citizens united's opposition to secretary's petition for rehearing en banc

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No. 14-1387 IN THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT CITIZENS UNITED, Plaintiff-Appellant, v. SCOTT GESSLER and SUZANNE STAIERT, Defendant-Appellees, and COLORADO DEMOCRATIC PARTY, et al. Intervenor-Defendant-Appellees. On Appeal From The United States District Court For The District Of Colorado Honorable R. Brooke Jackson In No. 1:14-CV-02266-RBJ CITIZENS UNITED’S OPPOSITION TO SECRETARY’S PETITION FOR REHEARING AND FOR REHEARING EN BANC Michael Boos CITIZENS UNITED 1006 Pennsylvania Avenue, S.E. Washington, D.C. 20003 (202) 547-5421 December 11, 2014 Theodore B. Olson Counsel of Record Matthew D. McGill Amir C. Tayrani Lucas C. Townsend GIBSON, DUNN & CRUTCHER LLP 1050 Connecticut Avenue, N.W. Washington, D.C. 20036 (202) 955-8500 [email protected] Counsel for Appellant Citizens United Appellate Case: 14-1387 Document: 01019354934 Date Filed: 12/11/2014 Page: 1

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Citizens United's Opposition to Colorado Secretary of State Scott Gessler's Petition for Rehearing or Rehearing En Banc in Citizens United v. Gessler, Tenth Circuit Case No. 14-1387

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Page 1: Citizens United's Opposition to Secretary's Petition for Rehearing en Banc

No. 14-1387

IN THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

CITIZENS UNITED,

Plaintiff-Appellant,

v.

SCOTT GESSLER and SUZANNE STAIERT,

Defendant-Appellees,

and

COLORADO DEMOCRATIC PARTY, et al.

Intervenor-Defendant-Appellees.

On Appeal From The United States District Court For The District Of Colorado Honorable R. Brooke Jackson In No. 1:14-CV-02266-RBJ

CITIZENS UNITED’S OPPOSITION TO SECRETARY’S PETITION FOR REHEARING AND FOR REHEARING EN BANC

Michael Boos CITIZENS UNITED 1006 Pennsylvania Avenue, S.E. Washington, D.C. 20003 (202) 547-5421 December 11, 2014

Theodore B. Olson Counsel of Record Matthew D. McGill Amir C. Tayrani Lucas C. Townsend GIBSON, DUNN & CRUTCHER LLP 1050 Connecticut Avenue, N.W. Washington, D.C. 20036 (202) 955-8500 [email protected]

Counsel for Appellant Citizens United

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TABLE OF CONTENTS

Page

INTRODUCTION...................................................................................................... 1

2BARGUMENT ............................................................................................................. 4

I. The Secretary’s Petition Fails To Meet The Stringent Standards For En Banc Review. ............................................................ 5

II. The Panel’s Holding Is Compelled By Binding Supreme Court Authority. .................................................................................. 10

CONCLUSION ........................................................................................................ 15

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TABLE OF AUTHORITIES Pages

Cases

Air Line Pilots Ass’n, Int’l v. E. Air Lines, Inc., 863 F.2d 891 (D.C. Cir. 1989) ............................................................................... 4

Citizens United v. FEC, 558 U.S. 310 (2010) .............................................................. 1, 2, 3, 6, 7, 8, 11, 14

Kimberlin v. U.S. Dep’t of Justice, 351 F.3d 1166 (D.C. Cir. 2003) ............................................................................. 9

McIntyre v. Ohio Elections Commission, 514 U.S. 334 (1995) .............................................................................................15

Minneapolis Star & Tribune Co. v. Minn. Comm’r of Revenue, 460 U.S. 575 (1983) .................................................................................. 3, 11, 13

In re Morgan, 717 F.3d 1186 (11th Cir. 2013) ........................................................................... 15

Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622 (1994) .............................................................................................14

United States v. Sturm, Nos. 09-1386, 09-5022, 2011 WL 6261657 (10th Cir. Apr. 4, 2011) ................... 5

Constitutional Provision

Colo. Const. art. XXVIII, § 2(8)(b) .........................................................................12

Rules

10th Cir. R. 35.1 .................................................................................... 1, 4, 5, 6, 7, 9

10th Cir. R. 40.1 ......................................................................................................... 2

Fed. R. App. P. 35 ..................................................................................................1, 4

Fed. R. App. P. 40 ...................................................................................................... 2

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INTRODUCTION

As requested by the Court, Citizens United respectfully submits this opposi-

tion to the Secretary’s Petition for Rehearing and for Rehearing En Banc. The

panel correctly held that Citizens United has established a substantial likelihood of

success on its claim that Colorado’s campaign finance law unconstitutionally im-

poses discriminatory registration, reporting, and disclosure requirements on

Citizens United that are not imposed on other, “exempted” media entities. That

decision does not merit rehearing by the en banc Court for at least two reasons.1

First, the Secretary fails to satisfy the stringent requirements for en banc re-

hearing. En banc review is highly disfavored and is reserved only for those rare

cases where a panel decision conflicts with circuit precedent or controlling Su-

preme Court authority, or where the decision involves an issue of exceptional

public importance. See Fed. R. App. P. 35; 10th Cir. R. 35.1(A). Neither factor is

met here. The Secretary makes no attempt to show that the panel’s narrow, as-

applied holding conflicts with circuit precedent, and his attempt to manufacture a

conflict with the Supreme Court’s decision in Citizens United v. FEC, 558 U.S.

310 (2010), is thoroughly refuted by the panel’s opinion. Nor does the panel deci-

1 Citations to “Op. __” are to the Court’s published slip opinion dated November

12, 2014. Citations to “Pet. __” are to the Secretary’s Petition for Rehearing and for Rehearing En Banc, filed on November 26, 2014. Citations to “Tr. __” are to the certified transcript of the oral argument in this appeal on October 7, 2014, at-tached hereto as Exhibit A.

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sion qualify as one of exceptional importance requiring en banc review. While the

right to participate in political discourse on equal terms with other speakers is, of

course, exceptionally important, the panel vindicated that right on the narrowest

possible grounds—far narrower than Citizens United sought—and that factbound

decision does not warrant further review by the full Court.2

Second, the panel’s judgment reversing the district court’s denial of a pre-

liminary injunction breaks no new ground and is plainly correct under settled First

Amendment principles. As Citizens United explained in its principal brief, Colo-

rado may not constitutionally burden the core political speech of an established

documentary filmmaker like Citizens United with onerous reporting and disclosure

requirements while exempting other favored speakers—newspapers, magazines,

and broadcast facilities—who engage in identical political speech. Under the First

Amendment, “restrictions distinguishing among different speakers, allowing

speech by some but not others,” are “[p]rohibited.” Citizens United, 558 U.S. at

340. In holding that “the First Amendment requires the Secretary to treat Citizens

United the same as the exempted media” (Op. 17), the panel simply applied settled

2 Although the petition is styled as one for “rehearing and rehearing en banc,” the

text of the petition itself includes no argument in support of panel rehearing. This response therefore addresses the arguments for rehearing en banc presented in the Secretary’s petition. To the extent that the Secretary seeks panel rehearing, the Secretary has waived any argument that “a significant issue has been overlooked or misconstrued by the court.” 10th Cir. R. 40.1(A); see also Fed. R. App. P. 40(a)(2).

