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National Association of Manufacturers v. Taylor

September 8, 2009

NATIONAL ASSOCIATION OF MANUFACTURERS, APPELLANT
v.
JEFFREY ALLEN TAYLOR, ET AL., APPELLEES



Appeal from the United States District Court for the District of Columbia (No. 1:08-cv-00208-CKK).

The opinion of the court was delivered by: Garland, Circuit Judge

Argued September 12, 2008

Before: GINSBURG, HENDERSON, and GARLAND, Circuit Judges.

More than fifty years ago, the Supreme Court held that the public disclosure of "who is being hired, who is putting up the money, and how much" they are spending to influence legislation is "a vital national interest." United States v. Harriss, 347 U.S. 612, 625-26 (1954). Today, we consider a constitutional challenge to Congress' latest effort to ensure greater transparency, the Honest Leadership and Open Government Act of 2007. Because nothing has transpired in the last half century to suggest that the national interest in public disclosure of lobbying information is any less vital than it was when the Supreme Court first considered the issue, we reject that challenge.

I.

A.

Congress first enacted comprehensive lobbying regulation in 1946 with passage of the Federal Regulation of Lobbying Act (FRLA), Pub. L. No. 79-601, tit. III, 60 Stat. 839 (1946). The Act required paid lobbyists, defined as persons whose services were engaged for the purpose of influencing legislation, to register with the Secretary of the Senate and the Clerk of the House of Representatives. Id. § 308(a), 60 Stat. at 841. Among other things, registered lobbyists were required to disclose, on a quarterly basis, the identity of each person who contributed $500 or more to fund their lobbying efforts. Id. § 305(a)(1), 60 Stat. at 840. The FRLA remained on the books as the primary font of federal lobbying regulation for fifty years.

In 1995, concerned that the FRLA had "failed to ensure the public disclosure of meaningful information about individuals who attempt to influence the conduct of officials of the Federal government," H.R. REP. NO. 104-339, pt. 1, at 5 (1995), the 104th Congress scrapped the Act and started from scratch. By unanimous vote of both Houses,*fn1 Congress passed the Lobbying Disclosure Act of 1995 (LDA), Pub. L. No. 104-65, 109 Stat. 691 (codified as amended at 2 U.S.C. §§ 1601 et seq.), which began with the following recitation of findings setting forth the need for a more aggressive approach to lobbying regulation:

The Congress finds that --

(1) responsible representative Government requires public awareness of the efforts of paid lobbyists to influence the public decisionmaking process in both the legislative and executive branches of the Federal Government;

(2) existing lobbying disclosure statutes have been ineffective because of unclear statutory language, weak administrative and enforcement provisions, and an absence of clear guidance as to who is required to register and what they are required to disclose; and

(3) the effective public disclosure of the identity and extent of the efforts of paid lobbyists to influence Federal officials in the conduct of Government actions will increase public confidence in the integrity of Government.

2 U.S.C. § 1601.

In concert with these findings, Congress enacted a new statutory scheme containing broader disclosure obligations, a more expansive definition of lobbying,*fn2 and a more robust enforcement scheme. The LDA requires lobbyists (or their employers) to register with the Secretary of the Senate and Clerk of the House within 45 days of making or being retained to make lobbying contacts. 2 U.S.C. § 1603(a)(1), (2). Each registration must contain identifying information regarding the registrant (i.e., the lobbyist or employer of lobbyists) and each of its clients. Id. § 1603(b)(1), (2). It must also contain a statement of "the general issue areas in which the registrant expects to engage in lobbying activities on behalf of the client" and specific issues that have already been or are likely to be addressed in its lobbying activities. Id. § 1603(b)(5). Each registrant must then submit periodic reports updating those disclosures and stating the income received from its clients as well as the expenses the registrant incurred in connection with lobbying activities conducted on its own behalf. Id. § 1604(b).

Particularly relevant here, the LDA provides that, "[i]n the case of a coalition or association that employs or retains other persons to conduct lobbying activities, the client is the coalition or association and not its individual members." Id. § 1602(2). For the first time, however, Congress took steps to partially pierce the veil of coalitions and associations that lobby Congress on behalf of their members. LDA § 4 required registrants --including coalitions and associations -- to disclose not only their clients, but also:

(3) the name, address, and principal place of business of any organization, other than the client, that --

(A) contributes more than $10,000 toward the lobbying activities of the registrant in a semiannual period . . . ; and

(B) in whole or in major part plans, supervises, or controls such lobbying activities.

