Judge Seabright ruling

Case 1:10-cv-00497-JMS -RLP Document 149 Filed 03/21/12 Page 1 of 88 PageID #:
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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

JIMMY YAMADA, RUSSELL ) CIVIL NO. 10-00497 JMS-RLP
STEWART, AND A-1 )
A-LECTRICIAN, INC., ) ORDER (1) PERMANENTLY
) ENJOINING DEFENDANTS FROM
Plaintiffs, ) ENFORCING HRS § 11-358 AS-
) APPLIED TO SPECIFIED
vs. ) CONTRIBUTIONS TO AFA-PAC, A
) COMMITTEE MAKING ONLY
MICHAEL WEAVER, IN HIS ) INDEPENDENT CAMPAIGN
OFFICIAL CAPACITY AS CHAIR ) EXPENDITURES; AND
AND MEMBER OF THE HAWAII ) (2) UPHOLDING THE
CAMPAIGN SPENDING ) CONSTITUTIONALITY, AS
COMMISSION; DEAN ROBB, ) CHALLENGED, OF PROVISIONS
CALMENTINA GOMES, AND G. ) OF HRS §§ 11-302, 355 & 391
WILLIAM SNIPES, IN THEIR )
OFFICIAL CAPACITIES AS )
MEMBERS OF THE HAWAII )
CAMPAIGN SPENDING )
COMMISSION, )
)
Defendants. )
______________________________ )

ORDER (1) PERMANENTLY ENJOINING DEFENDANTS FROM
ENFORCING HRS § 11-358 AS-APPLIED TO SPECIFIED
CONTRIBUTIONS TO AFA-PAC, A COMMITTEE MAKING ONLY
INDEPENDENT CAMPAIGN EXPENDITURES; AND (2) UPHOLDING
THE CONSTITUTIONALITY, AS CHALLENGED, OF PROVISIONS OF
HRS §§ 11-302, 355 & 391

I. INTRODUCTION

Plaintiffs Jimmy Yamada (“Yamada”), Russell Stewart (“Stewart”),

and A-1 A-Lectrician, Inc. (“A-1”) (collectively “Plaintiffs”) filed this action in

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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

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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

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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 “pay-

to-play” ban in § 11-355 is constitutional as applied to A-1.

In sum, based on the following, the Cross Motions for Summary

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Judgment are GRANTED in PART and DENIED in PART.

II. BACKGROUND

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).1 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).2 FAC at 59-60.

1
Hawaii’s campaign finance laws were updated and re-codified in 2010 by Act 211,
2010 Haw. Sess. L. (“Act 211”). See Act 211 § 13. The purpose of Act 211 was to “update,
organize, and clarify current [pre-July 2010] campaign finance laws.” Act 211 § 1. The FAC
and this court’s prior Orders refer to the challenged provisions as they were temporarily
numbered in Act 211. The sections were subsequently codified in HRS Chapter 11, and this
Order now refers to them as they are presently codified.
2
AFA-PAC is not a Plaintiff, but its status is important in this action.

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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.1.3

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.

3
The FAC names the Commission members, in their official capacities, as of September
2010. Pursuant to Federal Rule of Civil Procedure 25(d), current Commission members (as of
December 2011) Michael Weaver, Calmentina Gomes and G. William Snipes are automatically
substituted as Defendants. Dean Robb, whose term has continued throughout the litigation,
remains as a Defendant.

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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 committee4 that makes

only “independent expenditures.”5 It does not contribute directly to candidates,

and does not coordinate spending for political speech with candidates or political

4
See State of Hawaii, Campaign Spending Commission, Organizational Report of AFA-
PAC, available at https://nc.csc.hawaii.gov/NCFSPublic/ORG_Report.php?OR_ID=20274 (last
visited March 12, 2012).
5
HRS § 11-302 defines an “independent expenditure” as “an expenditure by a person
expressly advocating the election or defeat of a clearly identified candidate that is not made in
concert or cooperation with or at the request or suggestion of the candidate, the candidate
committee, a party, or their agents.” In turn, § 11-302 defines a “person” as “an individual, a
partnership, a candidate committee or noncandidate committee, a party, an association, a
corporation, a business entity, an organization, or a labor union and its auxiliary committees.”
Federal law defines “independent expenditure” similarly, as:
[A]n expenditure by a person --
(A) expressly advocating the election or defeat of a clearly
identified candidate; and
(B) that is not made in concert or cooperation with or at the request
or suggestion of such candidate, the candidate’s authorized
political committee, or their agents, or a political party committee
or its agents.
2 U.S.C. § 431(17).

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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

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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

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“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

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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).6 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 A-

Lectrician, 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.”

6
Exhibit 14 of the FAC is published as an Appendix to Yamada II, 2010 WL 4603936,
at *20.

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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.”7 Tr. 62-63.

7
Blake Oshiro and Calvin Say were Hawaii State representative candidates in the 2010
primary and general elections. See Final Summary Report, General Election -- State of Hawaii --
City and County of Honolulu (Nov. 2, 2010), available at http://hawaii.gov/elections/
results/2010/general/files/cch.pdf (last visited March 15, 2012).

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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.

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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 nonmonetary
contribution for the purpose of:

(A) Influencing the nomination for election, or

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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

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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

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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.[8]

8
An electioneering communication “statement of information” requires:

(1) The name of the person making the disbursement, name of any
person or entity sharing or exercising discretion or control over
such person, and the custodian of the books and accounts of the
person making the disbursement;

(2) The state of incorporation and principal place of business or,
for an individual, the address of the person making the
disbursement;

(3) The amount of each disbursement during the period covered by
the statement and the identification of the person to whom the
disbursement was made;

(4) The elections to which the electioneering communications
pertain and the names, if known, of the candidates identified or to
be identified;

(5) If the disbursements were made by a candidate committee or
noncandidate committee, the names and addresses of all persons
who contributed to the candidate committee or noncandidate
committee for the purpose of publishing or broadcasting the
electioneering communications;

(6) If the disbursements were made by an organization other than a
candidate committee or noncandidate committee, the names and
addresses of all persons who contributed to the organization for the
purpose of publishing or broadcasting the electioneering
communications; and

(7) Whether or not any electioneering communication is made in
(continued...)

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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

8
(...continued)
coordination, cooperation, or concert with or at the request or
suggestion of any candidate, candidate committee, or noncandidate
committee, or agent of any candidate if any, and if so, the
identification of the candidate, a candidate committee or a
noncandidate committee, or agent involved.

HRS § 11-341(b).

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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

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(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 issue committee
does not need to include the notice; or

(B) The advertisement is published,
broadcast, televised, or circulated without the
approval and authority of the candidate.

(b) The fine for violation of this section, if assessed by the
commission, shall not exceed $25 for each advertisement that
lacks the information required by this section, and shall not
exceed an aggregate amount of $5,000.

(Emphasis added.)

5. Contribution Ban by Government Contractors

Finally, A-1 challenges the constitutionality of Hawaii’s ban on direct

campaign contributions by government contractors. The challenged statute reads:

(a) It shall be unlawful for any person who enters into any
contract with the State, any of the counties, or any department
or agency thereof either for the rendition of personal services,
the buying of property, or furnishing of any material, supplies,
or equipment to the State, any of the counties, any department
or agency thereof, or for selling any land or building to the
State, any of the counties, or any department or agency thereof,
if payment for the performance of the contract or payment for
material, supplies, equipment, land, property, or building is to
be made in whole or in part from funds appropriated by the
legislative body, at any time between the execution of the

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contract through the completion of the contract, to:

(1) Directly or indirectly make any contribution,
or promise expressly or impliedly to make any
contribution to any candidate committee or
noncandidate committee, or to any candidate or to
any person for any political purpose or use; or

(2) Knowingly solicit any contribution from any
person for any purpose during any period.

(b) Except as provided in subsection (a), this section does not
prohibit or make unlawful the establishment or administration
of, or the solicitation of contributions to, any noncandidate
committee by any person other than the state or county
contractor for the purpose of influencing the nomination for
election, or the election of any person to office.

(c) For purposes of this section, “completion of the contract”
means that the parties to the government contract have either
terminated the contract prior to completion of performance or
fully performed the duties and obligations under the contract,
no disputes relating to the performance and payment remain
under the contract, and all disputed claims have been
adjudicated and are final.

HRS § 11-355.

C. Procedural Background

Plaintiffs initially filed this action on August 27, 2010. They followed

with the FAC on September 3, 2010, Doc. No. 24, and an Amended Motion for

Preliminary Injunction. Doc. No. 25. The court held an evidentiary hearing on the

preliminary injunction on October 1, 2010, and issued Yamada I on October 7,

21

#: 2531

2010, preliminarily enjoining enforcement of § 11-358 as applied to Yamada’s and

Stewart’s then-proposed contributions to AFA-PAC. Doc. No. 71. Defendants

appealed that preliminary injunction to the Ninth Circuit Court of Appeals, but

withdrew the appeal after Thalheimer was released. Doc. No. 113.

Meanwhile, on October 12, 2010, the Ninth Circuit issued a key

opinion, Human Life of Washington, Inc. v. Brumsickle, 624 F.3d 990 (9th Cir.

2010), cert. denied, 131 S. Ct. 1477 (2011), which addressed several of the issues

involved in this action. After receiving supplemental briefing regarding Human

Life, the court issued Yamada II on October 29, 2010, denying the remaining issues

pursued in the preliminary injunction Motion. Doc. No. 91. Thereafter, the

challenging entity in Human Life (represented by the same law firm that represents

Plaintiffs in this action) filed a writ of certiorari, seeking Supreme Court review.

Given Human Life’s importance to this action, the parties agreed to stay this case

pending Supreme Court action on the writ of certiorari. Doc. No. 97. After the

Supreme Court denied the writ, the stay was lifted on June 16, 2011. Doc. No.

115.

Accordingly, the parties filed Cross Motions for Summary Judgment

on all issues on December 5, 2011. Doc. Nos. 125 & 126. On December 19, 2011,

Oppositions were filed, Doc. Nos. 129 & 130, followed by Replies on January 6,

22

#: 2532

2012. Doc. Nos. 132 & 133. The court heard the Cross Motions on February 6,

2012. The parties also filed various Notices of Uncited or Supplemental Authority,

including relevant argument or responses. See Doc. Nos. 134, 135, 139, 140, 142,

143, 145, 147 & 148. The court has reviewed and considered all written

submissions and oral arguments, and now issues this Order ruling on the

constitutionality of the provisions, as challenged by Plaintiffs.

III. STANDARD OF REVIEW

Summary judgment is proper where there is no genuine issue of

material fact and the moving party is entitled to judgment as a matter of law. Fed.

R. Civ. P. 56(a). Rule 56(a) mandates summary judgment “against a party who

fails to make a showing sufficient to establish the existence of an element essential

to the party’s case, and on which that party will bear the burden of proof at trial.”

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Broussard v. Univ. of

Cal. at Berkeley, 192 F.3d 1252, 1258 (9th Cir. 1999).

“A party seeking summary judgment bears the initial burden of

informing the court of the basis for its motion and of identifying those portions of

the pleadings and discovery responses that demonstrate the absence of a genuine

issue of material fact.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th

Cir. 2007) (citing Celotex, 477 U.S. at 323); see also Jespersen v. Harrah’s

23

#: 2533

Operating Co., 392 F.3d 1076, 1079 (9th Cir. 2004). “When the moving party has

carried its burden under Rule 56[(a)] its opponent must do more than simply show

that there is some metaphysical doubt as to the material facts [and] come forward

with specific facts showing that there is a genuine issue for trial.” Matsushita Elec.

Indus. Co. v. Zenith Radio, 475 U.S. 574, 586-87 (1986) (citation and internal

quotation signals omitted); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

247-48 (1986) (stating that a party cannot “rest upon the mere allegations or

denials of his pleading” in opposing summary judgment).

“An issue is ‘genuine’ only if there is a sufficient evidentiary basis on

which a reasonable fact finder could find for the nonmoving party, and a dispute is

‘material’ only if it could affect the outcome of the suit under the governing law.”

In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (citing Anderson, 477 U.S. at

248). When considering the evidence on a motion for summary judgment, the

court must draw all reasonable inferences on behalf of the nonmoving party.

Matsushita Elec. Indus. Co., 475 U.S. at 587; see also Posey v. Lake Pend Oreille

Sch. Dist. No. 84, 546 F.3d 1121, 1126 (9th Cir. 2008) (stating that “the evidence

of [the nonmovant] is to be believed, and all justifiable inferences are to be drawn

in his favor.” (citations omitted)).

24

#: 2534

IV. DISCUSSION

The court first addresses whether Plaintiffs have standing to make

their claims, and then (satisfied that Plaintiffs have standing) analyzes the claims

on their merits.

