People For the American Way Foundation

Biden Judge Casts Deciding Vote to Reject Challenge to State Campaign Finance Disclosure Law

Biden Judge Casts Deciding Vote to Reject Challenge to State Campaign Finance Disclosure Law

Judge Jennifer Sung, nominated by President Biden to the Ninth Circuit court of appeals, cast the deciding vote in a 2-1 decision upholding a lower court ruling refusing to grant a preliminary injunction against Alaska campaign finance regulations. Judge Danielle Forrest, nominated by former President Trump, partly dissented and claimed that part of the challenge was likely to succeed. The March 2024 decision was in Smith v Helzer.


What is the background of this case?

In 2020, Alaska voters approved by referendum several regulations designed to “illuminate the use of dark money in their state’s elections.” Several independent expenditure groups and individuals challenged three of the regulations, claiming that on their face, they violated the First Amendment. A district court rejected a request for a preliminary injunction on all three.

Initially, the lower court turned down an injunction against an “individual-donor contribution-reporting requirement.” That provision calls for donors who contribute more than $2000 per year to a group that makes independent election expenditures to report such contributions within 24 hours to the state campaign finance commission. They also challenged a subpart of the reporting mandate, known as the “true-source requirement,” which calls on donors to report at the same time the “true sources” of the funds contributed, such as “revenue generated” by a business “from selling goods and services.”

The district court found that the challengers were unlikely to prevail on their lawsuit against these provisions. The challengers did not disagree that these parts of the law were substantially related to Alaska’s important interest in prompt disclosure of election-related information to voters. And the court found that the requirement was “narrowly tailored” to achieving that interest and so rejected the injunction request.

The plaintiffs also challenged a provision of the regulations that amended a requirement that any ad or communication “intended to influence the election of a candidate” contain an “easily discernible on-ad disclaimer.”  Since 2010, Alaska has required such disclaimers to contain such information as “the name and title of the speaking entity’s principal officer.”  The 2020 referendum required that if the speaking entity received more than 50% of its previous year’s contributions from people or sources outside of Alaska, the communication must disclose that information.

The lower court also rejected the injunction request as to this donor disclosure requirement, finding that the plaintiffs were not likely to prevail on their claim that it violated the First Amendment. The challengers appealed to the Ninth Circuit.


How did Judge Sung and the Ninth Circuit Rule and Why is it Impoatant?

 All three judges on the court of appeals panel agreed to affirm the lower court’s rejection of a preliminary injunction on the individual donor contribution and true source requirements. Their reasoning was similar to that of the district court.

On the donor disclosure requirement, Judge Sung provided the deciding vote in a 2-1 opinion by Chief Judge Mary Murguia, nominated by President Obama, which upheld the lower court decision.  The opinion explained that, as in a previous campaign finance case, there is a “strong governmental interest in informing voters about who funds political advertisements.” Murguia rejected as irrelevant the claim that the disclosure information is available on a state website, noting that disclosing it in the ad itself “more effectively serves” the government’s interest in informing voters. The fact that the requirement imposes a slight burden by requiring the disclosure to be in the ad itself, the majority held, is not enough to conclude that it is not “narrowly tailored” to promote the government’s interest. Judge Forrest disagreed and would have sent the case back to the district court to reconsider imposing a preliminary injunction on the donor disclosure requirement.

As a result of the court of appeals decision, the Alaska regulations will remain in place while the lower court fully adjudicates the merits of the challenge to them.  Judge Sung’s deciding vote was obviously critical to achieving this result as to the donor disclosure requirement in Alaska. The ruling also sets an important precedent about similar proposed campaign finance rules in other states. This is particularly true in the Ninth Circuit, which includes Alaska, California, Arizona, Washington, Hawaii, Idahp, Montana, Nevada, and Oregon. In addition, the case serves as a reminder of the importance of promptly confirming fair-minded nominees like Judge Sung to our federal courts.