Federal judge temporarily blocks W.Va. PAC contribution cap

By Jessica M. Karmasek | Aug 10, 2012



BLUEFIELD - A federal judge has temporarily blocked West Virginia's $1,000-per-election cap on contributions to political action committees that act independently of candidates or parties.

In his order Thursday, Judge Thomas Johnston for the U.S. District Court for the Southern District of West Virginia granted a motion for preliminary injunction by an independent PAC and a group of potential campaign donors.

Stay the Course West Virginia, an unaffiliated independent expenditure PAC; David Bailey, chairman and treasurer of Stay the Course; Pineville Lumber Inc., a West Virginia company and potential donor; and Thomas Bailey, a state resident and potential donor, filed their suit in federal court in May.

The named defendants include Secretary of State Natalie Tennant and Scott Ash, prosecuting attorney for Mercer County. Ash is also being sued as the representative of class of 55 prosecuting attorneys in the state, who are responsible for enforcing the criminal penalties associated with the state's Election Code.

Stay the Course argues that West Virginia's election laws and policies violate their First Amendment rights.

Last month, the PAC filed a motion for a preliminary injunction.

In his 13-page ruling, Johnston wrote that it is a "cardinal tenet" of the U.S. Supreme Court's campaign finance jurisprudence that political spending is constitutionally protected speech.

"More particularly, contribution limitations encroach upon First Amendment liberties because they 'entail[ ]... restriction upon the contributor's ability to engage in free communication,'" the judge wrote.

Tennant's lawyers argued that even if they are likely to succeed on the merits, the plaintiffs are unlikely to suffer "any real harm" without a preliminary injunction.

The secretary reasoned that "West Virginia law does not block the plaintiffs' ability to show support for, or opposition to, one or more candidates in the upcoming election," and they will therefore suffer no harm from enforcing the contribution limit.

The federal court disagreed.

"To address the Secretary's response, the availability to Plaintiffs of other, less effective means of political expression does not entitle the State of West Virginia to foreclose Plaintiffs' First Amendment right to pool their resources for the purpose of making concerted independent expenditures," Johnston explained.

Also, there is a "significant" public interest in upholding the free speech principles that are "integral to our democratic society," the judge said.

"Secretary Tennant argues that the State's interest in maintaining the legitimacy of its statewide elections is also in the public interest, and it justifies the burdens placed on Plaintiffs by the challenged statute. She relies a great deal on the Caperton decision to illustrate bias in West Virginia elections," Johnston wrote.

"However, Caperton dealt with the Fourteenth Amendment and recusal rules, not the First Amendment's free speech guarantees."

He continued, "Moreover, while ensuring the integrity of elections may be in the public interest, application of the statute at issue to independent expenditure PACs such as STCWV (Stay the Course) and its contributors does not further that goal."

The plaintiffs also requested that the prosecuting attorneys be certified as a defendant class; however, the federal court said Thursday it found it "unnecessary" to rule on the motion at this time.

Injunctive relief directed to the named defendants will "adequately protect the interests of Plaintiffs at this juncture of the case," Johnston wrote.

Johnston held a hearing on the preliminary injunction motion last week.

Senior Assistant Attorney General Doren Burrell, who represented Tennant at the hearing, repeatedly pointed to the Caperton decision in his arguments.

In its 2009 decision, the U.S. Supreme Court ordered current state Supreme Court Justice Brent Benjamin to recuse himself from cases involving Massey Energy Co.

In 2004, former Massey CEO Don Blankenship spent $3 million to help elect Benjamin to the court.

The nation's high court cited Blankenship's contributions as the reason for recusal.

Burrell, citing the U.S. Supreme Court's decision, explainined that the state has tried to improve its campaign finance oversight as a result.

"The West Virginia law addresses good government, fair government," he said, according to The Associated Press.

But lawyers for the PAC countered at last week's hearing that the decision has nothing to do with First Amendment rights -- as Johnson pointed out in his order.

Instead, attorney Allen Prunty of Charleston law firm Robinson and McElwee PLLC pointed to another U.S. Supreme Court decision -- Citizens United v. Federal Election Commission.

The PAC argued that Tennant's current policy violates the Court's 2010 ruling.

In Citizens United, the Court held that corporate funding of independent political broadcasts in candidate elections cannot be limited because of the First Amendment.

The Court's 5-4 ruling in favor of Citizens United stemmed from a dispute over whether the non-profit corporation could air a film critical of current U.S. Secretary of State Hillary Clinton.

The ruling overturned a ban on spending in support of or in opposition to a candidate -- i.e. advertising -- but kept intact a law that forbids companies from donating funds directly from their treasuries to candidates.

Currently, West Virginia's Election Code prohibits a person from contributing more than $1,000 "in connection with or on behalf of any person engaged in furthering, advancing, supporting or aiding the nomination or election of any candidate for any (statewide or other public office)."

In particular, the code prohibits a PAC, like Stay the Course, from accepting contributions of more than $1,000 from any one person prior to the primary election, and of more than $1,000 from any one person after the primary and before the general election.

Meanwhile, West Virginia Code, Section 3-8-8, which was rewritten by state lawmakers in 2010, does not expressly prohibit corporation contributions to a "political committee" or "other persons" for any election expense. Its prohibition of corporate contributions is limited to contributions to "any candidate or candidate's campaign."

However, current legislative rules -- adopted in 2008, before Section 3-8-8 was rewritten in 2010 -- prohibit corporations from making "a contribution or expenditure... whatsoever in connection with" any primary or general election campaign, with the exception of certain instances. The rules further provide that no political committee or other person shall knowingly accept corporate contributions.

In addition, it is the current policy of the Secretary of State's Office that no corporate political activity is permitted, except for the establishment of a separate segregated fund, or PAC.

"The current policy of the Secretary of State prohibiting corporations from contributing to any political action committee, even if the committee is an independent expenditure committee, violates the judicial extension of Citizens United to independent expenditure political action committees," Stay the Course wrote in its May 23 filing.

According to the complaint, Pineville Lumber wishes to contribute $5,000 to Stay the Course but "believes it is prohibited from doing so by law and by the Secretary of State's current policy, and that it would be subject to criminal prosecution should it make this contribution."

Thomas Bailey, of Kanawha County, also wishes to make a contribution -- of $1,000 -- to Stay the Course, but, like Pineville Lumber, fears criminal prosecution, the complaint states.

As a result, Stay the Course argues that it -- along with Pineville Lumber, Thomas Bailey and David Bailey -- is being denied its First Amendment right to free speech.

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