A. Standing

Although Defendants’ Motion does not challenge Plaintiffs’ standing,

at the preliminary injunction phase Defendants questioned whether Plaintiffs had

standing to challenge the electioneering communications and advertisement

definitions (and the court addressed those arguments, and standing more generally,

in Yamada II). The court reiterates its analysis here, based on an updated record,

because the court has an independent duty to address jurisdiction and standing

“even when not otherwise suggested.” See Steel Co. v. Citizens for a Better Env’t,

523 U.S. 83, 94 (1998) (citation omitted); see also Bernhardt v. Cnty. of L.A., 279

F.3d 862, 868 (9th Cir. 2002) (“[F]ederal courts are required sua sponte to examine

jurisdictional issues such as standing.”) (citations omitted).

“Article III restricts federal courts to the resolution of cases and

controversies.” Davis v. Fed. Election Comm’n, 554 U.S. 724, 732 (2008) (citation

omitted). “To qualify as a case fit for federal-court adjudication, an actual

controversy must be extant at all stages of review, not merely at the time the

25

#: 2535

complaint is filed.” Id. at 732-33 (quoting Arizonans for Official English v.

Arizona, 520 U.S. 43, 67 (1997)). “[A] claimant must present an injury that is

concrete, particularized, and actual or imminent; fairly traceable to the defendant’s

challenged behavior; and likely to be redressed by a favorable ruling.” Id. at 733

(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). “[T]he injury

required for standing need not be actualized. A party facing prospective injury has

standing to sue where the threatened injury is real, immediate, and direct.” Id. at

734 (citing Los Angeles v. Lyons, 461 U.S. 95, 102 (1983)). “Courts have long

recognized that ‘[o]ne does not have to await the consummation of threatened

injury to obtain preventive relief.’” Cal. Pro-Life Council v. Getman, 328 F.3d

1088, 1094 (9th Cir. 2003) (citation omitted).

Constitutional challenges alleging freedom of speech violations

require a less exacting review of standing. “In an effort to avoid the chilling effect

of sweeping restrictions, the Supreme Court has endorsed what might be called a

‘hold your tongue and challenge now’ approach rather than requiring litigants to

speak first and take their chances with the consequences.” Ariz. Right to Life

Political Action Comm. v. Bayless, 320 F.3d 1002, 1006 (9th Cir. 2003) (citing

Dombrowski v. Pfister, 380 U.S. 479, 486 (1965) (recognizing the “sensitive nature

of constitutionally protected expression,” in permitting a pre-enforcement action

26

#: 2536

involving the First Amendment) and Bland v. Fessler, 88 F.3d 729, 736-37 (9th

Cir. 1996) (“That one should not have to risk prosecution to challenge a statute is

especially true in First Amendment cases[.]”)). “Thus, ‘when the threatened

enforcement effort implicates First Amendment rights, the inquiry tilts

dramatically toward a finding of standing.’” Ariz. Right to Life, 320 F.3d at 1006

(quoting LSO, Ltd. v. Stroh, 205 F.3d 1146, 1155 (9th Cir. 2000)).

Applying these standards, Yamada and Stewart have standing to

challenge § 11-358. They desired to and eventually made contributions to AFA-

PAC that exceeded the statutory limitations, giving rise to an actual controversy.

See Davis, 554 U.S. at 732-33. If § 11-358 is constitutional as applied, they could

have been subject to administrative fines or misdemeanor criminal prosecution.

See HRS § 11-410(a)(1) (providing for possible fines up to $1,000 per occurrence,

or three times the amount of unlawful contribution) & § 11-412(a) (“Any person

who recklessly, knowingly, or intentionally violates any provision of this part shall

be guilty of a misdemeanor.”). And they indicate a legitimate desire to make

similar contributions in 2012. A favorable ruling would allow them to make

further contributions to AFA-PAC in 2012 without violating the law. Davis, 554

U.S. at 732-33.

Similarly, A-1 has standing to challenge the “noncandidate

27

#: 2537

committee” and “expenditure” definitions, “advertising” requirements, and

contribution restrictions by government contractors.9 A-1 is presently registered as

a noncandidate committee, but has a good faith basis for believing it should not

have to register, giving rise to an actual controversy. See id. If A-1 ceases

registration, either by affirmatively withdrawing from registration or by failing to

comply with various reporting requirements (because it believes it no longer needs

to register), but engages in campaign-related activities, it could subject itself to

possible fines or actions. See HRS §§ 11-410(a)(1) & 11-412(a). A-1 need not

actually violate the statutes to challenge their terms. See, e.g., Cal. Pro-Life

Council, 328 F.3d at 1094; Bland, 88 F.3d at 736-37. There is enough of an

“injury,” particularly in the First Amendment context, to allow it to seek a

declaratory judgment so that, if successful, it can cease registration without fear of

fine or prosecution. That is, a favorable ruling would allow A-1 to cease

registration without violating the law. See Davis, 554 U.S. at 732-33.

9
As explained below, A-1’s standing specifically to challenge the requirement of an
“electioneering communication” statement of information is contingent upon prevailing on its
challenge to the noncandidate committee provision. If A-1 has to register as a noncandidate
committee, it discloses its electioneering communications through those noncandidate committee
requirements. See Haw. Admin. R. § 3-160-48 (effective May 29, 2010) (“A noncandidate
committee registered with the commission is not required to file a statement of information for
disbursements for electioneering communications.”). Ultimately, the court need not reach this
aspect of the electioneering-communications challenge because A-1’s challenge to the
noncandidate committee definition fails. That is, in the end, A-1 lacks standing to challenge the
requirements of HRS § 341(a).

28

#: 2538

As to its challenge to the disclaimer provisions for an

“advertisement,” even if A-1 already published the advertisements with the

disclaimers does not mean A-1 faces no injury. A-1 sought, and seeks, a

declaration that it need not include disclaimer language in the future. Tr. at 60.10

And it challenges those statutes facially as well. A-1 does not have to publish the

advertisements without the disclaimer language (and risk a fine or other

enforcement action) in order to give itself standing. See Bland, 88 F.3d at 736-37.

Again, a favorable ruling will enable A-1 to publish its advertisements without the

disclaimer language and without fear of violating the law. See Davis, 554 U.S. at

732-33.

Finally, A-1 has standing to challenge HRS § 11-355. It is presently a

government contractor. It has made substantial contributions to candidates in the

past (presumably, while not a contractor), and seeks to make future contributions

while it is a contractor. It need not violate the statute to challenge its terms. See

Bland, 88 F.3d at 736-37. A favorable ruling would allow it to make contributions

as a contractor without violating the law. See Davis, 554 U.S. at 732-33.

10
Even if A-1 sought only to run the advertisements before the 2010 primary election,
and no longer has specific plans to run the same advertisements, the challenge is not moot --
“there is a reasonable expectation that [A-1] will face the prospect of enforcement of the
[challenged provisions] again.” Human Life of Washington, Inc. v. Brumsickle, 624 F.3d 990,
1002 (9th Cir. 2010), cert. denied, 131 S. Ct. 1477 (2011).

29

#: 2539

B. Section 11-358’s Contribution Limitation to Noncandidate Committees

The court first addresses Hawaii’s $1,000 per-election limitation on

contributions to noncandidate committees in § 11-358. In this regard, Yamada I

preliminarily enjoined Defendants from enforcing § 11-358 as to Yamada’s and

Stewart’s proposed contributions to AFA-PAC. See 744 F. Supp. 2d at 1087.

Yamada I relied primarily on Long Beach Area Chamber of Commerce v. City of

Long Beach, 603 F.3d 684 (9th Cir.), cert. denied, 131 S. Ct. 392 (2010), and

Speechnow.org v. Federal Election Commission, 599 F.3d 686 (D.C. Cir.) (en

banc), cert. denied, 131 S. Ct. 553 (2010), which both held that contribution

limitations to organizations that make only independent campaign expenditures are

invalid.

Defendants appealed Yamada I to the Ninth Circuit, but withdrew the

appeal after the Ninth Circuit reiterated that such contribution limitations are

invalid. See Thalheimer, 645 F.3d at 1121-22. The Seventh Circuit has since also

held the same. See Barland, 664 F.3d at 154-55. And the Ninth Circuit recently

applied the same rationale in striking a Washington state law that limited

contributions to recall committees, which by definition also do not coordinate or

prearrange their independent expenditures with candidates. See Farris v.

Seabrook, 667 F.3d 1051, 1059-60 (9th Cir. 2012).

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#: 2540

Given the strength of Plaintiffs’ position, Defendants do not oppose

Plaintiffs’ Motion to the extent it challenges § 11-358 as applied to Yamada’s and

Stewart’s contributions to AFA-PAC. That is, Defendants agree that, given

binding precedent, the court should make permanent the preliminary injunction

entered in Yamada I. In doing so here, the court incorporates and updates some of

its analysis from Yamada I, which is important not only for analyzing § 11-358,

but also for analyzing the other challenges to follow.

1. Level of Scrutiny

Since Buckley v. Valeo, 424 U.S. 1 (1976), the Supreme Court has

distinguished between restrictions on contributions to candidates and restrictions

on expenditures for political speech. See, e.g., Ariz. Free Enter. Club’s Freedom

Club PAC v. Bennett, 131 S. Ct. 2806, 2817 (2011); Thalheimer, 645 F.3d at 1117.

Although campaign contribution limitations “operate in an area of the most

fundamental First Amendment activities,” Buckley, 424 U.S. at 15, contribution

limitations generally “entail[] only a marginal restriction upon the contributor’s

ability to engage in free communication.” Id. at 20. And so, the court analyzes the

constitutional validity of campaign contribution limitations by applying “closely

drawn scrutiny.” Under this test, “[c]ontribution limitations are permissible as

long as the Government demonstrates that the limits are ‘closely drawn’ to match a

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#: 2541

‘sufficiently important [government] interest.’” City of Long Beach, 603 F.3d at

691 (quoting Randall v. Sorrell, 548 U.S. 230, 247 (2006)) (other citation omitted);

see also Thalheimer, 645 F.3d at 1117-18.

Unlike contributions, expenditure limitations directly inhibit speech.

See Citizens United, 130 S. Ct. at 910 (“[A]n independent expenditure is political

speech[.]”). “Expenditure limitations may restrict the breadth and depth of

political dialogue and they ‘preclude[] most associations from effectively

amplifying the voice of their adherents, the original basis for recognition of First

Amendment protection of the freedom of association.’” City of Long Beach, 603

F.3d at 692 (quoting Buckley, 424 U.S. at 22) (other citation omitted). As a result,

limitations on campaign expenditures must pass strict scrutiny -- they are valid

only if narrowly tailored to a compelling government interest. Id.11

2. The Government Interest

Therefore, the court’s First Amendment analysis of campaign finance

provisions starts by examining the possible government interests justifying a

limitation, whether it be an expenditure or contribution limitation. If there is no

valid interest (whether it needs to be “compelling” or “sufficiently important”), the

11
“Citizens United, rather than overruling Buckley, noted and reinforced the distinction
between independent expenditures on behalf of candidates and direct contributions to
candidates.” Siefert v. Alexander, 608 F.3d 974, 988 (7th Cir. 2010). Last term, Bennett
reaffirmed these dual levels of scrutiny. See 131 S. Ct. at 2816-17.

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court need not reach whether a regulation is “narrowly tailored” or “closely drawn”

to that interest. And Citizens United largely answers that question here. Although

Citizens United struck down an expenditure (and not a contribution) limitation, its

discussion of valid government interests provides direct insight in analyzing

whether § 11-358’s contribution limitation can constitutionally apply to limit

Yamada’s and Stewart’s contributions to AFA-PAC.

“The Supreme Court has concluded that preventing corruption or the

appearance of corruption are the only legitimate and compelling government

interests thus far identified for restricting campaign finances.” City of Long Beach,

603 F.3d at 694 (citations and internal quotation marks omitted) (emphasis

added).12 Citizens United rejected (by overruling Austin v. Michigan Chamber of

Commerce, 494 U.S. 652 (1990)) an “antidistortion” interest -- the government’s

preventing the “corrosive and distorting effects [in elections] of immense

aggregations of wealth that are accumulated with the help of the corporate form

and that have little or no correlation to the public’s support for the corporation’s

12
Other government interests, however, can apply to justify certain regulation (e.g.,
disclosure) of campaign-related speech -- such as an interest in “‘providing the electorate with
information’ about the sources of political campaign funds.” Speechnow.org v. Fed. Election
Comm’n, 599 F.3d 686, 696 (D.C. Cir. 2010) (quoting Buckley, 424 U.S. at 66 (brackets
omitted)); see also Human Life, 624 F.3d at 1008 (“Campaign finance disclosure requirements
. . . advance the important and well-recognized interest of providing the voting public with
information with which to assess the various messages vying for their attention in the market-
place of ideas.”).

