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Petition for cert granted by Supreme Court
order filed 11/18/02; opinion filed 1/25/02
is vacated
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
------------------------------------------------*
CHRISTINE BEAUMONT; LORETTA
THOMPSON; STACY THOMPSON;
BARBARA HOLT; NORTH CAROLINA
RIGHT TO LIFE, INCORPORATED, No. 01-1348
Plaintiffs-Appellees,
v.
FEDERAL ELECTION COMMISSION,
Defendant-Appellant.
------------------------------------------------*
------------------------------------------------*
CHRISTINE BEAUMONT; LORETTA
THOMPSON; STACY THOMPSON;
BARBARA HOLT; NORTH CAROLINA
RIGHT TO LIFE, INCORPORATED, No. 01-1479
Plaintiffs-Appellants,
v.
FEDERAL ELECTION COMMISSION,
Defendant-Appellee.
------------------------------------------------*
Appeals from the United States District Court
for the Eastern District of North Carolina, at Elizabeth City.
Terrence W. Boyle, Chief District Judge.
(CA-00-2)
Argued: October 31, 2001
Decided: January 25, 2002
Before WILKINSON, Chief Judge, and WIDENER and
GREGORY, Circuit Judges.
____________________________________________________________
Affirmed by published opinion. Chief Judge Wilkinson wrote the
majority opinion, in which Judge Widener concurred as to Parts I, II,
and IV, and in which Judge Gregory concurred as to Parts II.C.1,
II.C.2, and III. Judge Widener wrote an opinion concurring and dis-
senting. Judge Gregory wrote an opinion concurring in part and dis-
senting in part.
____________________________________________________________
COUNSEL
ARGUED: David Brett Kolker, FEDERAL ELECTION COMMIS-
SION, Washington, D.C., for Appellant. James Bopp, Jr., BOPP,
COLESON & BOSTROM, Terre Haute, Indiana, for Appellees. ON
BRIEF: Lois G. Lerner, Acting General Counsel, Richard B. Bader,
Associate General Counsel, FEDERAL ELECTION COMMISSION,
Washington, D.C., for Appellant. Richard E. Coleson, James R.
Mason, III, BOPP, COLESON & BOSTROM, Terre Haute, Indiana;
Paul Stam, Jr., STAM, FORDHAM & DANCHI, P.A., Apex, North
Carolina, for Appellees.
____________________________________________________________
OPINION
WILKINSON, Chief Judge:
Plaintiffs North Carolina Right to Life, a nonprofit advocacy cor-
poration, its officers, and an eligible voter in North Carolina filed a
challenge to 2 U.S.C. § 441b(a) of the Federal Election Campaign Act
and two implementing regulations. The district court held that these
provisions violated the plaintiffs' First Amendment right to make
expenditures and contributions in connection with federal elections.
However, the court declined to facially invalidate § 441b(a) and the
regulations. We conclude that these provisions burden the First
Amendment speech and association interests of nonprofit advocacy
groups. We further hold that the prohibition on independent expendi-
tures is not narrowly tailored to serve a compelling governmental
interest, and that the proscription on contributions is not closely
drawn to match a sufficiently important interest. Buckley v. Valeo,
424 U.S. 1, 24-25, 44-45 (1976); Nixon v. Shrink Missouri Govern-
2
ment PAC, 528 U.S. 377, 387-88 (2000). However, because the provi-
sions at issue are constitutional in the overwhelming majority of
applications, we decline to invalidate them facially and affirm the
judgment of the district court.
I.
Plaintiffs North Carolina Right to Life ("NCRL"), Christine Beau-
mont, Loretta Thompson, Stacy Thompson and Barbara Holt are chal-
lenging 2 U.S.C. § 441b(a) of the Federal Election Campaign Act
("FECA") and two implementing regulations, 11 C.F.R. §§ 114.2(b)
and 114.10. NCRL is a nonprofit corporation, exempt from federal
taxation under § 501(c)(4) of the Internal Revenue Code. NCRL is a
charitable organization that, inter alia, provides crisis pregnancy
counseling, publishes crisis pregnancy literature, and promotes alter-
natives to abortion. NCRL has no shareholders and none of its earn-
ings inure to the benefit of any individual. Christine Beaumont is an
eligible voter in North Carolina. Loretta Thompson is Vice President
of NCRL. Stacy Thompson is a member of NCRL's Board of Direc-
tors, and Barbara Holt is President of NCRL.
Plaintiffs filed this action against the Federal Election Commission
("FEC" or "Commission") on January 3, 2000, challenging the consti-
tutionality of FECA's prohibitions on corporate independent expendi-
tures and contributions in connection with federal elections. Plaintiffs
sought declaratory and injunctive relief, arguing that 2 U.S.C.
§ 441b(a) and two regulations promulgated thereunder violated their
First Amendment right to make independent expenditures and contri-
butions in connection with federal elections. Plaintiffs moved for
summary judgment and the FEC moved for partial dismissal and par-
tial summary judgment.
Section 441b(a) makes it "unlawful . . . for any corporation what-
ever . . . to make a contribution or expenditure in connection with any
election" for federal office. And accompanying regulation 11 C.F.R.
§ 114.2(b) prohibits all corporate contributions to federal candidates
and all expenditures made by non-qualified corporations. The exemp-
tion for qualified corporations was created in response to the Supreme
Court's decision that § 441b(a)'s prohibition on independent expendi-
tures from a corporation's general treasury was unconstitutional as
3
applied to Massachusetts Citizens for Life ("MCFL"), a small, non-
profit political advocacy corporation. FEC v. Massachusetts Citizens
for Life, Inc., 479 U.S. 238 (1986) ("MCFL"). The Court identified
three nonprofit characteristics of MCFL that were essential to its
holding that the group could not constitutionally be bound by
§ 441b(a)'s restriction on independent spending.1 The FEC rigidly
codified these three characteristics in 11 C.F.R. § 114.10. Corpora-
tions that meet the criteria in 11 C.F.R. § 114.10 are "qualified non-
profit corporation[s]" not subject to the prohibition on independent
expenditures of § 441b(a) and 11 C.F.R. § 114.2(b). NCRL did not
qualify for the 11 C.F.R. § 114.10 exemption and challenged the reg-
ulation for that reason.
The district court, on October 3, 2000, recognized that "the impor-
tance of campaign contributions and expenditures as political speech
is beyond question," and held that NCRL had established a First
Amendment right to make independent expenditures and limited con-
tributions. Beaumont v. FEC, 137 F. Supp. 2d 648, 651, 658
(E.D.N.C. 2000). The court then determined that there were two pos-
sible remedies: (1) declare the provisions of FECA unconstitutional
as applied to NCRL, or (2) declare the provisions of FECA facially
unconstitutional. Id. at 658. Instead of determining a remedy on Octo-
ber 3, the court required the parties to address the scope of declaratory
relief and stayed the effect of the October 3 ruling until it issued a
final order. Id. at 658.
On January 21, 2001, the district court held that 2 U.S.C. § 441b(a)
and 11 C.F.R. §§ 114.2(b) and 114.10 were unconstitutional as
applied to NCRL, and permanently enjoined the FEC from enforcing
violations of those sections against NCRL. The district court declined
to hold the provisions of FECA facially unconstitutional because
NCRL failed to demonstrate that "the constitutional infringements
caused by 2 U.S.C. § 441[b(a)] and the related regulations are `sub-
stantial' in relation to their `plainly legitimate sweep.'" The FEC
____________________________________________________________
1 First, MCFL was created to promote political ideas, and could not
engage in business activities. Second, it had no shareholders or other per-
sons with a claim on its assets or earnings. And third, it was not estab-
lished by a business corporation or labor union, and had a policy of
refusing contributions from such entities. MCFL, 479 U.S. at 263-64.
