By: Owen Ecker
In the wake of Citizens United v. FEC, Delaware took it upon itself to counteract the perceived “opening of the floodgates” ushered in by the United States Supreme Court on the issue of corporate third party political expenditures. As the state’s first major alteration in campaign finance laws for over two decades, House Bill 300, established to generate a greater amount of disclosure from third party advertisers, passed both houses of Delaware’s General Assembly by large margins (about 65 percent in the House of Representatives and 100 percent in the Senate) in 2012. Thereafter, the Governor of Delaware signed the Delaware Elections Disclosure Act (the “Act”) into law, which became effective in 2013. However, litigation ensued over the Act’s constitutionality, with one lawsuit making its way up to the Supreme Court.
On June 28, 2016, with the Act’s livelihood in the balance, the Court denied the petition for a writ of certiorari in Delaware Strong Families v. Matthew Denn, Attorney General of Delaware. Thus, given the absence of judicial scrutiny from this country’s highest Court, the Act lived to fight another day. The appellants, Delaware Strong Families, petitioned the Supreme Court after receiving an unfavorable ruling in the Third Circuit Court of Appeals in 2015. The Third Circuit case reversed the Delaware District Court’s grant of a preliminary injunction, which identified the Act’s disclosure requirements as unconstitutional.
By promulgating a stronger disclosure law than the corresponding disclosure laws of neighboring states, the legislature sought to compel non-candidate individuals or groups to file a “third party advertisement” report with the State Election Commissioner if more than $500 is spent on election-related communications. The Act touches upon even relatively small scale expenditures: those that spend or donate “in excess of $100” are required to disclose their full names and mailing addresses if they are part of a group that has met the $500 threshold. To qualify as election-related, these communications must refer to a clearly identified candidate, must be publicly distributed within 30 days of a primary or within 60 days of a general election, and must be distributed to those in the electorate of the office sought by the candidate. Called the most radical law in the country by some, the Act is distinct because, unlike the loophole that existed prior, it implicates all advertisements that simply mention a candidate’s name (e.g., “tell Candidate X he is wrong on climate change,” which previously would not have been covered under Delaware law), whereas other states’ disclosure laws typically have some sort of express generalized advocacy requirement (e.g., “Candidate Y must be defeated”).
At the district court level, Conservative group Delaware Strong Families (“DSF”), which publishes an internet “voter guide” describing where candidates in a given race stand on particular issues, challenged the Act’s constitutionality on the basis of it being overreaching and having the effect of chilling speech. Given the Act’s propensity to include “virtually every communication made during the critical time period, no matter how indirect and unrelated it is to the electoral process,” the court was quite hostile to a law that was allegedly only about electoral disclosures. With the district court taking into account DSF’s IRS status as a tax-exempt, nonprofit § 501(c)(3) organization, it concluded that because DSF’s voter guides were neutral communications established by presumptively neutral communicators, there existed a tenuous relationship between the purpose of the Act and the First Amendment burdens placed on parties such as DSF. Therefore, this court would not let the law go into effect.
On appeal and in reversing the district court’s opinion, the Third Circuit indicated that an organization’s IRS status does not shield DSF, or any similarly situated organization, when it uses candidates’ names in its communications. In essence, conduct trumps status. Moreover, the heightened level of scrutiny applied by this court identified a constitutionally-satisfying relationship between the governmental interest of an informed electorate and the Act’s time-related disclosure requirements, which were narrowly tailored enough to effectuate this desire.
Justice Clarence Thomas issued a blistering, six-page dissent in response to the Court’s denial of certiorari. Justice Thomas believed that this case could have clarified the notion that state transparency interests are not always supreme over First Amendment rights in federal and state elections. Building off of that premise, he indicated that sometimes “[transparency] chills speech by exposing anonymous donors to harassment and threats of reprisal.” Consequently, as other Court cases have held, disclosure requirements must withstand “exacting scrutiny,” where a state must establish that its disclosure requirement is substantially related to a sufficiently important governmental interest. According to Justice Thomas, the Third Circuit went beyond existing case law that indicated which circumstances were acceptable to require disclosure (express advocacy, corporation disclosure, and pejorative advertisements) in order to establish that “a mere ‘interest in an informed electorate’” was enough to justify disclosure in the case of neutral and informational advertisements. Additionally, Justice Samuel Alito did not want to deny certiorari.
It will be interesting to see the Act’s effect on not only the 2016 election cycle but all subsequent elections as well. Implicit throughout Justice Thomas’s dissent is the belief that these kinds of disclosure laws could “chill” speech, resulting in less of it being made. Hopefully, some sort of empirical study can be conducted to ascertain the law’s results, whether positive or negative. If these types of disclosure laws are shown to be a net positive, will other states adopt similar standards? That future remains unclear. What does remain clear is that the sunlight will continue to shine in Delaware with its strong disclosure law.