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political ideas.” 130 S. Ct. at 903 (quoting Austin, 494 U.S. at 660). Although

Citizens United reiterated that “ensur[ing] against the reality or appearance of [quid

pro quo] corruption” could justify certain limits on direct contributions, id. at 908,

it concluded that “[n]o sufficient government interest justifies limits on the

political speech of . . . corporations.” Id. at 913 (emphasis added). That is, no

interest can justify limits on amounts of independent corporate campaign

expenditures.

However specifically defined by statute, an independent expenditure

is not coordinated with a candidate or a candidate’s campaign. It is neither

prearranged nor done at the suggestion of a candidate. It is “independent.”

Citizens United therefore reasoned that such independent expenditures could not

give rise to corruption or the appearance of corruption. Id. at 908-09. Under

Citizens United, even if independent expenditures could lead to “influence” or

“access,” it does not follow that “corruption” exists -- “[t]he appearance of

influence or access . . . will not cause the electorate to lose faith in our democracy.”

Id. at 910. Therefore, a government interest in preventing the reality or appearance

of corruption cannot justify limiting amounts of independent expenditures for

political speech, even by a corporate entity. Id. at 913.

Courts after Citizens United have addressed the next logical question:

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whether contribution limitations to organizations that make only independent

campaign expenditures are valid -- precisely the situation with § 11-358 and

Yamada’s and Stewart’s contributions to AFA-PAC. As analyzed in Yamada I,

City of Long Beach applied Citizens United’s rationale -- that an anti-corruption

interest cannot apply where only independent expenditures are involved -- and

specifically held that there is no legitimate government interest in restricting

contributions to organizations that engage only in independent spending. See 744

F. Supp. 2d at 1083 (citing City of Long Beach, 603 F.3d at 696-99). Under such

precedent, prevention of corruption or its appearance cannot justify limiting

campaign contributions if those contributions can lead only to independent

campaign expenditures. See City of Long Beach, 603 F.3d at 699 (concluding that

“the City’s anti-corruption rationale does not support the [City’s campaign reform

act’s] limitations on contributions”).

Further, as mentioned above, the Ninth Circuit reaffirmed the logic of

City of Long Beach in Thalheimer, 645 F.3d at 1121-22, and, most recently, in

Farris, 667 F.3d at 1059-60. And the District of Columbia and Seventh Circuits

agree. See, e.g., Speechnow.org, 599 F.3d at 694-95 (“In light of the Court’s

holding [in Citizens United] as a matter of law that independent expenditures do

not corrupt or create the appearance of quid pro quo corruption, contributions to

35

#: 2545

groups that make only independent expenditures also cannot corrupt or create the

appearance of corruption.”); Barland, 664 F.3d at 154 (“[T]he anticorruption

rationale cannot serve as a justification for limiting fundraising by groups that

engage in independent spending on political speech.”).

Although the government can still limit contributions made directly to

candidates or parties, “the need for contribution limitations to combat corruption or

the appearance thereof tends to decrease as the link between the candidate and the

regulated entity becomes more attenuated.” City of Long Beach, 603 F.3d at 696.

If the organization receiving contributions truly engages in only independent

expenditures, the link is not only attenuated -- it is broken. Under the logic of this

precedent, an anti-corruption or appearance of corruption rationale is nonexistent.

It follows that contribution limitations to such organizations violate the First

Amendment.

Section 11-358 limits the amount of contributions a person can make

to a noncandidate committee. If that noncandidate committee makes only

independent expenditures -- as is true with AFA-PAC -- then, under Citizens

United, Hawaii cannot limit those expenditures. Yamada’s and Stewart’s

contributions to AFA-PAC can only lead to independent expenditures. The record

contains no evidence contradicting AFA-PAC’s assertion that it “operates like any

36

#: 2546

other independent political action committee.” There is “no basis on which to

conclude that [AFA-PAC] ha[s] the sort of close relationship with candidates that

supports a plausible threat of corruption or the appearance thereof.” City of Long

Beach, 603 F.3d at 698. Therefore, § 11-358 is unconstitutional as applied to

Yamada’s and Stewart’s contributions to AFA-PAC.13 Defendants are

permanently enjoined from enforcing § 11-358’s contribution limitation in that

situation.14

C. The Noncandidate Committee and Expenditure Definitions

A-1 next challenges Hawaii’s definitions in § 11-302 of

“noncandidate committee” and “expenditure” -- primarily taking issue with their

incorporation of the terms “to influence” or “for the purpose of influencing,” and a

perceived requirement that a committee must have a campaign-related “major

purpose” before being subject to such regulation. A-1 challenges the definitions

both facially and as-applied to its activities. It contends that the terms are

“unconstitutionally vague, and therefore overbroad.” FAC ¶ 72. Although courts

13
Because an anti-corruption interest is invalid under these circumstances, the court need
not reach whether the limitation is sufficiently tailored to that interest.
14
Yamada I also addressed at the preliminary-injunction phase what the court perceived
as a facial challenge to § 11-358. 744 F. Supp. 2d at 1084-85. Plaintiffs have now clarified that
they do not challenge § 11-358 facially. Accordingly, this Order does not address whether § 11-
358 is facially unconstitutional.

37

#: 2547

“have traditionally viewed vagueness and overbreadth as logically related and

similar doctrines,” Kolender v. Lawson, 461 U.S. 352, 358 n.8 (1983), A-1 makes

conceptually distinct overbreadth and vagueness arguments. See FAC at 42-44;

Pls.’ Mot. at 30-32, 34 (distinguishing A-1’s overbreadth and vagueness

challenges). Therefore, the court first separately addresses A-1’s overbreadth and

vagueness arguments, and then analyzes whether the definitions survive a First

Amendment challenge under an “exacting scrutiny” test.

1. Overbreadth

A-1 argues that, in an electoral context, government may not

constitutionally regulate an organization’s speech unless it is “unambiguously

[campaign] related.” Buckley, 424 U.S. at 80. The definitions are problematic, it

reasons, because they rely on the term “to influence” -- they regulate organizations

having “the purpose of . . . making expenditures . . . to influence” the election of a

candidate (where “expenditure” is then defined as including payments “for the

purpose of . . . influencing” an election). According to A-1, the term

“influencing” is overbroad because it can reasonably be read to reach a significant

amount of non-campaign-related speech (i.e., pure issue discussion), imposing

regulatory burdens such as registration, reporting, and disclosure, implicating the

First Amendment. See Buckley, 424 U.S. at 77 (“It is the ambiguity of this phrase

38

#: 2548

[(“for the purpose of influencing the nomination or election of candidates” in

federal statutes)] that poses constitutional problems.”).15

Buckley addressed the concern that a Federal Election Campaign Act

(“FECA”) definition of a “political committee” -- referring to expenditures “for the

purpose of influencing” a federal election -- was unconstitutionally “vague.” Id. at

79. And, although Buckley formulated its analysis in terms of “vagueness,” “there

are hints in Buckley that the constitutional basis for the Court’s concern lay more in

overbreadth -- i.e., that statutes that reached issue discussion might be deemed to

regulate impermissibly a substantial amount of speech protected by the First

Amendment[.]” Nat’l Org. for Marriage v. McKee, 649 F.3d 34, 53 (1st Cir. 2011)

(citing cases), cert. denied, --- S. Ct. ----, 2012 WL 603080 (U.S. Feb. 27, 2012)

(No. 11-599). “[T]he dividing line between issue discussion and express advocacy,

as it evolved, came to be associated more strongly with First Amendment

overbreadth analysis than with due process vagueness concerns.” Id. (footnote

omitted).

In applying the doctrine of “constitutional avoidance,”16 Buckley

15
And, as discussed in detail below, ambiguity or “vagueness” can raise Fourteenth
Amendment due process concerns, if a speaker cannot reasonably understand what is proscribed.
See, e.g., Buckley, 424 U.S. at 76-77.
16
The canon of constitutional avoidance is described as “the elementary rule . . . that
(continued...)

39

#: 2549

narrowly construed the terms as follows:

To fulfill the purposes of [FECA] [the words “political
committee”] need only encompass organizations that are under
the control of a candidate or the major purpose of which is the
nomination or election of a candidate. Expenditures of
candidates and of “political committees” so construed can be
assumed to fall within the core area sought to be addressed by
Congress. They are, by definition, campaign related.

Id. (emphasis added). And “to insure that the reach . . . is not impermissibly

broad,” Buckley also narrowly construed “expenditure” (defined in terms of “for

the purpose of influencing”) so as “to reach only funds used for communications

that expressly advocate the election or defeat of a clearly identified candidate.” Id.

at 80 (emphasis added).17

Given Buckley, A-1 argues that Hawaii’s definition of a noncandidate

16
(...continued)
every reasonable construction must be resorted to, in order to save a statute from
unconstitutionality.” Gonzales v. Carhart, 550 U.S. 124, 153 (2007) (quoting Edward J.
DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575 (1988)).
“Where the constitutional requirement of definiteness is at stake, we have the further obligation
to construe the statute, if that can be done consistent with the legislature’s purpose, to avoid the
shoals of vagueness.” Buckley, 424 U.S. at 77-78 (citations omitted).
17
“[Buckley’s] examples of words of express advocacy, such as ‘vote for,’ ‘elect,’
‘support,’ . . . ‘defeat,’ and ‘reject,’ . . . gave rise to what is now known as the ‘magic words’
requirement.” McConnell v. Fed. Election Comm’n, 540 U.S. 93, 191 (2003) (some editorial
marks omitted) (referring to Buckley, 424 U.S. at 44 n.52), overruled on other grounds by
Citizens United, 130 S. Ct. at 913. “Express advocacy” was later extended to its “functional
equivalent” (that is, communications “susceptible of no reasonable interpretation other than as an
appeal to vote for or against a specific candidate”). Fed. Election Comm’n v. Wisc. Right to Life,
Inc., 551 U.S. 449, 469-70 (2007). Thus, the “functional equivalent of express advocacy” is
synonymous with this “appeal to vote” test.

40

#: 2550

committee unconstitutionally imposes “political committee” status, with its

accompanying burdens, on organizations that engage in only limited political

activity (i.e., do not have the “major purpose” of which is political advocacy). The

premise is that government constitutionally can only require an organization to

register as a “political committee” if that organization is “under control of a

candidate” or has the nomination or election of candidates (political advocacy) as

its major purpose. See Buckley, 424 U.S. at 79. If so, A-1 argues, Hawaii’s

noncandidate committee definition is too broad; it impermissibly regulates

organizations that do not meet the “major purpose” test and thus “sweeps up” and

regulates organizations that only advocate “issues” outside a campaign-related

context, and thereby violates the First Amendment.

But Human Life (decided after this action was filed) rejected this very

argument. The Ninth Circuit rejected a bright line rule that “unless the sole major

purpose of a group is political advocacy, any regulation of that group will

automatically be too burdensome[.]” 624 F.3d at 1009. The narrowing

constructions the Supreme Court applied in Buckley “defined the outer limits of

permissible political committee regulation.” Id. at 1010 (quoting N.C. Right to

Life, Inc. v. Leake, 525 F.3d 274, 327 (4th Cir. 2008) (Michael, J., dissenting)).

Organizations often have more than one “major” or “primary” purpose, and the

41

#: 2551

First Amendment does not categorically prohibit government from imposing

disclosure requirements -- such as those accompanying noncandidate committee

status -- on such groups. Id. at 1011. See also McKee, 649 F.3d at 59 (“We find

no reason to believe that this so-called ‘major purpose’ test, like the other

narrowing constructions adopted in Buckley, is anything more than an artifact of

the Court’s construction of a federal statute. . . . The [Supreme] Court has never

applied a ‘major purpose’ test to a state’s regulation of [political action

committees.]”).

Indeed, Citizens United rejected the contention that “disclosure

requirements must be limited to speech that is the functional equivalent of express

advocacy.” 130 S. Ct. at 915 (emphasis added). “Given the Court’s analysis in

Citizens United, and its holding that the government may impose disclosure

requirements on speech, the position that disclosure requirements cannot

constitutionally reach issue advocacy is unsupportable.” Human Life, 624 F.3d at

1016.

In essence, after Citizens United, the “unambiguously campaign

related” standard from Buckley -- including its “major purpose” test -- articulates

only a safe harbor (from a regulatory perspective). “Buckley left room for

legislative judgment . . . so long as the resulting regulation does not prohibit a

42

#: 2552

substantial amount of non-electoral speech.” Leake, 525 F.3d at 327 (Michael, J.,

dissenting).