4
appeals and the plaintiffs cross-appeal the district court's decision not
to hold 2 U.S.C. § 441b(a) facially unconstitutional.
II.
A.
We review de novo the district court's grant of the plaintiffs'
motion for summary judgment. See Smith v. Va. Commonwealth
Univ., 84 F.3d 672, 675 (4th Cir. 1996) (en banc). In so reviewing the
judgment, we must determine whether the prohibitions of § 441b(a)
and 11 C.F.R. §§ 114.2(b) and 114.10 burden the exercise of political
speech. If they do, we must first decide whether the proscription on
independent expenditures is narrowly tailored to serve a compelling
governmental interest. Buckley, 424 U.S. at 44-45; see also MCFL,
479 U.S. at 251-52. We must next consider whether the prohibition
on contributions is closely drawn to match a sufficiently important
interest. Shrink Missouri, 528 U.S. at 387-88; Buckley, 424 U.S. at
24-25.
B.
1.
Any discussion of the First Amendment interests at issue in this
case must begin with the Supreme Court's decision in MCFL. The
Court took pains there to emphasize the special role that nonprofit
advocacy organizations play in the political process. The Court identi-
fied several characteristics of these groups that make them special
purveyors of political speech. Far from having as their organizing
purpose the aggregation of capital or the issuance of equity shares,
their central energizing principle is unabashedly political and expres-
sive. These groups, whether incorporated or not, are "formed to dis-
seminate political ideas, not to amass capital." MCFL, 479 U.S. at 259.2
____________________________________________________________
2 What the Court said of the nonprofit corporation at issue in MCFL
applies with equal force to NCRL. Applying MCFL in North Carolina
Right to Life, Inc. v. Bartlett, 168 F.3d 705 (4th Cir. 1999) ("NCRL I"),
we found that the small amount of corporate contributions NCRL
5
As a consequence, nonprofit advocacy organizations play a distinc-
tive role in the political scheme. Like the other participants in our
political conversation, they inform and generate"[d]iscussion of pub-
lic issues and debate on the qualifications of candidates," which are
"integral to the operation of the system of government established by
our Constitution." Buckley, 424 U.S. at 14. See also North Carolina
Right to Life, Inc. v. Bartlett, 168 F.3d 705, 713 (4th Cir. 1999), cert.
denied, 528 U.S. 1153 (2000) (referring to the field of campaign poli-
tics as "an area of . . . crucial import to our representative democ-
racy") ("NCRL I"). We live in a republic, where the people are
sovereign. See The Federalist No. 39, at 190 (James Madison) (Garry
Wills ed., 1982). As a consequence, "the ability of the citizenry to
make informed choices among candidates for office is essential, for
the identities of those who are elected will inevitably shape the course
that we follow as a nation." Buckley, 424 U.S. at 14-15. Through their
expressive activities, groups such as MCFL and NCRL help empower
citizens to make informed political choices. That is precisely why the
Court has concluded that it is this kind of speech and these types of
organizations that lend vitality to our political discourse.
That the functioning of these groups is vital to our democratic
political process is abundantly clear from looking at the types of
activities in which they engage. The Court in MCFL emphasized that
MCFL had accepted voluntary donations from members; engaged in
fundraising activities such as garage sales, bake sales, dances, raffles,
and picnics; organized a public prayer service; sponsored a regional
conference; provided speakers for discussion groups, debates, lec-
tures, and media programs; sponsored an annual march; drafted and
submitted legislation; sponsored testimony on proposed legislation;
urged its members to contact their elected representatives to express
their views on legislative proposals; and published a newsletter. 479
U.S. at 242. Similarly, NCRL engages in these same kinds of endeav-
ors. The group is funded overwhelmingly by private contributions
____________________________________________________________
received did not result in its "serving as a conduit `for the type of direct
spending [by for-profit corporations] that creates a threat to the political
marketplace.' MCFL, 479 U.S. at 264." NCRL I, 168 F.3d at 714. We
therefore held that "NCRL falls squarely within the MCFL exception."
Id.
6
from individuals, and has organized such traditional fundraising activ-
ities as bake sales, walk-a-thons, and raffles. In addition, NCRL pub-
lishes a newsletter, candidate surveys, and voter guides. It also holds
conventions, provides counseling and referrals, and publicizes and
promotes numerous service groups.
Taking stock of such activities reinforces the point that these orga-
nizations lie at the expressive heart of our political life. These endeav-
ors are what attract contributions and adherents. It is through projects
such as these that groups become important symbols in political life
and valuable participants in the daily ebb and flow of political dis-
course.
2.
All of the above activities embody participatory democracy. It fol-
lows ineluctably that restrictions on the expenditures and contribu-
tions of such organizations in federal election campaigns "operate in
an area of the most fundamental First Amendment activities." Buck-
ley, 424 U.S. at 14. The First Amendment "protect[s] our cherished
right to political speech." FEC v. Christian Action Network, Inc., 110
F.3d 1049, 1051 (4th Cir. 1997). The First Amendment also protects
political association, and the regulation of contributions and expendi-
tures implicates both of these interests. Buckley, 424 U.S. at 14-23.
It would be foolhardy to pretend that a ban on the ability of advocacy
groups to make contributions and expenditures does not impair their
capacity to participate in the political process. Making expenditures
and funding campaigns are essential means by which citizens in a
democracy can make themselves heard.
It is revealing that, even where the Court's decisions have not
addressed campaign contributions and expenditures, they have under-
scored the First Amendment values that may be served by them.
Without the ability to expend funds, it is almost impossible for politi-
cal expression in our modern society "to assure unfettered interchange
of ideas for the bringing about of political and social changes desired
by the people." Roth v. United States, 354 U.S. 476, 484 (1957). See
also Mills v. Alabama, 384 U.S. 214, 218 (1966) (noting the "practi-
cally universal agreement that a major purpose of [the First] Amend-
ment was to protect the free discussion of governmental affairs,"
7
including "discussions of candidates"); New York Times Co. v. Sulli-
van, 376 U.S. 254, 270 (1964) (noting our "profound national com-
mitment to the principle that debate on public issues should be
uninhibited, robust, and wide-open"). Similarly, without the expendi-
ture of funds, "[e]ffective advocacy of both public and private points
of view, particularly controversial ones," will not be significantly "en-
hanced by group association." NAACP v. Alabama, 357 U.S. 449, 460
(1958). See also Kusper v. Pontikes, 414 U.S. 51, 56-57 (1973) (stat-
ing that "[t]here can no longer be any doubt that freedom to associate
with others for the common advancement of political beliefs and ideas
is . . . protected by the First and Fourteenth Amendments," and that
"[t]he right to associate with the political party of one's choice is an
integral part of this basic constitutional freedom"). This language
from non-funding decisions does not suddenly become inoperative
when contributions and independent expenditures are at issue.
