Utah settles lawsuit, concedes First Amendment violation

July 14, 2016   •  By Scott Blackburn
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Alexandria, VA – In an agreement approved by a federal judge this afternoon, Utah agreed not to enforce a state campaign finance law that violated the First Amendment. The complex law required nonprofit advocacy groups to register with the state and publicly report their supporters’ private information, threatening donations to those organizations.

The agreement, known as a consent decree, was approved by U.S. District Court Judge Dale A. Kimball and settles a lawsuit filed on behalf of three Utah groups by attorneys at the Center for Competitive Politics (CCP), America’s largest nonprofit working to promote and defend First Amendment rights to freedom of political speech, assembly, and petition.

Allen Dickerson, CCP Legal Director and the lead attorney in the lawsuit said, “This complicated law chilled speech and association protected by the First Amendment. By regulating speech about any public policy issue and groups with only trivial connections to elections, Utah failed to regulate with the care the Constitution demands. We appreciate the work done by Attorney General Sean Reyes’s office to settle this litigation and provide necessary guidance to all advocacy groups in Utah.”

Connor Boyack, President of the Libertas Institute, a group that was co-plaintiff in the case, said, “We are happy with this outcome and look forward to working with the Legislature to amend the law to reflect the settlement.”

“Our judicial challenge came from the need to gain clarity for all nonprofits that engage in a limited amount of political activity in our state,” said Billy Hesterman, vice president of the Utah Taxpayers Association, another plaintiff in the case. “If the law had been left in place, an individual’s First Amendment right of free speech and association would have been in question and it would have had a chilling effect on Utah’s nonprofit and charitable organizations by requiring them to disclose their donors if they decided to engage on a political issue. We are pleased with the outcome of this settlement.”

“Utah’s law is so overbroad that our clients were concerned that participating in any public debate could destroy the privacy of their donors, many of whom believe that their donations to charitable organizations should be done in private,” Dickerson added. “This isn’t about regulating speech urging voters to support or oppose a candidate or ballot issue. It’s about the larger First Amendment right to privacy of association and belief.”

Under the terms of the settlement, the state will not enforce the law against nonprofit groups “engaging in constitutionally protected political advocacy and political issues advocacy.” The state agreed that doing so would be “unconstitutional unless those organizations are political action committees or political issues committees for which such advocacy is their major purpose.”

The state also agreed to update all published campaign finance guidance, such as its website, by the end of the year. It further recognized that the plaintiffs are entitled to attorney’s fees under federal civil rights laws, with the fees to be determined later by the court.

The settlement applies to all other groups, not just the plaintiffs in the case: the Utah Taxpayers Association, the Utah Taxpayers Legal Foundation, and the Libertas Institute. The lawsuit was filed against Lieutenant Governor Spencer Cox, Attorney General Sean Reyes, and two county attorneys in their capacities as officials tasked with enforcing the law.

The lawsuit challenged Utah House Bill 43, which passed in 2013. The lawsuit said the law suffers many of the same defects contained in the Federal Election Campaign Act, whose reach was limited by the landmark 1976 Supreme Court case Buckley v. Valeo.

Under the law in Utah, any corporation that has spent more than $750 on speech in a single year could become subject to burdensome filing requirements similar to those required for PACs, including detailed disclosure of donors giving just over $50 under a convoluted accounting scheme.

For example, if the issue of abortion had become the focus of discussion in an upcoming Governor’s race, or the subject of a future ballot initiative, groups like Utah’s Planned Parenthood or Right to Life chapters could have been forced to register with the state and disclose their donors because they disseminate information about abortion policy on their website, even if they didn’t explicitly seek to engage with the issue in the context of an election or even mention a candidate’s name.

Scott Blackburn

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