Federal Appeals Court Rules Colorado Disclosure Law Unconstitutional

Denver, CO – A federal appeals court unanimously affirmed a lower court decision declaring that Colorado’s ballot issue disclosure law violates the First Amendment for groups raising or spending less than $3,500. The decision was handed down late Wednesday by three judges nominated by President Barack Obama to the Tenth Circuit Court of Appeals in the case, Coalition for Secular Government (CSG) v. Williams.

“Requiring a small, two-person group to register with the government, report every detail of its operations down to the purchase of postage stamps, and disclose nearly all of its financial supporters to the government, is inherently and obviously burdensome,” said Center for Competitive Politics (CCP) Legal Director Allen Dickerson, who represented CSG in the litigation. “We are pleased the court found this complex law violated the First Amendment. Perhaps multi-million dollar political organizations can afford those burdens, but small citizen groups cannot. The result is a campaign finance system that harms small, grassroots organizations that form the backbone of our society. The Court of Appeals was right to protect these groups.”

“I’m thrilled that the court found the law infringed on our free speech rights,” said Diana Hsieh, the president of CSG. “We could not have won without the help of CCP, and because of the organization’s tireless efforts, my First Amendment armor against Colorado’s nonsensical campaign rules is stronger. Now, I hope Colorado’s General Assembly will fix the law so it respects our First Amendment rights.”

In the opinion for the three-judge panel, Judge Gregory A. Phillips wrote that “The informational interest in the Coalition’s disclosures is far outweighed by the substantial and serious burdens of the required disclosures… Simply put, Colorado’s issue-committee regulatory framework remains too burdensome for small-scale issue committees like the Coalition.” The court also noted that due to the donation disclosure requirements of contributions as small as $20, the “Coalition lost contributions it otherwise would have received.”

The Colorado Secretary of State, which appealed the lower court decision, had asked the court to rule the law unconstitutional in all cases, but the panel refused, writing “We understand the Secretary’s frustration with the present state of the law… From no one’s perspective is this a satisfactory posture. But the Secretary is better served seeking help from the institution best equipped in our governmental system to solve the problem – the Colorado legislature.”

In the lower court ruling, Senior District Judge John Kane wrote, describing the CSG paper: “the internet is the new soapbox; it is the new town square. CSG’s ‘personhood’ paper is Tom Paine’s pamphlet. It is the quintessence of political speech.”

Judge Kane characterized the Colorado Supreme Court’s earlier decision that all small groups would have to seek case-by-case relief in court as “itself offend[ing] the First Amendment. By setting in stone the uncertainty that precipitated this litigation in the first place, the [Supreme] Court’s interpretation chills robust discussion at the very core of our electoral process.”

Judge Kane also castigated state lawmakers for failing to bring Colorado’s laws into conformance with the First Amendment.  He ruled that he would award legal fees and warned “state lawmakers that the Secretary [of State] will be on the hook for fees every time a group, like CSG, falls under the $200 trigger for issue committee status and has to sue to vindicate its First Amendment rights.”

Beginning in 2008, Colorado resident Diana Hsieh organized the nonprofit Coalition for Secular Government in order to promote a secular understanding of individual rights, including freedom of conscience and the separation of church and state. Because of unconstitutionally vague state laws, confusion as to what constitutes political speech and what is covered under a press exemption, and a refusal by the state to abide by a federal court order, Hsieh and CSG found it nearly impossible to carry out the activities of a small nonprofit group without fear of running afoul of Colorado’s complex campaign finance laws.

CCP’s legal team filed a complaint alleging that, even though Hsieh and CSG planned to raise no more than $3,500, nearly all of which would go toward updating and disseminating an expanded and updated copy of their public policy paper, the state of Colorado appeared to demand that CSG register as an issue committee, with all the paperwork burdens and restrictions that status entails.

To read the Tenth Circuit’s decision, click here.

The Center for Competitive Politics is now the Institute for Free Speech.