It is true that there exists a differentiation in the weight the First
Amendment accords to contributions and expenditures, and that an
interest of the highest First Amendment order attaches to independent
expenditures. The Court in Buckley concluded that "although
[FECA's] contribution and expenditure limitations both implicate
fundamental First Amendment interests, its expenditure ceilings
impose significantly more severe restrictions on protected freedoms
of political expression and association than do its limitations on finan-
cial contributions." 424 U.S. at 23. See also FEC v. Colorado Repub-
lican Fed. Campaign Comm., 121 S.Ct. 2351, 2356 (2001)
("Colorado II"); Shrink Missouri, 528 U.S. at 386-88; Colorado
Republican Fed. Campaign Comm. v. FEC, 518 U.S. 604, 610, 614-
15 (1996) ("Colorado I"); MCFL, 479 U.S. at 259-60. At the same
time, however, the Court has been careful in all of these cases not to
expel financial contributions from the circle of First Amendment val-
ues. This is so for good reason. Individuals and groups that stand for
ideas have a First Amendment interest in pursuing various outlets for
those ideas. Independent expenditures are one such channel, and con-
tributions are another.
Making a contribution to a candidate not only "serves as a general
expression of support for the candidate and his views," but also
"serves to affiliate a person with a candidate." Buckley, 424 U.S. at
21-22. In addition, making a contribution to a candidate "enables like-
8
minded persons to pool their resources in furtherance of common
political goals." Id. Indeed, while citizens certainly can and do partici-
pate as individuals in the process of determining political change,
they often do not possess the time, information, and resources to
effectively influence public debate. Contributions to an advocacy
group from an individual permit the individual to take advantage of
the group's closer attention to political developments. And contribu-
tions from the advocacy group to a candidate in turn put the individu-
al's donation to a more efficient and informed political effect. As the
Court noted in MCFL:
[I]ndividuals contribute to a political organization in part
because they regard such a contribution as a more effective
means of advocacy than spending the money under their
own personal direction. Any contribution therefore neces-
sarily involves at least some degree of delegation of author-
ity to use such funds in a manner that best serves the shared
political purposes of the organization and contributor.
479 U.S. at 261. By making a contribution to an advocacy group, the
individual citizen authorizes and empowers the organization receiving
the money to serve as his or her proxy in political debate.
In sum, nonprofit advocacy organizations such as NCRL have a
strong First Amendment interest in expressing their ideas and associ-
ating with others who share the same views. These entities signifi-
cantly enhance the effectiveness of political expression by facilitating
political association. And these groups advance both the values of
political speech and association not only by making independent
expenditures, but also by making contributions to candidates who
share their beliefs.
3.
With these general principles in mind, it is clear that the statutory
and regulatory provisions at issue in this case burden the plaintiffs'
First Amendment speech and association interests. Taken together, 2
U.S.C. § 441b(a), 11 C.F.R. § 114.2(b), and 11 C.F.R. § 114.10 ban
corporate contributions and expenditures in connection with federal
elections, with an exception to the prohibition on corporate expendi-
9
tures for certain "qualified" nonprofit corporations so narrow that
NCRL does not fit into it. In view of the Court's conclusion in Buck-
ley that FECA's "contribution and expenditure limitations both impli-
cate fundamental First Amendment interests," 424 U.S. at 23
(emphasis added), there is no question that a complete ban on
NCRL's making contributions and expenditures burdens those very
same interests.3
The FEC responds that, contrary to the district court's characteriza-
tion, FECA and its implementing regulations do not impose a blanket
prohibition. Rather, the Commission submits that the Act takes a dif-
ferent approach. It allows all corporations to make campaign contri-
butions through a separate segregated fund, and corporations that do
not fall within 11 C.F.R. § 114.10's exception to make independent
expenditures through such a fund. See §§ 441b(a) and (b)(2)(C).
Given the availability of this alternative avenue through which to
make contributions and expenditures, the FEC maintains that it is fac-
tually incorrect to contend that an absolute ban is at issue in this case.
____________________________________________________________
3 The FEC argues that NCRL lacks standing to challenge 11 C.F.R.
§ 114.10, relying on our holding in NCRL I that "NCRL falls squarely
within the MCFL exception." 168 F.3d at 714. The Commission correctly
observes that NCRL I entitles NCRL to make independent expenditures
in connection with federal elections regardless of the FEC's regulation
or intentions. See supra note 2. Thus, the Commission submits that the
mere existence of a regulation that it cannot enforce against NCRL can-
not cause NCRL any injury.
We are not persuaded. The FEC has made inconsistent statements
throughout this litigation, and its present position is not sufficient to dis-
pel the "credible threat of prosecution" under which NCRL operates.
Babbitt v. United Farm Workers Nat'l Union, 442 U.S. 289, 298 (1979);
Va. Soc'y for Human Life, Inc. v. FEC, 263 F.3d 379, 386 (4th Cir.
2001). Though the Commission agrees that it is bound by NCRL I, it has
not foresworn its ultimate intention to prohibit NCRL even from making
independent expenditures. On the contrary, the FEC argued below that
if in the future NCRL were to receive a more substantial portion of its
funding from for-profit corporations, it would not qualify for the MCFL
exception even under the holding in NCRL I. Because we cannot con-
clude that NCRL does not presently operate under the potential threat of
an enforcement action, we agree with the district court that NCRL has
standing to challenge 11 C.F.R. § 114.10.
10
However, the FEC's view has already been rejected by the
Supreme Court in MCFL. While restricting MCFL's campaign spend-
ing to use of a separate segregated fund "is not an absolute restriction
on speech, it is a substantial one. Moreover, even to speak through a
segregated fund, MCFL must make very significant efforts." MCFL,
479 U.S. at 252 (plurality opinion).4 A segregated fund is a "political
committee" under the Act. 2 U.S.C. § 431(4)(B). As a consequence,
organizations that use a segregated fund must adhere to significant
reporting requirements, staffing obligations, and other administrative
burdens. These burdens stretch far beyond the more straightforward
disclosure requirements on unincorporated associations. See MCFL,
479 U.S. at 252-53. As noted in MCFL, 479 U.S. at 253-54, these
additional burdens include:
* appointing a treasurer, § 432(a);
* forwarding contributions to the treasurer within 10 or 30
days of receiving them, depending on the amount,
§ 432(b)(2);
* ensuring that the treasurer keeps an account of (1) every
contribution regardless of amount; (2) the name and
address of anyone who makes a contribution in excess of
$50; (3) all contributions received from political commit-
tees; and (4) the name and address of every person to
whom a disbursement is made regardless of amount,
§ 432(c);
* preserving receipts for all disbursements over $200 and
all records for three years, §§ 432(c) and (d);
____________________________________________________________
4 In her concurring opinion, Justice O'Connor pointedly emphasized
that "the significant burden on MCFL in this case comes . . . from the
additional organizational restraints imposed upon it by the Act," as well
as from the Act's "solicitation restrictions." 479 U.S. at 266 (O'Connor,
J., concurring in part and concurring in the judgment). Therefore, a
majority of the Court in MCFL rejected the argument that the FEC is
presently urging upon us.
