Appeal from the United States District Court for the Southern District of California Irma E. Gonzalez, Chief District Judge, Presiding D.C. No. 3:09-cv-02862-IEGWMC
The opinion of the court was delivered by: Kim McLANE Wardlaw, Circuit Judge
Argued and Submitted October 4, 2010 Pasadena, California
Before: WARDLAW and W. FLETCHER, Circuit Judges, and TIMLIN, Senior District Judge. *fn1
The modern era of campaign finance reform began in 1972, following the infamous break-in at the Watergate hotel. Congress responded to the ensuing scandal by overhauling the Federal Election Campaign Act to impose new caps on political spending, as states and cities followed suit with laws of their own. The City of San Diego (the "City") enacted its Municipal Election Campaign Control Ordinance ("ECCO") in 1973. See San Diego, Cal., Municipal Code ch. 2, art. 7, div. 29. Then, in Buckley v. Valeo, 424 U.S. 1, 14 (1976), the Supreme Court held that campaign finance regulations "operate in an area of the most fundamental First Amendment activities." The crucial constitutional distinction, according to the Buckley Court, was between limitations on campaign expenditures and campaign contributions. The Court reasoned that expenditure limits "represent substantial rather than merely theoretical restraints on the quantity and diversity of political speech," while contribution limits "entail only a marginal restriction upon the contributor's ability to engage in free communication." Id. at 19-20. Since Buckley, the Supreme Court has considered numerous laws that regulate the flow of political money. Some have been upheld, others struck down. But in each case the Court's analysis continued to build upon the familiar Buckley distinction.
Recent Supreme Court decisions, notably Citizens United v. FEC, 130 S. Ct. 876 (2010), have once again placed the constitutionality of campaign finance reform in flux, inspiring new challenges to election laws across the country. This is one such case. Plaintiffs mount a First Amendment challenge to San Diego's campaign finance laws. The district court considered the constitutionality of five provisions and generally upheld the City's pure contribution limits, but enjoined a provision that restricts both the fundraising and spending of independent political committees. The district court correctly recognized that even as the campaign finance reform landscape has shifted, nearly four decades after the Watergate break-in Buckley's expenditure-contribution distinction continues to frame the constitutional analysis of campaign finance regulations. Because the district court properly applied the applicable preliminary injunction standard in the context of the presently discernible rules governing campaign finance restrictions, we affirm.
I.FACTUAL AND PROCEDURAL BACKGROUND
ECCO is a comprehensive law governing all aspects of campaign finance in San Diego city elections. Plaintiffs Phil Thalheimer, a former and future city council candidate; ABC PAC, a political action committee for the Associated Builders and Contractors San Diego chapter; the Lincoln Club, a registered political action committee; the San Diego County Republican Party, the local branch of the national Party; and John Nienstedt, a San Diego resident who regularly contributes to local candidates and political committees, sued to enjoin enforcement of five ECCO provisions they claim violate their respective First Amendment rights, facially and as applied. Plaintiffs filed a verified complaint seeking a preliminary injunction to block enforcement of the challenged ECCO provisions before trial, a time period they noted would likely encompass at least two municipal elections: San Diego's June 8, 2010 primary, and the November 2, 2010 general election.
Plaintiffs challenged ECCO § 27.2936, which restricts the fundraising and spending of political committees, § 27.2938, which imposes a ban on contributions to candidates outside of a 12-month pre-election window, §§ 27.2950-51, which prohibit contributions by any non-individual entities, and § 27.2935, which imposes a $500 limit for contributions to candidates and committees supporting or opposing a candidate.
ECCO § 27.2936 applies to "general purpose recipient committees," defined elsewhere in the ordinance as committees "not controlled by a candidate" that receive $1,000 or more in annual donations for the purpose of supporting or opposing candidates or ballot measures. Id. at § 27.2903. Such committees may not "use a contribution for the purpose of supporting or opposing a candidate unless the contribution is attributable to an individual in an amount that does not exceed $500 per candidate per election." Id. at § 27.2936(b). The law applies only to contributions made with the specific purpose of participation in municipal elections, thus excluding "dues, donations, fees, or other forms of monetary transactions" from its scope. Id. at § 27.2936(f). The specific dollar amount of the limits are adjusted every two years based on the Consumer Price Index. Id. at § 27.2937(a).
The temporal limit, ECCO § 27.2938, makes it unlawful for any candidate or candidate-controlled political committee "to solicit or accept contributions prior to the twelve months preceding the primary election for the office sought." Id. at § 27.2938(a). The San Diego Ethics Commission has interpreted this provision as also preventing candidates from spending their own money on their campaigns outside of the 12-month window.
The organizational contribution limit, ECCO § 27.2950, prohibits "any person other than an individual" from contributing to a candidate or candidate-controlled committee. Id. at § 27.2950(a). The ordinance defines "person" as including "any individual, proprietorship, firm, partnership, joint venture, syndicate, business trust, company, corporation, association, committee, labor union, or any other organization or group of persons acting in concert." Id. at § 27.2903. The effect of the provision is to bar contributions to candidates from all organizations and other non-individual entities. ECCO § 27.2951 underscores the prohibition by making it unlawful for candidates to accept contributions drawn against checking or credit card accounts "unless such account belongs to one or more individuals in their individual capacity." Id. at § 27.2951(a).*fn2
On February 16, the district court preliminarily enjoined enforcement of ECCO § 27.2936, the committee fund-raising/spending limit, but held that Plaintiffs were unlikely to succeed in their First Amendment challenge to the temporal contribution ban, § 27.2938, except as to the San Diego Ethics Commission's enforcement position that the temporal ban may prohibit candidates' spending their own money on their behalf. As to the non-individual contribution limits, §§ 27.2950 and 27.2951, the district court concluded that Plaintiffs were unlikely to succeed in their claim that the laws are unconstitutional as applied generally to corporations and other organizational entities, but enjoined the provisions as applied to political parties. The district court also concluded that Plaintiffs were unlikely to succeed in challenging ECCO § 27.2935, the City's $500 individual contribution limit. Plaintiffs do not appeal this portion of the ruling.
