ORDER
Pending before this Court are Plaintiffs’ Motion for Preliminary Injunction and Plaintiff-Intervenors’ Motion for Preliminary Injunction. (Docs. 14, 77). For the reasons stated below, Plaintiff-Intervenors’ Motion is granted and Plaintiffs’ Motion is dismissed as moot.
BACKGROUND
An employee in the state of Arizona may authorize his or her employer to withhold certain amounts from the employee’s pay and to transfer those funds to a separate entity. Through such payroll deduction programs, employees pay their health care ór other welfare benefit premiums to insurance companies, invest for retirement with banks and financial institutions, make donations to charitable organizations, and pay dues to their unions. All of these organizations are permitted to engage in political activity, including lobbying, by using money in their general operating fund. See Citizens United v. FEC, — U.S. -,
On April 18 and 19, 2011, the Arizona House and Senate passed Senate Bill 1365, the “Protect Arizona Employees’ Paychecks from Politics Act,” 2011 Arizona Session Laws, Chapter 251, which Governor Janice K. Brewer signed into law on April 26, 2011. The law amended Title 23, Chapter 2, Article 7 of the Arizona Revised Statutes (“A.R.S.”) by adding section 23-361.02. The statute requires that organizations collecting funds through checkoff payroll deductions either affirm to the employers who process the deductions that none of their general fund is used for “political purposes,” or specify the percentage of their general fund so used. A.R.S. § 23-361.02(B). The law defines “political purposes” to mean “supporting or oppos
While the law is written to have general application to all payroll deductions, it explicitly exempts a number of types of deductions from its scope, including, among others, deductions for the benefit of charitable organizations and organizations that provide employee health care, retiree, or welfare benefits. Id. § 23-361.02(E). In addition, SB 1365 excludes from its definition of employee “any public safety employee, including a peace officer, firefighter, corrections officer, probation officer or surveillance officer.” Id. § 23-361.02(H). As a result, no public safety employee union would be obliged to comply with the statute to obtain its dues through payroll deductions from public safety employees. The law is scheduled to go into effect on October 1, 2011. Id. § 23-361.02(A).
On May 9, 2011, Plaintiffs United Food & Commercial Workers 99, et al. filed a complaint challenging SB 1365’s companion legislation, SB 1363, as unconstitutional. (Doc. 1). Plaintiffs amended their complaint to allege that SB 1365 is also unconstitutional. (Doc. 8). Plaintiffs further moved for a preliminary injunction to prevent SB 1365 from going into effect. (Doc. 14).
DISCUSSION
I. SUBJECT-MATTER JURISDICTION AND RIPENESS
In their response, Defendants apparently incorporate the arguments made in their Motion to Dismiss on lack of subject-matter jurisdiction, lack of ripeness, and immunity from suit under the Eleventh Amendment to the United States Constitution. (Doc. 50). To the extent they do so, these arguments lack merit. Federal courts have subject-matter jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Plaintiffs allege that SB 1365 is pre-empted by the Supremacy Clause of the U.S. Constitution, and Plaintiff-Intervenors allege that SB 1365 violates the First Amendment. (Docs. 8, 52). The Court has jurisdiction to entertain constitutional challenges to state statutes. 28 U.S.C. § 1331. To the extent that the parties allege they may choose to restrict their own speech in order to comply with an unconstitutional law, the complaint is ripe for adjudication. LSO, Ltd. v. Stroh,
II. LEGAL STANDARD
To be granted a preliminary injunction, a plaintiff must establish four elements. A plaintiff 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. Nat’l Res. Def. Council,
III. MERIT OF CLAIMS
Plaintiffs make three broad arguments regarding SB 1365. First, they argue that the statute is unconstitutional under the Supremacy Clause because it is pre-empted by the Labor Management Relations Act (“LMRA”) and the National Labor Relations Act (“NLRA”). Next, they argue that the statute is impermissibly vague and overbroad. Finally, they claim that the statute is pre-empted by the Federal Election Campaign Act (“FECA”). (Doc. 14). Plaintiff-Intervenors argue that the law violates the First Amendment, both because it burdens protected political speech and it discriminates on. the basis of speaker and viewpoint. Next, they argue that the law violates the Fourteenth Amendment because its exception for public safety unions is not rationally related to a legitimate governmental interest. They also argue that the law imposes unconstitutional conditions on payroll deductions. They claim that the law violates the Contracts Clause of the United States Constitution. They also assert that the statute is unconstitutionally vague. (Doc. 77).