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law to allow Citizens United to engage in protected political speech on the same

terms as other speakers ahead of the November 2014 elections.3

Indeed, to the extent the panel erred at all, it was in failing to apply strict

scrutiny to Colorado’s blatantly discriminatory reporting and disclosure regime.

Although the panel correctly recognized that the Supreme Court has “‘consistently

rejected the proposition that the institutional press has any constitutional privilege

beyond that of other speakers’” (Op. 23 (quoting Citizens United, 558 U.S. at 352)

(emphasis in original)), the panel nonetheless failed to heed the Supreme Court’s

direction that strict scrutiny applies where a facially discriminatory law “single[s]

out the press for special treatment.” Minneapolis Star & Tribune Co. v. Minn.

Comm’r of Revenue, 460 U.S. 575, 582 (1983). That error did not affect the out-

come, however, because, as the panel correctly concluded, Citizens United’s claim

that its political speech is burdened relative to that of the institutional press is like-

ly to succeed even under the less stringent exacting scrutiny standard.

3 The panel concluded that advertisements for Citizens United’s film were subject

to the reporting and disclosure requirements (see Op. 34) because Citizens United had not established that similar advertisements would be exempt if published by a newspaper or other “exempted” media entity. The Secretary has since conceded that he historically exempts such advertisements when published by “exempted” media entities, and thus under the panel opinion, Citizens United’s advertisements will also be treated as exempt. See Letter from Theodore B. Olson to Elisabeth Shumaker, Citizens United v. Gessler, No. 14-1387, at 1-2 (Oct. 24, 2014) (attach-ing correspondence from the Secretary).

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Accordingly, rehearing should be denied and the case remanded for the dis-

trict court to resolve any remaining issues and enter final judgment on the merits.

2BARGUMENT

Rehearing en banc is “not favored” and “ordinarily will not be ordered un-

less: (1) en banc consideration is necessary to secure or maintain uniformity of the

court’s decisions; or (2) the proceeding involves a question of exceptional im-

portance.” Fed. R. App. P. 35(a). “[O]nly in the rarest of circumstances” should a

circuit court “countenance the drain on judicial resources, the expense and delay

for the litigants, and the high risk of a multiplicity of opinions offering no authori-

tative guidance, that full circuit rehearing of a freshly-decided case entails.” Air

Line Pilots Ass’n, Int’l v. E. Air Lines, Inc., 863 F.2d 891, 925 (D.C. Cir. 1989)

(R.B. Ginsburg, J., concurring in the denial of rehearing en banc; internal quotation

marks omitted).

This Court’s rules echo the federal judicial policy, making clear that en banc

review is “disfavored” and an “extraordinary procedure.” 10th Cir. R. 35.1(A). En

banc review is only appropriate in circumstances involving: (1) “a panel decision

that conflicts with a decision of the United States Supreme Court or of this Court,”

or (2) “an issue of exceptional public importance.” Id.

These stringent requirements are not met here. The Secretary fails to estab-

lish any conflict between the panel decision and decisions of the Supreme Court or

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of this Court. And although the issues in this case are certainly of public im-

portance, the Secretary has failed to show that the panel’s narrow, as-applied

holding is so “exceptional” as to justify extraordinary en banc review. In any

event, the panel decision is substantially correct on the merits; and although, in an-

other case, en banc rehearing might be appropriate to rectify the panel’s failure to

apply strict scrutiny, correcting that error would not change the outcome here.

I. The Secretary’s Petition Fails To Meet The Stringent Standards For En Banc Review.

The Secretary’s petition raises no argument that was not already addressed

in the panel decision and presumably considered by the full Court prior to publica-

tion. As this Court’s rules explain, “before any published panel opinion issues, it is

generally circulated to the full court and every judge on the court is given an op-

portunity to comment.” 10th Cir. R. 35.1(A). Thus, under the Court’s ordinary

procedures, the full Court had already had an opportunity to consider and comment

on the panel decision before it was published on November 12, 2014. See, e.g.,

United States v. Sturm, Nos. 09-1386, 09-5022, 2011 WL 6261657, at *1 (10th Cir.

Apr. 4, 2011) (ordering en banc rehearing sua sponte on the same day that the pan-

el decisions were issued). The Court did not elect to rehear the case en banc then,

and en banc review remains inappropriate now.

1. The Secretary fails to identify any relevant conflict between the panel’s

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decision and a decision of the Supreme Court or of this Court. See 10th Cir. R.

35.1(A). The Secretary does not even contend that the panel decision conflicts

with any decision of this Court. Instead, the Secretary asserts that the panel deci-

sion is in “direct conflict” with Citizens United v. FEC, 558 U.S. 310 (2010),

which the Secretary mischaracterizes as somehow endorsing the discriminatory ap-

plication of compelled disclosure requirements. Pet. 1, 3-5. The Secretary errs.

Citizens United involved a broad challenge to federal disclosure and dis-

claimer requirements, and the Supreme Court held only that those requirements

were not unconstitutional “as applied in th[at] case.” 558 U.S. at 371. In contrast,

the precise issue here was neither raised nor decided in Citizens United: Whether

Colorado may apply its reporting and disclosure requirements to Citizens United

and other speakers who do not own a printing press or broadcast facility while ex-

pressly exempting selected press entities from those burdensome requirements and

the chilling threat of enforcement liability. See, e.g., Op. 4 (noting that the ques-

tion presented in this case concerns whether Citizens United “is treated differently

from various media that are exempted” from Colorado’s reporting and disclosure

regime). The Supreme Court in Citizens United did not consider, much less de-

cide, whether reporting and disclosure requirements are valid when they are

applied, not evenhandedly to all speakers, but discriminatorily to a subset of speak-

ers singled out by the State for disfavored treatment because they do not publish a

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print periodical or own a broadcast station.

Under Colorado law, only those disfavored speakers are required to register

with the State, file periodic reports, and submit to the threat of enforcement liabil-

ity for infractions—a regime of speech regulation that institutionalizes the very

type of identity-based discrimination expressly prohibited by the Court in Citizens

United. See 558 U.S. at 340 (“Speech restrictions based on the identity of the

speaker are all too often simply a means to control content.”). Indeed, the Secre-

tary concedes that Citizens United did not address this scenario, noting that “the

Supreme Court’s disclosure analysis was not entity-focused” and did not “consid-

er[] the identity or corporate form of the speaker.” Pet. 4. And although the

Secretary posits that the Supreme Court “was surely aware” that “arguments about

unequal treatment could be raised in the disclosure context” (id. at 4-5), such spec-

ulation plainly is insufficient to create a conflict between the panel’s narrow

holding and binding Supreme Court authority. See 10th Cir. R. 35.1(A).