11
* filing a statement of organization containing (1) its name
and address; (2) the name of its custodian of records; and
(3) its banks, safety deposit boxes, or other depositories,
§§ 433(a) and (b);
* reporting any change in the above information within 10
days, § 433(c);
* terminating only upon filing a written statement that it
will no longer receive any contributions or make any dis-
bursements, and that it has no outstanding debts or obli-
gations, § 433(d)(1);
* filing either (1) monthly reports with the FEC; or (2)
quarterly reports during election years, a pre-election
report no later than the 12th day before an election, a
post-election report within 30 days after an election, and
reports every 6 months during nonelection years,
§§ 434(a)(4)(A) and (B);
* including in such reports information regarding (1) the
amount of cash on hand; (2) the total amount of receipts
in multiple categories; (3) the identification of each polit-
ical committee and candidate's authorized or affiliated
committee making contributions, and any persons mak-
ing loans, providing rebates, refunds, dividends, interest,
or any other offset to operating expenditures in an aggre-
gate amount above $200; (4) the total amount of all dis-
bursements in numerous categories; (5) the names of all
authorized or affiliated committees to which transfers
have been made; (6) persons to whom loan repayments
or refunds have been made; and (7) the total sum of all
contributions, operating expenses, outstanding debts and
obligations, and the settlement terms of the retirement of
any debt or obligation, § 434(b); and
* soliciting contributions for its separate segregated fund
only from its "members," §§ 441b(b)(4)(A) and (C),
which, under FEC v. National Right to Work Committee,
459 U.S. 197, 203-206 (1982) ("NRWC"), does not
12
include persons who have merely contributed to or
expressed support for the group in the past.
Many small groups may be unable to bear the substantial costs of
complying with these regulations. These "more extensive require-
ments and more stringent restrictions . . . may create a disincentive
for such organizations to engage in political speech." MCFL, 479 U.S.
at 254. This is because:
Faced with the need to assume a more sophisticated organi-
zational form, to adopt specific accounting procedures, to
file periodic detailed reports, and to monitor garage sales
lest nonmembers take a fancy to the merchandise on display,
it would not be surprising if at least some groups decided
that the contemplated political activity was simply not worth
it.
Id. at 255. And Justice O'Connor emphasized in her concurring opin-
ion that "the additional organizational restraints" imposed on "groups
such as MCFL" by the Act amount to a "significant burden" on their
First Amendment interests. 479 U.S. at 266 (O'Connor, J., concurring
in part and concurring in the judgment).
Thus, what was true of MCFL is equally true of NCRL:
[W]hile § 441b does not remove all opportunities for inde-
pendent spending by organizations such as MCFL, the ave-
nue it leaves open is more burdensome than the one it
forecloses. The fact that the statute's practical effect may be
to discourage protected speech is sufficient to characterize
§ 441b as an infringement on First Amendment activities.
MCFL, 479 U.S. at 255. The "practical effect" of § 441b(a) on NCRL
"is to make engaging in protected speech a severely demanding task."
MCFL, 479 U.S. at 256. Accordingly, we have little difficulty con-
cluding that the prohibitions of § 441b(a) and 11 C.F.R. §§ 114.2(b)
and 114.10 burden the exercise of political speech and association.
13
C.
1.
Having determined that 2 U.S.C. § 441b(a) and the associated regu-
lations burden a significant First Amendment interest in the exercise
of political speech and association, we must first determine whether
the prohibition on expenditures is narrowly tailored to serve a com-
pelling governmental interest. Buckley, 424 U.S. at 44-45. Then we
must determine whether the proscription on contributions is closely
drawn to match a sufficiently important governmental interest. Shrink
Missouri, 528 U.S. at 387-88. "The Supreme Court has regularly rec-
ognized that the prevention of real and perceived corruption in the
electoral process qualifies as a compelling state interest." Adventure
Communications, Inc. v. Ky. Registry of Election Fin., 191 F.3d 429,
442 (4th Cir. 1999); see also FEC v. Nat'l Conservative Political
Action Comm., 470 U.S. 480, 496-97 (1985) (" NCPAC"); Shrink Mis-
souri, 528 U.S. at 388-89. The danger of corruption or the appearance
of corruption is especially keen in the context of corporate contribu-
tions and expenditures because of the unique legal and economic
characteristics of the corporate form. Corporations benefit from state
laws that grant them special advantages such as limited liability,
favorable treatment for asset accumulation, and perpetual life. These
state-created advantages allow corporations to attract capital and
deploy resources in order to maximize shareholder wealth in ways
that other business forms cannot. Corporations could use that wealth
to influence federal elections. See, e.g., Austin v. Michigan State
Chamber of Commerce, 494 U.S. 652, 658-59 (1990). Consequently,
the Court has identified certain types of corruption that may warrant
legislative regulation of a corporation's ability to make expenditures
or contributions in connection with federal elections.
The first and most obvious type of corruption identified by the
Court is quid pro quo corruption, where an officeholder takes money
with the explicit understanding that he will perform certain duties for
the donor in return. See generally Thomas Burke, The Concept of
Corruption in Campaign Finance Law, 14 Const. Comment. 127,
131-33 (1997). As the Court noted in Buckley, "To the extent that
large contributions are given to secure a political quid pro quo from
current and potential office holders, the integrity of our system of rep-
14
resentative democracy is undermined." 424 U.S. at 26. Simply put,
"[t]he hallmark of corruption is the financial quid pro quo: dollars for
political favors." NCPAC, 470 U.S. at 497.
Quid pro quo corruption is related to a second form of corruption,
monetary influence. Corruption through monetary influence is a more
subtle and hence more pervasive form of corruption than the quid pro
quo, one in which officeholders consider monetary influences when
performing their public duties. Monetary influence need not involve
an explicit deal between a donor and an officeholder. Burke, supra,
at 131-33. The corrupting effect of monetary influences has been clar-
ified in the case law as the concern over the power of corporations to
utilize the special advantages of the corporate form to create political
"war chests" which could be used to incur political debts. NRWC, 459
U.S. at 207-08. The concern here has to do with permitting corpora-
tions to use "resources amassed in the economic marketplace" to
obtain "an unfair advantage in the political marketplace." MCFL, 479
U.S. at 257. Accordingly, the Court has recognized as compelling the
governmental interest in preventing corruption, which supports
restricting the influence of political "war chests" funneled through the
corporate form. NRWC, 459 U.S. at 207-08; see also MCFL, 479 U.S.
at 257.
Third, the possibility of distortion of political support for corporate
causes has been recognized as a form of corruption significant enough
to warrant government regulation. Burke, supra, at 133-135. Distor-
tion involves the concern that "[t]he resources in the treasury of a
business corporation . . . are not an indication of popular support for
the corporation's political ideas." MCFL, 479 U.S. at 258. Instead,
these resources may reflect only "the economically motivated deci-
sions of investors and customers." Id. The fear here is that sharehold-
ers or members of certain corporations will have an "economic
disincentive for disassociating with [the corporation] if they disagree
with its political activity." Id. at 264; see also Austin, 494 U.S. at 663.
Accordingly, the potential for distortion is also a compelling govern-
mental interest for limiting political expression. MCFL, 479 U.S. at
263-64; Austin, 494 U.S. at 663.
2.
Nevertheless, the Supreme Court has also made it clear that the
"[r]egulation of corporate political activity. . . has reflected concern
15
not about use of the corporate form per se, but about the potential for
unfair deployment of wealth for political purposes." MCFL, 479 U.S.
at 259. This potential presents a real danger when for-profit corpora-
tions are involved. However, such a danger is not present when the
corporation at issue is a nonprofit advocacy corporation.
