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Jimmy Yamada, Russell Stewart, and A-1 A-Lectrician, Inc v. Michael Weaver

March 21, 2012


The opinion of the court was delivered by: J. Michael Seabright United States District Judge



Plaintiffs Jimmy Yamada ("Yamada"), Russell Stewart ("Stewart"), and A-1 A-Lectrician, Inc. ("A-1") (collectively "Plaintiffs") filed this action in August 2010, challenging the constitutionality of several Hawaii campaign finance laws in the wake of Citizens United v. Federal Election Commission, 130 S. Ct. 876 (2010), which (among other matters) invalidated limitations on amounts of corporate independent campaign expenditures.

In October 2010, the court addressed most of Plaintiffs' challenges at a preliminary-injunction stage of the proceedings, and issued two comprehensive Orders granting in part and denying in part Plaintiffs' Amended Motion for Preliminary Injunction. See Doc. Nos. 71, 91; Yamada v. Kuramoto, 744 F. Supp. 2d 1075 (D. Haw. 2010) ("Yamada I"); and Yamada v. Kuramoto, 2010 WL 4603936 (D. Haw. Oct. 29, 2010) ("Yamada II"). Campaign finance law has continued to evolve since then, and the record in this action has been further developed. The court now faces the same, or similar, issues on Cross Motions for Summary Judgment. Where appropriate, the court draws upon and incorporates parts of Yamada I and Yamada II in ruling on the current Cross Motions.

Citizens United held that limitations on independent campaign expenditures violate the First Amendment because no sufficient government interest justifies suppressing corporate independent speech. 130 S. Ct. at 913. Applying that logic, Courts of Appeals subsequently invalidated restrictions on amounts of contributions to organizations that make only independent campaign expenditures. See, e.g., Thalheimer v. City of San Diego, 645 F.3d 1109, 1121-22 (9th Cir. 2011) (upholding injunction against enforcement of San Diego ordinance limiting fundraising of independent political committees); Wisc. Right to Life State Political Action Comm. v. Barland, 664 F.3d 139, 154-55 (7th Cir. 2011) (holding campaign contribution limit unconstitutional as applied to organizations that engage only in independent expenditures for political speech). Likewise, Yamada I preliminarily enjoined enforcement of Hawaii Revised Statutes ("HRS") § 11-358 as applied to Yamada's and Stewart's then-proposed contributions to Aloha Family Alliance-Political Action Committee ("AFA-PAC") -- an entity that engages in solely independent expenditures. See 744 F. Supp. 2d at 1087. This Order now makes that injunction permanent.

Citizens United also embraced disclosure and transparency in elections -- organizations that engage in independent campaign spending can do so freely, but should also do so openly. Although disclosure requirements "may burden the ability to speak . . . they impose no ceiling on campaign-related activities and do not prevent anyone from speaking[.]" 130 S. Ct. at 914 (citations and quotation marks omitted). "The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages."

Id. at 916. Accordingly, Yamada II upheld (again, at the preliminary injunction phase) Hawaii campaign finance laws that enable and require disclosure of certain activities that, for example, have the purpose of influencing the nomination or election of candidates. See 2010 WL 4603936, at *20 (finding Plaintiffs were unlikely to succeed in their challenges to requirements now codified at HRS §§ 11-302 and 391). This Order now confirms that, as challenged, Hawaii's noncandidate committee, expenditure, and advertisement requirements in HRS §§ 11-302 and 391 are constitutional.

Finally, Citizens United did not address whether campaign contributions directly to candidates may be limited, and did not change the principle that such restrictions may be justified to prevent corruption or its appearance. See, e.g., Fed. Election Comm'n v. Beaumont, 539 U.S. 146, 154-55 (2003). This Order (addressing an issue not previously pursued by Plaintiffs) upholds Hawaii's ban on direct campaign contributions by government contractors set forth in HRS § 11-355, as applied to A-1, given A-1's past and proposed donations to candidates and its status as a government contractor. Hawaii's "payto-play" ban in § 11-355 is constitutional as applied to A-1.