The Secretary argues that Colorado’s reporting and disclosure requirements

“turn primarily on the form that the speech takes and the manner in which it is dis-

tributed.” Pet. 7. Even if that were true, however, the requirements would still

violate the Supreme Court’s admonition that the First Amendment precludes “con-

stitutional lines based on the particular media or technology used to disseminate

political speech from a particular speaker.” Citizens United, 558 U.S. at 326. At

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the oral argument, for example, the Secretary’s attorney explained that the report-

ing and disclosure requirements would apply if electioneering communications and

independent expenditures were printed on a “glossy mailer” (Tr. 23:21) or a news-

paper “insert” (Tr. 20:17-21:5) or distributed via DVD (Tr. 92:17), but would not

apply if identical communications were printed on the pages of a newspaper (Tr.

23:20) or a newspaper’s online edition (Tr. 26:13-18) or an Internet blog (Tr. 27:9-

28:7). In other words, the Secretary seeks to “draw, and then redraw,” limits on

core political speech through ad hoc application of Colorado’s discriminatory re-

porting and disclosure requirements. Citizens United, 558 U.S. at 326. The panel

correctly rejected the Secretary’s ad hoc distinctions, and the Secretary again fails

to show a conflict with any decision of the Supreme Court.

2. While the right to be free from discriminatory burdens on political speech

is undoubtedly an issue of public importance, the Secretary has not shown that the

panel’s narrow vindication of that right here is sufficient to justify en banc review.

See 10th Cir. R. 35.1(A). The panel expressly declined to reach Citizens United’s

facial challenge to Colorado’s reporting and disclosure regime (Op. 17-18), de-

clined to decide whether strict scrutiny should apply (id. at 19), and declined to

grant injunctive relief against application of Colorado’s reporting and disclosure

requirements to Citizens United’s advertisements (id. at 5), although the Secretary

has since conceded that point (see Letter from Theodore B. Olson to Elisabeth

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Shumaker, Citizens United v. Gessler, No. 14-1387, at 1-2 (Oct. 24, 2014)). The

narrowness of the panel’s holding counsels strongly against en banc review. See,

e.g., Kimberlin v. U.S. Dep’t of Justice, 351 F.3d 1166, 1166 (D.C. Cir. 2003)

(Tatel, J., concurring in denial of rehearing en banc) (rehearing not warranted “giv-

en [the] extraordinarily narrow scope” of the panel decision).

The Secretary argues that the panel decision creates “the type of entity-based

distinction that troubled the Supreme Court in Citizens United I,” and “imports that

distinction in Colorado law where it did not previously exist.” Pet. 2. Neither con-

tention has merit, much less creates an issue of exceptional importance warranting

en banc review. Indeed, the only conclusion that can be drawn from the Secre-

tary’s admission that “entity-based distinction[s]” run afoul of Citizens United is

that the panel decision arrived at the correct outcome. As a result of the panel de-

cision, Citizens United now enjoys the same exempt status under Colorado law that

it enjoys under federal law. See App. at A33 (Federal Election Commission con-

cluding that “[t]he distribution of documentary films to the public is the legitimate

press function of an entity, such as Citizens United, that regularly produces ‘news

stories, commentary, or editorials’ in the form of films”). That result obviously is

not in conflict with Citizens United.

Moreover, the Secretary’s strained argument that the panel decision creates a

distinction based on a speaker’s identity where none existed in Colorado law (Pet.

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5-8) is flatly wrong. Colorado’s reporting and disclosure law is discriminatory on

its face. It exempts favored speakers in the “traditional” media (newspapers, mag-

azines, and broadcasters) while subjecting new media voices to its onerous

burdens—except, of course, where the Secretary, in the exercise of his limited

powers to construe Colorado law, has determined not to impose those burdens, as

with online editions of periodicals and Internet blogs of every stripe (but not doc-

umentary films distributed over the Internet). See Op. 10-11; see also Tr. 26-28.

The vagueness and malleability of Colorado’s media exemptions and the Secre-

tary’s uneven enforcement of those exemptions hardly undermine the panel’s

judgment; they validate it.

II. The Panel’s Holding Is Compelled By Binding Supreme Court Authority.

In addition to failing to meet the standards for rehearing en banc, the petition

should be denied because the panel’s decision is compelled by binding Supreme

Court precedent.

Although the Secretary mischaracterizes this case as simply involving the

legality of disclosure requirements, this case is about the right to engage in political

speech on equal terms. As the panel recognized, Colorado lacks a sufficient inter-

est to discriminate against Citizens United by burdening its political speech while

exempting similarly situated media entities from those burdens. Op. 29-30. In so

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holding, the panel decision brings Colorado law into compliance with the First

Amendment’s prohibition on “distinguishing among different speakers,” at least as

applied to Citizens United. Citizens United, 558 U.S. at 340.

The Secretary does not even attempt to distinguish Minneapolis Star &

Tribune Co. v. Minnesota Commissioner of Revenue, 460 U.S. 575 (1983), which

struck down a state law that applied “differentially” to certain favored media enti-

ties. Id. at 585. There, the Court held that where a facially discriminatory law

“single[s] out the press for special treatment,” such a law “suggests that the goal of

the regulation is not unrelated to suppression of expression,” and therefore is “pre-

sumptively unconstitutional.” Id. at 583, 585. That holding is unaffected by

Citizens United, which did not present a challenge to reporting and disclosure re-

quirements on the ground that they applied differentially to certain speakers but not

others.

The Secretary accuses the panel of adding to an “unworkable . . . thicket” of

rulings applying Colorado’s media exemptions (Pet. 8-11), and claims that the

panel decision fails to provide “practical guidance,” “clarity,” and “stability” (id. at

10-11). But it is clear that as applied to Citizens United, the panel decision is both

correct and easily administrable because it eliminates the Secretary’s artificial dis-

tinction between favored media entities in the “traditional” press and a

documentary filmmaker with an extensive history of producing and distributing

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dozens of films exploring controversial political organizations, personalities, and

policies in the United States and abroad. Indeed, that is exactly the result that the

Federal Election Commission reached when it construed the parallel media exemp-

tion in federal law to apply to Citizens United. See App. at A32 (“[G]iven that

Citizens United produces documentaries on a regular basis, the Commission con-

cludes it is a press entity for the purposes of this advisory opinion.”). The panel’s

as-applied decision is no less “workable.”

To the extent the application of Colorado’s media exemptions has become

unworkable or lacks clear guidance, it is the result of the Secretary’s nebulous in-

terpretation and uneven enforcement of those exemptions. For example, during the

oral argument, when asked the difference under Colorado law between an exempt

newspaper or magazine and another non-exempt form of publication, the Secre-

tary’s attorney offered only that “I know it when I see it,” and admitted that the

Secretary has not promulgated regulations on point. Tr. 23:7-24:4. Similarly, in

discussing whether a blog engaged in political speech would be exempted even

though it is not “printed,” Colo. Const. art. XXVIII, § 2(8)(b), the Secretary’s at-

torney explained that the answer depends on a factbound inquiry into the blog’s

“general attributes” and the “manner of the communication,” including how fre-

quently it is updated. Tr. 27:7-28:7.