To begin with, when independent expenditures are considered, the
potential for corruption, whether it be quid pro quo, monetary influ-
ence, or distortion, is "substantially diminished." Buckley, 424 U.S. at
47. Hence, the Supreme Court has crafted an exception to the expen-
diture prohibition contained in 2 U.S.C. § 441b(a) for nonprofit advo-
cacy corporations. This is the so-called MCFL exception. This court
has already held that NCRL is entitled to the MCFL exception. NCRL
I, 168 F.3d at 714.
In NCRL I, we determined that "the list of nonprofit corporate char-
acteristics in MCFL was not `a constitutional test for when a nonprofit
must be exempt,' but `an application, in three parts, of First Amend-
ment jurisprudence to the facts in MCFL.'" 168 F.3d at 714 (quoting
Day v. Holahan, 34 F.3d 1356, 1363 (8th Cir. 1994)). After examin-
ing the factors identified in MCFL, we were persuaded that NCRL
was entitled to the MCFL exception. Id. When applying MCFL, we
noted that "NCRL displays all the typical characteristics of the non-
profit form - it does not engage in profit-making activity, it has no
shareholders or other persons who might have [a claim] on its assets
and earnings, and it is exempt from federal income taxation." Id.
Unlike MCFL, NCRL did not have a policy against accepting corpo-
rate donations. However, NCRL was funded overwhelmingly by pri-
vate, individual donations. While NCRL had accepted some corporate
donations in the past, these donations made up only between zero and
eight percent of NCRL's total revenues. Id. We concluded that "this
modest percentage of revenue" did not disqualify NCRL for the
MCFL exemption. Id. In addition, many of those corporate contribu-
tions were not of the traditional form because they were "part of a
program by which phone company customers may direct their phone
bill refunds to a nonprofit of their choice." Id. Therefore, we held that
"NCRL falls squarely within the MCFL exception." Id.
Because NCRL has not changed in any relevant way since our
decision in NCRL I, NCRL does not "serv [e] as [a] conduit[ ] for the
16
type of direct spending that creates a threat to the political market-
place." MCFL, 479 U.S. at 264. This constitutionally entitles NCRL
to an exemption from the provisions banning independent expendi-
tures in § 441b(a) and 11 C.F.R. § 114.2(b). And because the excep-
tion in 11 C.F.R. § 114.10 constitutes merely a rigid codification of
the factors in MCFL, it is also unconstitutional as applied to NCRL.
3.
While the FEC recognizes that our decision in NCRL I controls the
outcome of this case insofar as independent expenditures are con-
cerned, it contends that we must consider contributions separately and
hold the contribution portion of the statute and regulations constitu-
tional as applied to NCRL. The Supreme Court has not addressed
whether the risk of corruption from direct contributions is present
when the contributors are nonprofit advocacy corporations who nei-
ther have shareholders nor investing members, and accept the over-
whelming share of their donations from private individuals. We do
not believe that it is.
Viewing every direct campaign contribution from a nonprofit advo-
cacy corporation to be corrupting would be devastating to the proper
functioning of the political process. The argument that only an abso-
lute ban on nonprofit contributions can serve the important public
interest in preventing corruption simply proves too much. If this were
true, contributions would also have to be banned in every situation
where contributing individuals or unincorporated associations bore a
strong commitment to an issue or candidate. Instead, limits, not total
bans, have been adopted for individuals and unincorporated advocacy
groups.
NCRL is more akin to an individual or an unincorporated advocacy
group than a for-profit corporation. Neither individuals nor unincor-
porated advocacy groups pose so great a risk of quid pro quo or mon-
etary influence corruption that a ban on contributions is required.
Similarly, nonprofit advocacy corporations do not avail themselves of
the state-conferred advantages associated with the corporate form,
which is the rationale for regulating corporate activity in the first
place. See, e.g., Austin, 494 U.S. at 658-59. Advocacy groups rely on
donations to fund a variety of projects, none of which involve making
17
a profit in the capital markets. It is simply implausible to argue that
a small nonprofit accepting individual contributions from like-minded
donors poses the same risk to our political order as a Fortune 500
company.
However, the FEC argues that by virtue of taking the corporate
form, NCRL now poses those risks. But MCFL requires a different
conclusion. The Court emphasized that taking the corporate form does
not, by itself, transform an otherwise benign group into one that poses
an inherent risk of corruption. As noted earlier, NCRL, like MCFL,
"was formed to disseminate political ideas, not to amass capital."
MCFL, 479 U.S. at 259. Thus, NCRL does not utilize the advantages
states confer on corporations that enable them to amass capital. The
advantages NCRL derives from taking on the corporate form are
those "that redound to its benefit as a political organization, not as a
profit-making enterprise." Id.
NCRL also poses no threat of distortion of political support
because the very reason people join and contribute to NCRL is that
their views are aligned with those of the organization. NCRL's mem-
bers have no underlying economic incentive to join the group, making
NCRL distinctly different from for-profit corporations and many non-
profits as well. See, e.g., Austin, 494 U.S. 652. There is simply no
danger that a nonprofit advocacy group's cause will bear no relation
to the beliefs of its contributors and members because the group's rai-
son d'etre is to amplify and publicize those beliefs. Nor is there the
danger that an individual donor would feel alienated because his
views are diametrically opposed to those of the organization. In fact,
as the Court recognized in MCFL, individuals contribute to political
organizations "precisely because they support those purposes," and
because they believe that contribution is a "more effective means of
advocacy" than spending the money on their own. 479 U.S. at 260-61.
Thus, allowing NCRL to make limited contributions creates no credi-
ble threat of distortion to the political process.
To be sure, it would be administratively more convenient if all
direct contributions to candidates were prohibited. After all, a bright-
line rule would be easier to administer and would tend to avoid litiga-
tion. It could likewise be said, of course, that convenience would be
served if all corporate independent expenditures were prohibited. But
18
the Court in MCFL flatly refused to credit administrative convenience
as an adequate basis for such a blanket rule, stating that "the desire
for a bright-line rule . . . hardly constitutes the compelling state inter-
est necessary to justify any infringement on First Amendment free-
dom." 479 U.S. at 263. Although administrative convenience
constitutes a legitimate state interest where rational basis scrutiny of
regulatory enactments is involved, such convenience is insufficient to
justify state action that triggers any level of heightened scrutiny. See,
e.g., Craig v. Boren, 429 U.S. 190, 198 (1976) (citing decisions that
"rejected administrative ease and convenience as sufficiently impor-
tant objectives to justify gender-based classifications"). And while the
Court has differentiated the level of scrutiny applied to expenditure
restrictions and contribution restrictions, see Shrink Missouri, 528
U.S. at 386-88, we do not understand it to have relegated the latter
to a mere matter of rational basis review. The Court has recently
stated that "a contribution limit involving `significant interference'
with associational rights . . . [can] survive if the Government demon-
strate[s] that contribution regulation [is] `closely drawn' to match a
`sufficiently important interest.'" Shrink Missouri, 528 U.S. at 387-88
(quoting Buckley, 424 U.S. at 25). This formulation requires some-
thing more exacting than rational basis review. As a result, a rationale
of administrative convenience cannot successfully be advanced to
sustain § 441b(a) and the FEC's sweeping regulatory ban at issue in
this case.