In sum, based on the following, the Cross Motions for Summary Judgment are GRANTED in PART and DENIED in PART.


A. Factual Background

Plaintiffs' First Amended Verified Complaint, Doc. No. 24 ("FAC"), seeks declaratory and injunctive relief pursuant to 28 U.S.C. § 2201 and 42 U.S.C. § 1983, and challenges the constitutionality of five Hawaii campaign finance laws (or sets of laws) that regulate Plaintiffs' actual or proposed activities. Specifically, Plaintiffs challenge Hawaii's: (1) restrictions on contributions to noncandidate committees (HRS § 11-358), (2) "noncandidate committee" and related "expenditure" definitions (HRS § 11-302), (3) "electioneering communication" disclosure requirements (HRS § 11-341), (4) disclaimer-language requirements for an "advertisement" (HRS § 11-391), and (5) ban on contributions to candidates by government contractors (HRS § 11-355).*fn1 The FAC was verified by Yamada and Stewart (as individuals), by A-1 (through Yamada, as A-1's chief executive officer), and by AFA-PAC (through its Chair Andrew Gerakas).*fn2 FAC at 59-60.

Defendant Michael Weaver is the current Hawaii Campaign Spending Commission ("the Commission") chairperson. Defendants Dean Robb, Calmentina Gomes, and G. William Snipes are current members of the Commission. All Defendants are sued in their official capacities as Commission members. FAC ¶ 23; Defs.' Mot. at 2 n.1.*fn3

Because the FAC was verified, the court treats it as an affidavit. See, e.g., Thalheimer, 645 F.3d at 1116 ("A verified complaint may be treated as an affidavit, and, as such, it is evidence that may support injunctive relief.") (citations omitted). Yamada also submitted declarations, and testified at a preliminary injunction hearing on October 1, 2010 (both individually and as A-1's representative). Stewart and Gerakas also testified and submitted declarations. Given the FAC's verified allegations, testimony at the October 1, 2010 hearing, and the evidence most recently submitted with the Cross Motions, the court finds the facts as described below are essentially undisputed. That is, the parties agree that there are no genuine issues of material fact in dispute, and that the court should decide the legal issues based upon the Cross Motions.

Yamada and Stewart are Hawaii residents. As individuals, they each sought to contribute $2,500 to AFA-PAC before the 2010 general election.

FAC ¶ 7. Doing so, however, would have exceeded the $1,000 per election contribution limitation contained in HRS § 11-358. In October 2010, after the court preliminarily enjoined enforcement of § 11-358 as to their proposed contributions, they both contributed $2,500 to AFA-PAC. And they both seek to contribute $2,500 to AFA-PAC again in 2012. Pls.' Mot. Exs. 3-4.

AFA-PAC is a Hawaii registered noncandidate committee*fn4 that makes only "independent expenditures."*fn5 It does not contribute directly to candidates, and does not coordinate spending for political speech with candidates or political parties. FAC ¶ 8. Gerakas confirmed at the preliminary injunction hearing that he is chairman of AFA-PAC, and that it "operates like any other independent political action committee." Transcript of Oct. 1, 2010 Hearing ("Tr.") at 11. AFA-PAC was created in July 2010, and was formed to "influence passage of legislation that supports traditional marriage, the right to life against such things as physician-assisted suicide, and promoting the issue of life in our community." Id. AFA-PAC is "committed to endorsing and financially supporting candidates, no matter what their party affiliation, who will stand up in the public square for Hawaii's families." FAC Ex. 1. Its goal is to "identify, endorse and elect county, state, and federal officials who favor policies that strengthen and nourish Hawaii's families." Id. It asks people to "register to vote" and make contributions to AFA-PAC so that "[m]onies will be used to support candidates who share and reflect our values." Id. Defendants have not challenged Gerakas's testimony that AFA-PAC makes only independent expenditures.