Similarly, the Secretary’s attorney admitted at oral argument that the defini-

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tions of independent expenditures and electioneering communications are subject

to the Secretary’s discretion. For example, when asked whether a book would

qualify as an independent expenditure or electioneering communication, the Secre-

tary’s attorney explained that the focus of the reporting and disclosure

requirements is on so-called “mass media,” which, as defined by the Secretary, ex-

cludes books. Tr. 6:6-17; 13:22-14:6; 28:18-29:19. The Secretary has only

himself to blame for any “unworkab[ility] and “confusi[on]” (Pet. 8) in a regime of

speech regulation that turns on such arbitrary distinctions. Rather than creating

confusion, the panel decision properly protected Citizens United’s ability to partic-

ipate in core political speech on the eve of an important election.

To the extent the panel erred at all, it was in failing to apply strict scrutiny to

Colorado’s discriminatory reporting and disclosure requirements. See Op. 18-19.

Although the Supreme Court in Citizens United applied a less-stringent “exacting

scrutiny” standard in evaluating a facial challenge to disclosure requirements that

was unrelated to their discriminatory application, that case and others make clear

that laws that discriminate against speakers based on their identity are subject to

strict scrutiny. See Citizens United, 558 U.S. at 340; Minneapolis Star, 460 U.S. at

583. And because this case involves a challenge to disclosure requirements that

are applied differentially on the basis of a speaker’s identity, those discriminatory

burdens on speech must survive strict scrutiny. The panel erred in applying a less-

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er form of scrutiny, but that error did not affect the judgment and therefore does

not merit en banc review in this case. See Op. 19.4

In this regard, the panel majority erred in effectively concluding that Colo-

rado’s discriminatory regulations were content-neutral. See Op. 19. Under Turner

Broadcasting System, Inc. v. FCC, 512 U.S. 622 (1994), laws that “impose differ-

ential burdens upon speech because of its content” are analyzed under “the most

exacting scrutiny.” Id. at 642. Intermediate scrutiny applies only to regulations

that are “unrelated to the content of speech.” Id. Although Turner permitted dif-

ferential treatment based on the technological difference between cable and

broadcast television, it was clear that the differential treatment in that case was not

based on the content of the speech at issue. Id. at 643-44. Here, by contrast, the

Secretary has conceded that whether an entity will actually be exempt depends on

whether the speech can be easily identified and evaluated by the audience. Op. 25-

26. Colorado’s regulations, as interpreted by the Secretary, therefore expressly fa-

vor speakers with well-known, easily identified viewpoints over the speech of

4 Even if exacting scrutiny were the correct standard—and even accepting the

Secretary’s asserted “informational” justification for treating some media entities differently from others—the hodgepodge of exceptions enshrined in Colorado law comes nowhere close to satisfying the “substantial relation” requirement under ex-acting scrutiny. Citizens United, 558 U.S. at 366-67. The Secretary fails to establish that exempting newspapers, magazines, periodicals, and the owners of broadcast facilities from the disclosure requirements, but not other similar media entities, bears a substantial relation to the State’s asserted informational interest.

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obscure speakers, those who are new to the marketplace of ideas, or those whose

viewpoints are simply unknown.5

CONCLUSION

“In our democratic republic, where the right to vote is fundamental,” courts

of appeals “routinely decide appeals about elections and voting without granting en

banc review.” In re Morgan, 717 F.3d 1186, 1194 (11th Cir. 2013) (Pryor, J., re-

specting the denial of rehearing en banc). The Secretary has identified no

compelling reason to prolong this appeal and burden the full Court with en banc

review of a panel decision that is narrowly decided and reaches the correct result.

For the foregoing reasons, the panel should decline to rehear the case, and this

Court should deny rehearing en banc.

5 It is also impossible to reconcile Colorado’s apparent hostility to obscure

speakers or unknown viewpoints with McIntyre v. Ohio Elections Commission, 514 U.S. 334 (1995), in which the Court struck down a law prohibiting anonymous campaign literature and held that anonymous political speech is part of “an honor-able tradition of advocacy and of dissent.” Id. at 357.

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Respectfully submitted,

MICHAEL BOOS [email protected] CITIZENS UNITED 1006 Pennsylvania Avenue, S.E. Washington, D.C. 20003 Telephone: (202) 547-5420 Fax: (202) 547-5421

s/ Theodore B. Olson THEODORE B. OLSON [email protected] MATTHEW D. MCGILL [email protected] AMIR C. TAYRANI [email protected] LUCAS C. TOWNSEND [email protected] GIBSON, DUNN & CRUTCHER LLP 1050 Connecticut Avenue, N.W. Washington, D.C. 20036 Telephone: (202) 955-8500 Fax: (202) 467-0539

Counsel for Appellant Citizens United Dated: December 11, 2014

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CERTIFICATION OF DIGITAL SUBMISSION AND ANTI-VIRUS SCAN

I hereby certify that I have scanned for viruses the Portable Document For-

mat version of the attached document, using Microsoft Forefront (version

4.5.216.0, updated December 11, 2014), and according to that program, the docu-

ment was free of viruses. I further certify that I have not made any privacy

redactions in the attached document. I further certify that the Portable Document

Format version that was submitted to the court is an exact copy of the written doc-

ument filed with the Clerk.

s/ Theodore B. Olson THEODORE B. OLSON

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EXHIBIT A

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UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT------------------------:CITIZENS UNITED, : Case No. : 14-1387 Plaintiff-Appellant, : : v. : :GESSLER, : : Defendants-Appellee. :------------------------:

Denver, Colorado

Tuesday, October 7, 2014

The hearing in the above-entitled matter

before HONORABLE HARRIS HARTZ, HONARABLE TIMOTHY

TYMKOVICH, and HONORABLE GREGORY PHILLIPS

heard at the United States Court of Appeals

for the Tenth Circuit, Byron White U.S.

Courthouse, 1823 Stout Street, Denver, Colorado

80257, when were present on behalf of the

respective parties:

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1 A P P E A R A N C E S

2 On behalf of Colorado Secretary of State:

3 MATTHEW D. GROVE, ESQ. Deputy Attorney General

4 1525 Sherman Street, Seventh Floor Denver, CO 80203

5On behalf of Plaintiff-Appellant:

6 THEODORE B. OLSON, ESQ.

7 Gibson Dunn 1050 Connecticut Avenue, NW

8 Washington, DC 20036-5306

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1 C O N T E N T S

2 PAGEMatthew D. Grove, Esq.,

3 Counsel for Colorado Secretary of State 3

4 Theodore Olson, Esq., Counsel for Citizens United 38

5Mr. Grove,

6 Rebuttal 49

7 Mr. Olson, Rebuttal 69

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1 P R O C E E D I N G S

2 JUDGE HARTZ: I guess I owe an apology

3 for the unusual procedure that we're going to

4 start with today. But, after reading the briefs

5 and trying to get through the statutes, it seemed

6 like it would be useful for us to be sure we're

7 all starting on the same page regarding what the

8 statute says.