Organizations that in substance pose no risk of "unfair deployment
of wealth for political purposes" may not be banned from participat-
ing in political activity simply because they have taken on the corpo-
rate form. MCFL, 479 U.S. at 259. The rationale utilized by the Court
in MCFL to declare prohibitions on independent expenditures uncon-
stitutional as applied to MCFL-type corporations is equally applicable
in the context of direct contributions. In neither case is there the threat
of quid pro quo, monetary influence, or distortion corruption that the
prohibitions seek to prevent. We cannot sustain a measure that drains
lifeforce from democracy when that measure does not reflect the pub-
lic interest that would warrant such a drastic step. A corporation that
qualifies for an MCFL exception poses no special threat to the politi-
cal process. See MCFL, 479 U.S. at 263 ("It is not the case . . . that
MCFL merely poses less of a threat of the danger that has prompted
regulation. Rather, it does not pose such a threat at all."). As a conse-
19
quence, neither NCRL's expenditures nor its contributions may be
prohibited under the First Amendment.
4.
In making this determination, we seek only to respect the Supreme
Court's basic pronouncement in MCFL on the role that nonprofit
advocacy groups play in our political life. We do not think that other
decisions undermine the Supreme Court's commitment to the expres-
sive and associational values that these organizations promote. In
Austin, the Supreme Court held that a state statute banning direct con-
tributions could be applied to the Michigan State Chamber of Com-
merce, a nonprofit corporation. 494 U.S. at 654-55. Although Austin
did uphold a state ban on contributions as applied to the Chamber, the
Court noted that the Chamber was established for many varied pur-
poses and was not inherently a political advocacy group like MCFL.
Id. at 661-65. In fact, the Chamber's educational goals were "not
expressly tied to political goals," and many of the Chamber's mem-
bers, much like shareholders in a for-profit corporation, might be
reluctant to withdraw their membership if they did not agree with the
Chamber's political expression. Id. at 662-63. The Austin Court also
noted that the Chamber had for-profit members and did not exhibit
the characteristics identified in MCFL that would require the state to
grant an exemption. In contrast, we have earlier held that NCRL
exhibits the precise characteristics identified in MCFL and is entitled
to the MCFL exception. NCRL I, 168 F.3d at 714.
Similarly, we are not persuaded that the Court's decision in NRWC
requires the sweeping holding that an absolute ban on nonprofit con-
tributions is constitutional. In NRWC, the Court had to determine
whether National Right to Work Committee ("NRWC"), a nonprofit
corporation, had violated 2 U.S.C. § 441b(b)(4)(C) by using its gen-
eral funds to solicit contributions for its separate segregated political
fund from persons who were not its "members." 459 U.S. at 198-99.
The issues in NRWC were whether NRWC's mailing had been sent
to persons who did not fall within the statutory definition of "mem-
ber," and, if so, whether the restriction on soliciting only "members"
was constitutional. Id. at 198, 200-01, 206-11. The NRWC Court did
not decide the constitutionality of the corporate ban provision as
20
applied to MCFL-type corporations. However, that is precisely the
question that confronts us today.
The District of Columbia Circuit took the approach that we now
adopt in determining whether the FEC could successfully bring a civil
enforcement action against the National Rifle Association ("NRA")
for allegedly impermissible contributions and expenditures made dur-
ing different years. FEC v. National Rifle Ass'n., 254 F.3d 173 (D.C.
Cir. 2001). That court expressed the view that corporate ban provi-
sions are valid only insofar as they prevent certain threats to the polit-
ical process. Id. at 191-92. It held that corporations which do not pose
such threats may not be subject to § 441b(a)'s restrictions regardless
of whether the restriction is on expenditures or contributions. The
D.C. Circuit noted, "As we read MCFL and Austin, the [FEC] must
demonstrate that the NRA's political activities threaten to distort the
electoral process through the use of resources that, as MCFL put it,
reflect the organization's `success in the economic marketplace'
rather than the `power of its ideas.'" Id. at 191 (quoting MCFL, 479
U.S. at 258-59). Since the FEC could not meet this burden with
respect to one of the years at issue, § 441b(a) could not constitution-
ally be applied to the NRA's contributions and expenditures during
that year. Id. at 192-93.
5.
Finally, the FEC has failed to meet its other burden in this case. In
addition to showing that a sufficiently important governmental inter-
est justifies the prohibition on contributions in the statute and regula-
tions, the FEC was required to prove that the provisions are closely
drawn to match it. Shrink Missouri, 528 U.S. at 387-88. In Buckley,
the Court held that a $1,000 limit on contributions to candidates for
federal elective office by an individual or a group was constitutional
because "the Act's contribution limitations in themselves do not
undermine to any material degree the potential for robust and effec-
tive discussion of candidates and campaign issues." 424 U.S. at 28-
29. Yet, when a limit becomes a ban, the burden of demonstrating that
the regulation is closely drawn becomes that much more difficult.
This is especially the case when that ban, combined with the costs and
burdens associated with forming a separate segregated fund, could
21
effectively cripple small, nonprofit advocacy groups that may have
few or no ties to the world inhabited by for-profit corporations.
As noted earlier, it is possible to respect the congressional interest
in minimizing corruption and to simultaneously doubt that an all-out
ban on contributions by nonprofit advocacy corporations is necessary
to prevent this potential abuse. The government has not met its burden
of showing that § 441b(a) is closely drawn as applied to nonprofit
advocacy corporations when other means, such as contribution limits,
are fully available to address the important public interest in honest
elections.
It is, of course, the task of Congress, not the courts, to set limits
on campaign contributions. Such contribution limits for individuals,
corporations, and political committees have withstood numerous con-
stitutional challenges. See Buckley, 424 U.S. 1; California Med. Ass'n
v. FEC, 453 U.S. 182 (1981) (allowing limits on contributions to
political committees). Such contribution limits reduce the risk that
either individuals or for-profit corporations can circumvent FECA and
§ 441b(a) by establishing and utilizing nonprofit advocacy groups to
funnel money that could not otherwise be placed into the pockets of
political candidates. The utilization of an absolute ban on advocacy
group contributions becomes especially suspect when more closely
drawn and widely utilized means, such as contribution limits, exist to
address the asserted problem.
In sum, the issue is whether political associations that are incorpo-
rated, but present no risk whatever to the political process, see MCFL,
479 U.S. at 263, may be altogether prohibited from making contribu-
tions or expenditures out of their general treasuries simply by virtue
of their corporate status. The district court correctly found "the dis-
tinction between contributions and expenditures to be immaterial in
this case." Beaumont v. FEC, 137 F. Supp. 2d 648, 657 (E.D.N.C.
2000). The issue is whether the FEC has demonstrated a sufficient
interest "in prohibiting even limited contributions by all corporations,
even those that `do[ ] not pose such a threat.'" Id. (quoting MCFL,
479 U.S. at 263). Because we find that the FEC has not met this bur-
den, we hold that the absolute ban on contributions and expenditures
in § 441b(a) and its implementing regulations cannot constitutionally
be applied to NCRL. If we held otherwise, we believe we would be
22
effectively eviscerating the political role of nonprofit advocacy
groups highlighted by the Supreme Court in MCFL .
III.
The plaintiffs ask us to go beyond the district court's decision that
§ 441b(a) and its implementing regulations are unconstitutional as
applied to NCRL, and hold these provisions facially unconstitutional.
This step would fly in the face of Supreme Court precedent, and we
decline to take it.
A ruling of facial invalidity based on overbreadth "is, manifestly,
strong medicine. It has been employed by the Court sparingly and
only as a last resort." Broadrick v. Oklahoma, 413 U.S. 601, 613
(1973). See also Bd. of Trs. of the State Univ. of N.Y. v. Fox, 492 U.S.
