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Media Alerts - Stop This Insanity Inc. Employee Leadership Fund v. Federal Election Commission
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August 5, 2014
  Stop This Insanity Inc. Employee Leadership Fund v. Federal Election Commission
Headline: D.C. Circuit rejects First Amendment challenge to corporate segregated fund restrictions.

Area of Law: First Amendment, Federal Election Commission Act

Issue(s) Presented: Whether restrictions on solicitation by corporate segregated funds withstand First Amendment scrutiny after Citizens United.

Brief Summary: Under the Federal Election Campaign Act, corporations cannot contribute directly to candidates for federal office or parties. Prior to Citizens United, corporations could not use their treasuries to pay for independent expenditures, i.e., funds used to advocate for or against a candidate. They could, however, create separate segregated funds and engage in limited participation in the political process. These funds were subject to reporting and organizational requirements and faced solicitation constraints. Funds could only solicit corporate employees and family members twice yearly. In exchange, because the funds were so closely tied to the corporate entity, they were not required to report expenses. The Supreme Court's decision in Citizens United v. FEC, 558 U.S. 310 (2010), eliminated the ban on corporations' independent expenditures. The separate segregated funds, now functionally obsolete, remained.

Appellant, Stop This Insanity, Inc. (the Corporation), sought to use the segregated fund mechanism, with its concealed expenses benefit, to solicit the general public. The Corporation filed suit challenging the restrictions on separate segregated funds - including the solicitation restrictions - as unconstitutional. The U.S. District Court for the District of Columbia rejected the claim, and the U.S. Court of Appeals for the District of Columbia Circuit affirmed.

The court first concluded that Citizens United was inapposite because there was no "outright ban" on political speech and because the corporation retained the right, through the less burdensome and more robust option of independent expenditures, to make unfettered political speech. The court noted that the corporation and the fund are two parts of the same whole. If the fund cannot speak on an issue, the corporation can, thus making any burden on speech "merely theoretical." The court held, moreover, that appellant had not adequately refuted the Commission's "sufficiently important interest" in preventing corruption and in knowing who is funding political speech. As such, the court concluded that the fund may solicit freely but "must do so in the light."

For the full text of the opinion, please visit http://www.cadc.uscourts.gov/i...le/13-5008-1506093.pdf.

Panel: Brown, Griffith, and Sentelle

Argument Date: November 19, 2013

Date of Issued Opinion: August 5, 2014

Docket Number: 13-5008

Decided: Affirmed

Case Alert Author: Albertine Guez

Counsel (if known): Tara A. Brennan, Tillman J. Breckenridge, Patricia E. Roberts, and Dan Backer for appellants. Erin Chlopak, Anthony Herman, Kevin Deeley, and Steve Hajjar for appellee.

Author of Opinion: Brown

Case Alert Circuit Supervisor: Elizabeth Earle Beske, Ripple Weistling

    Posted By: Ripple Weistling @ 08/05/2014 04:02 PM     DC Circuit  

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