9 So there'll be -- so I'm going to ask

10 the counsel for the secretary of state to come

11 first and we'll ask some questions about that.

12 Then we will -- this is not for argument about

13 constitutionality, just about the meaning of the

14 statute. Then we'll start with Citizens United as

15 the appellant to argue the merits and the clock

16 will not be running while you're answering these

17 questions.

18 MR. GROVE: Thank you Your Honor.

19 JUDGE HARTZ: Okay.

20 MR. GROVE: Fire away.

21 JUDGE HARTZ: Go ahead and identify

22 yourself for the record, although I should have

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1 called the case: 14-1387, Citizens United v.

2 Gessler.

3 MR. GROVE: Matthew Grove on behalf of

4 the secretary of state.

5 JUDGE HARTZ: Great. So the definition

6 of electioneering communication is: "any

7 communication broadcasted by television or radio,

8 printed in a newspaper or on a billboard, directly

9 mailed or delivered by hand to personal residences

10 or otherwise distributed that unambiguously refers

11 to any candidate." First, unambiguously refers to

12 any candidate. That does not require the

13 communication to attack or support a candidate.

14 MR. GROVE: That's correct. It's a

15 timing requirement only and an unambiguous

16 reference requirement only.

17 JUDGE HARTZ: You had a regulation

18 saying it did, and that was overturned by the

19 court of appeals?

20 MR. GROVE: Yes, that precise issue is

21 actually pending on cert in front of --

22 JUDGE HARTZ: Okay, that's what the

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1 question -- so has the Supreme Court of Colorado

2 granted cert?

3 MR. GROVE: It has not. So presently

4 the functional equivalent requirement that was in

5 our regulation is -- does not exist.

6 JUDGE HARTZ: Okay. It also has

7 language, "Or otherwise distributed." That's very

8 broad. Are there any limitations on the meaning

9 of that clause other than the exemptions that are

10 in the statute?

11 MR. GROVE: Our view is that that clause

12 as a whole, much like the FEC -- sorry, the FECA's

13 electioneering communication provision is focused

14 on mass media activities, and so something like a

15 book, for example, I don't think would be included

16 but what Citizens United is doing here in our view

17 is.

18 JUDGE HARTZ: Okay. Is there a

19 regulation that describes that limitation on what

20 distributed means?

21 MR. GROVE: I don't think so. No we

22 don't have a regulation on that.

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1 JUDGE HARTZ: Okay, and electioneering

2 communications refer -- that term refers only to

3 communications regarding persons on the ballot in

4 Colorado, is that correct?

5 MR. GROVE: That's correct. It's

6 focused on -- this is only focused on state or, I

7 suppose countywide or municipal also.

8 JUDGE HARTZ: So something attacking or

9 supporting a Delaware candidate would not be an

10 electioneering communication under the act?

11 MR. GROVE: Not under Colorado law, no.

12 JUDGE HARTZ: Okay. Then I have some

13 questions about donors and donations and I'll

14 later be asking if any of these answers would

15 differ for an independent expenditure as opposed

16 to an electioneering communication. But are all

17 payments considered donations? Is there any type

18 of payment that would not be considered a donation

19 if it meets the other requirements?

20 MR. GROVE: You mean a payment to the

21 entity who is distributing the communication?

22 JUDGE HARTZ: Yes.

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1 MR. GROVE: Well, not for purposes of

2 disclosure because of the earmarking requirement.

3 If the individual donor's name is going to be

4 disclosed as a funder of the electioneering

5 communication, we have an election rule that says

6 that it has to be specifically earmarked for that

7 communication and I think it also has to be over

8 $250.

9 JUDGE HARTZ: What if, in this case we

10 have DVDs, if someone buys a DVD, would that be a

11 payment? Would that be a donation?

12 MR. GROVE: No. We don't consider that

13 a donation to fund. We consider the funding of

14 the film in this case to be on the front end, that

15 you fund the production beforehand, not that if

16 you go out and buy it or if you buy Citizens

17 United T-shirts afterwards, that that would be

18 funding it.

19 JUDGE HARTZ: Okay, so that would be,

20 that would not be a donation for the

21 electioneering matter.

22 MR. GROVE: Yeah, the --

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1 JUDGE HARTZ: I'm sorry, go ahead.

2 MR. GROVE: In our view, buying the DVD

3 afterwards is buying a product. It's not saying,

4 "I'm buying this because I really wanted to fund

5 Citizens United's efforts to put this movie out."

6 JUDGE HARTZ: What if you --

7 MR. GROVE: If you're interested in the

8 product.

9 JUDGE HARTZ: What if you bought a lot

10 of them, or promised to buy them before it was put

11 out?

12 MR. GROVE: There's certainly -- there's

13 certainly a lot of hypotheticals that you could go

14 through here, and I don't think that we have that

15 situation here. I think if there was a promise to

16 buy a lot of them and implicit in that promise

17 was, "Sure, I'll buy 5,000 of them and in doing so

18 give you $50,000 towards your -- towards making

19 this movie", that that, that might be considered

20 an earmark.

21 JUDGE HARTZ: Okay. Now, there's an

22 earmark definition in the independent expenditure

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1 section. Is that also the definition for earmarks

2 for electioneering communications? The definition

3 is: "A designation, instruction or encumbrance

4 that directs the transmission by the recipient of

5 all or part of a donation to a third party for the

6 purpose of making one or more independent

7 expenditures in excess of a thousand." Does that

8 also apply? Is that how you've applied the term

9 earmark for electioneering communications?

10 MR. GROVE: I think that's fair, and I

11 think we would also pull in the FEC's definition

12 which is discussed in the McCutcheon case which

13 talks about, you know, it can be oral or written,

14 it can be expressed or implied. The point is that

15 if I --

16 JUDGE HARTZ: What can be oral or

17 written, expressed or implied?

18 MR. GROVE: The earmark. And so, if I

19 give you money to produce a film and I say, "This

20 is for the film that you guys are planning on

21 distributing in Colorado to influence Colorado's

22 election," that would be sufficient. It doesn't

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1 have to say, you know, it can be -- it doesn't

2 have to be, you know, precise on a knife's edge, I

3 suppose is what I'm saying.

4 But it does have to be very clear that

5 Citizens United wouldn't just say, "We're raising

6 money this year to fund our advocacy activities.

7 Please donate." That wouldn't be an earmarking.

8 That would be more of a general treasury donation.

9 And so, the line there is specifically supporting

10 the communication, specifically funding the

11 communication versus more generally supporting the

12 company treasury. That's the secretary's

13 interpretation of earmarking.