Stated another way, that some issue advocacy may fall within a

disclosure requirement is not necessarily fatal to the regulation itself. Government

may impose reasonable disclosure requirements, but must be careful to avoid

“sweeping into its purview groups that only incidentally engage in [political]

advocacy” or “only occasionally engage[] in activities on behalf of political

candidates and whose central organizational purpose is issue advocacy.” Human

Life, 624 F.3d at 1011 (citations and internal quotation marks omitted). For, as

reiterated in Human Life, the Supreme Court has rejected the notion that “speakers

possess an inviolable First Amendment right to engage in [issue advocacy].” Id. at

1016 (quoting McConnell v. Fed. Election Comm’n, 540 U.S. 93, 190 (2003),

overruled on other grounds by Citizens United, 130 S. Ct. at 913)). “[I]mposing

disclosure obligations on communicators engaged in issue advocacy is not per se

unconstitutional[.]” Id. Rather, the more fundamental question is whether a

regulation burdening such speech satisfies the appropriate level of scrutiny -- a

question the court addresses after considering A-1’s vagueness challenge.

2. Vagueness

A-1 also attacks the terms “for the purpose of influencing” and “to

43

#: 2553

influence” as unconstitutionally vague, in violation of the Fourteenth Amendment.

“A law is unconstitutionally vague if it fails to provide a reasonable opportunity to

know what conduct is prohibited, or is so indefinite as to allow arbitrary and

discriminatory enforcement.” Human Life, 624 F.3d at 1019 (quoting Tucson

Woman’s Clinic v. Eden, 379 F.3d 531, 555 (9th Cir. 2004)). Nevertheless,

“[m]any statutes will have some inherent vagueness, for ‘[i]n most English words

and phrases there lurk uncertainties.’” Rose v. Locke, 423 U.S. 48, 49-50 (1975)

(per curiam) (quoting Robinson v. United States, 324 U.S. 282, 286 (1945)).

“[P]erfect clarity and precise guidance have never been required even of

regulations that restrict expressive activity.” Ward v. Rock Against Racism, 491

U.S. 781, 794 (1989). That is, “[t]he touchstone of a facial vagueness challenge in

the First Amendment context . . . is not whether some amount of legitimate speech

will be chilled; it is whether a substantial amount of legitimate speech will be

chilled.” Cal. Teachers Ass’n v. State Bd. of Educ., 271 F.3d 1141, 1152 (9th Cir.

2001) (citing Young v. Am. Mini Theatres, Inc., 427 U.S. 50, 60 (1976)).

A-1’s vagueness challenge to the term “influence” is similar to that

discussed above regarding overbreadth -- the term “raise[s] serious problems of

vagueness” in that it has the “potential for encompassing both issue discussion and

advocacy of a political result.” Buckley, 424 U.S. at 76-77, 79; see also McKee,

44

#: 2554

649 F.3d at 65 (“Conceivably falling within the meaning of ‘influence’ are

objectives as varied as advocacy for or against a candidate’s election; championing

an issue for inclusion in a candidate’s platform; and encouraging all candidates to

embrace public funding. Without more context, we believe the intended meaning

of ‘influence’ to be uncertain enough that a person of average intelligence would

be forced to guess at its meaning and modes of application.”) (quotation marks and

citation omitted).

In opposing A-1’s argument, Defendants -- in their briefing and again

during oral argument -- ask the court to apply a “narrowing gloss” to the term

“influence.” Specifically, they request the court to construe the meaning of

“influence” to communications or activities that constitute express advocacy or its

functional equivalent. See Buckley, 424 U.S. at 80; McKee, 649 F.3d at 66-67. It

is not clear to the court that such a narrowing construction is necessary, given

Citizens United’s rejection of the view that disclosure requirements must be limited

to express advocacy or its functional equivalent. Nevertheless, to avoid any

lingering vagueness doubts, the court addresses Defendants’ request to apply a

“narrowing gloss.”18

18
The court reads “to influence” and “influencing” in this election context as clearly
referring to actions attempting to affect the outcome of an election, either in favor of, or against,
a candidate or ballot issue. Nevertheless, the court recognizes the terms could “present some
(continued...)

45

#: 2555

Initially, the court rejects A-1’s argument that the court in this

situation should not adopt a narrowing construction of a state statute (as opposed to

a federal provision). Federal courts may use such a narrowing gloss if such a

construction is “reasonable and readily apparent.” See Boos v. Barry, 485 U.S.

312, 330 (1988) (“[F]ederal courts are without power to adopt a narrowing

construction of a state statute unless such a construction is reasonable and readily

apparent.”) (emphasis added). “When federal courts rely on a ‘readily apparent’

constitutional interpretation, plaintiffs receive sufficient protection from

unconstitutional application of the [state] statute, as it is quite likely nonparty

prosecutors and state courts will apply the same interpretation.” Planned

Parenthood of Idaho, Inc. v. Wasden, 376 F.3d 908, 932 (9th Cir. 2004).

Moreover, “[i]n evaluating a facial challenge to a state law, a federal

court must . . . consider any limiting construction that a state court or enforcement

agency has proffered.” Hoffman Estates v. The Flipside, Hoffman Estates, Inc.,

455 U.S. 489, 494, n.5 (1982) (citing Grayned v. City of Rockford, 408 U.S. 104,

110 (1972)). Here, Defendants encourage the court to apply a narrowing gloss, and

offer convincing arguments why such a construction is “reasonable and readily

18
(...continued)
vagueness problems.” Nat’l Org. for Marriage v. McKee, 649 F.3d 34, 65 (1st Cir. 2011).

46

#: 2556

apparent.” See White v. City of Norwalk, 900 F.2d 1421, 1424 (9th Cir. 1990)

(adopting narrow construction of an ordinance to avoid constitutional concerns,

concluding that the ordinance was “readily susceptible” to the interpretation

presented by the City’s counsel during the litigation) (citing Frisby v. Schultz, 487

U.S. 474, 480-84 (1988)).

The term “to influence” in the challenged State statutes is “reasonably

and readily” interpreted to refer to express advocacy or its functional equivalent for

two reasons. First, Hawaii’s campaign statutes were substantially re-codified and

revised in 1979, in form and terminology similar to the current provisions. See

Defs.’ Mot. Ex. 10 (setting forth Act 224, 1979 Haw. Sess. L.). And Hawaii

specifically enacted Act 224 in 1979 in reaction to (and to conform, in large part,

with) Buckley. See Defs.’ Mot. Ex. 11 (providing Conf. Comm. Rep. No. 78, in

1979 House J. 1137, 1140). Hawaii’s Legislature was “mindful of” Buckley’s

“narrowing construction” and its use of the term “express advocacy.” Id. It is

reasonable to infer, as Defendants argue, that Hawaii’s Legislature adopted

terminology such as “to influence” in reliance on the Supreme Court’s

interpretation of the same terminology in federal law.

Second, Hawaii’s provisions are identical to the federal provisions

analyzed in Buckley. Hawaii’s Legislature specifically defined “independent

47

#: 2557

expenditures” in terms of “express advocacy.” See HRS § 11-302 (“‘Independent

expenditure’ means an expenditure by a person expressly advocating the election

or defeat of a clearly identified candidate that is not made in concert or cooperation

with . . . the candidate[.]”). And when the Supreme Court subsequently adopted a

test for the “functional equivalent” of express advocacy (i.e., the “appeal to vote”

test), it is reasonable to construe Hawaii statutes similarly. Indeed, the Hawaii

Legislature codified the “appeal to vote” test in defining “electioneering

communications.” See HRS § 11-341(c)(3). Further, the Commission has adopted

-- by regulation -- a definition of “express advocacy” that includes that “appeal to

vote” test. Hawaii Administrative Rule § 3-160-6 defines “expressly advocating”

as follows:

“Expressly advocating” means a communication when
taken as a whole and with limited reference to external
events, could be susceptible to no other reasonable
interpretation but as an exhortation to vote for or against
a candidate because:
(1) The communication is unmistakable,
unambiguous, and suggestive of only one
meaning;
(2) The communication presents a clear plea
for action and is not merely informative; and
(3) Reasonable minds could not differ as to
whether the communication encourages
actions to elect or defeat a clearly identified
candidate or encourages some other kind of
action.

48

#: 2558

It is therefore “reasonable and readily apparent” that this court may

narrowly construe relevant Hawaii campaign provisions, as in Buckley and other

cases, to avoid constitutional vagueness concerns. See, e.g., McKee, 649 F.3d at

66-67 (limiting meaning of “to influence” to “include only ‘communications and

activities which expressly advocate for or against [a candidate] or that clearly

identify a candidate by apparent and unambiguous reference and are susceptible of

no reasonable interpretation other than to promote or oppose the candidate’” as the

Maine Commission on Governmental Ethics and Election Practices had

proposed);19 Nat’l Org. for Marriage, Inc. v. McKee, 669 F.3d 34, 44 (1st Cir.

19
The court also disagrees with A-1 that, after Citizens United, the appeal to vote test is
itself unconstitutionally vague. Rather, the court agrees with McKee, which rejected the same
argument, as follows:

. . . . [National Organization for Marriage (“NOM”)] contends that Citizens
United eliminated “the appeal-to-vote test as a constitutional limit on government
power,” and reads into this an implicit holding that the test was unconstitutionally
vague.
NOM’s reading finds no support in the text of Citizens United, though we
agree with NOM that, in striking down the federal electioneering expenditure
statute, Citizens United eliminated the context in which the appeal-to-vote test has
had any significance. It is a large and unsubstantiated jump, however, to read
Citizens United as casting doubt on the constitutionality of any statute or
regulation using language similar to the appeal-to-vote test to define the scope of
its coverage. The basis for Citizens United’s holding on the constitutionality of
the electioneering expenditure statute had nothing to do with the appeal-to-vote
test or the divide between express and issue advocacy. Instead, the decision
turned on a reconsideration of prior case law holding that a corporation’s political
speech may be subjected to greater regulation than an individual’s.

McKee, 649 F.3d at 69 (footnote omitted).

49

#: 2559

2012) (addressing ballot question committees in a “second chapter” of a challenge

to Maine’s campaign laws, and following McKee regarding vagueness and the

meaning of “influence”).

The court therefore applies the narrowing construction sought by

Defendants, and interprets the terms “to influence” and “for the purpose of

influencing” as referring to express advocacy or its functional equivalent. So

construed, the meaning of “influence” is “considerably more precise,” and “ensures

that persons of average intelligence will have reasonable notice of the provisions’

coverage” so as not to offend due process. McKee, 649 F.3d at 67 (citing Grayned,

408 U.S. at 108).

Having addressed A-1’s overbreadth and vagueness arguments, the

court now turns to whether the noncandidate committee and expenditure

definitions otherwise survive a First Amendment challenge under an “exacting

scrutiny” test.

3. Hawaii’s Definition of Noncandidate Committee Survives Exacting
Scrutiny

Distinct from its facial overbreadth and vagueness challenges, A-1

also contends that Hawaii’s definition of noncandidate committee cannot be

justified by government interests, and, even if it could, it is not sufficiently tailored

to any such interests. In this context -- under binding caselaw -- the court applies

50

#: 2560

“exacting” scrutiny (not strict scrutiny) in analyzing the noncandidate committee

definition. See Human Life, 624 F.3d at 1005 (“The [Supreme] Court has clarified

that a campaign finance disclosure requirement is constitutional if it survives

exacting scrutiny, meaning that it is substantially related to a sufficiently important

governmental interest.”) (citing Doe v. Reed, 130 S. Ct. 2811, 2818 (2010));

Family PAC v. McKenna, --- F.3d ----, 2012 WL 266111, at *3 (9th Cir. Jan. 31,

2012) (“Disclosure requirements are subject to exacting scrutiny.”).

Importantly, the definition of noncandidate committee itself is a

“disclosure requirement” for purposes of this analysis. Many decisions since

Citizens United have analyzed various definitions of a “political committee,”

which include the burdens associated with such classification, and considered them

to be “disclosure requirements.” See Human Life, 624 F.3d at 1012 (concluding

that “the definition of ‘political committee’ does not violate the First Amendment,”

analyzing “the disclosure requirements attached to political committee status”); see

also McKee, 649 F.3d at 54 n.29 (“Maine’s requirement that non-major-purpose

PACs register with the Commission is . . . first and foremost a disclosure

provision”); Speechnow.org, 599 F.3d at 696 (characterizing political committee

organizational and reporting requirements as “disclosure requirements”); N.M.

