United States District Court, D. Delaware
David E. Wilks, Esquire of Wilks, Lukoff & Bracegirdle, LLC, Wilmington, Delaware, Counsel for Plaintiff Delaware Strong Families. Of Allen Dickerson, Esquire and Zac Morgan, Esquire of the Center for Competitive Politics.
Joseph C. Handlon, Deputy Attorney General, Delaware Department of Justice, Wilmington, Delaware, Counsel for Defendants. Of Randolph D. Moss, Esquire, Jonathan G. Cedarbaum, Esquire and Weili J. Shaw, Esquire of Wilmer Cutler Pickering Hale and Dorr LLP and J. Gerald Hebert, Esquire, Paul S. Ryan, Esquire and Megan McAllen, Esquire of The Campaign Legal Center.
ROBINSON, United States District Judge.
Plaintiff Delaware Strong Families (" DSF" ) has filed a verified complaint seeking a judgment to prevent enforcement of certain provisions of the Delaware Election Disclosures Act (" the Act" ), 15 Del. C. § 8001, et seq., which became law on January 1, 2013. Prior to its enactment, Delaware's election laws did not regulate nonprofit corporations like DSF. In 2012, DSF distributed a voter guide  over the Internet within 60 days of Delaware's general election. DSF plans to engage in similar activity before the 2014 general election, and expects to incur costs over $500 in doing so. Under the Act, DSF's activities, including the publication of its voter guide, will be within the regulatory purview of the State Commissioner of Elections (" the Commissioner" ) and the Attorney General of the State of Delaware, defendants at bar.
More specifically, § 8031(a) of the Act requires that " [a]ny person . . . who makes an expenditure for any third-party advertisement that causes the aggregate amount of expenditures for third-party advertisements made by such person to exceed $500 during an election period shall file a third-party advertisement report with the Commissioner." 15 Del. C. § 8031(a). The report includes, inter alia, the names and addresses of each person who has made contributions to the " person" in excess of $100 during the election period. " Person" includes " any individual, corporation, company, incorporated or unincorporated association, general or limited partnership, society, joint stock company, and any other organization or institution of any nature." 15 Del. C. § 8002(17). " Third-party advertisement" means " an independent expenditure or an electioneering communication." 15 Del. C. § 8002(27). " Electioneering communication" means " a communication by any individual or other person (other than a candidate committee or a political party) that: (1) Refers to a clearly identified candidate; and (2) Is publicly distributed within 30 days before a primary election or special election, or 60 days before a general election to an audience that includes members of the electorate for the
office sought by such candidate." 15 Del. C. § 8002(10)(a).
According to the legislative history of the Act, its focus was on " clos[ing] loopholes about the transparency of third-party ads" by " better regulat[ing] electioneering communications by third-parties," particularly as to " how the third party receives funding and where that money goes." (D.I. 30, ex. 1, Del. House Admin. Comm. Minutes, House Bill No. 300 (May 2, 2012)) Also apparent from the legislative history is a concern about the power vested in the Commissioner " to make an exemption without any stipulations or guidelines as to how [she] can make exemptions. As a result, the state is delegating broad authority to a single person, and this could result in potential long-term problems." ( Id. ) In this regard, 15 Del. C. § 8041(1)(c) gives the Commissioner the power to " adopt[ ] any amendments or modifications to the statements required under § 8021 of this title, or exemptions from the requirements thereunder." 15 Del. C. § 8041(1)(c).
The court has jurisdiction over the matter pursuant to 28 U.S.C. § 1331, as the action arises under the First and Fourteenth Amendments to the United States Constitution. Venue in this court is proper under 28 U.S.C. § 1391(b)(1) and (b)(2).
II. STANDARD OF REVIEW
In the Third Circuit, " [f]our factors determine whether a preliminary injunction is appropriate: (1) whether the movant has a reasonable probability of success on the merits; (2) whether the movant will be irreparably harmed by denying the injunction; (3) whether there will be greater harm to the nonmoving party if the injunction is granted; and (4) whether granting the injunction is in the public interest." B.H. v. Easton Area Sch. Dist., 725 F.3d 293, 302 (3d Cir. 2013) (internal citation and quotation marks omitted); see also N.J. Retail Merchs. Ass'n. v. Sidamon Eristoff, 669 F.3d 374, 385-386 (3d Cir. 2012); Iles v. de Jongh, 638 F.3d 169, 172, 55 V.I. 1251 (3d Cir. 2011). A preliminary injunction is " an extraordinary remedy," which " should be granted only in limited circumstances." Kos Pharmaceuticals, Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d 2004) (citation omitted).
A. Analytical Framework
The regulation of campaign finances has a long history. The dispute at issue, therefore, cannot be adequately addressed without an understanding of the analytical framework established by Supreme Court precedent on campaign finance regulation.
