In February 2014, the Center for Competitive Politics began representing Citizen Outreach, a 501(c)(4) that allegedly ran afoul of Nevada campaign finance law in 2010 when it distributed two fliers critical of a state legislator.
The Nevada law required organizations engaged in “express advocacy” to register as PACs and disclose their donors. State law did not, however, define “express advocacy.” Thus, Citizen Outreach assumed this term of art meant what the U.S. Supreme Court said it meant. The fliers lacked these words, and, therefore, Citizen Outreach did not file campaign finance reports in connection with their distribution.
Nevada’s Democratic Secretary of State Ross Miller took issue with this. He sued Citizen Outreach to compel disclosure of all of their donors nationwide even though none of the donors had any knowledge of the fliers.
The Nevada State District Court applied—in violation of the principles of federalism and statutory interpretation—the Ninth Circuit Court of Appeals’ test for express advocacy from FEC v. Furgatch, which defines express advocacy more broadly than the Supreme Court. It then concluded that the fliers were express advocacy under this standard and ordered Citizen Outreach to disclose all of its donors, regardless of whether their contributions had anything to do with Citizen Outreach’s express advocacy activities.
The breadth of disclosure ordered by the Nevada court is truly unprecedented. Indeed, also in Buckley, the U.S. Supreme Court recognized that compulsory donor disclosure could only constitutionally be imposed upon organizations with the major purpose of influencing elections. Absent such major purpose, only those contributors who earmark their donations for express advocacy are subject to compulsory disclosure.
On February 11th, 2015, the Nevada Supreme Court ruled in favor of Citizen Outreach. The 5-2 ruling said that “Perhaps the 1997 Legislature intended express advocacy to include more communications than those that contain magic words, but this intent was not clear… when Citizen Outreach distributed its flyers. When it comes to the exercise of First Amendment rights, any ‘tie goes to the speaker, not the censor….’ [W]e conclude that basic principles of fundamental fairness require us to construe [the law in effect in 2009] narrowly, limiting it to only those communications that contain magic words of express advocacy.”