Youth Organized v. Herrera, 611 F.3d 669, 676 (10th Cir. 2010) (indicating that a

51

#: 2561

challenge to regulations defining a political committee is a challenge to disclosure

regulations); Minn. Citizens Concerned for Life, Inc. v. Swanson, 741 F. Supp. 2d

1115, 1128 (D. Minn. 2010) (“The law to which Plaintiffs object is, in fact, a

disclosure law -- a method of requiring corporations desiring to make independent

expenditures to disclose their activities.”); Ctr. for Individual Freedom v. Madigan,

735 F. Supp. 2d 994, 1000 (N.D. Ill. 2010) (equating “election law disclosure

requirements” as discussed in Citizens United with “registration requirements,

including related reporting, recordkeeping, and disclosure requirements”); Iowa

Right To Life Comm., Inc. v. Smithson, 750 F. Supp. 2d 1020, 1039 (S.D. Iowa

2010) (similar). This makes sense -- the purpose of requiring registration as a

noncandidate committee is transparency and to enable disclosure.

a. “Sufficiently important” governmental interests

The next step under exacting scrutiny is to identify the governmental

interests at stake. In this regard, Human Life reiterated the primary interest:

providing information to the electorate. “[B]y revealing information about the

contributors to and participants in public discourse and debate, disclosure laws

help ensure that voters have the facts they need to evaluate the various messages

competing for their attention.” 624 F.3d at 1005. This is a “sufficiently important,

if not compelling, governmental interest.” Id. at 1005-06.

52

#: 2562

Campaign finance disclosure requirements thus advance
the important and well-recognized governmental interest
of providing the voting public with the information with
which to assess the various messages vying for their
attention in the marketplace of ideas. An appeal to cast
one’s vote a particular way might prove persuasive when
made or financed by one source, but the same argument
might fall on deaf ears when made or financed by
another.

Id. at 1008.

And the importance of this informational interest “is only likely to

increase” given recent jurisprudence -- as exemplified above by this court’s

permanent injunction -- striking limits on independent expenditures. Id. at 1007-08

(citing Citizens United, 130 S. Ct. at 911, and City of Long Beach, 603 F.3d at 695-

99).

There are other sufficiently important interests. “[D]isclosure

requirements deter actual corruption and avoid the appearance of corruption by

exposing large contributions and expenditures to the light of publicity. . . . A

public armed with information about a candidate’s most generous supporters is

better able to detect any post-election special favors that may be given in return.”

Buckley, 424 U.S. at 67. And, “recordkeeping, reporting, and disclosure

requirements are an essential means of gathering the data necessary to detect

violations of . . . contribution limitations[.]” Id. at 67-68.

53

#: 2563

[T]he public has an interest in knowing who is speaking
about a candidate and who is funding that speech, no
matter whether . . . contributions were made towards
administrative expenses or independent expenditures.
Further, requiring disclosure of such information deters
and helps expose violations of other campaign finance
restrictions, such as those barring contributions from
foreign corporations or individuals.

Speechnow.org, 599 F.3d at 698.

Another related interest is anti-circumvention. “[C]ircumvention of

valid contribution limits . . . is a valid theory of corruption[.]” Fed. Election

Comm’n v. Colo. Republican Fed. Campaign, 533 U.S. 431, 456 (2001). Human

Life also discussed this interest in analyzing and upholding Washington’s

Disclosure Law, reasoning that if the Washington law exempted groups having

only “a” primary purpose of political advocacy (i.e., only regulated groups having

“the” (sole) primary purpose of advocacy), political action groups affiliated with a

larger, multipurpose organization could circumvent the law simply by merging

with the affiliated organization. 624 F.3d at 1011-12.

The legislative history of Hawaii’s campaign finance laws confirms

that the Hawaii Legislature considered these same interests in enacting Hawaii’s

campaign disclosure provisions. As summarized above, Hawaii’s Legislature

adopted Hawaii’s “comprehensive disclosure and reporting requirements”

specifically to meet the goals identified in Buckley:

54

#: 2564

(1) its informational value, with the “sources of a
candidate’s financial support” alerting the voters “to the
interests to which the candidate is most likely to be
responsive,” (2) its deterrence of corruption “by exposing
large contributions and expenditures to the light of
publicity[,]” and (3) its value as “an essential means of
gathering data necessary to detect violations[.]”

Defs.’ Mot. Ex. 11, Conf. Comm. Rept. No. 78, Haw. H. J. 1137, 1140 (1979)

(quoting Buckley). Further, although commenting specifically about ballot issues,

the legislative committee also emphasized more generally Hawaii’s “informational

interest” and that disclosure requirements were a method of “furthering First

Amendment values by opening the basic processes of our federal election system

to public view.” Id.

Similar legislative intent was demonstrated in 1995, when Hawaii’s

campaign finance laws were revised. See, e.g., Defs.’ Mot. Ex. 17, Haw. H. J. 853

(Floor Speech of Representative Tom (“The bill before us today seeks to ensure

fair election practices by closing the loopholes in the current law and by mandating

full disclosure . . . . [I]t increases the effectiveness . . . of the Campaign Spending

Commission in the areas of enforcement and disclosure[.]”)); Defs.’ Mot. Ex. 15,

S. Stand. Comm. Rpt. No. 1344 on H.B. No. 2094, Haw. S. J. 1346 (1995)

(“[R]eforming the campaign spending law is important to restoring the public’s

confidence in the political process. Making candidates, contributors, and others

55

#: 2565

more accountable by requiring the filing of reports . . . and specifying what

information must appear in these reports go[es] a long way to accomplishing these

goals.”).

Accordingly, the court has little difficulty concluding that Hawaii has

sufficient government interests in imposing disclosure requirements such as

registration as a noncandidate committee for organizations that participate in the

political process on a more than an “incidental” basis (i.e., that have a “purpose” of

political advocacy).

b. “Substantial relationship”

Given sufficiently important government interests, the court next

analyzes whether the disclosure requirement is substantially related to those

interests. In this regard, Hawaii’s definition of noncandidate committee imposes

registration, reporting, and other disclosure requirements on groups having “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.” HRS § 11-302. It does not require groups to have only the

purpose of conducting activities to influence an election. It specifically excludes

from its definition “[a]ny organization that raises or expends funds for the sole

purpose of producing and disseminating informational or educational

56

#: 2566

communications that are not made to influence the outcome of an election,

question, or issue on a ballot.” Id. In conformity with Buckley, it excludes

organizations doing only issue advocacy. And HRS § 11-321(g) requires $1,000

of contributions or expenditures in a two-year election period before noncandidate

committee disclosure requirements are triggered.

Addressing a similar issue under Washington law, Human Life

reasoned that most organizations have more that one “primary” purpose, and so a

“political committee” need not be confined only to organizations having political

advocacy as their singular purpose. 624 F.3d at 1011. That is, there is a

substantial relationship between government’s important interests and the

disclosure requirements it imposes on groups engaged in multiple purposes

including political advocacy. Id.

And so, even though Hawaii’s definition of noncandidate committee

refers to “the” purpose of an organization, it can cover organizations with multiple

“purposes.” As long as the organization’s non-incidental activities include

“making or receiving contributions, making expenditures, or incurring financial

obligations to influence the nomination for election, or the election, of any

candidate,” it falls within the purview of a noncandidate committee. If an

organization has multiple purposes, as in Human Life, “[b]y applying the

57

#: 2567

disclosure requirements attached to [noncandidate committee] status to

organizations with a primary purpose of political advocacy, its coverage vindicates

the government’s interest in an informed electorate without imposing on

nonpolitical organizations unnecessarily.” Id. at 1012.

Washington’s version of “political committee” includes the modifier

“primary” before “purpose.” This modifier, however, was born of judicial

construction -- a political committee was interpreted to mean “only an organization

that has as its ‘primary or one of the primary purposes’ to ‘affect, directly or

indirectly, governmental decision making by supporting or opposing candidates or

ballot propositions.’” Id. at 997 (quoting Evergreen Freedom Found. v. Wash.

Educ. Ass’n, 49 P.3d 894, 903 (Wash. Ct. App. 2002)). Such a limitation

(“primary”) “ensures that the electorate has information about groups that make

political advocacy a priority, without sweeping into its purview groups that only

incidentally engage in such advocacy.” Id. at 1011.

Because Hawaii’s definition does not include “primary,” it does not

automatically fall within Human Life’s analysis finding that Washington’s

definition does not “impos[e] on nonpolitical organizations unnecessarily.” Id. at

1012. The Ninth Circuit, however, was careful to comment that it was not holding

that “the word ‘primary’ or its equivalent is constitutionally necessary,” just that it

58

#: 2568

was “sufficient” to ensure the disclosure law was “appropriately tailored to the

government’s informational interest.” Id. at 1011. That is, Hawaii’s definition

presents a closer call.

The court thus turns to whether Hawaii’s limitation improperly

“imposes on nonpolitical organizations,” id. at 1012, by “unnecessarily sweeping

into its purview groups that only incidentally engage in such advocacy.” Id. at

1011. The court could read into or infer a similar meaning (e.g., “primary” or

“meaningful”) into the kind of “purpose” necessary to require registration as a

noncandidate committee in Hawaii. While such meaning might be implicit, it is

not necessary to do so. An organization having “the purpose” of political

advocacy necessarily means activity that is not “incidental.” Thus, it is enough to

survive a facial First Amendment challenge -- i.e., the limitation is sufficiently

tailored -- where Hawaii’s definition: (1) specifically excludes groups engaged

exclusively in issue advocacy, (2) can cover organizations with multiple purposes,

including political advocacy, and (3) requires that an organization make

contributions or expenditures “of more than $1,000, in the aggregate, in a two-year

election period[.]” HRS § 11-321(g). These provisions suffice to assure that

Hawaii does not unconstitutionally impose on nonpolitical groups or those with

incidental political activity. See Human Life, 624 F.3d at 1012; N.C. Right to Life,

59

#: 2569

Inc. v. Bartlett, 168 F.3d 705, 712 (4th Cir. 1999) (finding unconstitutional a

definition regulating organizations with a “primary or incidental” purpose of

political advocacy, reasoning that “unlike the provisions of FECA, North

Carolina’s definition expressly sweeps within its ambit those groups that only

incidentally engage in express advocacy. This is a much broader definition of

political committee than that at issue in Buckley[.]”).

Thus, A-1’s challenge to Hawaii’s definition of noncandidate

committee fails. The statute is substantially related to the important governmental

interests. “[I]ts coverage vindicates the government’s interest in an informed

electorate without imposing on nonpolitical organizations unnecessarily.” Human

Life, 624 F.3d at 1012. This conclusion squares with Citizens United’s emphasis

on transparency and the public’s “interest in knowing who is speaking about a

candidate,” 130 S. Ct. at 915, and the Court’s approval of disclosure requirements

that serve to inform the electorate about organizations active in electoral politics,

even if “influencing” elections is not their major or primary purpose. See McKee,

649 F.3d at 59 (“Because we find a substantial relation between Maine’s

disclosure-oriented regulation of non-major-purpose PACs and its interest in the

dissemination of information regarding the financing of political speech, we

conclude that the law does not, on its face, offend the First Amendment.”).

60

#: 2570

Hawaii’s noncandidate committee requirements do not facially violate the First

Amendment.

4. A-1’s As-Applied Challenge to the Noncandidate Committee
Definition

A-1 also contends that Hawaii’s noncandidate committee definition is

unconstitutional as-applied to A-1’s speech because it does not have a “major

purpose” of political advocacy. It is not “under the control of a candidate” nor

does it pass a “major purpose” test, either by (1) assessing its central organizational

purpose, or (2) comparing its electioneering spending with its overall spending.

See Herrera, 611 F.3d at 678. A-1 has also claimed that it “only incidentally

engages in [political] advocacy” and thus cannot constitutionally be required to

register as a noncandidate committee.

As explained above, however, A-1’s argument that it does not meet a

“major purpose” test is misplaced, and largely irrelevant. Falling outside the major

purpose test does not mean an organization cannot be regulated as a noncandidate

committee. See Human Life, 624 F.3d at 1009 (rejecting a bright line rule that

“unless the sole major purpose of a group is political advocacy, any regulation of

that group will automatically be too burdensome”).

The court also rejects the argument that A-1 only “incidentally”

engages in political advocacy. As set forth above, A-1 had substantial and varied

61

#: 2571

election-related activity in the 2010 election cycle. To reiterate, A-1

(1) contributed a total of $20,100 to fourteen different State office candidates and

$12,500 to the Hawaii Republican Party before the 2010 primary election;

(2) published three advertisements (the day of the primary election and the two

days prior) costing $2,000 to $3000 each, identifying candidates and otherwise

meeting the definition of an “electioneering communication” under Hawaii law;

(3) contributed $1,000 to AFA-PAC; and (4) contributed an additional $18,000 in

total to thirty-one State-office candidates before the 2010 general election. It seeks

to make contributions “[i]n 2012 and in materially similar situations in the future,”

and plans to run advertisements “in September or October 2012” that will be

similar to those it ran in 2010. Doc. No. 132-1, Fourth Decl. of A-1 ¶¶ 5, 7, Jan. 6,

2012.