14 JUDGE HARTZ: How precise? If you say,

15 "This is money you can use for Rocky Mountain

16 Heist or to pay overhead for your D.C. office, or

17 your Virginia office," is that -- you're not

18 directing it. You're giving them permission to

19 use it for that and other things. Is that an

20 earmark?

21 MR. GROVE: I would say -- I would say

22 no, because it leaves -- if the funding leaves the

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1 use of the money to the discretion of the entity

2 that is engaging in the electioneering

3 communication or expenditure, then it's not

4 earmarked. Citizens United could take that money

5 and decide to use it to buy office paper.

6 JUDGE HARTZ: Okay.

7 MR. GROVE: But that doesn't mean that

8 they have to use it for Rocky Mountain Heist.

9 JUDGE HARTZ: That answered a few

10 follow- -up questions. Let me -- whoops.

11 MR. GROVE: (To colleague.) Okay.

12 JUDGE HARTZ: Do you need to amend your

13 answer?

14 MR. GROVE: I don't. I should just say

15 that the secretary of state's office, of course,

16 as the state agency in charge of administering the

17 campaign finance law, has a say on this and these

18 are our interpretations. But ultimately state

19 courts have the final interpretive authority for

20 our act.

21 JUDGE HARTZ: Yeah. Okay, let me ask

22 you about expenditures and is there any -- well,

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1 I'll read the definition: "Any

2 purchase, payment distribution, loan, advance,

3 deposit or gift of money by any person for the

4 purpose of expressly advocating the election or

5 defeat of a candidate." Is there any limit on

6 where the money can be spent or how the message is

7 communicated?

8 MR. GROVE: Well, in terms of -- in

9 terms of disclosure, there's -- I think that's

10 what you're asking. Is there any way that I as an

11 entity could spend money that wouldn't require me

12 to disclose earmark donations.

13 JUDGE HARTZ: Yes.

14 MR. GROVE: If it qualifies as an

15 electioneering communication and the donation is

16 earmarked for that purpose, then that's where the

17 disclosure line falls.

18 JUDGE HARTZ: I'm sorry. I'm talking

19 about independent expenditures now.

20 MR. GROVE: It's generally the same

21 rule.

22 JUDGE HARTZ: Okay. And when I asked is

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1 there any limit on how the message is

2 communicated, does that mean it's limited to mass

3 media? Does that mean that an independent

4 expenditure couldn't go for a book? Because you

5 say a book is not mass media?

6 MR. GROVE: Yes, that's our position.

7 JUDGE HARTZ: And I want to make sure

8 what a corporation -- what the restrictions are.

9 If a corporation makes an independent expenditure,

10 what are the disclosure, disclaimer and other

11 requirements that follow from that? What does the

12 corporation have to do?

13 MR. GROVE: So they are slightly

14 different for electioneering communications and

15 expenditures. I'll start with electioneering

16 communications. Well, and maybe we should talk

17 about this case in particular, and this is

18 addressed in the brief. For electioneering

19 communications, it is the expenditure on the

20 communication itself, like in this case, creating

21 the film is not something that is disclosable

22 because there is no communicative aspect to it

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1 before it's distributed to the public. The

2 advertisements, on the other hand, promoting the

3 film --

4 JUDGE HARTZ: I'm sorry, repeat that

5 again.

6 MR. GROVE: So, Citizens United has said

7 they're going to spend something like $550,000 on

8 creating the film. Their film production budget

9 is $550,000.

10 JUDGE HARTZ: Okay.

11 MR. GROVE: There is, until the film is

12 released, no -- there's no distribution to the

13 public of that, and so, there's been no, in our

14 view, electioneering communication at that point.

15 JUDGE HARTZ: Okay.

16 MR. GROVE: However, they're also going

17 to spend $225,000 promoting the film and those

18 communications they've alleged will contain things

19 like -- that they'll contain electioneering

20 communications. They'll identify candidates for

21 office and there'll be a TV ad, or, I don't know -

22 - a banner on the internet. I'm not exactly sure

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1 what form that they'll take. That's not in the

2 record.

3 So for an electioneering communication,

4 the first $550,000 of production budget is not an

5 electioneering communication. The $225,000 spent

6 to promote the film, to the extent that it

7 contains communications that are consistent with

8 the electioneering communication law, will be

9 electioneering communications and have to be

10 disclosed.

11 Now the number of reports, I suppose

12 that's another question here. We're talking about

13 three at this stage. The electioneering

14 communications schedule is published and it's

15 actually -- it's the same as the normal disclosure

16 schedule for all sorts of committees, candidate

17 committees, everything across the board in

18 Colorado, and there are disclosure dates I think

19 on the 15th, the 29th and then a month after the

20 election, which is December 4th.

21 And so, in those, depending on whether

22 things are earmarked or not, there will have to be

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1 disclosure report. Primarily I think that if

2 there are not earmarkings, then the disclosure

3 would simply have to be, "We spent $225,000 on

4 marketing and this is how we did it." If that

5 involved, say, them spending $225,000 on an

6 advertising firm but then went and took the money

7 and spent it as they wished, it would be a single

8 entry.

9 JUDGE HARTZ: And no disclaimer

10 requirements in that circumstance?

11 MR. GROVE: Well, there certainly would

12 be a disclaimer requirement on the -- on the ads

13 of themselves.

14 JUDGE HARTZ: Okay. Now, what about for

15 independent expenditure?

16 MR. GROVE: So for independent

17 expenditure, there is more involvement certainly.

18 Our position would be that once you're making --

19 once you've engaged in making the movie, that you

20 need to create an independent expenditure

21 committee which involves the creation of a

22 separate bank account and then donations to and

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1 expenditures from that bank account would have to

2 be disclosed.

3 Now, that entire donation to it could

4 come from Citizens United's general treasury and

5 which then, you know, that acts as a funnel and

6 they then spend the money in that bank account on

7 the production of the film.

8 JUDGE HARTZ: So the production expenses

9 are considered independent expenditure?

10 MR. GROVE: They would be, yes, because

11 the definition of independent expenditure is

12 somewhat broader than the definition of

13 electioneering communication.

14 JUDGE HARTZ: Okay.

15 MR. GROVE: And then, the committee

16 reporting requirements are essentially the same in

17 the two. I mean, the timing.

18 JUDGE HARTZ: As I understand your regs,

19 if the money is spent only for independent

20 expenditures, then it is not a political committee

21 subject to those disclosure requirements. Is that

22 correct?

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1 MR. GROVE: That's correct.

2 JUDGE HARTZ: So is there anything here

3 that could make Citizens United responsible for

4 the disclosures required by political committees

5 as long as they don't contribute to a candidate in

6 Colorado.

7 MR. GROVE: I think absent any

8 coordination with the candidate that there

9 wouldn't be any sort of independent political

10 committee obligation.

