Category Archives: Catholic Leadership v Reisman

Fifth Circuit Court of Appeals strikes down Texas PAC waiting period

Press release issued by Najvar Law Firm:

FOR IMMEDIATE RELEASE

August 13, 2014

Contact: Jerad Najvar, 281.404.4696

Fifth Circuit Court of Appeals Strikes Down Texas PAC Waiting Period

Late yesterday afternoon, the United States Court of Appeals for the Fifth Circuit issued a decision striking down provisions of the Texas Election Code, in place since 1987, that imposed a “waiting period” on newly-formed Texas political committees.  The decision is a major First Amendment victory that restores the fundamental free speech rights of all grassroots groups in Texas.

The central issue in the lawsuit was a challenge to Texas Election Code section 253.037(a), which demanded that before any group defined as a “general purpose” political committee could spend more than $500, it had to jump through three bureaucratic hurdles:  (i) register with the state; (ii) collect contributions from ten persons; and (iii) wait 60 days.  A “general purpose” political committee is defined as any group of two or more persons who share common principles and form with the purpose of pooling their resources to support and oppose candidates based on those principles.  Section 253.037(a) prevented such groups from spending funds on everything from political contributions to fully independent political advertisements, even though “specific purpose” committees formed to support identified candidates (rather than their own principles) were not subject to the waiting period.

The plaintiff PACs planned to spread their message to voters before Texas’ primary runoff elections on July 31, 2012.  They all registered with the Texas Ethics Commission (“TEC”) and filed campaign finance reports prior to the elections, disclosing all contributions and expenditures in strict compliance with the reporting requirements.  Yet they were still silenced because they had not formed more than 60 days before Election Day. Plaintiffs filed suit in Austin in June 2012, seeking an emergency injunction before the runoffs.  The district court denied that request, and the Fifth Circuit denied an emergency appeal with only days before the elections.  After final judgment was granted for defendants, the plaintiffs remained undeterred, appealing again to the Fifth Circuit.

“We were always confident that when the Fifth Circuit looked at this on the merits, it could only reach one conclusion,” said Jerad Najvar, attorney for the plaintiffs.  “The government can never impose a waiting period on political speech, and the court properly rejected the TEC’s attempt to cloak this pernicious speech ban as a mere disclosure requirement.”

The Fifth Circuit’s opinion holds that the 60-day waiting period and ten-contributor requirements are facially unconstitutional in all applications—that is, to the extent they restrict political expenditures (including independent, “direct campaign expenditures”) and contributions to candidates and other PACs.

Notably, the Fifth Circuit roundly rejected the specious argument the TEC relied on throughout the case: that these plaintiffs should not complain about a waiting period on their PACs when they could have re-purposed themselves as narrowly-focused “specific purpose” committees or used related nonprofit organizations to pay for election ads.  The court properly recognized that “the availability of other avenues of speech does not excuse the imposition of an unconstitutional burden on organizations wanting to engage in speech.”  The Court specifically found that the TEC’s suggestion to act like a specific-purpose committee amounted to a demand that the plaintiffs “change their message and pledge fidelity for or against particular candidates or measures,” which “contravenes the fundamental rule of protection under the First Amendment that a speaker has the autonomy to choose the content of his own message.”  After this ruling, Texas can no longer require general-purpose committees to wait 60 days and collect ten contributions before engaging in meaningful political activity.

The Fifth Circuit upheld the separate requirement that a political committee register before exceeding $500 in expenditures.  This Texas registration requirement differs from almost all other jurisdictions by banning activity over a certain level before registration, as opposed to requiring registration within a certain number of days after a threshold is exceeded.  “The Fifth Circuit essentially said that because these groups actually were able to register without a problem, it didn’t see the harm from this provision,” said Najvar.  “But I believe the law is clear that this is an unconstitutional prior restraint, and I have no doubt that the courts will strike it down when a plaintiff can show the harm it causes.  The Ethics Commission continues to fine groups and candidates for failing to register before they spend more than $500.  The court just needs to see those facts.”