A-1 is an electrical contractor that is "often a government contractor" -- it previously worked as a contractor for State organizations, provides services for past jobs, and expected to have State contracts in the near future when Plaintiffs filed the FAC in September 2010. FAC ¶¶ 11-12. And, as of December 2011, A-1 in fact had State contracts. Pls.' Mot. Exs. 5-7. A-1 is registered as a noncandidate committee, FAC ¶¶ 9-10, but no longer wants to face burdens such as registration and record-keeping associated with such a classification. Id. ¶ 28. A-1 wants to make (and has made) contributions to candidates, and has run advertisements that identify candidates, but wants to do so without including a disclaimer otherwise required by Hawaii law. According to Yamada, A-1 "wants to make contributions, while it is a government contractor, to candidates -- like those to whom it contributed in 2010 -- who do not decide whether A-1 receives contracts and who do not oversee the contracts." Pls.' Mot. Ex. 5 ¶ 7. A-1 is not connected with any political candidate or political party, nor with any political committee. A-1 did not form a distinct noncandidate committee to register with the Commission. Rather, it registered itself (as a noncandidate committee) with the Commission "many years ago" pursuant to direction it received from the Commission. FAC ¶ 10; Tr. 30, 35, 37.

A-1 contends it need not comply with noncandidate committee requirements because it does not have "the major purpose of nominating or electing a candidate or candidates for state or local office in Hawaii." FAC ¶ 27. Yamada states that "[p]olitical advocacy is not one of A-1's reasons for existing," and that political advocacy "is not a 'priority' for A-1, in the sense that it does not 'take precedence' over A-1's business activities." Pls.' Mot. Ex. 5 ¶¶ 11-12. It "reasonably fear[ed] that if it [did] its 2010 speech as a noncandidate committee, it [would] have to continue complying with noncandidate-committee burdens[.]" FAC ¶ 28. It also reasonably fears having to comply with burdens associated with noncandidate committee status, and with burdens associated with making electioneering communications. Tr. 60. Thus, A-1 seeks a declaration that it need not comply with noncandidate committee burdens, and may lawfully terminate its registration.

A-1 contributed $20,100 in total to fourteen different State office candidates before the September 18, 2010 primary election. Defs.' Mot. Ex. 2. The FAC also states that A-1 wanted to make nine separate $250 contributions to Hawaii State-legislative candidates before the 2010 general election. FAC ¶ 11. As of September 3, 2010, A-1 had also contributed $12,500 to the Hawaii Republican Party. Defs.' Mot. Ex. 2. Further, as of September 13, 2010, A-1 had contributed $1,000 to AFA-PAC. Tr. 65; see also Defs.' Mot. Ex. 3. And, by October 19, 2010 (for the November 2010 general election), A-1 contributed an additional $18,000 in total to thirty-one candidates for State office. Defs.' Mot. Exs. 4-5. Although the amounts are not specified, it seeks to contribute to "several Hawaii state-legislature candidates . . . again in 2012." Defs.' Mot. Ex. 5 ¶ 4.

During the 2010 election cycle, A-1 published three newspaper advertisements identifying candidates. They ran in the Honolulu Star-Advertiser immediately before, and the day of, the 2010 primary election -- on September 16, 17, and 18, 2010. Tr. 51, 55; FAC Exs. 14, 15, & Doc. No. 119-1 (substituting FAC Ex. 16).*fn6 Yamada testified that the advertisements cost "roughly $3,000 each," Tr. 63, and later attested that A-1 spent "more than $2,000 on these ads." Pls.' Mot. Ex. 5 ¶ 9. According to Yamada, "[t]he ads have clearly identified candidates for state office and refer to "PEOPLE WE PUT INTO OFFICE" and "THE REPRESENTATIVES WE PUT INTO OFFICE[.]" Id.