469, 484-85 (1989); Colorado I, 518 U.S. at 623-24. Thus, rulings of
facial invalidity are distinctly disfavored as a brusque intrusion on the
legislative branch and a real breach of the separation of powers. A
court properly holds a statute facially invalid only where "the over-
breadth [is] substantial . . ., judged in relation to the statute's plainly
legitimate sweep." Broadrick, 413 U.S. at 615.
Applying this test, we agree with the district court's conclusion that
§ 441b(a) is not facially overbroad. Despite the list of nonprofit, tax-
exempt corporations that the plaintiffs compiled in support of its over-
breadth claim, the district court properly found that they had failed as
an empirical matter "to demonstrate that the constitutional infringe-
ments caused by [§ 441b(a)] and the related regulations are `substan-
tial' in relation to their `plainly legitimate sweep.'" First, the plaintiffs
fail to distinguish between those nonprofit corporations that are
exempt and those that are not. And the Court held in Austin that an
almost identical state statute may be properly applied to some non-
profit corporations. See 494 U.S. at 661-65.
Second, even if we were to assume that every one of the corpora-
tions on the plaintiffs' list are entitled to an exemption, no calcula-
tions are necessary to conclude that hundreds or even thousands of
constitutionally protected advocacy groups pale in comparison to the
infinitely larger number of for-profit corporations that exist in this
country. And the plaintiffs do not suggest that § 441b(a) and the regu-
23
lations are unconstitutional with respect to for-profit corporations, not
to mention the many labor organizations and national banks to which
the provisions also apply. Indeed, the Supreme Court and other courts
have upheld § 441b(a)'s validity in routine applications. See, e.g.,
NRWC, 459 U.S. at 207-211; Nat'l Rifle Ass'n, 254 F.3d at 191-92
(upholding application of § 441b(a) for certain years); Mariani v.
United States, 212 F.3d 761, 773 (3d Cir. 2000) (en banc), cert.
denied, 531 U.S. 1010 (2000). In short, the plaintiffs cannot establish
substantial overbreadth in this case.
A further fatal flaw in the plaintiffs' overbreadth position is that the
Supreme Court has rejected it. In Austin, the Court held that a state
statute, modeled on § 441b(a) and almost identical to it, was "not sub-
stantially overbroad." 494 U.S. at 661. The Court then went on to
apply the MCFL exception, which was not contained in the statute, to
determine whether the statue was constitutional as applied. Id. at 661-
65. Thus, the plaintiffs' argument that § 441b(a) is facially invalid
because its text does not contain an MCFL exception fails in view of
the Court's own refusal in Austin to declare an almost identical state
statute facially invalid for the same reason. The Supreme Court has
consistently endorsed as-applied rulings in reviewing the constitution-
ality of FECA and analogous state statutes. See Colorado II, 121 S.Ct.
2351; Colorado I, 518 U.S. at 613-14, 623-26; Austin, 494 U.S. at
661-65; MCFL, 479 U.S. at 263-64; Buckley, 424 U.S. at 68-74.
Indeed, MCFL explicitly anticipated the possibility that only a "small"
group of corporations would be exempt from § 441b(a)'s prohibitions
on independent expenditures. 479 U.S. at 264.
Finally, Congress included a severability clause in FECA that pro-
vides for retaining as much of the statute as possible where it is found
invalid in particular applications. Specifically, the clause states that
"[i]f any provision of this Act, or the application thereof to any person
or circumstance, is held invalid, the validity of the remainder of the
Act and the application of such provision to other persons and cir-
cumstances shall not be affected thereby." 2 U.S.C. § 454. Congress
has made its intent clear. And after applying conventional overbreadth
doctrine in this case, we see no reason to frustrate it.
For all of these reasons, we hold that § 441b(a) and the associated
regulations are not facially overbroad. Whatever overbreadth exists
24
"should be cured through case-by-case analysis of the fact situations
to which its sanctions, assertedly, may not be applied." Broadrick,
413 U.S. at 615-16. If every partial constitutional shortcoming in a
statute mandated its wholesale demise, the courts would assume for
themselves more fearsome powers than our Constitution posits.
IV.
This court would not lightly conclude that any federal statute was
unconstitutional in any of its applications. We also view seriously the
interest in keeping American elections rigorously honest, as well as
expressively robust. However, it is important to consider in perspec-
tive the sweeping nature of the position that the FEC is urging us to
take. The Commission asks us to hold that an absolute ban on every
direct contribution by every nonprofit advocacy corporation in Amer-
ica is altogether legitimate. No matter how small the organization, no
matter how modest the contribution, and no matter how absent the
threat the group poses to the political process, the FEC argues that the
contribution can be prohibited.
This position overlooks the difference between for-profit corpora-
tions and nonprofit advocacy groups funded overwhelmingly by indi-
vidual donors who simply happen to believe in their ideas. An
advocacy group, the Supreme Court has noted, does not "merely
pose[ ] less of a threat of the danger that has prompted regulation.
Rather, it does not pose such a threat at all." MCFL, 479 U.S. at 263.
Yet the FEC would require that the full panoply of regulatory require-
ments be imposed upon nonprofit corporations before they can begin
to participate in the political process in what the Supreme Court has
emphasized is a meaningful and important way. See 2 U.S.C. §§ 432,
433, 434, and 441b(b)(4)(A) and (C). Viewed in this light, the step
we take is a cautious and modest one. It is only the consequences of
failing to take it that would loom immeasurably large for the vitality
of the democratic system of government that the First Amendment is
intended to protect.
In its order of judgment of January 24, 2001, the district court
declared that 2 U.S.C. § 441b and 11 C.F.R. §§ 114.2(b) and 114.10
were unconstitutional as applied to NCRL, a non-profit, MCFL-type
corporation. The court therefore permanently enjoined the FEC from
25
prosecuting the plaintiffs for violations of § 441b and 11 C.F.R.
§§ 114.2(b) and 114.10. For the foregoing reasons, its judgment is
AFFIRMED.
WIDENER, Circuit Judge, concurring and dissenting:
I concur in the result of affirmance and in all of the opinion of
Judge Wilkinson, with the exception of Part III.
As to part III, I am of opinion we should decline to consider the
broader question of whether 2 U.S.C. § 441b(a) and its implementing
regulations are facially unconstitutional, that being unnecessary to an
affirmance. I would follow Rule 2 of Ashwander : "The Court will not
anticipate a question of constitutional law in advance of the necessity
of deciding it . . . . It is not the habit of the Court to decide questions
of a constitutional nature unless absolutely necessary to a decision of
the case." Ashwander v. TVA, 297 U.S. 288, 341, 346-347 (1935)
(Justice Brandeis concurring, internal quotations and citations omit-
ted).
GREGORY, Circuit Judge, concurring in part and dissenting in part:
I concur in Parts II.C.1 and II.C.2 of the court's opinion. I agree
that, insofar as independent expenditures are concerned, this case is
controlled by North Carolina Right to Life, Inc. v. Bartlett, 168 F.3d
705, 713 (4th Cir. 1999), cert. denied, 528 U.S. 1153 (2000). I also
concur in Part III of the Court's opinion; § 441b(a) is not substantially
overbroad. I respectfully dissent, however, from Parts II.C.3 through
II.C.5. That portion of the opinion, which holds that NCRL must be
given an MCFL-type exemption for its campaign contributions, is
inconsistent with FEC v. National Right to Work Committee, 459 U.S.