The Fifth Circuit also rejected a narrow challenge to Texas’s ban on corporate contributions as applied to prohibit the Catholic Leadership Coalition of Texas, an incorporated 501(c)(4), from contributing its email contact list to a PAC solely for the PAC’s use in distributing advertisements done independently of candidates.  The Court said plaintiffs had not shown enough in the record to establish that sufficient safeguards were in place to ensure that the email list would only be used for independent expenditures.  This issue was presented in a very narrow sense on specific facts, and the Fifth Circuit was careful not to prejudice a ruling on the broader issue of hybrid PACs.

The case is Catholic Leadership Coalition of Texas, et al. v. Reisman, et al., No. 13-50582, on appeal from the U.S. District Court for the Western District of Texas at Austin.  Plaintiffs, all based in the San Antonio area, are:

  • Texas Leadership Institute for Public Advocacy – a group of predominantly lay Catholics who believe in the true precepts of the Church and who, among other things, wish to support candidates who will protect religious freedom against government encroachment
  • Friends of SAFA Texas – a group also composed primarily of lay Catholics to support candidates “focused on protecting, defending, and promoting the family, the original and basic unit of society”
  • Texas Freedom PAC – focused on recruiting and promoting Hispanic candidates who adhere to core conservative values
  • Catholic Leadership Coalition of Texas, Inc. – an nonprofit educational organization formed to inform Catholics about the moral precepts of the Church, particularly as they pertain to Catholics’ responsibilities as voters

Jerad Najvar practices political and appellate law and is founder of the Najvar Law Firm in Houston.  He served as co-counsel to plaintiff Shaun McCutcheon in McCutcheon v. FEC, a successful challenge to federal aggregate contribution limits decided by the U.S. Supreme Court.

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The duplicitous Texas Ethics Commission and Empower Texans

Today the Texas Ethics Commission (TEC) is scheduled to finally hold a hearing to consider its case against Empower Texans and Michael Quinn Sullivan.  David Rauf of the SA Express News has a story, though it doesn’t touch on some key points and background to put this whole sad affair into context.  I’ll fill in more of that as this overreaching investigation continues. The investigation, which was initiated by bare allegations lodged by two sitting state legislators with an assist from a registered lobbyist (and based on “information and belief,” rather than personal knowledge), focuses on two issues: (1) the allegation that Empower Texans, a 501(c)(4) organization, meets the definition of a “general purpose political committee” and therefore should be disclosing donors to the TEC; and (2) that Michael Quinn Sullivan, its director, meets the definition of “lobbyist” under Texas law and therefore should have registered, and paid an annual lobbying fee to the state, before advocating policy to the Legislature.

There is much that needs to be said about all of this, which the news media (like the TEC) is totally oblivious to. This morning, I at least thought it would be appropriate to point out the TEC’s duplicity on the issue of nonprofit disclosure.

The TEC has led a two-year-long witch hunt against the nonprofit Empower Texans, including the issuance of subpoenas for financial records, calendars, internal communications and the like, which a federal district judge described as “absurd.”  All of it aimed at determining whether Empower Texans meets the definition of “political committee,” which would require donor disclosure.

Now shift gears for a second. In a case called Catholic Leadership Coalition v. Reisman (as in David Reisman, former Exec. Dir. of the TEC), I’m representing three “general purpose political committees” in a First Amendment lawsuit challenging a Texas law (Elec. Code 253.037(a)) that requires general purpose committees to wait 60 days before spending $500 on political speech. Two of those groups have related nonprofit arms associated with them. This is common practice–a group of people want to engage in discussion, advocacy, and political action, so to comply with the law they set up a nonprofit to do what nonprofits do and a PAC to do what PACs do.  Realizing that there is no substantive argument that can sustain Texas’s two-month ban on spending by general purpose committees, the TEC decides to argue all the way through district court that my two clients with associated nonprofits should have just funded their election speech via the nonprofits, rather than having the gall to come into court to challenge Texas’s $500 speech limit. Citizens United–the TEC argues–validated the rights of independent nonprofits to spend on electioneering, so nonprofits should just do that, rather than set up a general purpose committee and complain about a two month blackout period.

We argued Catholic Leadership April 30 in the Fifth Circuit, and the TEC continued the same theme throughout its appellate briefing and even at oral argument (audio here).  (A decision could be released any day.)

