Appealed from: US District Court for the District of Columbia
Oral argument: January 17, 2006
Plaintiff Wisconsin Right to Life broadcasted three advertisements condemning the Senate for filibustering President Bush’s judicial nominees and urging viewers to contact Senator Feingold who was campaigning for reelection at the time. Wisconsin Right to Life believed that continued broadcasting of the ads would violate the Bipartisan Campaign Reform Act’s prohibition on electioneering communications. Accordingly, Wisconsin Right to Life filed suit to request an injunction against the Federal Election Commission for possible enforcement of the restrictions on electioneering against Wisconsin Right to Life, and a judgment that the definition of electioneering, as applied to Wisconsin Right to Life’s ads, violated the Constitution. The court relied on a prior Supreme Court case, McConnell v. Federal Election Commission, to dismiss Wisconsin Right to Life’s “as-applied” challenge. Wisconsin Right to Life now argues that McConnell did not, indeed could not, preclude as-applied challenges and that the ads were a permitted form of grassroots lobbying, not electioneering. The Federal Election Commission argues that McConnell squarely precluded as-applied challenges and that Wisconsin Right to Life’s distinction between grassroots lobbying and electioneering is a line drawn in the sand on a windy day.
Whether as-applied challenges are permitted to the prohibition on corporate disbursements for electioneering communications at 2 U.S.C. § 441b after McConnell v. FEC, 540 U.S. 93 (2003)?
Although McConnell v. FEC upheld the primary definition of electioneering communications, did it also preclude parties from challenging the application of that definition to prohibit certain forms of broadcast advertisements?
Through the Federal Election Campaign Act (FECA) of 1971, Congress consolidated roughly 60 years of laws that restricted corporations from contributing funds to influence the outcome of federal elections. The FEC and the Federal Campaign Finance Law Brochure. Congress was largely concerned with the ability of wealthy individuals and powerful special interests groups to disproportionately influence elections by purchasing various forms of communications, such as political advertisements. Id.
Because the contents of political advertisements varied, the Supreme Court was asked to decide which category of contents fell under the regulatory umbrella of the FECA. In Federal Election Com’n v. Massachusetts Citizens for Life, 479 U.S. 238 (1986) (MCFL) the Court first distinguished advertisements that expressly advocated for the election or defeat of a candidate from those that merely discussed issues or candidates, often called issue ads. Because “express advocacy” ads were clearly intended to influence an election, the Court subjected them to regulation under § 441b of the FECA, which prohibits the use of money from a corporation’s general treasury to make “expenditures in connection with any election to any political office.” Id. at 249. The Court further held that issue ads were not regulated under § 441b, in order to avoid unduly restricting speech that might not have been intended to influence an election. Id.; Buckley v. Valeo, 424 U.S. 1, 80 (1976). When the lower courts applied the MCFL rule, they often found that a political ad did not expressly advocate for or against a candidate as long as it avoided language such as "vote for," "elect," "support," "defeat," or "reject." McConnell v. FEC, 540 U.S. 93, 103 (2003).
Although the express advocacy test seemed in theory to carve a clear line between regulated and unregulated ads, in practice it allowed corporations to evade the FECA’s restrictions. Instead of airing ads that expressly advocated for or against a candidate, corporations aired “sham issue ads” that were equally intended to influence an election. Id. at 126-27. For example, “[l]ittle difference existed…between an ad that urged viewers to ‘vote against Jane Doe’ and one that condemned Jane Doe's record on a particular issue before exhorting viewers to ‘call Jane Doe and tell her what you think.’” Id. Unlike “genuine issue ads,” which intended to discuss issues, sham issue ads were the functional equivalent of express advocacy. Id.
The Bipartisan Campaign Reform Act of 2002
After recognizing this loophole in the FECA, Congress amended it with the Bipartisan Campaign Reform Act (BCRA) of 2002. Section 203 of the BCRA (now § 441b of the FECA) makes “electioneering communication” a second form of advertisement that corporations, including nonprofits, were prohibited from paying for with money from their general treasury. 2 U.S.C. § 441b(b)(2); McConnell, 540 U.S. at 190-194. Electioneering communication restrictions remedy the shortcomings of the express advocacy test because its broader definition covers an ad that merely “refers to a clearly identified candidate” instead of one that expressly advocates for her. 2 U.S.C. § 434(f)(3)(A)(i). In short, electioneering communications is corporate funded speech, broadcasted during the 60 days before a general election, or 30 days before a primary election, that refers to a federal candidate, and is targeted at possible voters. 2 U.S.C. § 441b(b)(2). Without surprise, the public is most engaged and the campaign issues are most salient during this 30 or 60-day “blackout” period.
