By Terry Baynes
Sept 5 (Reuters) - A Minnesota law that requires companies
to track and disclose the amount of money they spend on
political campaigns likely violates the U.S. Constitution, a
federal appeals court ruled on Wednesday.
In a 6-5 ruling, the 8th U.S. Circuit Court of Appeals in
St. Louis temporarily blocked the law, saying it burdens
companies' free speech, in violation of the U.S. Supreme Court's
2010 decision Citizens United v. Federal Election Commission.
That case removed limits on what companies and unions can spend
to support or oppose political candidates.
"After Citizens United, it is clear Minnesota may not
suppress political speech on the basis of the speaker's
corporate identity," Judge William Riley wrote for the majority.
The Minnesota law requires companies and other organizations
to establish a political fund if they spend more than $100 a
year on political speech. The fund must have a treasurer who
segregates political funds, keeps detailed records and files
reports with the state. Failure to comply can result in fines
and imprisonment up to five years.
Two nonprofit organizations, Minnesota Citizens Concerned
for Life Inc and The Taxpayers League of Minnesota, and a
for-profit travel company, Coastal Travel Enterprises,
challenged the law in July 2010. The groups claimed that the
burdensome reporting requirements deterred them from making any
political expenditures and chilled their political speech.
A federal court in Minnesota rejected the groups' request to
temporarily block the law, and a divided three-judge panel of
the 8th Circuit affirmed that decision in May 2011. But a larger
8th Circuit panel agreed to review the case, and on Wednesday
issued a preliminary injunction and sent the case back to the
lower court for further proceedings.
Wednesday's decision found that Minnesota's law effectively
treats companies that make political expenditures the same as
political action committees, in violation of the Supreme Court's
decision in Citizens United.
The court refused to block another part of the law, which
bans companies from donating directly to political candidates.
Five judges dissented, accusing the majority of disregarding
the voting public's right to know where political money is
coming from.
A spokesman for the Minnesota Attorney General said the
office was reviewing the ruling.
DIVIDED RULINGS
James Bopp, a lawyer for the plaintiffs who also brought the
Citizens United case, said the ruling was a significant one in
the fight over whether states and federal regulators can impose
the requirements for political action committees on companies
and other associations.
Courts disagree over whether such requirements are
constitutional, Bopp said. Six courts that have ruled on the
issue are evenly split, he said.
Among them, a three-judge panel of the 4th Circuit in June
rejected a suit brought by the nonprofit group The Real Truth
About Abortion that challenged Federal Election Commission
disclosure requirements. Bopp, who also brought that case, said
he will appeal that decision to the Supreme Court in coming
weeks.
The 8th Circuit case is Minnesota Citizens Concerned for
Life Inc et al v. Swanson et al, No. 10-3126.
For Minnesota Citizens Concerned for Life et al: James Bopp
of The Bopp Law Firm.
For the state defendants: Alan Gilbert of the Minnesota
Attorney General's Office.
Follow us on Twitter @ReutersLegal | Like us on Facebook