All three advertisements state that they are "paid for by A-1 ALectrician, Inc.," and contain disclaimer language "published without the approval and authority of the candidate," as required in HRS § 11-391(a)(2)(B). A-1 did not want to include the disclaimer language, and does not want to add disclaimers to future advertisements. FAC ¶ 40; Tr. 60, 63-64. Although Yamada indicates that "it is too early for A-1 to plan similar speech for September or October 2012," Pls.' Mot. Ex. 5 ¶ 10, Plaintiffs also assert that "[i]n materially similar situations in the future, Plaintiffs intend to engage in speech materially similar to all of the speech at issue in this action, such that Hawaii law will apply to them as it does now."

Pls.' Concise Statement of Facts ¶ 19 (citing FAC ¶ 50). More specifically, Yamada attests that A-1 will engage in such speech in September or October 2012 and will buy no more than three ads, the number it purchased in 2010. They will be similar in size to those A-1 purchased in 2010. Like A-l's previous ads, this speech will cost more than $2000 in the aggregate, will have a clearly identified candidate or candidates for state office, and will refer to "PEOPLE WE PUT INTO OFFICE" and "THE REPRESENTATIVES WE PUT INTO OFFICE[.]"

Pls.' Reply, Attachment One (Yamada Decl. ¶ 7, Jan. 6, 2012).

Yamada considers A-1's advertisements to be "issue ads." Tr. 59-60. Specifically, Yamada testified that the purpose of the advertisements was to express opinions regarding the loss of freedom in the United States. Tr. 62. Yamada explained that he included the name of a candidate (Blake Oshiro) as "an example of how we have lost our freedom . . . . [T]he issue is not against Blake or any particular person -- I [also] mentioned [candidate] Calvin Say -- but it's against leaders in our community that the people need to look up to . . . . I think something needs to be done."*fn7 Tr. 62-63.

B. The Challenged Provisions of Hawaii Campaign Finance Law

As summarized above, Plaintiffs challenge five sets of Hawaii campaign finance laws: (1) restrictions on contributions to noncandidate committees; (2) "noncandidate committee" and related "expenditure" definitions; (3) "electioneering communication" disclosure requirements; (4) disclaimer-language requirements for an "advertisement"; and (5) a ban on contributions to candidates by government contractors. The provisions are detailed as follows (with certain key terms and phrases at issue in this action emphasized in bold and italics):

1. Limitations on Contributions to Noncandidate Committees

Yamada's and Stewart's contributions to AFA-PAC implicate HRS § 11-358, which provides:

No person shall make contributions to a noncandidate committee in an aggregate amount greater than $1,000 in an election. This section shall not apply to ballot issue committees. (Emphasis added.)

The corresponding term "noncandidate committee" is defined in HRS § 11-302 (which defines many terms in HRS Ch. 11), and that definition in itself is challenged, as set forth next.

2. The Definitions of "Noncandidate Committee" and "Expenditure"

Section 11-302 defines a "noncandidate committee" as follows: "Noncandidate committee" means an organization, association, party, or individual that has the purpose of making or receiving contributions, making expenditures, or incurring financial obligations to influence the nomination for election, or the election, of any candidate to office, or for or against any question or issue on the ballot; provided that a noncandidate committee does not include:

(1) A candidate committee;

(2) Any individual making a contribution or making an expenditure of the individual's own funds or anything of value that the individual originally acquired for the individual's own use and not for the purpose of evading any provision of this part; or

(3) Any organization that raises or expends funds for the sole purpose of producing and disseminating informational or educational communications that are not made to influence the outcome of an election, question, or issue on a ballot. (Emphasis added.) In turn, § 11-302 defines "expenditure" to mean:

(1) Any purchase or transfer of money or anything of value, or promise or agreement to purchase or transfer money or anything of value, or payment incurred or made, or the use or consumption of a non-monetary contribution for the purpose of:

(A) Influencing the nomination for election, or the election, of any person seeking nomination for election or election to office, whether or not the person has filed the person's nomination papers;

(B) Influencing the outcome of any question or issue that has been certified to appear on the ballot at the next applicable election; or

(C) Use by any party for the purposes set out in subparagraph (A) or (B)[.]

(Emphasis added.)