In 2003, this primary definition of electioneering communications sustained a First Amendment challenge in McConnell v. FEC. The Court held that the definition of electioneering communication was constitutional because it was not broad enough to cover substantial amounts of speech that the definition did not intend to regulate. McConnell, 540 U.S. at 206-07. The Court also held that section 203 was not a complete ban on expression, but rather a regulation. Id. The Court reasoned that, although a corporation was prohibited from using money from its general treasury to fund electioneering communications, it could create and fund such communications from a federally-registered “separate segregated fund,” commonly known as a political action committee or PAC. Id. A PAC is strictly segregated from a corporation’s other assets and may, subject to limitations, solicit donations from a corporation’s stockholders, employees, and their families. Federal Election Com’n v. National Right to Work Comm., 459 U.S. 197, 200 n.4 (1982); 2 U.S.C. § 441b(b)(4)(A)-(C).
The Present Case
Plaintiff Wisconsin Right to Life (WRTL) is a nonprofit corporation organized to “protect individual human life from the time of fertilization until natural death.” Brief for the FEC at 11. WRTL announced in 2004 its objective of defeating Democrat Senator Russell Feingold of Wisconsin, who ran for reelection in 2005. Jurisdictional Statement at 5a. Feingold participated in the Senate filibustering of President Bush’s federal judicial nominees in July 2004, and WRTL began broadcasted ads on July 26, 2004 that criticized the filibusters and referred to Feingold by name. Id. WRTL sought to continue broadcasting the ads, paid for by monies from its general treasury—rather than its PAC—from August 15 until the general election on November 2, 2004. Id. WRTL anticipated that during this time, the ads would be considered electioneering communications, in part because WRTL planned to broadcast them during section 203’s 30 and 60-day “blackout” period. Id. at 6a. Accordingly, on July 28, WRTL filed suit in a federal district court against Defendant Federal Election Commission (FEC), which is charged with enforcing the FECA. WRTL’s complaint alleged that section 203’s prohibition on electioneering communications was unconstitutional “as applied” to WRTL’s ads, and sought an injunction preventing the FEC from enforcing this portion of the BCRA against WRTL. Id.
In an unpublished opinion, the three-panel court denied the request for an injunction for two reasons. First, after McConnell upheld the definition of electioneering communication, WRTL could not demonstrate that it had a substantial likelihood of prevailing on the merits of its “as-applied” challenge to the definition. Specifically, the court cited language in the McConnell opinion that upheld “all applications of the primary definition” of electioneering communication. Second, the court believed that WRTL’s ads “may fit the very type of activity McConnell found Congress had a compelling interest in regulating.” Id. at 8a. On September 27, 2005, the U.S. Supreme Court accepted the case, which inquires whether WRTL may challenge the application of the definition of electioneering communication to the three ads that name Senator Feingold.
The Bipartisan Campaign Reform Act and the decision in McConnell used the restrictions on electioneering communications to curtail the flow of public outreach conducted by corporations, both for-profit and nonprofit, and other advocacy groups. After this case, these groups might either experience continued suppression of speech or be allowed to broadcast certain ads without the restrictions of the FECA.
If the Court bars as-applied challenges to electioneering communication, the result would continue to stifle the effectiveness of many tax-exempt nonprofit corporations. These corporations respond to emerging issues of public policy by communicating with and engaging their constituents, including encouraging the public to contact their elected officials. Amici Brief of a Coalition of Public Charities at 2-3. In these communications, it is oftentimes impossible not to refer to candidates for federal offices because, among other reasons, the candidates have significant roles in influencing the outcome of these issues. Id. Not all nonprofits, however, are subject to electioneering regulations. Massachusetts Citizens For Life, 479 U.S. 238 (MCFL). MCFL nonprofits, named after the case that exempts them from all FEC regulations, are identified by a three part definition: first, they were formed for the express purpose of promoting political ideas and cannot engage in business activities; second, they have no shareholders or other persons affiliated so as to have a claim on their assets or earnings; and third, they were not established by a business corporation or a labor union, and it is their policy not to accept contributions from such entities. Id. at 263-264. MCFL nonprofits are exempt because they do not pose the corruption risks represented by business corporations. Id. at 209.
One might argue that non-MCFL nonprofits could avoid bringing their ads within the definition of electioneering communications by mailing or telephoning, instead of broadcasting, their messages. Ads, however, are usually more effective when broadcasted because they reach more of the public, including those not members of the corporation. Amici Brief of a Coalition for Public Charities. One might also argue that these nonprofits could pay for electioneering communications with money from their PACs. Unlike for-profit corporations or labor unions, however, these nonprofits are prohibited from establishing a PAC because they cannot participate in partisan activity. Id. at 14. Thus, the electioneering communication restrictions leave many non-MCFL nonprofits with a Hobson’s choices: staying silent or risking prosecution. Id.
