The full eleven-member bench of the Eighth Circuit Court of Appeals heard oral argument in the case of Minnesota Citizens Concerned for Life v. Swanson on September 21st. The case is an appeal of a ruling by a three-judge panel upholding a lower-court decision that refused to grant a preliminary injunction and enjoin Minnesota election laws regarding independent expenditures and corporate contributions to candidates and political parties. In July, the Eighth Circuit granted the petitioners’ request for en banc review and vacated the Court’s previous ruling.
A three-judge panel found that that an injunction was not proper because the plaintiffs, three Minnesota corporations, were unlikely to prevail on the merits of their claims, and Minnesota’s provisions regarding corporate independent expenditures are similar in both purpose and effect to the federal disclosure laws that the Supreme Court upheld in Citizens United v. Federal Elections Commission. There, the Supreme Court found that both corporate and union contributions to independent political committees were constitutionally protected free speech and upheld contribution disclosure requirements. Following Citizens United, The Eighth Circuit panel found that the Swanson plaintiffs would likely not prevail on the claim that the Minnesota laws were not sufficiently tailored or on the claim that the ban on direct corporate contributions is unconstitutional.
The contested Minnesota law bans corporations from making direct contributions to candidates and political parties and imposes reporting and disclosure requirements. Following the Supreme Court’s ruling in Citizens United, Minnesota changed its existing election laws. Where previously Wisconsin prohibited corporate use of general treasury funds on independent political expenditures and corporate contributions to candidates to state office, now it permits corporate independent expenditures subject to periodic reporting and disclosure requirements.
According to the Brennan Center, which filed an amicus brief urging the Eighth Circuit to recognize the importance of transparency, the lawsuit was part of a “nationwide effort to disrupt state election laws on the eve of the November 2010 election.” The attorney who filed the case, James Bopp, claims the Minnesota requirements are more burdensome than what is allowed under strict scrutiny and, because expenditures can only be made to independent committees and not directly to candidates, that disclosure should not be required. The Brennan Center’s amicus argument focused on the constitutional interests of voters and corporate shareholders, the public’s informational interest in knowing who is funding political speech, and the benefits of robust disclosure laws.
Corporations and organizations supporting them, including the Minnesota Chamber of Commerce, are concerned that the disclosure requirements will hinder corporate speech. As David Olsen, president of the Minnesota Chamber, said, “It’s been very hard for companies to [make] any contributions to candidates.” Despite these concerns, Brad Allen, a writer for the MinnPost, claims there is both a shareholder movement to demand transparency and an increase in corporate willingness to disclose donations. Other corporations, in an attempt to steer clear of a scandal like that surrounding Target’s contribution to MN Forward in 2010 supporting Republican Tom Emmer’s campaign for Minnesota governor, are avoiding political donations.
During oral argument, Bopp argued that the Minnesota statute not only “prevents the corporation itself from speaking,” but also “has all of the characteristics that Citizen’s United condemned.” The court seemed very interested in comparing the case at issue to various Supreme Court cases including Citizens United, FEC v. Mass. Citizens for Life, Buckley v. Valeo, and FEC v. Beaumont, to determine the proper standards for infringement upon First Amendment protected speech and the threshold question for the case at issue. Alan Gilbert, the Minnesota Solicitor General, then argued that disclosure of information to the electorate is essential. The judges were very critical toward Gilbert and asked him questions regarding the disclosure requirements and procedures, focusing particularly on “two farmers hanging up a sign” and other small groups of business people who wish to engage in political speech. They seemed especially concerned with the periodic reporting requirements that would force such small entities to continue to follow the procedures for minor activities throughout an election cycle. One judge indicated that these hypothetical circumstances were cause for concern, as the statute does not indicate that it is only applicable to large corporations. Gilbert also received questions regarding the purpose of continuous reporting and whether the reporting requirements as outlined in the statute were adequately justified rather than “using disclosure as a global justification.” Although the Eighth Circuit appeared critical regarding the disclosure requirements and justifications contained in the Minnesota statute, it did not seem concerned with the ban on corporate donations made directly to candidates.
The result in this case is of interest to many as similar cases regarding corporate political contributions, including the Danielczyk case in the Fourth Circuit and the Thalheimer case in the Ninth Circuit, are currently in various stages of litigation.
Stephanie Bitto is a third-year student at William and Mary Law