Although a "noncandidate committee" must comply with several other provisions in HRS Ch. 11, A-1 does not challenge any of those particular provisions as unconstitutional. Rather, A-1 characterizes its challenge as one to the noncandidate committee definition itself, arguing that the law imposes unconstitutional burdens such that A-1 should not have to register at all. It understands that if an organization is properly a noncandidate committee, then that status comes with acceptable burdens. (As an example, AFA-PAC is a noncandidate committee that makes only independent expenditures.)

A noncandidate committee must (1) register with the Commission by filing an organizational report as set forth in § 11-323 (including (a) designating a name and address, (b) disclosing a chairperson, treasurer, and officers,

(c) requiring "depository institution" account information, and (d) providing names and addresses of contributors who contributed an aggregate amount of more than $100); (2) have a treasurer as set forth in § 11-324, who shall keep records regarding contributions; (3) comply with reporting requirements set forth in § 11-335, which include schedules disclosing aggregate contributions of over $100, expenditures, receipts, and assets; and (4) comply with other requirements limiting, regulating, or prohibiting contributions -- such as prohibitions on receiving false-name contributions (§ 11-352), anonymous contributions (§ 11-353), government contractor contributions (§ 11-355), and foreign corporations (§ 11-356). A-1 describes these noncandidate committee requirements collectively as "burdensome" and "onerous" as a matter of law. Pls.' Mot. at 54 n.39.

3. Electioneering Communications

If A-1 does not have to register as a noncandidate committee, it could still be subject to certain requirements if it makes "electioneering communications." A-1 thus challenges the constitutionality of these requirements in the alternative.

These electioneering-communication disclosure requirements may be implicated because A-1 has published, and desires to publish, newspaper advertisements that mention candidates. Specifically, if a person makes an "advertisement" that is an "electioneering communication" it must comply with requirements set forth in HRS § 341(a) (and related terms), as follows:

[e]ach person who makes a disbursement for electioneering communications in an aggregate amount of more than $2,000 during any calendar year shall file with the commission a statement of information within twenty-four hours of each disclosure date provided in this section.*fn8

In turn, "electioneering communication" means: any advertisement that is broadcast from a cable, satellite, television, or radio broadcast station; published in any periodical or newspaper; or sent by mail at a bulk rate, and that:

(1) Refers to a clearly identifiable candidate;

(2) Is made, or scheduled to be made, either within thirty days prior to a primary or initial special election or within sixty days prior to a general or special election; and

(3) Is not susceptible to any reasonable interpretation other than as an appeal to vote for or against a specific candidate.

HRS § 11-341(c) (emphasis added).

"Electioneering communication" shall not include communications:

(1) In a news story or editorial disseminated by any broadcast station or publisher of periodicals or newspapers, unless the facilities are owned or controlled by a candidate, candidate committee, or noncandidate committee;

(2) That constitute expenditures by the disbursing organization;

(3) In house bulletins; or

(4) That constitute a candidate debate or forum, or solely promote a debate or forum and are made by or on behalf of the person sponsoring the debate or forum.

Id. And § 11-302 defines "advertisement" as:

. . . any communication, excluding sundry items such as bumper stickers, that:

(1) Identifies a candidate directly or by implication, or identifies an issue or question that will appear on the ballot at the next applicable election; and

(2) Advocates or supports the nomination, opposition, or election of the candidate, or advocates the passage or defeat of the issue or question on the ballot. (Emphasis added.)

4. Disclaimer Requirements in Advertisements

A-1 next challenges the requirement to include a "disclaimer" on advertisements. The requirement is set forth in HRS § 11-391(a)(2), which provides (with the challenged disclaimer language emphasized):

(a) Any advertisement shall contain:

(1) The name and address of the candidate, candidate committee, noncandidate committee, or other person paying for the advertisement; and

(2) A notice in a prominent location stating either that:

(A) The advertisement is published, broadcast, televised, or circulated with the approval and authority of the candidate; provided that an advertisement paid for by a candidate, candidate committee, or ballot ...

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