Labor unions, including the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), also stand to benefit from a decision in favor of WRTL. Since 1995, the AFL-CIO has sponsored television and radio ads as part of its legislative and policy advocacy in support of workers and their families. Amicus Brief of AFL-CIO at 3. In 2003, McConnell limited the AFL-CIO’s advocacy techniques because the restrictions on electioneering communication apply to labor unions. This Court has the ability to affirm this limitation or remove it.
Incorporated businesses, particularly smaller ones, are a third group this case will affect. Federal legislation and policy profoundly affect small businesses which have an interest in being able to engage in issue advocacy. Although these businesses are permitted to establish PACs to fund express advocacy and electioneering communications, for the vast majority of small businesses, PACs are too complex and burdensome to initiate. Amicus Brief of Chamber of Commerce at 2. To be sure, as of January 1, 2005, only 1,622 corporate-sponsored PACs were registered with the FEC. Id.
The definition of electioneering communications also allows restrictions on documentary films paid for by a corporation, broadcasted during the blackout period, and that name a federal candidate. See 2 U.S.C. 434(f)(3)(A)(i). For example, when conservative nonprofit corporations sought to air two documentary films, Celsius 41.11 (2004) and Broken Promises: The United Nations at 60 (2005), they were denied exemption from the restrictions on electioneering communications. Amicus Brief of Citizens United and Citizens United Foundation at 3. Undoubtedly, the outcome of this case will affect the broadcasting of similar documentary films.
Because of the potentially adverse impact of this case on free speech and the ability of numerous corporations and labor unions to pursue their missions, several organizations that oppose WRTL’s ideology have nonetheless filed amicus curiae briefs arguing that WRTL should prevail.
Overview of the FECA and BCRA
The Federal Election Campaign Act (FECA) prohibits any corporation organized under the laws of Congress to “make a contribution or expenditure in connection with any election to” a federal political office. 2 U.S.C. § 441b(a). “Contribution or expenditure” includes electioneering communications paid for by money from a corporation’s general treasury, but not a separate segregated fund commonly known as a political action committee or PAC. 2 U.S.C. § 441b(b)(2). A PAC is strictly segregated from a corporation’s other assets and may solicit donations from a corporation’s stockholders, employees, and their families. Federal Election Com’n v. National Right to Work Comm., 459 U.S. 197, 200 n.4 (1982); 2 U.S.C. § 441b(b)(4)(A)-(C). However, nonpartisan corporations, such as nonprofits, cannot create PACs. See Internal Revenue Code § 501(c)(3); see also J.E. Kindell & J.F. Reilly, Election Year Issues, Exempt Organizations Continuing Professional Education Technical Instruction Program 335, 344 (2002).
In 2002, Congress introduced the Bipartisan Campaign Finance Act (BCFA) to amend the FECA. The amended FECA regulates electioneering communication, which has two definitions. The primary definition is “any broadcast, cable, or satellite communication” that “refers to a clearly identified candidate for federal office,” is made within 60 days before a general election, or 30 days before a primary election, and is targeted to a minimum number of potential voters. 2 U.S.C. 434(f)(3)(A)(i). Thus far, this is the definition referred to in the discussion. In the event a court finds the primary definition unconstitutional, a modified backup definition would apply. 2 U.S.C. 434(f)(3)(A)(ii).
When the primary definition of electioneering communication is applied, it covers two types of issue ads that refer to federal candidates: genuine issue ads that are intended only to discuss issues, and sham ads that do not expressly advocate for against a candidate, but employ language clearly intended to influence the outcome of elections.
The Decision in McConnell
McConnell recognized that Congress enacted the restrictions on electioneering communications to restrict sham ads. McConnell, 540 U.S. at 206. However, it also recognized that the primary definition is broad enough to encompass genuine issue ads, which Congress might not have intended to regulate. Id. Despite the breadth of this definition, the Court upheld it after finding that the vast majority of issue ads were actually sham ads. Id. In other words, the Court found that, because the primary definition was not “substantially overbroad,” it was constitutional on its face. Id. Not only did the Court uphold the primary definition, it upheld “all applications of the primary definition” and never discussed the backup definition. Id. (emphasis added).