LDA § 4(b)(3), 109 Stat. at 696 (codified at 2 U.S.C. § 1603(b)(3) (1995)). According to the House Judiciary Committee Report that recommended passage of the LDA, this provision was "intended to preclude evasion of the disclosure requirements of the Act through the creation of ad hoc lobbying coalitions behind which real parties in interest can hide." H.R. REP. NO. 104-339, pt. 1, at 18.

In 2007, after twelve years of experience with the LDA, and spurred by a series of lobbying-related scandals, see H.R. REP. NO. 110-161, pt. 1, at 9 (2007), Congress again enacted lobbying reform. According to the House Judiciary Committee Report, Congress' purpose was to close "loopholes in current law." Id. This time, it did not repeal its earlier handiwork. Instead, Congress amended the LDA while keeping much of it intact, including its statement of legislative findings and most of its definitions. The result was the Honest Leadership and Open Government Act of 2007 (HLOGA), Pub. L. No. 110-81, 121 Stat. 735.

Section 207 of HLOGA is the provision at issue on this appeal. It amends LDA § 4(b)(3), 2 U.S.C. § 1603(b)(3), by altering both the monetary and level-of-participation thresholds necessary to trigger disclosure of organizations other than clients. The participation threshold is our focus here. Instead of only requiring the disclosure of an organization that "in whole or in major part" plans, supervises, or controls the lobbying activities of the registrant, HLOGA requires the disclosure of any organization that "actively participates" in the planning, supervision, or control of such lobbying activities.

Amended § 1603(b) now requires that each registration contain (and that each quarterly report update):

(3) the name, address, and principal place of business of any organization, other than the client, that --

(A) contributes more than $5,000 to the registrant or the client in the quarterly period to fund the lobbying activities of the registrant; and

(B) actively participates in the planning, supervision, or control of such lobbying activities[.]

2 U.S.C. § 1603(b)(3) (emphasis added). HLOGA also increased the civil penalties for anyone who "knowingly" fails to make the disclosures required by this and other sections, and added criminal penalties for "knowingly and corruptly" failing to do so. Id. § 1606(a), (b); see infra Part III.C.1. There is, however, a safe harbor from the disclosures required by § 1603(b)(3) for certain organizations that are identified on the registrant's website. 2 U.S.C. § 1603(b); see infra Part III.C.2.*fn3

B.

The plaintiff in this case, the National Association of Manufacturers (NAM), is "the nation's largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states." Appellant's Br. ii. Although some of NAM's more than 11,000 corporate members choose to disclose their affiliation with the association, NAM's policy is to keep its membership list confidential. Amundson Decl. ¶¶ 6-8. NAM employs approximately 35 people who make lobbying contacts with the federal government, id. ¶9, and it therefore must make disclosures under the LDA, 2 U.S.C. § 1603(a)(2).

According to NAM, hundreds of its corporate members make contributions that exceed the monetary threshold of amended § 1603(b)(3)(A). Amundson Decl. ¶ 7. The plaintiff explains that member groups like NAM "did not have to concern themselves" with disclosures under the 1995 version of § 1603(b)(3) because, "[a]s long as several members were involved, no single member would meet the ['in whole or in major part' participation] threshold." Appellant's Br. 45. The amended version of § 1603(b)(3), however, requires disclosure of any member who "actively participates" in planning, supervision, or control of lobbying activities, and this will require disclosure ofmany NAM members.

On February 6, 2008, NAM filed suit in the United States District Court for the District of Columbia, challenging the constitutionality of § 207 of HLOGA. The suit contends that 2 U.S.C. § 1603(b)(3), as amended by HLOGA § 207, violates the First Amendment both facially and as applied to NAM and similar membership organizations. NAM maintains that the section will chill NAM members from participating in public policy initiatives for fear of the consequences of public disclosure. It further argues that the disclosure requirements of amended § 1603(b)(3) are impermissibly vague. In the district court, NAM sought declaratory relief and an injunction against enforcement of the section. By agreement of the parties, NAM's motion for a preliminary injunction was converted into a motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), and the court decided the merits of the case on the basis of the parties' written submissions. See Nat'l Ass'n of Mfrs. v. Taylor, 549 F. Supp. 2d 33, 37 (D.D.C. 2008).