This Order addresses the First Amendment challenges in detail. Because the Court determines that Plaintiffs are likely to succeed in demonstrating that SB 1365 violates the First Amendment, Defendants are from enforcing it, pending determination on the merits. It will therefore
The statute specifically exempts from its regulatory structure payroll deductions for contributions to charitable organizations; payments to organizations that administer healthcare, retirement, or welfare benefits; payment of taxes; and donations to unions’ political action committees. A.R.S. § 23-361.02(E). Five types of public safety employees, including police officers, firefighters, corrections officers, probation officers, and surveillance officers, are exempted from the law’s definition of “employee.” Id. § 23-361.02(H). As a result, the burdens imposed by the law do not fall equally on similarly-situated groups. The law therefore violates the First Amendment by discriminating against “those wishing to express less favored or more controversial views.” Police Dept. of City of Chicago v. Mosley,
Viewpoint discrimination occurs when the government burdens “speech by particular speakers, thereby suppressing a particular view about a subject.” Moss v. U.S. Secret Service,
A regulation that burdens speech may discriminate by viewpoint through its underinclusiveness — that is, because it fails to burden all similarly situated parties equally. In particular, “an exemption from an otherwise permissible regulation of speech may represent a governmental ‘attempt to give one side of a debatable public question an advantage in expressing its views to the people.’ ” City of Ladue v. Gilleo,
A recent Supreme Court case upholding a statute barring public sector employees from contributing to political action committees through payroll deductions includes instructive commentary on underinclusiveness. See Ysursa v. Pocatello Educ. Ass’n.,
The law at issue here, however, places restrictions on an employee’s ability to donate through payroll deductions to an organization that engages in political activity depending upon the identity of the organization receiving the donation. Employees may thus use payroll deductions to supply money to charitable organizations; banks, trusts, and organizations that administer retiree plans; or insurance companies or other organizations that provide health care or welfare benefits. A.R.S. § 23-361.02(E)(l-5). The Defendants do not dispute that such organizations may spend such funds for political purposes. Moreover, SB 1365 overtly exempts employees who typically are members of public safety unions from its regulations. Id. § 23-361.02(H). The functional result of SB 1365’s numerous exceptions is that the burdens imposed by the law fall principally, if not solely, on unions collecting dues. Even then, they do not fall squarely on unions representing police officers, firefighters, corrections officers, probation officers, or surveillance officers. Id.
Organizations that wish to use payroll deduction to fund their political activity but are not exempted from the statute are disadvantaged from doing so in at least three ways. First, the statute requires them to disclose to the employers of their constituents the maximum percent of the amount deducted that will be used for political activity. A.R.S. § 23-361.02(B). Second, the law imposes a minimum fine of $10,000 per occurrence if an organization exceeds that maximum percent. Id. § 23-361.02(D). Third, it requires the annual authorization of each employee to initiate or continue payroll deduction. Id. § 23-361.02(B). Exempted organizations are subject to no such requirements to receive payroll deductions subsidizing their political activity.