In light of the Court’s language in McConnell, did it preclude parties from going to court to challenge situations where the FEC applied the definition to regulate genuine issue ads? The district court and the FEC answered in the affirmative, reasoning that in upholding “all applications of the primary definition,” McConnell left no room for as-applied challenges of the type WRTL advances in this case. WRTL answers in the negative, arguing that applying the definition to its ads is unconstitutional.
WRTL asserts two primary reasons for its conclusion that McConnell did not, and could not, bar as-applied challenges. First, WRTL opines that in upholding the primary definition, McConnell only noted but did not resolve its concern that the reasons justifying the regulation of sham ads might not apply to the regulation of genuine issue ads. Brief of WRTL at 13. According to WRTL, McConnell left the task of sorting out genuine issue ads from sham ads for another case. Id. That case is this case, WRTL argues, because as-applied challenges are the proper vehicles for exempting genuine issue ads from the regulations of electioneering communication. Id.
According to WRTL, the district court erred in deciding to the contrary because it misunderstood the Supreme Court’s meaning of, “uphold[ing] all applications of the primary definition.” Id. at 14. The district court believed that the Court prohibited parties from challenging an application of the definition to electioneering communications. Whereas WRTL believes that the Court only prohibited such challenges to other sections of the FECA that the definition applies to, such as those on disclosure requirements. Id. Naturally, WRTL’s interpretation leaves untouched the possibility of challenging the primary definition as applied to general issue ads.
Second, WRTL argues that Broadrick v. Oklahoma, 413 U.S. 601 (1973), Article III, and judicially-created tenets permit as-applied challenges. McConnell cited Broadrick for the rule that the breadth of an overly broad definition must be substantial before a court will strike it down. Broadrick v. Oklahoma, 413 U.S. 601. Further, if the definition is stricken, Broadrick requires a court to cure the overbreadth through case-by-case analysis of the facts to which the definition applies. Id. at 615-16. Further, WRTL argues that McConnell could not have decided WRTL’s present as-applied challenge because Article III and judicially-created tenets restrict a court from formulating “a rule of constitutional law broader than is required by the precise facts to which it is to be applied.” Brief of WRTL at 12. Thus, McConnell could not have resolved the constitutionality of genuine issue ads.
In response, the FEC argues in large part that McConnell foreclosed as-applied challenges of all types and that WRTL does not present a workable standard to identify the types of electioneering communications that it believes are exempt from FECA regulations. Brief of FEC at 17. The FEC also notes that the practice of following precedent counsels against deviating from McConnell and that WRTL offers no sound basis for doubting that its broadcasted ads were intended in part to influence elections. Id.
The FEC argues that McConnell foreclosed as-applied challenges because, among other reasons, McConnell explicitly rejected the argument that the definition was unconstitutionally overbroad. Id. at 19-20. Indeed, McConnell upheld the definition despite recognizing that it was broad enough to cover issue ads not intended to influence federal elections. Id. Further, the FEC did not find any language in the Court’s opinion to suggest that as-applied challenges could be used to exempt issue ads from regulation. Id. To the contrary, the FEC argues that McConnell intended to preclude as-applied challenges because it stated that corporations could avoid FEC enforcement in two ways: avoiding specific references to federal candidates, or paying for ads from a PAC. McConnell, 540 U.S. at 206. According to the FEC, if the Court intended to permit as-applied challenges, it would likely have stated so, as it did in several other parts of the opinion for other restrictions, and would not have gone through the trouble of identifying two alternatives. See McConnell, 540 U.S. at 157 n.52, 159, 173, 199, 244.
The FEC further argues that allowing a single as-applied challenge would undermine the primary definition by allowing a political advertiser to argue that an ad was not intended to influence an election. Brief of FEC at 26. The FEC believes that examining the actual intent behind each disputed ad could be the costly, complicated, and fact-intensive process that Congress and McConnell sought to avoid through the easily understood and objectively determinable primary definition of electioneering communication. Id.
Exceptions for Genuine Grassroots Lobbying
WRTL’s second main argument is that genuine grassroots lobbying is different from electioneering and thus constitutionally exempt from FECA restrictions. Because WRTL alleges that its three ads were grassroots lobbying, it seeks exemption from FECA restrictions.
According to the Internal Revenue Code (IRC), lobbying seeks to influence legislation while electioneering seeks to influence elections. The IRC defines grassroots lobbying as referring to specific legislation, reflecting a view on such legislation, and encouraging the recipient of the communication to take some action with respect to such legislation. 26 U.S.C. 4911(c)(3)-(4). Advocacy groups such as WRTL, but not charities, may spend an unlimited amount of their general treasury funds on lobbying. Brief of WRTL at 21. On the other hand, the IRC refers to electioneering as “political intervention,” which is defined as “the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office or office in a political organization…” Id.