Make no mistake: my clients in Catholic Leadership are not in the same category as Empower Texans.  The Catholic Leadership groups challenging the waiting period on PACs are undeniably PACs–they specifically solicit funds for express advocacy communications about candidates, which means those funds are “political contributions” and the group soliciting them is a PAC. Empower Texans does not do that.  In fact, it has a related PAC that exists for that purpose.

This situation reveals the true motivations and duplicity of the decision-makers at the TEC. Suspend your disbelief and consider the TEC’s positions in these two concurrent cases over the last two years:

  • In Empower Texans’ case, TEC pursues an aggressive investigation to determine whether a nonprofit became a political committee and violated the law by failing to register and disclose donors.  But:
  • In Catholic Leadership, TEC tries mightily to hoodwink two federal courts into believing that my clients–who have loudly proclaimed all along that they had to, and in fact did, solicit political contributions to fund their speech–should have simply spent the money through their nonprofits (which don’t disclose donors).

Where is the media to pick up on this blatant inconsistency? If my clients had taken the route the TEC has suggested in litigation, they would have found themselves in the chair next to Empower Texans today. Except that they would have deserved to be there, while Sullivan does not. Much more to come on this.

Fifth Circuit to hear oral argument in Texas campaign finance case challenging prior restraint on PACs

The Fifth Circuit has announced that it will set oral argument in Catholic Leadership Coalition, Inc., et al. v. Reisman, et al., the week of April 28.  See the June 2013 press release announcing the appeal here.  NLF represents plaintiffs-appellants.

CLC v. Reisman: Appellants’ Reply Brief opposing Texas’s attempt to justify a 60 day ban on PAC speech

The arguments made by the State of Texas, attempting to defend section 253.037(a) of the Election Code, are truly remarkable and borderline frivolous.  The provision requires any group organized based on common principle (instead of, for example, fidelity to an identified candidate) to (a) register, (b) collect contributions from ten persons, and (c) wait 60 days, all before spending more than $500 even on their own, independent speech (“independent expenditures” in constitutional jargon).  The State’s arguments are, thankfully, entirely foreclosed by decades of Supreme Court precedent.  But they deserve more attention and discussion, and this blog will delve into them more deeply and explain just how dim a view at least some attorneys at the Texas Attorney General’s office have of the First Amendment rights of Texans to organize for political advocacy.

In a nutshell, Texas is arguing that the plaintiffs before the Fifth Circuit (three “general purpose” political committees and a nonprofit 501(c)(4)) have no business complaining about a waiting period on their speech, because Texas generously affords multiple “choices” for the exercise of First Amendment rights, and plaintiffs should have either spent money through a nonprofit organization or registered as “specific purpose” committees to support identified candidates. Appellants’ reply brief responds to these dubious arguments.

REPLY BRIEF HERE

Catholic Leadership Coalition, Inc. v. Reisman: Texas Ethics Commission files its brief

In Catholic Leadership Coalition, Inc. v. Reisman (background here), the Attorney General’s office filed its brief for appellee David Reisman and the other members of the Texas Ethics Commission on December 5, arguing, among other things, that Texas PACs can be required to wait 60 days after registering with the State before spending any money (at least, any in excess of $500).  NLF’s brief on behalf of appellants (three Texas general purpose committees and one 501(c)(4), namely the Catholic Leadership Coalition, Texas Leadership Institute for Public Advocacy, Friends of SAFA Texas, and Texas Freedom PAC), arguing that the First Amendment prohibits such prior restraints on speech, is here.

Appellants’ reply brief is due December 23.

Conservative Groups File Appeal in Fifth Circuit Challenging Texas PAC “Waiting Period”

FOR IMMEDIATE RELEASE
June 28, 2013
Contact: Jerad Najvar
(281) 404-4696

HOUSTON – Four separate conservative groups have filed an appeal with the United States Court of Appeals for the Fifth Circuit, seeking to invalidate several Texas laws imposing draconian and unconstitutional restrictions on their political activities.

Three of the plaintiffs are “general purpose” political committees under Texas law.  These are groups that share common principles and form with the purpose of pooling their resources to support and oppose candidates based on those principles.  The central issue in the lawsuit is a challenge to Texas Election Code section 253.037(a), which demands that before any such group can spend more than $500, it must jump through three bureaucratic hurdles:  (i) register with the state; (ii) collect contributions from ten persons; and (iii) wait 60 days.  The law prevents expenditures for everything from political contributions to fully independent political advertisements.