A-1, of course, may participate in our democratic process by making

its views known and by supporting candidates. But such participation means it

must also comply with Hawaii’s valid campaign finance laws. Hawaii has a

substantial interest in imposing noncandidate committee disclosure requirements

on an organization -- like A-1 -- that actively engages in political activity. Indeed,

ironically, A-1’s very activities exemplify other government interests as well.

For example, as explained in Human Life, government has an interest

62

#: 2572

in “anti-circumvention” -- preventing or minimizing opportunities for speakers to

find ways to circumvent campaign finance laws. 624 F.3d at 1011-12. The Ninth

Circuit explained that by exempting groups with only “a” primary purpose of

political advocacy (e.g., a group that spends significant amounts on political

spending, but a small amount proportionally to its overall activity) from

registration, it would “effectively encourage[] [affiliated] advocacy groups to

circumvent the law by not creating political action committees and instead to hide

their electoral advocacy from view by pulling it into the fold of their larger

organizational structure.” Id. at 1012 (quoting Leake, 525 F.3d at 332 (Michael, J.,

dissenting) (emphasis in original). Whether it intended to or not, A-1 is such an

example. It has purposely not created a separate organizational structure for

election-related activity, choosing instead to register itself (A-1 A-Lectrician, Inc.)

as a noncandidate committee. Tr. 30, 37. If it were allowed to avoid registration

merely because its political activity is small proportionally to its overall activities

(as an electrical contractor and perhaps as a pure issue advocacy organization), it

would encourage any affiliated noncandidate committee to avoid disclosure

requirements by merging its activities into a larger affiliated organization. (This

exemplifies why the noncandidate committee definition is construed to be able to

regulate “multipurpose” organizations.)

63

#: 2573

The court is also satisfied that the registration and disclosure

requirements that come with noncandidate committee status do not present an

undue burden on A-1. It has apparently been complying with the requirements for

several years. The requirements satisfy a facial challenge (they are not out of

proportion for organizations that have “the purpose” of political advocacy).

Although the requirements might be inconvenient, the record does not indicate the

burdens on A-1 are onerous as matters of fact or law. See, e.g., Tr. 58-59 (“[W]e

do not want to be a noncandidate committee because the registrations are burdened

as we are going forward. There’s a tough economy. . . . [W]e need to be free to

speak.”).

And so, A-1’s as-applied challenge to the noncandidate committee

definition also fails. A-1 actively participates in our democracy; it is not

unconstitutional to require it to comply with campaign finance laws that are

substantially related to important government interests.

D. “Electioneering Communication” Registration Requirements

The court has found that A-1 is not likely to succeed on the merits of

its challenge, either facially or as-applied, to Hawaii’s noncandidate committee

definition. As noted earlier, an organization registering as a “noncandidate

committee” does not have to file an electioneering communications report or

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#: 2574

otherwise comply with most of the other provisions set forth in HRS § 11-341. See

Haw. Admin. R. § 3-160-48 (“A noncandidate committee registered with the

commission is not required to file a statement of information for disbursements for

electioneering communications.”). Any required reporting of “electioneering

communications” would be included as part of the noncandidate committee

provisions.

Because A-1 is not relieved of complying with the requirements of

registering as a noncandidate committee, the court need not fully address A-1’s

alternate challenge to § 11-341 (e.g., a challenge to the requirement of providing a

statement of information within twenty-four hours of each “disclosure date,” which

is the date disbursements for electioneering communications exceed $2,000). A-1

agrees that, if it must register as a noncandidate committee, it lacks standing to

challenge the “electioneering communications” disclosure regime. (The definition

of “electioneering communications” remains relevant, however, in the next

challenge to the disclaimer requirement in an advertisement.)

E. The “Disclaimer” Requirement in an “Advertisement”

The court next addresses A-1’s challenge to the statutory requirement

that “disclaimer” language be included in any “advertisement” that identifies a

candidate and “advocates or supports the nomination, opposition, or election of a

65

#: 2575

candidate[.]” See HRS § 11-391(a)(2)(B) (requiring a “notice in a prominent

location stating” that “[t]he advertisement is published . . . without the approval

and authority of the candidate”). As set forth earlier, A-1 published advertisements

(what it calls “issue ads”) on September 16, 17, and 18, 2010. Those

advertisements contained the disclaimer language “published without the approval

and authority of the candidate.” A-1 did not want to include the disclaimers in

those advertisements, and does not want to include them in future advertisements.

Section 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.)

A-1 contends the language “advocates or supports” and “opposition”

is unconstitutionally “vague, and therefore overbroad.” FAC at 40. It also

contends the disclaimer language distracts from its message, and gives the wrong

impression that the advertisement is campaign speech, rather than issue advocacy.

“Disclaimer . . . requirements may burden the ability to speak, but

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#: 2576

they impose no ceiling on campaign-related activities and do not prevent anyone

from speaking.” Citizens United, 130 S. Ct. at 914 (citations and internal quotation

marks omitted). Disclaimer requirements are therefore subjected to “exacting

scrutiny,” which requires a “substantial relation” between the disclaimer

requirement and a “sufficiently important” government interest. Id.

1. “Advocates and Supports” and “Opposes” -- the Facial Vagueness
Challenge

A-1 contends the terms “advocates,” “supports,” and “opposes” are

unconstitutionally vague. Pls.’ Mot. at 40-41. This challenge, however, is

substantially similar to the challenge (rejected earlier) that A-1 made regarding the

use of the term “to influence” in the “noncandidate committee” and “expenditure”

definitions. A-1 cites, for example, cases addressing whether a state law defining

“political committee” as any group “the primary or incidental purpose of which is

to support or oppose any candidate or to influence or attempt to influence the

results of an election”20 and requiring disclosure of payments “for the purpose of

supporting, opposing, or otherwise influencing the nomination or election of a

person to public office.”21 The concern with terms “support or oppose” or

“supporting or opposing or otherwise influencing” is the same concern as with the

20
N. C. Right to Life, Inc. v. Bartlett, 168 F.3d 705, 712-13 (4th Cir. 1999).
21
Ctr. for Individual Freedom v. Carmouche, 449 F.3d 655, 662-63 (5th Cir. 2006).

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#: 2577

term “influence” -- the concern is that the phrases “could be interpreted to reach

both express advocacy and issue advocacy.” Carmouche, 449 F.3d at 663. See

also Bartlett, 168 F.3d at 712-13 (“[T]he North Carolina definition of political

committee covers groups engaging in issue advocacy by explicitly juxtaposing

express and issue advocacy, and thereby indicating that it encompasses both[.]”).

And, as with the term “to influence,” courts avoided such vagueness

concerns by applying a narrowing construction, limiting the reach only to

“communications that expressly advocate the election or defeat of a clearly

identified candidate.” Buckley, 424 U.S. at 80. Again, “express advocacy” was

later extended to its “functional equivalent” (“susceptible of no reasonable

interpretation other than as an appeal to vote for or against a specific candidate”).

Wisc. Right to Life, Inc., 551 U.S. at 469-70. This functional equivalent test is

objective, and (although “contextual factors . . . should seldom play a significant

role in the inquiry”) “basic background information that may be necessary to put

an ad in context” may be considered in determining whether a communication falls

within its meaning. Id. at 473-74. As explained above, so construed, the definition

of an “advertisement” like Hawaii’s, which uses “advocates or supports the

nomination, opposition, or election of the candidate,” is not unconstitutionally

vague.

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#: 2578

Perhaps more importantly, Citizens United rejected a similar challenge

to disclaimer requirements under federal law. It specifically refused to import the

“express advocacy and its functional equivalent” test from an “expenditure”

context into the disclaimer and disclosure regime under federal law: “[W]e reject

Citizens United’s contention that the disclosure requirements must be limited to

speech that is the functional equivalent of express advocacy.” 130 S. Ct. at 915.22

“Even if the ads only pertain to a commercial transaction, the public has an interest

in knowing who is speaking about a candidate shortly before an election.” Id.

Essentially, disclosure requirements can apply to issue advocacy, so long as the

exacting scrutiny test is otherwise met. Human Life, 624 F.3d at 1015-16. And

disclosure and disclaimer requirements -- such as requiring a disclaimer under

federal law that a communication “is not authorized by any candidate or

candidate’s committee” -- satisfy the exacting scrutiny analysis. Citizens United,

130 S. Ct. at 914-16. “Citizens United has effectively disposed of any attack

on . . . attribution and disclaimer requirements.” McKee, 649 F.3d at 61.

22
Even if disclosure requirements are not “limited to speech that is the functional
equivalent of express advocacy,” it is still true that speech that is the functional equivalent (i.e.,
is not susceptible of any reasonable interpretation other than an appeal to vote for or against a
candidate) is subject to disclosure and disclaimer requirements. As with a noncandidate
committee definition, the express advocacy or its functional equivalent test functions as a kind of
“safe harbor” (from a regulator’s perspective). In other words, even if it might be superfluous, it
is not irrelevant.

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#: 2579

Accordingly, A-1’s facial challenge to the disclaimer requirement in § 11-

391(a)(2)(B) fails.

2. Disclaimer Requirement -- the As-Applied Challenge

A-1 argues that the disclaimer requirement is unconstitutional as

applied to its advertisements. But the court concludes that the advertisements fit

within a regulatory “safe harbor” -- they are an “advertisement” that is an

“electioneering communication” and are the functional equivalent of express

advocacy under § 11-341(c). The advertisements mention a candidate (Blake

Oshiro or Calvin Say or both). The advertisements ran on primary election day

(and the two days prior). They state that those candidates, for example, “are

representatives who do not listen to the people.” FAC Exs. 14, 15, & Doc. No.

119-1 (substituting FAC Ex. 16). One advertisement states that “the

representatives we put into office do not understand the importance of the values

that made our nation great” and that “Blake Oshiro and other representatives do not

show the aloha spirit in the way they disrespect the legislative process.” FAC Ex.

15. One states “Blake Oshiro and other representatives are intent on the

destruction of the family.” FAC Ex. 16. These advertisements -- running on

election day or the day or two prior -- are not susceptible to any reasonable

interpretation other than as an appeal to vote against a candidate. See Wisc. Right

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to Life, 551 U.S. at 474 (allowing courts to consider basic background information

necessary to put an advertisement in context). That is, they fit the definition of

“electioneering communications” as defined by Hawaii law in § 341(c) -- they

refer to a clearly identifiable candidate, within thirty days prior to a primary

election or sixty days prior to a general election, and are the “functional equivalent

of express advocacy.”

And, in any event, Citizens United rejected an as-applied challenge to

a disclaimer requirement for “commercial advertisements” that otherwise fall

within a proper definition of “electioneering communications” (as do the

advertisements at issue here). See 130 S. Ct. at 915-16. Essentially,

advertisements that might include at least some “issue advocacy” can nevertheless

be regulated if they mention a candidate shortly before an election. “[D]isclaimers

. . . provide the electorate with information, and insure that the voters are fully

informed about the person or group who is speaking.” Id. at 915 (citations and

editorial marks omitted). “At the very least, the disclaimers avoid confusion by

making clear that the ads are not funded by a candidate or political party.” Id.

For these reasons, the court rejects A-1’s as-applied challenge to the

disclaimer requirement in § 11-391(a)(2)(B) and the corresponding definition of

advertisement in § 11-302, which includes the electioneering communications

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#: 2581

definition in § 11-341(c).

F. Hawaii’s Ban on Contributions by Government Contractors

A-1 next challenges the constitutionality of Hawaii’s ban on direct

campaign contributions by government contractors set forth in HRS § 11-355. As

detailed above, A-1 has made numerous contributions to candidates in the past and

“seeks to do so again in 2012.” Pls.’ Mot. Ex. 5 ¶ 4. A-1 was a government

contractor before, and is one now. A-1 claims it is forced to choose between

engaging in its business and engaging in its speech. Doc. No. 42-1, A-1 Decl. ¶ 8,

Sept. 16, 2010. The candidates it wants to support are Legislators or prospective

Legislators who, A-1 contends, “do not decide whether A-1 receives government

contracts or oversee the contracts.” Pls.’ Reply Ex. G ¶ 3.