WRTL argues that because effective grassroots advocacy requires referencing an incumbent who may be a candidate, the definition of electioneering communications may encompass grassroots advocacy. Id. As a result, a conflict arises between an advocacy group’s right to spend money from their general treasury to fund lobbying, and electioneering communication’s restriction on an advocacy group’s broadcast communications. Id. WRTL believes that this conflict compels the Court to resolve, for the purposes of campaign finance laws, the difference between grassroots lobbying and electioneering. Id.
In asking the Court to make this distinction, WRTL urges it to recognize that genuine grassroots lobbying is not sham issue advertising and thus does not implicate McConnell’s concerns of corruption. Id. at 25. WRTL argues that, because grassroots lobbying seeks to influence the exercise of government power by incumbent officeholders, it has nothing to do with elections and cannot be sham issue advertising. Id. Nonetheless, WRTL concedes that grassroots lobbying may on a few occasions be perceived to support or oppose a candidate. Id. at 29. However, the viewer of the advertisement, not a court, should judge the purpose of the ad, “lest the people lose their ability to govern themselves.” Id.
Having attempted to extricate grassroots lobbying from the FECA’s restrictions, WRTL asks the Court to find that the three ads at issue are grassroots lobbying, not express advocacy or its functional equivalent. Id. at 33. WRTL supports its conclusion by examining the text of the ads. Id. Of relevance are the ads’ pleads to viewers to call Senator Feingold about filibusters (a specific legislative topic), the failure to mention Feingold in the main body of the ads, and the lack of words that supported or opposed Feingold. Id. Further, WRTL opines that in assessing whether the three ads are the functional equivalent of express advocacy, the Court cannot examine factors external to the text of the ads. Id. at 35. For instance, the Court cannot look at WRTL’s news release announcing that the defeat of Senator Feingold was a priority because doing so would in effect punish WRTL for having exercised its constitutional right to speak on a public issue. Id.
Finally, WRTL argues that relying on PACs to fund otherwise prohibited advertisements is an inadequate option for many corporations. Id. at 39. When a corporation without a PAC must respond to legislative issues on short notice, there is no time to go through the time-consuming, cumbersome process of first acquiring FECA-compliant “members” to organize a PAC. Id. at 41. Even for corporations with PACs, such as WRTL, there was simply no time to raise enough money by appealing to existing PAC members for contributions. Id.
The FEC does not agree with WRTL’s clear-line distinction between grassroots lobbying and electioneering. Brief of FEC at 37. As a practical matter—and as Congress recognized in enacting the restrictions on electioneering communications—common sense suggests that corporations that fund ads urging citizens to contact their election officials on an issue will generally prefer that viewers or listeners vote for candidates who favor the corporation’s view. Id. Further, an ad aired 30 or 60 days before an election and clearly referring to a federal candidate is likely to influence voting behavior. Id. at 38. Finally, "the distinction between discussion of issues and candidates and advocacy of election or defeat of candidates may often dissolve in practical application.” Id. Candidates, especially incumbents, are intimately tied to public issues involving legislative proposals and governmental actions." Buckley, 424 U.S. at 42. "What separates issue advocacy and political advocacy is a line in the sand drawn on a windy day." McConnell, 540 U.S. at 126 n.16.
The FEC then argues that WRTL’s proposed standard of having courts examine whether an ad was intended to support or oppose a candidate—that is, whether an ad was a sham—is unworkable. Id. at 39. As the FEC emphasized earlier, this type of costly, fact-intensive inquiry is exactly what Congress and McConnell sought to avoid through the objectively determinable definition of electioneering communications. Id.
The outcome of this case will turn largely on the Court’s interpretation of McConnell. Did it only uphold the primary definition of electioneering communications, or did it also preclude all as-applied challenges to the definition? This inquiry may require the Court to carefully delineate the purpose behind the enactment of the Bipartisan Campaign Reform Act and to examine the concerns expressed in past Supreme Court cases addressing campaign finance laws. The Court must also determine if a clear line exists between grassroots lobbying and electioneering. The FEC and past Supreme Court opinions suggest that in practice, the line is an illusion.
Prepared by: Ya-Wei Li
- http://www.fec.gov/pages/brochures/electioneering.shtml - FEC’s webpage on electioneering communication
- http://www.docket.medill.northwestern.edu/archives/003084.php - Northwestern University’s coverage of this case
- http://www.allianceforjustice.org/nonprofit/wrtl.html - Coverage of this case by Amici Curiae Alliance for Justice
- http://usinfo.state.gov/dhr/democracy/elections/campaign_finance.html - Interview with expert on campaign finance reform law