A panel of the Court of Appeals for the First Circuit affirmed a district court’s preliminary injunction against a Maine ballot initiative that prohibited “foreign governments and ‘foreign government-influenced entit[ies] from contributing or otherwise influencing candidate elections and ballot initiatives.” The district court granted the plaintiffs’ preliminary injunction motion on the ground that a substantial application of the statute was unconstitutional and that plaintiffs were likely to succeed on the merits. In a 47-page opinion, Judge Lara Montecalvo upheld the lower court’s decision.
According to the Court:
The Act states that “[a] foreign government-influenced entity may not make, directly or indirectly, a contribution, expenditure, independent expenditure, electioneering communication or any other donation or disbursement of funds to influence the nomination or election of a candidate or the initiation or approval of a referendum.” Tit. 21-A, § 1064(2).
The district court upheld the Act’s ban on political spending by foreign corporations. But the court concluded that a substantial number of the Act’s application was likely unconstitutional. From the opinion:
In the end, because the district court determined that a substantial number of the Act’s applications likely violated the First Amendment, and the remaining factors favored a preliminary injunction, it enjoined the Act in its entirety. Id. at 55-56. In doing so, the district court expressly noted Maine severability law but declined to sever given the expedited and preliminary nature of the proceeding; instead, the court reserved the issue for later consideration. Id. at 55.
Maine timely appealed, arguing that the district court abused its discretion as to its holdings regarding preemption, the applicable level of scrutiny, the state’s compelling interest, and whether the Act was narrowly tailored. Maine also argued that the Act was not facially invalid, the injunction was overly broad, and the district court abused its discretion in reserving its decision on severability. Since March 21, 2024, the proceedings have been stayed pending appeal.
This case raises a number of interesting issues including the level of scrutiny applicable to political spending by foreign citizens and whether one can distinguish the speech of a domestic subsidiary from the speech of its foreign parent company.