11 JUDGE HARTZ: Okay, and now let me ask

12 about the exemptions for news articles, editorial

13 endorsements and communications in the regular

14 course and scope of business.

15 Sometimes after a newspaper runs a very

16 favorable or negative -- favorable story in

17 support of a candidate or maybe a negative story

18 against a candidate, somebody supporting that

19 candidate may wish to place an ad just reporting,

20 just duplicating the editorial.

21 You know, the Rocky Mountain News

22 endorses a candidate. So somebody supporting that

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1 candidate will say, "I'll place an ad in the

2 Denver Post showing that the Rocky Mountain News

3 endorsed the candidate and ran that as an ad." Is

4 that an independent expenditure? The content is

5 identical to what was in the paper that ran it

6 originally.

7 MR. GROVE: So if the Denver Post runs

8 that ad, the Denver Post is not engaging in

9 independent expenditure. But the person who funds

10 that ad likely would be. That's the same with any

11 advertisement.

12 JUDGE HARTZ: Okay. Even though the

13 content is identical to what it was in the Rocky

14 Mountain News?

15 MR. GROVE: That's right. I mean, an

16 advertisement is subject to disclosure, period.

17 JUDGE HARTZ: Okay. What if Citizens

18 United printed a newspaper insert on its own and

19 paid to have it inserted in the newspaper? Is that

20 an independent expenditure?

21 MR. GROVE: So let me understand it. So

22 the Denver Post runs it normally and Citizens

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1 United runs essentially an advertising insert that

2 they paid to put in?

3 JUDGE HARTZ: Yes.

4 MR. GROVE: Yes. That would have to be

5 disclosed by Citizens United but not by the Post.

6 JUDGE HARTZ: And what if Parade

7 Magazine did that? I don't know quite how their

8 business model works. But they have ads there. I

9 don't know if they paid the newspaper to insert

10 Parade Magazine there. Is Parade Magazine then --

11 if it says anything about a candidate, supporting

12 or whatever, is that an independent expenditure by

13 Parade Magazine?

14 MR. GROVE: My understanding of Parade

15 Magazine comes mainly from shaking it out of the

16 paper.

17 JUDGE HARTZ: Well, let's just say --

18 let's assume that it sells the ads. It's on its

19 own, and the Post just wants to -- and makes money

20 on those ads but says, "We're going to place this

21 in newspapers around the country," but they pay

22 the publisher of the newspaper to insert it. If

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1 that were the case, would Parade Magazine have to

2 report this sort of thing as an independent

3 expenditure or perhaps an electioneering

4 communication?

5 MR. GROVE: I don't think so, because of

6 the nature of what Parade Magazine is and I don't

7 want to cross over into the argument side of this.

8 JUDGE HARTZ: Yes.

9 MR. GROVE: So I could address that

10 later.

11 JUDGE HARTZ: Okay, and someone who

12 submits an op-ed, say the head of some political

13 organization writes an op-ed that the newspaper

14 publishes. Does that person, who wrote the op-ed,

15 is there any need for any disclosure about the

16 sources of funding for that organization even if

17 it were to support the op-ed?

18 MR. GROVE: I would say that if the op-

19 ed is not placed as a paid advertising vendor.

20 JUDGE HARTZ: No, it's done with the --

21 you know, a newspaper likes to have lots of

22 different -- often likes to have a variety of

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1 opinion expressed. So they get an opinion from

2 somebody who runs an advocacy organization of some

3 sort. There's no need for any disclosure by that

4 organization. Is that correct?

5 MR. GROVE: As long as it's not an ad,

6 that's correct.

7 JUDGE HARTZ: Okay, and what determines

8 whether a publication is a magazine or a

9 newspaper? Could Citizens United just label a

10 flyer Citizens United Gazette and avoid the

11 disclosure requirements then?

12 MR. GROVE: I want to say I know it when

13 I see it but, you know, that doesn't have the

14 greatest history. The --

15 JUDGE HARTZ: There are no regulations

16 regarding how that's determined. Is that correct?

17 MR. GROVE: Maybe that's the best

18 answer, yes. I mean, I can tell you -- I can

19 certainly tell you what is and wouldn't be.

20 Clearly the New York Times is a newspaper, a

21 periodical. Clearly a glossy mailer that appears

22 in my mailbox or is taped to my door that is one

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1 page and is focused solely on a candidate for

2 office, is not. Is there a lot of middle ground

3 there? Yes. But I think the best line to draw

4 is, is it -- well, let me just leave it there.

5 JUDGE HARTZ: Now, what about an

6 advertisement by one media, medium and another.

7 Say the Washington Post has an exposabout the

8 candidate and runs an ad on the radio or on TV

9 saying "Buy the Sunday Washington Post, read about

10 your congressman," or something like that. We

11 should move that to Colorado so it comes under

12 their statute. Does that come under the media

13 exemption in Colorado or is that an ad placed and

14 therefore becomes an independent expenditure or

15 campaign electioneering communication?

16 MR. GROVE: It depends on how the

17 Washington Post funds that. If the Post, and

18 again I'm wary about crossing over into the

19 argument side, so I'll just be brief on this. If

20 the Washington Post were to go out and collect

21 money and say, "Hey, we're going to put together

22 this hit piece or a puff piece on this particular

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1 candidate. Why don't you raise money so we can do

2 this investigative report," that's not the way

3 that newspapers normally operate, and so it's not

4 normally a disclosure we would expect to see.

5 JUDGE HARTZ: But there are things to be

6 disclosed even if there were no specific donors

7 who supported the independent expenditure. Isn't

8 that correct?

9 MR. GROVE: Well sure, they're -- you

10 could conceivably disclose how much it cost to

11 place the ad for example, but --

12 JUDGE HARTZ: Okay. Well, you're not

13 sure, I think.

14 MR. GROVE: Yeah. We're getting deep

15 into the grey area there that I haven't thought

16 about thoroughly.

17 JUDGE HARTZ: Okay. What about the

18 online edition of the Denver Post?

19 MR. GROVE: That's exempt.

20 JUDGE HARTZ: Why is that? Well, not a

21 constitutional argument but why under the statute

22 is that not covered?

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1 MR. GROVE: The medium matters to some

2 extent but it's -- in either an electioneering

3 communication or expenditure, covers writings in

4 general, and so whether it's the physical paper

5 edition of the Denver Post or the online edition I

6 don't think makes a difference. The same applies

7 to a political blogger and that may have been your

8 next question.

9 JUDGE HARTZ: Well, I want to make sure

10 I understand what the deal is with the online

11 edition. You're saying that's considered printed?

12 MR. GROVE: Yes, essentially.

13 JUDGE HARTZ: So the exemptions, any

14 news articles, editorial endorsements, opinions,

15 commentary, writings or letters to the editor

16 printed in a newspaper, et cetera, it's printed

17 even if it's online?

18 MR. GROVE: Yes.

19 JUDGE HARTZ: And what if it's public --

20 well, a newspaper that only has online editions,

21 is that still printed online?