A-1 thus makes an “as-applied” challenge to Hawaii law. It argues

not that § 11-355 is facially unconstitutional, but rather that the statute, as applied,

violates its First Amendment right to contribute to candidates it believes would not

later award or oversee contracts. Given no perceived connection between a

contractor’s donations to Legislators who would not award or oversee contracts, A-

1 argues there is no plausible justification for banning its contributions.23

23
A-1’s challenge is limited to § 11-355’s contribution ban by government contractors.
Any other part of § 11-355 is not before the court as part of this action.

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1. The Court Applies “Closely Drawn” Scrutiny

Although Citizens United applied strict scrutiny in holding that

limitations on independent campaign expenditures are unconstitutional, the action

squarely presented no issue regarding contributions. See 130 S. Ct. at 909

(“Citizens United has not made direct contributions to candidates, and it has not

suggested that the Court should reconsider whether contribution limits should be

subjected to rigorous First Amendment scrutiny.”). Accordingly, as explained

above when addressing contribution limitations to noncandidate committees (HRS

§ 11-358), courts still apply “closely drawn scrutiny” in analyzing contribution

restrictions. See Thalheimer, 645 F.3d at 1117-18 (setting forth traditional

distinction between limitations on expenditures and contributions). And the court

does so here in analyzing Hawaii’s ban on campaign contributions by government

contractors. See Green Party of Conn. v. Garfield, 616 F.3d 189, 199 (2d Cir.

2010) (specifically applying closely drawn scrutiny after Citizens United and

observing that “[t]he [Supreme] Court has applied the closely drawn standard even

when the law in question imposed an outright ban on contributions”) (citing

Beaumont, 539 U.S. at 162); Ognibene v. Parkes, --- F.3d ----, 2012 WL 89358, at

*7 (2d Cir. Jan. 12, 2012) (analyzing a campaign contribution ban on entities

“doing business” with New York City, observing that “Bennett[, 131 S. Ct. at

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#: 2583

2817,] reaffirmed . . . that the lower closely drawn standard applies to contribution

limits[.]”). Under this test, “[c]ontribution limits . . . need only be ‘closely drawn’

to match a sufficiently important [government] interest to survive a constitutional

challenge.” Thalheimer, 645 F.3d at 1117-18 (quoting Randall, 548 U.S. at 247)

(other citation omitted)).24

2. Sufficiently Important Interests -- Safeguarding Against Quid Pro
Quo Corruption and its Appearance

Laws banning direct corporate campaign contributions are hardly new.

See Citizens United, 130 S. Ct. at 900 (“At least since the latter part of the 19th

century, the laws of some States and of the United States imposed a ban on

corporate direct contributions to candidates.”) (citation omitted); see also

Beaumont, 539 U.S. at 152-54 & 159-60 (detailing the history of corporate

contribution limitations, and upholding a federal statute barring corporate

contributions to candidates). In the federal context, “[a]ny attack on the federal

prohibition of direct corporate political contributions goes against the current of a

century of congressional efforts to curb corporations’ potentially ‘deleterious

24
Although A-1 is not challenging § 11-355 facially, the court still examines the
government interests that justify the contribution ban and determines whether it is closely drawn
to meet those interests, as applied to A-1’s proposed activities. See, e.g., Preston v. Leake, 660
F.3d 726, 735-37 (4th Cir. 2011) (discussing government’s anti-corruption interests in analyzing
whether a ban on contributions by lobbyists survives an as-applied challenge).

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#: 2584

influences on federal elections[.]’” Beaumont, 539 U.S. at 152.25 Contribution

limits (and corporate contribution limits in particular) are justified by a

paradigmatic government interest -- prevention of corruption or its appearance in

elections. See, e.g., Buckley, 424 U.S. at 27; McConnell, 540 U.S. at 143;

Thalheimer, 645 F.3d at 1124 (discussing an anti-circumvention interest as “part of

the familiar anti-corruption rationale”). Such limitations make the most sense

when they restrict direct candidate contributions. See, e.g., City of Long Beach,

603 F.3d at 696 (“[T]he state’s interest in the prevention of corruption -- and,

therefore, its power to impose contribution limits -- is strongest when the state

limits contributions made directly to political candidates.”) (quoting Leake, 525

F.3d at 291).

More specifically, “contribution limits . . . unlike limits on

independent expenditures, have been an accepted means to prevent quid pro quo

corruption.” Citizens United, 130 S. Ct. at 909. Further, eliminating the

appearance of quid pro quo corruption is, by itself, a sufficiently important

25
Beaumont relied in part on an “anti-distortion” interest previously articulated in Austin
v. Michigan Chamber of Commerce, 494 U.S. 652 (1990), overruled by Citizens United, 130 S.
Ct. at 913. Beaumont, however, was decided before Citizens United, which overruled Austin.
Nevertheless, Beaumont remains binding precedent. Even if Citizens United undermined some
of its reasoning, it remains good law for present purposes because it had other justifications for
upholding the federal ban. See Garfield, 616 F.3d at 199 (“Beaumont and other cases applying
the closely drawn standard to contribution limits remain good law.”).

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interest. “Since neither candidate nor contributor is likely to announce a quid pro

quo, the appearance of corruption has always been an accepted justification for a

campaign contribution limitations.” Ognibene, 2012 WL 89358, at *9 (citation

omitted).

In other words, because the scope of quid pro quo
corruption can never be reliably ascertained, the
legislature may regulate certain indicators of such
corruption or its appearance, such as when donors make
large contributions because they have business with the
City, hope to do business with the City, or are expending
money on behalf of others who do business with the City.
Furthermore, such donations certainly feed the public
perception of quid pro quo corruption, and this alone
justifies limitations or perhaps an outright ban.

Id. (citing Citizens United, 130 S. Ct. at 908, 910).

The legislative history of HRS § 11-205.5 (§ 11-355’s predecessor)

confirms that Hawaii’s Legislature passed the government contractor contribution

ban in large part precisely because of these concerns -- prevention of both actual

corruption and its appearance.26

26
Act 203 of the 2005 Hawaii Session Laws amended several sections of Hawaii’s
campaign finance laws, including the prior HRS § 11-205.5. Act 203 was derived from that
session’s House Bill (“H.B.”) 1747 and a companion Senate Bill (“S.B.”) 440. The legislative
history of H.B. 1747 and S.B. 440 contains several references to an “anti-corruption” interest.
For example, Senator Trimble, speaking in favor of S.B. 440 stated:
Colleagues, corruption is the cruelest tax. It warps the decision-making process.
It demoralizes the public sector, and it reflects poorly on us as a society. . . . I
urge that you consider that corruption of money in the political process should
not, and does not, distinguish between whether it comes from a corporation or a
(continued...)

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26
(...continued)
union.
2005 Senate Journal, at 349 (statement of Sen. Trimble). Likewise, Senator Hemmings spoke in
support of S.B. 440:
[I]f the Majority Party is really interested in a level playing field that benefits the
people that sent us here, they would pass this amendment to do just what the
Senator who’s proposing this amendment wants -- eliminate money from
corrupting the election process.
Id. at 350 (statement of Sen. Hemmings).
Statements from Representatives supporting H.B. 1747 spoke specifically about
government contractors. Representative Blake Oshiro, who introduced H.B. 1747 spoke about
the constitutionality of contribution limitations, and addressed contractor limitations:
. . . . [U]nder Buckley v. [Valeo], the distinction is made that contributions can be
limited because the affinity to free speech is not nearly as close [as with
expenditure limitations]. And that’s what this bill is doing. . . . The idea behind
this is, we are tired of tinkering around the edges. We’re tired of just providing
transparency by saying everything has to go through a separate, segregated fund,
and blah, blah, blah. We’re tired of saying that contractors cannot give except for
these exceptions in these periods of time. So we’re just going to say that we’re
going to lower campaign contributions across the board. . . . [W]hen you look at
what other states have done, we’re actually not doing anything that’s not really
that drastic.
2005 House Journal, at 476-77 (statement of Rep. B. Oshiro). Representative Oshiro understood
the necessity of tailoring contribution limits to an anti-corruption government interest:
And for anyone that is fearful of a constitutional challenge, there was a specific
court case called Montana Right to Life Association v. Eddleman, where the
Montana contribution limits were actually lower than the ones in the bill and yet,
the Ninth Circuit Court of Appeals held that we hold Montana’s interest in
purging corruption and the appearance of corruption from its electoral system is
sufficiently important to withstand constitutional scrutiny. . . . So we are on very
firm constitutional grounds moving forward.
Id.
Other Representatives also spoke in support of the bill regarding government contractor
contributions, and sought -- as was eventually codified -- to simply ban contributions, rather than
lower the threshold:
It’s such a complete disappointment for me, Session after Session, year after year,
not to see us go after the heart of the problem, which is the “pay-to-play” game.
We should simply outlaw, ban contributions from people who do work with
government. We ought to do it. It should have been done long ago. It’s done in
thirty states. It’s done by the federal government.
Id. at 477 (statement of Rep. Fox).
(continued...)

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Section 11-355 is directed at government (State and county) contractors and the

perception that they donate money to receive favorable treatment in the awarding

of contracts, i.e., the perception that they “pay to play.”27

26
(...continued)
Representative Lee quoted then-Hawaii County Mayor Harry Kim’s comments into the
legislative record:
If I may, I’d like to quote the words of Hawaii County Mayor, Harry Kim when
he testified in support of this measure. He said, “I know this is a difficult area
and the details can be mind boggling so I defer to the wisdom of the Legislature
as to how best to set up a program that levels the playing field, enables candidates
of limited means to participate meaningfully in the electoral process, and
recognizes the cynicism and frustration that have been caused rightfully or not by
the appearance of influence that money has on the electoral process. But whether
or not House Bill [1747] is the perfect answer, do not let the perfect be the enemy
of the good.”

Id. (statement of Rep. Lee).
27
Defendants submit evidence of the type of contributions that were made before § 11-
205.5 was enacted in 2005 -- indicative of the political climate in which the government
contractor ban was passed. According to Commission records, in the 2004 election numerous
contractors made contributions to both sides of the Honolulu Mayoral race. “At least 100 of the
almost 850 individuals, businesses, and organizations who contributed to [Duke] Bainum’s
campaign also contributed to [Mufi] Hannemann’s campaign.” Doc. No. 127-1, Baldomero
Decl. ¶ 9, Dec. 5, 2011. Further, “[a]t least 44 of the 100 contributors who gave to both
campaigns [including A-1] . . . were businesses (or principals of businesses) that sold goods or
services, or engaged in construction that the City would regularly purchase.” Id. ¶¶ 10, 12.
As further indication of the climate and perception of a “pay to play” system in the 2005
time frame, media reports also suggest that § 11-205.5 was established to combat not only actual
corruption, but its appearance, and that it was enacted at least partly in response to a series of
well-publicized investigations by the Commission involving politicians and State contractors.
As summarized by the Honolulu Advertiser in March 2010:
The law was enacted in 2005 in response to the campaign finance scandals
involving [former Honolulu Mayor] Harris and other Democrats. More than 30
local engineers, architects and other donors pleaded no contest to misdemeanor
charges of violating the state’s campaign law between 2003 and 2005 while
another 90 architects, engineers and other donors paid out more than $1.8 million
in fines to the state Campaign Spending Commission for making illegal
donations.
(continued...)

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Indeed, A-1 does not seriously question that Hawaii has a sufficiently

important governmental interest in prevention of corruption or its appearance in the

electoral process. Rather, A-1 argues that the restriction (a ban on contributions to

any candidate, including those candidates that do not select and do not oversee

government contracts) is unconstitutional, either because there is no sufficient

27
(...continued)
Rick Daysog, Contract-linked Donations Soar, Honolulu Advertiser, March 7, 2010.
More recent attempts to change the law were unsuccessful, reportedly because of the
memory of the prior “pay to play” scandals:
Wary of public perception, the House amended a campaign finance bill to
preserve a ban on political donations by state and county contractors. The bill
would have relaxed the ban for contractors who have smaller government
contracts. State Rep. Barbara Marumoto, R-19th (Kaimuki, Waialae, Kahala),
said there should be “no return to pay-to-play in any form.”
Derrick DePledge, Furlough Bills Move Forward, Honolulu Advertiser, March 3, 2010. As
reported in 2003, when versions of the current law were being debated, reasons for a total ban
(including Legislators) were argued:
Proponents say the changes are long overdue and would restore integrity to a
system that many view as inherently corrupt. “It’s clear that the current system of
campaign finance doesn’t make the public confident that decisions are made on
their merits,” said House Majority Whip Brian Schatz, D-25th (Makiki, Tantalus).
...
If you’re getting a benefit from a government contract and taxpayer money, you
shouldn’t be paying your way in to get that money,” [Bob Watada, former head of
the Commission] said. “That’s the evil we’re trying to stop: pay to play.”
...
The Legislature last year approved a ban on direct contributions from businesses
and unions, and barred awarding of government contracts to people who donated
to candidates for certain offices. But former Gov. Ben Cayetano vetoed the
measure, saying lawmakers had unfairly exempted themselves from the ban on
money from contractors. The present bill does not allow that exception. “We
wanted to make sure we included ourselves, although the reality is that legislators
don’t give out contracts[.]” Schatz said.
Campaign Finance Legislation off to Senate after House OK, Honolulu Advertiser, March 31,
2003.

