Texans for Free Enterprise v. Texas Ethics Commission
732 F.3d 535
| 5th Cir. | 2013Background
- Texans for Free Enterprise (TFE) is a Texas political committee that makes only independent expenditures and solicits contributions to fund its advocacy; it does not contribute to candidates.
- Texas Election Code §§ 253.094(a) and 253.003(b) prohibit corporate political contributions and prohibit accepting contributions known to be unlawful, defining "political contribution" broadly to include transfers made "in connection with a campaign."
- TFE sued the Texas Ethics Commission seeking a declaration and injunction that those provisions, as applied to TFE, violate the First Amendment by barring corporate funding of independent-expenditure advocacy.
- The district court granted a preliminary injunction preventing enforcement of the challenged provisions against TFE; the Commission appealed.
- The Fifth Circuit evaluated whether TFE met the standard for a preliminary injunction: likelihood of success on the merits, irreparable injury, balance of harms, and public interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas may bar corporations from contributing to independent-expenditure political committees | TFE: Citizens United protects independent corporate political spending and extends to accepting corporate funds for independent advocacy | Commission: Contributions to political committees are not equivalent to independent expenditures and may be limited to prevent corruption | Court: Law is incompatible with First Amendment as applied to TFE; likelihood of success for plaintiff |
| Whether precedent (Cal-Med) permits limits on contributions to independent committees | TFE: Cal-Med is distinguishable (multi-candidate PACs that make direct contributions) and is only plurality | Commission: Cal-Med supports contribution limits | Court: Cal-Med not controlling; Justice Blackmun’s concurrence suggests different result for independent-expenditure committees; Cal-Med unhelpful to defendant |
| Appropriate level of scrutiny (strict vs. intermediate) | TFE: Case is indistinguishable in principle from Citizens United (favoring strict protection) | Commission: McConnell/Cal-Med principles could allow limits | Court: Agnostic on exact standard; outcome would be same under either; did not decide which test to announce |
| Irreparable harm and public interest for preliminary injunction | TFE: Loss of ability to raise funds restricts First Amendment speech and causes irreparable injury; injunction serves public interest | Commission: Harm is speculative and centered on anti-corruption interest | Court: Loss of First Amendment freedoms is irreparable; equities and public interest favor injunction |
Key Cases Cited
- Citizens United v. FEC, 558 U.S. 310 (2010) (corporate independent expenditures are protected political speech; anti-corruption is the only legitimate governmental interest)
- McConnell v. FEC, 540 U.S. 93 (2003) (campaign-finance regime subject to intermediate scrutiny in prior precedent; addressed contribution/expenditure limits)
- SpeechNow.org v. FEC, 599 F.3d 686 (D.C. Cir. 2010) (contributions to groups that make only independent expenditures cannot corrupt or create appearance of corruption)
- California Medical Ass’n v. FEC, 453 U.S. 182 (1981) (plurality upholding limits on contributions to certain multi-candidate PACs; not controlling for independent-expenditure-only groups)
- Buckley v. Valeo, 424 U.S. 1 (1976) (distinguishes contributions from independent expenditures; quid pro quo corruption concern tied chiefly to contributions)
- Christian Legal Soc’y v. Walker, 453 F.3d 853 (7th Cir. 2006) (injunctions protecting First Amendment freedoms serve the public interest)