All three groups planned to communicate with voters before Texas’ primary runoff elections on July 31, 2012.  They all registered with the Texas Ethics Commission (“TEC”) and filed campaign finance reports prior to the elections, disclosing all contributions and expenditures in strict compliance with the reporting requirements.  Yet they were still silenced because they had not formed more than 60 days before Election Day.  The lawsuit, which names the TEC and the Bexar County District Attorney as defendants, challenges section 253.037(a) as a facially unconstitutional prior restraint on core political speech.

In May, the federal district court in Austin granted summary judgment for the defendants.  The court characterized the statute as a mere “disclosure” law, stating that it did not actually limit political spending because plaintiffs had alternate avenues of communication during the waiting period.  For example, the court suggested plaintiffs could have spoken through “inexpensive”  “social media platforms” without exceeding $500.

“The State can define a group of people as a political committee and require reporting,” said plaintiffs’ attorney Jerad Najvar, “but it can never actually ban speech, not for a moment and certainly not for 60 days.  Speech about politics and candidates is at the very core of the First Amendment, and this law stifles spontaneous activity by grassroots groups.  It has been unconstitutional since the day it was passed in 1987, and we are confident the Court of Appeals will vindicate our arguments.”

As to the ten-contributor requirement, Najvar said: “It is beyond me why the Legislature thought they could silence two people who have a message, unless and until they convince eight others to join the cause.  Two people acting together have just as much right to share a message as a group of ten or a hundred people.”

The lawsuit also challenges Texas Election Code section 253.094(a), the state’s general prohibition on corporate contributions, to the extent it prohibits an incorporated nonprofit from lending its contact list to a political committee for distribution of “independent expenditure” ads.  In this case, the ban has prevented a nonprofit Catholic organization from lending its contact list to an associated PAC.

Plaintiffs in the case, all based in the San Antonio area, are:

  • Texas Leadership Institute for Public Advocacy – a group of predominantly lay Catholics who believe in the true precepts of the Church and who, among other things, wish to support candidates who will protect religious freedom against government encroachment
  • Friends of SAFA Texas – a group also composed primarily of lay Catholics to support candidates “focused on protecting, defending, and promoting the family, the original and basic unit of society”
  • Texas Freedom PAC – focused on recruiting and promoting Hispanic candidates who adhere to core conservative values
  • Catholic Leadership Coalition of Texas, Inc. – an nonprofit educational organization formed to inform Catholics about the moral precepts of the Church, particularly as they pertain to Catholics’ responsibilities as voters

The case is Catholic Leadership Coalition of Texas, Inc. v. Reisman, No. 12-cv-566, filed in the Western District of Texas in June 2012.  Plaintiffs’ notice of appeal was filed June 27, 2013.

DISTRICT COURT’S ORDER HERE: 20130531 ORDER granting and denying summary judgment.

Catholic Leadership v Reisman: Judge Denies Bexar County DA’s Motion to Dismiss

Catholic Leadership Coalition of Texas v. Reisman is a First Amendment lawsuit brought by three Texas PACs and a related nonprofit to challenge provisions of the Texas Election Code that (i) require all political committees to register with the Ethics Commission before spending more than $500; (ii) require certain types of issue-oriented committees to wait 60 days after registration before spending more than $500; and (iii) prohibit corporations, including nonprofit corporations, from making contributions to support “independent expenditures” that are not coordinated with the benefiting candidate.  This case–and others currently pending in Texas that raise similar claims–will be closely followed on this blog. [Disclosure: I am representing the plaintiffs in Catholic Leadership.]

While a more complete discussion will be posted soon, the latest: the court issued an order Jan 10 denying a motion to dismiss filed by Bexar County DA Susan Reed. The court’s order includes a brief discussion concluding that plaintiffs’ standing remains intact, even though the relevant election has already passed. Pretty straightforward application of Fifth Circuit and Supreme Court precedent regarding standing in the election context.

The case is in the US District Court for the Western District of Texas, Austin Division.