March 27 (Reuters) - A Minnesota rule limiting the ability of judicial candidates to personally solicit campaign funds does not violate the First Amendment, a federal appeals court ruled on Tuesday.

In a 7-5 en banc decision, the St. Louis-based U.S. Court of Appeals for the 8th Circuit upheld the judicial code and rejected the reasoning of a Minnesota Supreme Court candidate who argued the provision limited his ability to raise campaign funds.

"Minnesota's interest in preserving (judicial) impartiality, defined as the lack of bias for or against a party to a proceeding, is compelling," Judge Kermit Bye wrote for the majority. The restriction on personal solicitations advances that interest while also preventing the appearance of bias, the court concluded.

The case marks the second time that Minnesota Supreme Court candidate Gregory Wersal has challenged campaign fundraising rules. Wersal, who has unsuccessfully run for the bench several times, first sued to reverse Minnesota's total ban on personal solicitations in 1998. During the appeals process, the 8th Circuit agreed the ban should be revoked, which prompted the Minnesota Supreme Court to pass a rule allowing candidates to personally solicit money, but only from groups of 20 people or more.

Wersal then took on the revised rule, and returned to court in 2008. In that case, he accused judges on the Minnesota Supreme Court of crafting the new rule to protect their own positions. Incumbent judges pursuing re-election hold events at big law firms where they solicit donations from large groups of lawyers and reap thousands of dollars, he said. Those types of personal requests are permitted under the 20 people or more rule. Meanwhile, the rule bars non-incumbents from going door-to-door or making phone calls to raise funds.

But the 8th Circuit majority rejected Wersal's challenges to the judicial code, finding the restrictions narrowly tailored to prevent judicial bias.

Several judges in the 8th Circuit agreed with Wersal. "Certain regulations have apparently created circumstances leading to a mismatch in the ability of incumbents and non-incumbents to raise campaign funds, the mother's milk of electoral success," Judge Arlen Beam wrote in a dissent. He noted that incumbent judges were able to raise around $207,000 in 2008 and 2010 Minnesota Supreme Court elections -- around double what non-incumbents collected.

"In Minnesota, we haven't had an incumbent judge defeated in an election in over 50 years. They have shut down the entire election system," Wersal said.

He said he plans to appeal the case to the U.S. Supreme Court and that a split among the federal circuit courts makes the high court more likely to review the case. In 2010, the 6th Circuit ruled in Carey v. Wolnitzek that Kentucky's judicial solicitation rule violated candidates' free-speech rights.

In addition to the personal solicitation rule, Wersal also challenged a judicial canon preventing candidates from endorsing other political candidates for office. Wersal had wanted to endorse then-congressional candidate Michelle Bachmann, among others. The 8th Circuit also upheld that rule, finding that such endorsements could cause judges to appear beholden to political interests.

The Minnesota Attorney General's Office did not immediately respond to a request for comment.

The case is Wersal v. Sexton et al, U.S. Court of Appeals for the 8th Circuit, No. 09-1578.

For Wersal: James Bopp of The Bopp Law Firm.

For Sexton et al: Steven Gunn of the Minnesota Attorney General's Office.

(Reporting By Terry Baynes)

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