In a February 22 order, the district court clarified that its preliminary injunction against enforcement of § 27.2936, the committee fundraising and spending limit, applied to committees that make only independent expenditures, and covered contributions made by both individuals and non-individual entities. The district court also granted in part Plaintiffs' request for an injunction against § 27.2951, the limit on contributions drawn against non-individual entities' credit card and checking accounts, to the extent that it barred contributions drawn against organizational accounts to committees that make only independent expenditures. These cross-appeals ensued.
II.JURISDICTION AND STANDARD OF REVIEW
The district court had jurisdiction pursuant to 28 U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1292(a)(1).We review a district court's decision to grant or deny a preliminary injunction for abuse of discretion. See Dominguez v. Schwarzenegger, 596 F.3d 1087, 1092 (9th Cir. 2010). We review conclusions of law de novo, and findings of fact for clear error. Id. "Under this standard, [a]s long as the district court got the law right, it will not be reversed simply because the appellate court would have arrived at a different result if it had applied the law to the facts of the case." Id. (quotations omitted). "This review is 'limited and deferential,' and it does not extend to the underlying merits of the case." Johnson v. Couturier, 572 F.3d 1067, 1078 (9th Cir. 2009) (quoting Am. Trucking Ass'ns v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009)).
"A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Winter v. NRDC, 555 U.S. 7, 24-25 (2008); see also Stormans, Inc. v. Selecky,586 F.3d 1109, 1126-27 (9th Cir. 2009). The district court analyzed whether Plaintiffs were likely to prevail in challenging each ECCO provision. It properly considered the remaining Winter elements only as to claims it concluded were meritorious. See Advertise.com, Inc. v. AOL Advertising, Inc., 616 F.3d 974, 982 (9th Cir. 2010).
Courts asked to issue preliminary injunctions based on First Amendment grounds face an inherent tension: the moving party bears the burden of showing likely success on the merits -- a high burden if the injunction changes the status quo before trial -- and yet within that merits determination the government bears the burden of justifying its speech-restrictive law. Compare Mazurek v. Armstrong, 520 U.S. 968, 972 (1997), with United States v. Playboy Entm't Group, 529 U.S. 803, 816 (2000). In Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 423 (2006), the district court had entered a preliminary injunction to prevent the government from enforcing the Controlled Substances Act against a religious sect that used sacramental hallucinogenic tea. The district court applied the "compelling interest test" from the Religious Freedom Restoration Act of 1993 (RFRA), which, like the First Amendment strict scrutiny standard, places the burden on the government to demonstrate that a law burdening religious exercise is the least restrictive means of furthering a compelling state interest. Id. at 424. Finding that the evidence presented by the parties was "in equipoise," the district court concluded that the government failed to carry its burden and the sect was likely to succeed on the merits, and the Tenth Circuit agreed. Id. at 426-27.
The Supreme Court affirmed, reasoning that the burden of proof at the preliminary injunction phase tracks the burden of proof at trial, and therefore "RFRA challenges should be adjudicated in the same manner as constitutionally mandated applications of the test, including at the preliminary injunction stage." Id. at 430. The Court relied on its earlier decision in Ashcroft v. ACLU, 542 U.S. 656 (2004), in which it affirmed a preliminary injunction against enforcement of the Child Online Protection Act (COPA) on First Amendment grounds. The Ashcroft Court explained the burden of proof at the preliminary injunction stage:
In deciding whether to grant a preliminary injunction, a district court must consider whether the plaintiffs have demonstrated that they are likely to prevail on the merits . . . . As the Government bears the burden of proof on the ultimate question of COPA's constitutionality, respondents must be deemed likely to prevail unless the Government has shown that respondents' proposed less restrictive alternatives are less effective than COPA.
Id. at 666 (internal citations omitted).
Therefore, in the First Amendment context, the moving party bears the initial burden of making a colorable claim that its First Amendment rights have been infringed, or are threatened with infringement, at which point the burden shifts to the government to justify the restriction. See also Klein v. City of San Clemente, 584 F.3d 1196, 1201 (9th Cir. 2009) (explaining that the party seeking a preliminary injunction "has the general burden of establishing the elements necessary to obtain injunctive relief, [and] the city has the burden of justifying the restriction on speech").
A verified complaint may be treated as an affidavit, and, as such, it is evidence that may support injunctive relief. See Lew v. Kona Hosp., 754 F.2d 1420, 1423 (9th Cir. 1985); Ross-Whitney Corp. v. Smith Kline & French Labs., 207 F.2d 190, 198 (9th Cir. 1953). According to Plaintiffs' verified complaint, Thalheimer, the former San Diego City Council candidate mulling another run for office, has created a campaign committee and would begin soliciting and accepting contributions now, but cannot because ECCO § 27.2938 prohibits such activity before the 12-month window. Thalheimer would also like to solicit, accept and use donations from organizational entities, but cannot because of ECCO § 27.2950's prohibition on contributions from non-individuals. He also intends to solicit contributions ...