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interest in banning such contributions, or because a ban is not “closely drawn” to

the government interest of preventing corruption. There can be no connection, it

argues, between its proposed contributions and corruption if the candidates that it

contributes to do not award or oversee a contract. The court disagrees, and

explains below why the ban is closely drawn to the sufficiently important interest.

3. The Ban Is Closely Drawn to A-1’s Past and Proposed Activities

First, A-1 supports its as-applied challenge by arguing that, because it

does not itself “pay to play” or does not “grease the skids,” § 11-355 regulates too

broadly and is therefore not closely drawn. The Second Circuit, however, recently

rejected a similar argument: Ognibene upheld (facially) a New York City ban on

campaign contributions from organizations “doing business” with the City,

rejecting the argument that such a ban was “overbroad because [it] ban[ned]

legitimate as well as corrupt acts.” 2012 WL 89358, at *12.

[N]ot only is it difficult to isolate suspect contributions,
but more importantly . . . the interest in safeguarding
against the appearance of impropriety requires that the
opportunity for abuse inherent in the process of raising
large monetary contributions be eliminated.

Id. (quoting Buckley, 424 U.S. at 30) (emphasis added). Again, “[such] provisions

aim at eliminating, not only corrupt acts, but the appearance of corruption.” Id.

Applying Ognibene (which the court finds persuasive), even if A-1 is not corrupt,

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#: 2590

its contributions may have the appearance of impropriety and may thus be barred.

Second, Defendants point out that A-1 has other means of speaking.

Any burden on A-1 caused by the contribution ban is lessened because A-1’s

officers or employees (e.g., Yamada or his family members) may themselves make

contributions. See HRS § 11-355(b) (“[T]his section does not prohibit or make

unlawful the establishment or administration of, or the solicitation of contributions

to, any noncandidate committee by any person other than the state or county

contractor for the purpose of influencing the nomination for election, or the

election of any person to office.”).28 That is, to the extent A-1’s desired

contributions to particular legislative candidates are speech, A-1 may speak at least

indirectly through those individuals.29 See Beaumont, 539 U.S. at 161 n.8 (“A ban

on direct corporate contributions leaves individual members of corporations free to

make their own contributions, and deprives the public of little or no material

information.”). Moreover, A-1 may also lawfully make its own independent

28
See also Defs.’ Mot. Ex. 19, Hse. Conf. Comm. Rep. No. 185, in 2004 House Journal,
at 1828 (“[T]he prohibition on contributions by state and county contractors applies to the
specific contracting entity and not to individuals associated with the contractor, such as the
individual owners of a contracting entity.”).
29
Other jurisdictions have gone further than Hawaii and enacted similar provisions --
upheld against constitutional challenge -- against contributions by certain “principals” and
family members of government contractors. See Green Party of Conn. v. Garfield, 616 F.3d
189, 202-04 (2d Cir. 2010) (upholding Connecticut ban on campaign contributions made by
“principals” of state contractors or prospective state contractors, as well as spouses and children
of contractors).

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expenditures in support of or against particular candidates -- and, following

Citizens United, it may make unlimited expenditures, so long as they are not

coordinated with a candidate or party. A-1 may also make unlimited contributions

to organizations that make only independent expenditures. See Thalheimer, 645

F.3d at 1125.

Third, as Defendants emphasize, although individual Legislators

might not themselves award or manage contracts, the Legislature itself must

appropriate funds for State contracts. The Legislature routinely holds

informational and oversight hearings. Legislators ask questions, request audits,

and otherwise represent constituents and the public in an appropriate role

overseeing administration of State contracts and utilization of appropriated funds --

they might criticize, scrutinize, or support contractor performance. See, e.g., Defs.’

Mot. Exs. 24-26 (samples of legislative committee meetings or briefings on State

contracts); Defs.’ Mot. Ex. 33 (providing a legislative committee report explaining

that “it is the function of the Legislature to hold agencies accountable for

expenditures of public funds, and therefore the Legislature needs to be provided

with certain information regarding . . . construction projects”). Legislators make

decisions and hold power over large infrastructure projects, sometimes involving

hundreds of millions of dollars, where government contractors stand to benefit.

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And Legislators may have power over, or close friendships with, the government

employees or others who do award or manage A-1’s contracts.30

Thus, even more than deterring Legislators from actual corruption in

awarding contracts, the government has an interest in alleviating a public

perception that Legislators or others in public office have power to influence who

is awarded government contracts. The appearance of “quid pro quo” is more than

appearance of straight “dollars for contracts.” It is also the appearance of “dollars

for political favors.” Citizens United, 130 S. Ct. at 910 (quoting Fed. Election

Comm’n v. Nat’l Conservative Political Action Comm., 470 U.S. 480, 497 (1985)).

Again, even if individual Legislators do not directly award contracts, it does not

mean contributions by contractors do not have the appearance of corruption. That

30
Defendants also point out a clear fallacy in A-1’s logic. A-1 cannot know in advance
whether any particular candidate will not be in a position to control or “oversee” specific
contracts if the candidate is later elected. Certain committees have stronger oversight roles, and
these (and all) legislative committee assignments change each session, after the election. (And
all Legislators vote on many bills concerning procurement and budgetary issues). Defendants
offer an example from the 2011 Legislative Session: A-1 testified -- through Yamada’s son
Jason (an A-1 officer) -- in favor of a construction and procurement-related bill regarding the
University of Hawaii. Defs.’ Exs. 34-35. At least three Legislators that served on committees
that considered the bill (and voted in favor of it) also received campaign contributions from A-1
in the 2010 elections. Defs.’ Mot. at 53; Defs.’ Exs. 28, 31. And A-1 made contributions to
opponents of fifteen other Legislators who considered the bill. Defs.’ Mot. Ex. 31. A-1 cannot
have known in advance that candidates would not consider contractual oversight issues when it
made its contributions in 2010, and likewise cannot know that if it makes contributions to
candidates in 2012. This situation exemplifies the Second Circuit’s reasoning in Ognibene v.
Parkes, 2012 WL 89358, at *9 (2d Cir. Jan. 12, 2012) (“Contributions to candidates for
[government] office from persons with a particularly direct financial interest in these officials’
policy decisions pose a heightened risk of actual and apparent corruption, and merit heightened
government regulation.”).

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a Legislator might not have the power to award a contract directly does not make

the connection to the interest any less “closely drawn.”

Under A-1’s logic, a contractor-contribution limitation would need to

be drawn narrowly enough to restrict contributions only to those candidates for

offices that actually award or oversee specific contracts. Under its logic, to analyze

whether § 11-355 is applied constitutionally, a court would have to know which

Legislators have “control” over all types of contractual matters (whether large or

small, be them for general electrical work or for a non-bid research study of a

particular issue). But drawing these lines is not the court’s role. As the Second

Circuit recognized in upholding a Connecticut ban on government contractor

contributions, “we, as judges, cannot consider each possible permutation of a law

limiting contributions, and thus we ‘cannot determine with any degree of

exactitude the precise restriction necessary to carry out the statute’s legitimate

objectives.’” Garfield, 616 F.3d at 203 (quoting Randall, 548 U.S. at 248).

Garfield concluded that, in light of Connecticut’s past political contractor scandals,

a ban on contributions by any current state contractor “is, without question,

‘closely drawn’ to meet the state’s interest in combating corruption and the

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appearance of corruption.” Id. at 202.31

Moreover, a complete ban on contractor contributions -- as opposed to

a mere limit on the amount or a restriction on the type of contract -- is also closely

tailored. Hawaii’s Legislature made a judgment to eliminate any contribution to

alleviate a perception of government contractors receiving benefits for dollars.

Questions such as whether to apply the ban only to non-bid contractors or only

large contractors, whether to allow small contributions or allow no contributions,

or whether principals of contractors may contribute, are all legislative choices. Cf.

Preston, 660 F.3d at 737 (“[W]e find no reason to second-guess the legislative

judgment that a ban on all contributions from lobbyists was the best response.”). A

choice to completely ban direct government contractor contributions indicates, at

some level, the strength of the Legislature’s intended message combating a

perception that government contracts are awarded to friends based on corruption

(i.e., indicative of the tailoring of the restriction to the government interest). That a

ban is total, that it has no dollar exceptions, might “eliminate[] any notion that

contractors can influence state officials by donating to their campaigns,” Garfield,

31
Garfield is consistent with Ninth Circuit caselaw upholding other corporate
contribution bans. See Jacobus v. Alaska, 338 F.3d 1095, 1122 (9th Cir. 2003) (upholding
corporate soft money bans); cf. Mont. Right to Life Ass’n v. Eddleman, 343 F.3d 1085, 1094 (9th
Cir. 2003) (finding statutory limits on campaign contributions by individuals and political action
committees were closely drawn to further state’s interests).

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616 F.3d at 205, and in that sense indicates closer tailoring to the important

government interest than if contributions to certain types of Legislators were

excepted.32 The wisdom of these particular choices (the scope of the ban or any

exceptions) is not for courts to decide; courts decide whether the choices are

closely tailored to sufficiently important government interests. And this court

upholds Hawaii’s choice.

In sum, the court concludes that, as applied to A-1’s proposed

campaign contributions to State Legislators, § 11-355 is closely tailored to an

important government interest. Given the public role of Legislators and the power

(or perceived power) they can have in contractual matters, applying the

contribution ban is closely connected to the governmental interest in refuting at

least the perception of corruption in the electoral process. It functions to alleviate

even the appearance of a connection (a quid pro quo) between a government

contractor and a candidate for public office. Hawaii’s government-contractor ban

on direct campaign contributions set forth in § 11-355 is constitutional as applied

32
As Garfield reasoned,
[Connecticut’s] ban on contractor contributions . . . unequivocally addresses the
perception of corruption brought about by Connecticut’s recent scandals. By
totally shutting off the flow of money from contractors to state officials, it
eliminates any notion that contractors can influence state officials by donating to
their campaigns. . . . [A]n outright ban on contributions by contractors. . . is
closely drawn to the state’s interest in combating the appearance of corruption.
616 F.3d at 205.

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to A-1’s proposed contributions.

V. CONCLUSION

The Cross Motions for Summary Judgment are GRANTED in PART

and DENIED in PART, as follows:

1. Plaintiffs’ Motion as to HRS § 11-358 is GRANTED.

Accordingly, the court enters the following permanent injunction:

The contribution limit in HRS § 11-358 is unconstitutional as applied
to Jimmy Yamada’s and Russell Stewart’s past and proposed
contributions to AFA-PAC (an entity that engages in solely
independent expenditures) in excess of the statutory limit. Defendants
are permanently ENJOINED from enforcing § 11-358’s monetary
contribution limit as to Jimmy Yamada’s and Russell Stewart’s past
and proposed campaign donations to AFA-PAC.

2. In all other respects, Plaintiff’s Motion is DENIED and

Defendants’ Motion is GRANTED. As challenged, HRS §§ 11-302 and 391 are

constitutionally valid disclosure requirements, and HRS § 11-355 is upheld as

applied to A-1 as a constitutionally valid contribution limit. These provisions of

Hawaii’s campaign finance laws -- Hawaii’s definition of noncandidate committee

(and a related term “expenditure”), the disclaimer provision for an electioneering-

communication advertisement, and the ban on campaign contributions by

government contractors -- all withstand Plaintiffs’ constitutional challenges. These

Hawaii provisions promote disclosure and transparency in elections -- values

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endorsed, embraced and extended in Citizens United.

3. There being no other issues remaining, the Clerk of Court shall

close the case file.

IT IS SO ORDERED.

DATED: Honolulu, Hawaii, March 21, 2012.

/s/ J. Michael Seabright
_____________________________
J. Michael Seabright
United States District Judge

Yamada et al. v. Kuramoto et al., Civ. No. 10-00497 JMS-RLP, Order (1) Permanently
Enjoining Defendants from Enforcing HRS § 11-358 As-Applied to Specified Contributions to
AFA-PAC, a Committee Making Only Independent Campaign Expenditures; and (2) Upholding
the Constitutionality, as Challenged, of Provisions of HRS §§ 11-302, 355 & 391

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