As the Court recognized in Citizens United, some disclosure requirements that may burden speech are subjected to something less than strict scrutiny. Citizens United,
Second, unlike the provisions upheld in Citizens United or Buckley, the requirements of SB 1365 are forward-looking. They apparently require the non-exempt organizations to anticipate in advance the amount they intend to spend on political purposes for a given year. If they under
This fíne, and the ceiling on spending that this fine enforces, is not a disclosure requirement. It is a financial burden that political speakers subject to the law may be required to pay to match the speech of their political opponents. The Supreme Court has held that adding costs to political speech relative to a political speaker’s rivals represents “a special and potentially significant burden.” Davis v. Federal Election Comm’n,
The Court, however, need not analyze whether the state, through a law written to be generally applicable and uniformly applied, could impose such burdens on collecting funds through the payroll deduction program for political purposes. The statute at issue is not generally applicable, and is not “evenhanded.” Ysursa,
The statute contains a sever-ability clause, which provides that “[i]f any provision of this act or its application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this act that can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.” Ariz. Laws 2011, Ch. 251 § 3. Whether or not to enforce a severability provision “is of course a matter of state law.” Leavitt v. Jane L.,
Here, to render SB 1365 viewpoint-neutral, it would be necessary to sever not merely the public safety employee provisions, but also the exemptions for donations to charitable organizations and to health, welfare and retiree benefit associations as well. A.R.S. § 23-361.02(E)(2-3), (H). As a result, every charity, health insurance company, bank, or investment firm that receives money through any Ari
IV. IRREPARABLE HARM
In addition to demonstrating a likelihood of success on the merits, Plaintiffs must demonstrate “that irreparable injury is likely in the absence of an injunction.” Winter,
Y. BALANCE OF EQUITIES
The third preliminary injunction factor requires the court “to balance the interests of all parties and weigh the damage to each.” L.A. Memorial Coliseum Comm’n v. Nat’l Football League,
As discussed above, Plaintiffs and Plaintiff-Intervenors have demonstrated that they are likely to suffer irreparable loss of core First Amendment rights. Defendants will suffer the hardship of both delay in the implementation of the law should it Ultimately be found to be constitutional and delay in writing the rules that will implement the legislation. Defendants’ harms are not substantial enough to tip the balance of equities against Plaintiffs and Plaintiff-Intervenors. The balance of equities weigh in favor of an injunction.
VI. PUBLIC INTEREST
Determining whether an injunction is in the public interest “addresses impact on nonparties rather than parties.” Sammartano v. First Judicial Dist. Court,
VII. SECURITY
A court may issue a preliminary injunction “only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been -wrongfully enjoined or restrained.” Fed. R. Crv. P. 65(c). Although the plain language of the rule suggests that a bond is mandatory, the Ninth Circuit has held that it “invests the district court with discretion as to the amount of security required, if any.” Johnson v. Couturier,
VIII. OTHER CLAIMS
The Court has read and considered the remaining claims, and the statute presents further questions beyond those discussed above. The pre-emption questions are serious and complex. However, since SB 1365, as a law of general application, could only be pre-empted as it applies to private sector employees covered by the LMRA and the NLRA, and since Defendants are, at any rate, enjoined from enforcing the law in its entirety on First Amendment grounds, it is unnecessary at this stage to determine such issues. For the same reason, the Court will refrain from ruling on the other claims, including those alleging that the law is impermissibly vague, imposes unconstitutional conditions, violates equal protection, is pre-empted by election law, and violates the Contracts Clause.
CONCLUSION
Plaintiffs and Plaintiff-Intervenors have shown a likelihood that they will succeed in demonstrating that the law’s exceptions render it underinclusive, and that it therefore discriminates according to viewpoint in violation of the First Amendment. The claims allege constitutional harms, which are necessarily irreparable. The balance of equities and the public interest likewise tilt in favor of enjoining a law that implicates core constitutional rights.
IT IS THEREFORE ORDERED that Plaintiff-Intervenors’ Motion for a Preliminary Injunction (Doc. 77) is GRANTED.
IT IS FURTHER ORDERED that Plaintiffs’ Motion for a Preliminary Injunction (Doc. 14) is DISMISSED AS MOOT.
IT IS FURTHER ORDERED that Attorney General Horne is preliminarily enjoined from enforcing Senate Bill 1365, creating A.R.S. § 23-361.02.
Notes
. Charitable organizations may lose their federal tax-exempt status if a "substantial part” of their activities include "carrying on propaganda, or otherwise attempting, to influence legislation.” 26 U.S.C. § 501(c)(3). Although there is no statutory or regulatory definition of what constitutes a "substantial part” of an organization’s activities, courts have found that less than 5% of an organization’s activity is not substantial, while over 16.6% is substantial. See Seasongood v. Comm’r,
. No injunction is sought against SB 1363.
. In their Motion to Dismiss, State Defendants further argue that Governor Brewer, Secretary of State Bennett, and Director of the Labor Department Maruca are immune from suit under the Eleventh Amendment. (Doc. 40). Because Plaintiff-Intervenors have only sought a preliminary injunction against Attorney General Home, it is not yet necessary to determine whether immunity protects the other parties. (Doc. 77).