197 (1982) ("NRWC"). I would join the Sixth Circuit in upholding
§ 441b(a)'s ban on contributions by non-profit ideological corpora-
tions such as NCRL. Kentucky Right To Life, Inc. v. Terry, 108 F.3d
637 (6th Cir. 1997).
I see no way to avoid the import of the Supreme Court's analysis
in NRWC. See also FEC v. Nat'l Conservative PAC, 470 U.S. 480,
26
495 (1985) (noting that NRWC upheld "the prohibition of corporate
campaign contributions"). The majority relies almost exclusively on
FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986)
("MCFL"), to reach its result. In doing so, however, the majority turns
a blind eye not only to NRWC, but to the extended discussion of
NRWC contained in both the MCFL majority and dissenting opinions.
This subsequent endorsement of the holding of NRWC, adhered to by
every Member of the Court, confirms the validity of § 441b(a)'s ban
on corporate contributions, even as applied to non-profit corporations
such as NCRL.
In NRWC, the Supreme Court addressed § 441b's regulation of cor-
porate campaign contributions as applied to non-profit corporations.
Specifically, the Court considered the scope of the exemption con-
tained in § 441b(b)(2)(C) and §§ 441b(b)(4)(A) and (C) to § 441b(a)'s
ban on corporate contributions and expenditures. 459 U.S. at 207-21.
Section 441b(b)(2)(C) exempts "the establishment, administration,
and solicitation of contributions to a separate segregated fund to be
utilized for political purposes by a corporation . . . ." Sections
441b(b)(4)(A) and (C) further define the scope of the exemption by
limiting "solicitation of contributions" by corporations without capital
stock to its "members." The issue in NRWC was whether the corpora-
tion had "limited its solicitation of funds to`members'," but that spe-
cific question was "but the tip of the statutory iceberg" because the
solicitation of funds was part of an exemption from the general rule
prohibiting corporate contributions. Id. at 198, n.1.
The Court found two purposes sufficient to justify § 441b's "prohi-
bitions and exceptions." The first purpose was "to ensure that substan-
tial aggregations of wealth amassed by the special advantages which
go with the corporate form of organization should not be converted
into political `war chests' which could be used to incur political debts
from legislators who are aided by the contributors." Id. at 207. The
second purpose was "to protect the individuals who have paid money
into a corporation . . . for purposes other than the support of candi-
dates from having that money used to support political candidates to
whom they may be opposed." Id. at 208.
NRWC was a non-profit corporation similar to MCFL and NRCL,
funded by solicitations that "would neither corrupt officials nor coerce
27
members of the corporation holding minority political views . . . ."
459 U.S. at 207. The definition NRWC sought for the term "mem-
bers" would only include persons who were "philosophically compati-
ble" with the corporation. Id. at 206, 210; see also MCFL, 479 U.S.
at 269 (Rehnquist, C.J., dissenting). But the Court "declined the invi-
tation to modify the statute to account for the characteristics of differ-
ent corporations," MCFL, 479 U.S. at 269, finding that § 441b was
"sufficiently tailored" to "avoid undue restriction" on NRWC's First
Amendment rights:
In order to prevent both actual and apparent corruption,
Congress aimed a part of its regulatory scheme at corpora-
tions. The statute reflects a legislative judgment that the spe-
cial characteristics of the corporate structure require
particularly careful regulation. While § 441b restricts the
solicitation of corporations and labor unions without great
financial resources, as well as those more fortunately situ-
ated, we accept Congress's judgment that it is the potential
for such influence that demands regulation. Nor will we sec-
ond guess a legislative determination as to the need for pro-
phylactic measures where corruption is the evil feared. As
we said in California Medical Association v. FEC, 453 U.S.
182, 201 (1982), the "differing structures and purposes" of
different entities "may require different forms of regulation
in order to protect the integrity of the electoral process."
NRWC, 459 U.S. at 209 (citations omitted). Repeating the acknowl-
edged interests in preventing corruption and the appearance of corrup-
tion, the Court concluded that "there is no reason why it may not in
this case be accomplished by treating unions, corporations, and simi-
lar organizations differently from individuals." Id. at 208, 210; Buck-
ley v. Valeo, 424 U.S. 1, 26-27 (1976); First Nat'l Bank of Boston v.
Bellotti, 435 U.S. 765, 788, n.26 (1978).
I understand the majority's point that NRWC dealt with the defini-
tion of "members" for § 441b segregated fund solicitations purposes,
but the NRWC Court's discussion of the exception cannot be so easily
divorced from its discussion of the general rule. In considering the
scope of the exception to § 441b's prohibition, the Court also consid-
ered the prohibition itself. Indeed, the Court's analysis of the excep-
28
tion was largely determined by the need to give broad prophylactic
effect to the ban on corporate contributions.
The majority rejects NRWC in favor of MCFL, arguing that the
Constitution ought to view § 441b's ban on contributions the same as
it views the ban on expenditures. The respective discussions in both
the majority and dissenting opinions in MCFL demonstrate that the
Supreme Court struggled with this very question. Chief Justice Rehn-
quist, writing in dissent in MCFL, and joined by three other Justices,
took the view that there was no constitutional difference between con-
tributions and independent expenditures in the context of § 441b. 479
U.S. at 270. According to the Chief Justice's view, NRWC required
a finding of constitutionality in MCFL. See MCFL, 479 U.S. at 269
("I would have thought the distinctions drawn by the Court today
largely foreclosed by our decision in NRWC."). Justice Brennan, writ-
ing for a majority of the Court, thought otherwise, specifically distin-
guishing NRWC by noting that NRWC involved direct contributions
to candidates:
[T]he political activity at issue in that case was contribu-
tions . . . . (citations omitted.) We have consistently held that
restrictions on contributions require less compelling justifi-
cation than restrictions on independent spending. (citations
omitted.) In light of the historical role of contributions in the
corruption of the electoral process, the need for a broad pro-
phylactic rule was thus sufficient in National Right to Work
Committee to support a limitation on the ability of a com-
mittee to raise money for direct contributions to candidates.
The limitation on solicitation in this case, however, means
that nonmember corporations can hardly raise any funds at
all to engage in political speech warranting the highest con-
stitutional protection. Regulation that would produce such a
result demands far more precision than § 441b provides.
Therefore, the desirability of a broad prophylactic rule can-
not justify treating alike business corporations and [MCFL]
in the regulation of independent spending.
MCFL, 479 U.S. at 260 (emphasis added).
If MCFL had not mentioned NRWC, I might question its continuing
vitality. The amount of deference shown to legislative judgment cer-
29
tainly differs between NRWC and MCFL. Compare NRWC, 459 U.S.
at 210 ("[W]e accept Congress's judgment that it is the potential for
such influence that demands regulation."), with MCFL, 479 U.S. at
260 ("Regulation that would produce such a result demands far more
precision than § 441b provides."). Or if the Court in MCFL had dis-
tinguished NRWC in the way the majority does here, instead of going
out of its way to confirm NRWC as applied to corporate contributions,
I might be persuaded by the majority in this case. But the Court took
neither of those two options, instead expressly reaffirming NRWC,
and explaining it as a contributions case. After considering this
caselaw, I cannot escape the conclusion that NRWC is dispositive
with respect to § 441b's ban on corporate contributions. I respectfully
dissent.
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