1. Buckley v. Valeo (" Buckley" )
The court starts its review of such with the decision in Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976), where the United States Supreme Court addressed various challenges to the Federal Election Campaign Act of 1971 (" FECA" ), as amended in 1974. Appellants in Buckley did not challenge the disclosure requirements of FECA, 2 U.S.C. § § 431, et seq., as per se unconstitutional; they instead argued that several provisions were over-broad as applied to contributions: (a) to minor parties and independent candidates; and (b) by individuals or groups other than a political committee or candidate. Of import to the disclosure requirements at bar, the Court explored the general principles related to the challenged reporting and disclosure requirements, to wit: The Court has " repeatedly found that compelled disclosure, in itself, can seriously infringe on privacy of association and belief guaranteed by the First Amendment." Id. at 64. The Court has
long . . . recognized that significant encroachments on First Amendment rights of the sort that compelled disclosure imposes cannot be justified by a mere showing of some legitimate governmental interest. Since NAACP v. Alabama we have required that the subordinating interests of the State must survive exacting scrutiny. We also have insisted that there be a " relevant correlation" or " substantial relation" between the governmental interest and the information required to be disclosed.
Id. (citations omitted). The Court reiterated the fact that
[t]he right to join together " for the advancement of beliefs and ideas" . . . is diluted if it does not include the right to pool money through contributions, for funds are often essential if " advocacy" is to be truly or optimally " effective." Moreover, the invasion of privacy of belief may be as great when the information sought concerns the giving and spending of money as when it concerns the joining of organizations, for " [f]inancial transactions can reveal much about a person's activities, associations, and beliefs."
Id. at 65-66 (citations omitted). In addressing the other side of the scale, the Court identified the governmental interests sought to be vindicated by the disclosure requirements: (1) providing the electorate with information " 'as to where political campaign money comes from and how it is spent by the candidate' in order to aid the voters in evaluating those who seek federal office; " (2) " defer[ring] actual corruption and avoid[ing] the appearance of corruption by exposing large contributions and expenditures to the light of publicity; " and (3) serving as " an essential means of gathering the data necessary to detect violations of the contribution limitations" described elsewhere in the statute. Id. at 66-68. The Court went on to conclude that disclosure requirements, " as a general matter, directly serve substantial governmental interests" and appear, " in most applications," " to be the least restrictive means of curbing the evils of campaign ignorance and corruption that Congress found to exist." Id. at 68.
With respect to FECA's reporting and disclosure requirements as applied to minor parties and independents, the Court concluded that, absent evidence of a " reasonable probability that the compelled disclosure of a party's contributors' names will subject them to threats, harassment, or reprisals from either Government officials or private parties," id. at 74, " the substantial public interest in disclosure identified by the legislative history of [FECA] outweighs the harm generally alleged." Id. at 72.
In considering the disclosure provision applicable to individual contributions, attacked by appellants as " a direct intrusion on privacy of belief," the Court noted that it " must apply the same strict standard of scrutiny, for the right of associational privacy . . . derives from the right of the organization's members to advocate their personal points of view in the most effective way." Id. at 75 (citations omitted). According to the Court, § 434(e) was
part of Congress' effort to achieve " total disclosure" by reaching " every kind of
political activity" in order to insure that the voters are fully informed and to achieve through publicity the maximum deterrence to corruption and undue influence possible. . . .
In its efforts to be all-inclusive, however, the provision raises serious problems of vagueness, particularly treacherous where, as here, the violation of its terms carries criminal penalties and fear of incurring these sanctions may deter those who seek to exercise protected First Amendment rights.
Id. at 76-77. More specifically, § 434(e) applied to " [e]very person . . . who makes contributions or expenditures." " Contributions" and " expenditures" were defined under FECA " in terms of the use of money or other valuable assets 'for the purpose of . . . influencing' the nomination or election of candidates for federal office. It [was] the ambiguity of this phrase that pose[d] constitutional problems" for the Court. Id. at 77 (emphasis added).
With the constitutional requirement of definiteness at stake in the context of First Amendment rights, the Court recognized that, " to avoid the shoals of vagueness," it had the obligation to construe the statute with a heightened degree of specificity. Id. at 77-78 (" Where First Amendment rights are involved, an even 'greater degree of specificity' is required." ). Harking back to Congress' intent to ferret out and prevent election-related corruption, the Court explained that, when the maker of a contribution or of an expenditure is not a political committee or a candidate presumably focused on the nomination or election of a candidate for political office, " the relation of the information sought to the purposes of [FECA] may be too remote. To insure that the reach of § 434(e) is not impermissibly broad, we construe 'expenditure' for purposes of that section . . . to reach only funds used for communications that expressly advocate the election or defeat of a clearly identified candidate. This reading is directed precisely to that spending that is unambiguously related to the campaign of a particular federal candidate." Id. at 79-80. The Court concluded that " § 434(e), as construed, bears a sufficient relationship to a substantial governmental interest. As narrowed, § 434(e) . . . does not reach all partisan discussion for it only requires disclosure of those expenditures that expressly advocate a particular election result." Id. at 80 (emphasis added).
2. McConnell v. FEC (" McConnell" )
The Supreme Court in McConnell v. Federal Election Commission, 540 U.S. 93, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003), addressed the Bipartisan Campaign Reform Act of 2002 (" BCRA" ), which amended FECA and other portions of the United States Code. " In enacting BCRA, Congress sought to address three important developments in the years since th[e] Court's landmark decision in Buckely v. Valeo . . . : the increased importance of 'soft money' [and] the proliferation of 'issue ads,' [as detailed in] ...