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Minnesota Citizens Concerned for Life, Inc. v. Swanson

After an Eighth Circuit Court of Appeals panel upheld Minnesota’s disclosure laws and ban on corporate contributions, the Eighth Circuit granted petitioners’ request for an en banc review, vacating the panel’s prior ruling.

Published: July 12, 2011

On May 16, 2011, an Eighth Circuit Court of Appeals panel upheld Minnesota’s disclos­ure laws and ban on corpor­ate contri­bu­tions. The Bren­nan Center filed an amicus brief in the case, urging the Eighth Circuit to recog­nize the import­ance of trans­par­ency in money in polit­ics.

Though the Eighth Circuit initially upheld the state’s disclos­ure laws, it struck them down on narrow grounds on en banc review.The decision is an outlier from decisions routinely uphold­ing disclos­ure laws after the Supreme Court strongly affirmed their consti­tu­tion­al­ity and import­ance in Citizens United. The Eighth Circuit did, however, uphold the state’s ban on direct corpor­ate contri­bu­tions to candid­ates.

Back­ground:

Prior to the Supreme Court’s opin­ion in Citizens United v. FEC, Minnesota and many other states prohib­ited corpor­a­tions from spend­ing general treas­ury funds on inde­pend­ent polit­ical expendit­ures.  In Citizens United, the Court found that such restric­tions viol­ate a corpor­a­tion’s First Amend­ment right to polit­ical speech.  Citizens United, however, also upheld disclos­ure and disclaimer laws that apply to corpor­ate inde­pend­ent expendit­ures, and emphas­ized that the disclos­ure of money in polit­ics is a neces­sary part of our elect­oral process.  After Citizens United, Minnesota appro­pri­ately respon­ded to the Court’s direct­ive: it promptly changed its law to permit corpor­ate inde­pend­ent expendit­ures, while simul­tan­eously ensur­ing that these expendit­ures are made with the trans­par­ency called for in Citizens United

Minnesota’s new law to permit corpor­ate inde­pend­ent expendit­ures was chal­lenged in MCCL v. Swan­son.  This lawsuit was filed by James Bopp, Jr., the attor­ney behind the Citizens United case, as part of a nation­wide effort to disrupt state elec­tion laws on the eve of the Novem­ber 2010 elec­tion.  The plaintiff corpor­a­tions claimed that Minnesota’s disclos­ure require­ments viol­ate their First Amend­ment free speech rights.  Plaintiffs also claimed that Minnesota’s ban on direct corpor­ate contri­bu­tions is no longer consti­tu­tional after Citizens United.

On Septem­ber 20, 2010, the District Court denied Plaintiffs’ motion for a prelim­in­ary injunc­tion, and concluded that they were unlikely to succeed on the merits of this case.  The District Court found that Minnesota law – by freely permit­ting corpor­ate inde­pend­ent expendit­ures; provid­ing for the disclos­ure of those expendit­ures; and retain­ing limits on corpor­ate contri­bu­tions in order to combat corrup­tion and the appear­ance of corrup­tion – is plainly consti­tu­tional and fully comports with Supreme Court preced­ent, includ­ing Citizens United.  

On Decem­ber 22, 2010, the Bren­nan Center submit­ted an amicus brief to the Eighth Circuit Court of Appeals in support of Minnesota’s disclos­ure law for corpor­ate inde­pend­ent expendit­ures.  On May 16, 2011, an Eighth Circuit Court of Appeals panel (in agree­ment with the posi­tion urged by the Bren­nan Center) affirmed the district court’s opin­ion. On July 12, 2011, the Eighth Circuit gran­ted peti­tion­ers’ request for an en banc review, vacat­ing the Court’s prior ruling. On Septem­ber 4, 2012, the Eigth Circuit, sitting en banc, struck down Minnesota’s disclos­ure law but upheld its ban on direct corpor­ate contri­bu­tions.

Summary of Bren­nan Center’s Amicus Argu­ment:

The Bren­nan Center’s amicus brief was submit­ted to emphas­ize that the asser­ted consti­tu­tional rights of the plaintiff corpor­a­tions are not the only consti­tu­tional interests at stake in this dispute.  We urged the Court to give due regard to the First Amend­ment interests of voters and corpor­ate share­hold­ers in the campaign finance disclos­ure laws chal­lenged in the litig­a­tion. 

The Supreme Court and the federal courts have consist­ently recog­nized the public’s inform­a­tional interest in know­ing who is fund­ing polit­ical speech.  This inform­a­tion is crit­ical so that voters can make informed decisions about polit­ical candid­ates and messages.  This inform­a­tion is also crit­ical so that share­hold­ers can hold corpor­a­tions respons­ible for polit­ical expendit­ures.

Moreover, despite the posi­tion taken by plaintiffs, many other busi­ness and corpor­ate lead­ers have recog­nized that campaign finance reforms, includ­ing robust disclos­ure laws, help to protect the corpor­ate bottom line.  These busi­ness lead­ers recog­nize that rampant and undis­closed corpor­ate polit­ical spend­ing may exacer­bate often extor­tion­ate pres­sures on Amer­ican busi­nesses to donate increas­ing sums to polit­ical campaigns.  Disclos­ure – by enabling share­hold­ers to serve as watch­dogs for inap­pro­pri­ate uses of corpor­ate treas­ur­ies – can mitig­ate the pres­sure on corpor­ate Amer­ica to parti­cip­ate in an escal­at­ing arms race of covert polit­ical spend­ing.

The bene­fits of robust disclos­ure laws were extolled by the Supreme Court in Citizens United, and are well-docu­mented in Minnesota and nation­wide.  Accord­ingly, in our amicus brief, the Bren­nan Center recom­men­ded that the Court support Minnesota’s efforts to ensure that voters receive the inform­a­tion they need to fully eval­u­ate polit­ical speech during elec­tion campaigns, and that share­hold­ers receive the inform­a­tion they need to ensure corpor­ate account­ab­il­ity. 

The Bren­nan Center also fully endorsed the argu­ments set forth by the State of Minnesota, which accur­ately char­ac­ter­ized the relev­ant laws for the Court and thor­oughly rebut­ted the plaintiffs’ legal claims.