This interest was deemed sufficiently important in the campaign finance context. The court dismissed the plaintiffs' arguments that the reporting requirement was duplicative of existing criminal laws and overly burdensome. It also rejected their contention that the disclaimer requirement for political advertisements was unconstitutionally discriminatory against out-of-state speakers.
The court concluded that the plaintiffs had not shown that the district court abused its discretion in denying their motion for a preliminary injunction. Therefore, the district court's denial of the preliminary injunction was affirmed. The court, however, did not consider the remaining factors for a preliminary injunction as they were unnecessary for this holding.
Court Description: First Amendment/Campaign Finance. The panel affirmed the district court’s denial of a preliminary injunction sought by five individual donors and two independent-expenditure organizations who sued the Alaska Public Offices Commission (“Commission”) alleging that certain campaign finance regulations, enacted after Alaska voters passed Ballot Measure 2 to illuminate the use of dark money in their state’s elections, facially violated the First Amendment. Plaintiffs challenged two campaign finance regulations: (1) the individual-donor contribution-reporting requirement, which generally requires the reporting within twenty-four hours of contributions that exceed an annual aggregate of $2,000 to an entity making expenditures for a candidate in prior or current election cycles, and a sub-part of the contribution-reporting requirement providing that contributors must report the true sources of the contributions; and (2) the on-ad donor-disclaimer requirement for political advertisements, which requires the disclosure of certain identifying information about donors in any communications intended to influence the election of a candidate.
The panel first held that, assuming this appeal would otherwise be moot because the 2022 general election has already taken place, the capable-of-repetition-yet-evading- review exception applies.
The panel held that the district court did not abuse its discretion when it concluded that the contribution-reporting and on-ad donor-disclaimer requirements were substantially related and narrowly tailored to the government’s asserted interest in providing the electorate with accurate, real-time information.
Because both the contribution-reporting and donor- disclaimer requirements were regulations directed only at disclosure of political speech, they were subject to exacting scrutiny. Plaintiffs conceded that the government’s interest in an informed electorate was “sufficiently important” in the campaign finance context to warrant disclosure requirements and satisfied the first prong of the exacting scrutiny test.
The panel rejected plaintiffs’ argument that the contribution-reporting requirement was not narrowly tailored. The requirement was not duplicative of existing criminal laws because the covered donations were outside the limited reach of the criminal laws and were not unconstitutionally redundant. Moreover, nothing in the record indicated that compliance with the reporting structure was overly burdensome.
Applying the holdings and reasonings in No on E v. Chiu, 85 F.4th 493 (9th Cir. 2023), the panel rejected plaintiffs’ arguments that the on-ad donor-disclaimer requirement was not narrowly tailored because it added marginal additional value while imposing a substantial cost on the speaker and took up too much space and time on political advertisements. The panel further rejected plaintiffs’ argument that the disclaimer requirement for organizations that receive most of their contributions from sources outside of Alaska was unconstitutionally discriminatory. Nothing in the outside-entity disclaimer restricts out-of-state speakers’ speech. Rather, the disclaimer only requires that organizations communicate whether most of their contributions came from outside Alaska—information that is already validly disclosed to the Commission.
Concurring in part and dissenting in part, Judge Forrest agreed with the majority that this case is not moot but for a different reason: The challenged provisions of Ballot Measure 2 continue to be enforceable in the present, and plaintiffs have suffered and continue to suffer the constitutionally sufficient injury of self-censorship. Judge Forrest also agreed that the district court did not abuse its discretion in concluding at this preliminary stage that plaintiffs failed to show they were likely to succeed in establishing that Ballot Measure 2’s on-ad disclaimers failed under exacting scrutiny. Judge Forrest disagreed, however, that plaintiffs’ challenge to Ballot Measure 2’s individual- donor reporting requirement was unlikely to succeed. Plaintiffs were likely to succeed in showing that the duplicative individual-donor contribution-reporting requirement failed to satisfy exacting scrutiny because the burdens it imposes are not in proportion to the interest served.
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