The district court concluded that amended § 1603(b)(3) does not violate the First Amendment because the section is narrowly tailored to serve compelling governmental interests, and it further found that the section was not unconstitutionally vague. Accordingly, it denied NAM's motion and dismissed the complaint. Id. at 68. NAM now appeals, and we review de novo the district court's ruling on the motion for judgment on the pleadings. See Thompson v. District of Columbia, 428 F.3d 283, 285 (D.C. Cir. 2005). We consider NAM's First Amendment challenge in Part II and its vagueness challenge in Part III.

II.

Amended § 1603(b)(3) does not prohibit lobbyists from saying anything. It requires only disclosure. Nonetheless, NAM explains that "the disclosures mandated by [amended § 1603(b)(3)] will discourage and deter speech, petitioning, and expressive association." Appellant's Br. 26. We agree with NAM that these are substantial First Amendment interests and that requiring disclosure can burden them. As the Supreme Court has noted, "compelled disclosure, in itself, can seriously infringe on privacy of association and belief guaranteed by the First Amendment." Buckley v. Valeo, 424 U.S. 1, 64 (1976) (citing, inter alia, NAACP v. Alabama ex rel. Patterson, 357 U.S. 449 (1958)).

But we also note that the Court, recognizing the lesser burdens that disclosure generally imposes on First Amendment interests, has upheld numerous statutes requiring disclosures by those endeavoring to influence the political system. For example, in United States v. Harriss, which we discuss in detail below, the Court upheld lobbying disclosure requirements of the FRLA on the ground that the statute served a "vital national interest" in a "manner restricted to its appropriate end." 347 U.S. at 626. In so doing, the Court emphasized that Congress had "not sought to prohibit [lobbying] pressures," but had "merely provided for a modicum of information." Id. at 625. Similarly, in Buckley v. Valeo, the Court rejected a First Amendment challenge to campaign finance disclosure requirements of the Federal Election Campaign Act (FECA), holding that a disclosure requirement was a "reasonable and minimally restrictive method of furthering First Amendment values by opening the basic processes of our federal election system to public view." 424 U.S. at 82. And in McConnell v. FEC, the Court upheld the expanded campaign finance disclosure provisions of the Bipartisan Campaign Reform Act (BCRA), including a provision requiring the disclosure of persons who contribute to groups or individuals that spend money on electioneering communications. 540 U.S. 93, 195-99 (2003).*fn4 The courts of appeals have been similarly deferential to disclosure statutes.*fn5

The question we face at the outset is the level of scrutiny we should apply to NAM's First Amendment challenge. The parties vigorously debate whether the Supreme Court applies "strict," or some lesser-but-still-heightened form of scrutiny to disclosure statutes. On the one hand, the government notes that in Buckley, the Court used the term "exacting" rather than "strict" to describe the scrutiny it applied to the disclosure requirements of FECA. 424 U.S. at 64-68. On the other hand, NAM notes that the Supreme Court has, on occasion, used the terms "exacting" and "strict" interchangeably to describe the same First Amendment test. See Burson v. Freeman, 504 U.S. 191, 198 (1992); see also McIntyre v. Ohio Elections Comm'n, 514 U.S. 334, 347 (1995). We, too, have described Buckley's test as "strict" scrutiny. AFL-CIO v. FEC, 333 F.3d 168, 176 (D.C. Cir. 2003).

In many respects, this debate over the appropriate adjective is beside the point. Whatever the test is called, the Court has clearly described what the test is. Just two Terms ago, in Davis v. FEC, the Court explained that "we have closely scrutinized disclosure requirements, including requirements governing independent expenditures made to further individuals' political speech." 128 S.Ct. 2759, 2775 (2008). "To survive this scrutiny, significant encroachments 'cannot be justified by a mere showing of some legitimate governmental interest.'" Id. (quoting Buckley, 424 U.S. at 64). "Instead," the Court said, there must be "a 'relevant correlation' or 'substantial relation' between the governmental interest and the information required to be disclosed," and the governmental interest "must survive exacting scrutiny." That is, the strength of the governmental interest must reflect the seriousness of the actual burden on First Amendment rights.

Id. (quoting Buckley, 424 U.S. at 64). This test is consistent with the scrutiny the Court applied to disclosure requirements in Buckley and McConnell.*fn6

More important, however, the debate over the appropriate test to apply is irrelevant because it makes no difference to our disposition. As we said in Blount v. SEC, "if [a statute] can withstand strict scrutiny there is no need to decide the issue" of which test to apply. 61 F.3d 938, 943 (D.C. Cir. 1995). To satisfy strict scrutiny, the government must establish three elements:

(1) "the interests the government proffers in support" of the statute must be "properly ...


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