22 MR. GROVE: Yeah, that's similar to the

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1 blogger exemption example that I just raised. As

2 long as it has -- there's a difference between

3 advertising and reporting in this context, and I

4 understand the lines get blurred, particularly in

5 the modern age. But those are lines that the

6 Court's is equipped to draw.

7 JUDGE HARTZ: Okay. Go ahead and talk

8 about blogs also. You anticipated that question.

9 MR. GROVE: So if they have the general

10 attributes of are they regularly updated, for

11 example, do they appear just before the election

12 and disappear afterwards, do they have aspects --

13 and it doesn't matter whether they take an

14 ideological point of view. The whole blog could

15 be devoted, and many are, to promoting the

16 Republicans, promoting the Democrats, the Green

17 Party and the Libertarians, whoever. That's not

18 the issue. It's not the viewpoint or the content

19 that makes a difference.

20 It's the manner of the communication and

21 the way in which it's updated. I mean, there are

22 political blogs in Colorado that certainly fall

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1 within this definition that are never printed on

2 any sort of physical medium, unless you actually

3 print them off. And so, those, in our view, even

4 assuming that people spend more than the

5 electioneering communication on them, which I

6 think is doubtful in many cases, would qualify as

7 exempt.

8 JUDGE HARTZ: So it's the same sort of

9 distinction that you make between a flyer and a

10 newspaper, that --

11 MR. GROVE: You know, there's a good

12 case on this that we didn't cite here but we cited

13 below called Bailey v. State of Maine Commission

14 on Governmental Ethics that actually talks the way

15 to distinguish a political blog and basically the

16 way to distinguish an attack blog versus a news

17 blog.

18 JUDGE HARTZ: And below you indicated

19 that a book could never be an independent

20 expenditure or an electioneering communication.

21 Is that correct? And you're saying that's because

22 it's not in the mass media?

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1 MR. GROVE: That's right. Just a

2 moment. So my answer's not any different on the

3 book but the focus is slightly different. Our

4 interpretation, and I should preface this by

5 saying that, again, our initial interpretive

6 authority is somewhat limited.

7 It's less focused on the mass media,

8 although I think that does play into it, than it

9 does the regular business exception that is

10 contained. So a book publisher is in the regular

11 business of publishing books and that is exempt

12 under 7(a)(b)(3).

13 JUDGE HARTZ: And how many books does it

14 have to publish before it's exempt? How often, or

15 is there --

16 MR. GROVE: I can't give you a number on

17 that.

18 JUDGE TYMKOVICH: You'll know it when

19 you see it.

20 JUDGE HARTZ: What about advertising the

21 book to get people to buy it? Is that -- if the

22 book is -- I mean politicians write books. If it's

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1 an ad to go out and buy that book, is that exempt

2 under the --

3 MR. GROVE: Well, if it's a--

4 JUDGE HARTZ: -- business exemption also

5 because it's still in the course of their

6 business?

7 MR. GROVE: Well, if it's a politician

8 who's writing the book, you run into coordination

9 issues clearly, and so I think that you're going

10 to sort of step over the line into what a

11 political committee would have to and what it

12 wouldn't have to do.

13 JUDGE HARTZ: Assuming there isn't a

14 coordination problem. Maybe it's an attack on a

15 candidate. So there probably is not a lot of risk

16 of coordination. If you advertise that book, is

17 that within the business?

18 MR. GROVE: Well, again, certainly if

19 the advertisement runs in a communication that is

20 itself exempt, the advertisement itself, the

21 printing policy --

22 JUDGE HARTZ: Well, you're probably

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1 going to advertise books in the newspaper and on

2 TV and things.

3 MR. GROVE: Sure, and so I want to draw

4 the distinction between the TV facility. 9 News

5 or the Denver Post wouldn't have to disclose the

6 production costs that went into running it,

7 sticking the tape in the player. But the creation

8 of the advertisement I think does cross a line

9 there into electioneering communications,

10 depending on the content obviously.

11 JUDGE HARTZ: Okay. Any other -- do you

12 have any questions? Why don't you go first?

13 JUDGE TYMKOVICH: I'd like to go back to

14 the digital -- your answer on digital media. Are

15 broadcast -- are cable news or cable opinion

16 outlets covered, CNN, Fox. Are they eligible for

17 the broadcast exemption?

18 MR. GROVE: Are they exempt? Yes.

19 JUDGE TYMKOVICH: They're exempt as

20 broadcasters?

21 MR. GROVE: Yes.

22 JUDGE TYMKOVICH: You answered with

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1 respect to the Denver Post digital platform and is

2 all content on that platform considered as

3 encompassed with the writing portion of the

4 exemption?

5 MR. GROVE: Well, I mean certainly the

6 Denver Post -- I've seen anyway -- they will

7 sometimes post videos and things like that.

8 JUDGE TYMKOVICH: Yeah. That's where

9 I'm going. If the Denver Post posted a video,

10 this, a movie that unambiguously refers, would

11 they be exempt as a newspaper or do they then

12 become eligible for the exemption as a

13 broadcaster, even though they're not a licensed

14 broadcast entity?

15 MR. GROVE: The line that we draw here

16 is not based on the Denver Post as a newspaper

17 entity. It's more focused on what the

18 communication looks like, and so, I can give you a

19 good example. I watched a good portion of the

20 Beauprez-Hickenlooper debate on the Denver Post

21 website just last week. That clearly -- I mean,

22 it clearly would be an electioneering

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1 communication because they both appeared on it.

2 But that sort of communication is not

3 the type of communication that would fall outside

4 of the exemption. Now, if the Denver Post went

5 out and raised money to put together a movie about

6 -- that either supported or opposed the candidate,

7 that's the sort of thing that would be subject to

8 disclosure. Again, that's veering towards argument

9 which I don't want to do right now.

10 JUDGE TYMKOVICH: Right. But if the

11 movie is deemed newsworthy by the Post and they

12 may provide a link on their website to the movie,

13 people can watch it, there's no risk to the Denver

14 Post exemption under the statute?

15 MR. GROVE: Well, if it's just a

16 question of providing a link, I doubt that they

17 would cross the expenditure threshold for that and

18 so I don't think that -- I think that's a

19 hypothetical that probably would not actually come

20 to fruition.

21 JUDGE TYMKOVICH: And, you know,

22 likewise, 9 News is primarily a broadcast medium.

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1 But you go to their website and they have written

2 content. How is the written content covered under

3 the exemption?

4 MR. GROVE: I view the website as an

5 extension of what 9 News' normal course of

6 business is.

7 JUDGE TYMKOVICH: And how do you

8 distinguish then the blog activities because - -

9 do you go back and look at the attributes of the

10 media for a blogger website?

11 MR. GROVE: Could you repeat that? I

12 didn't quite pick it up.

13 JUDGE TYMKOVICH: Yeah. Would you treat

14 the 9 News digital platform the same as you would

15 a blogger or another policy- or informational-

16 oriented website?

17 MR. GROVE: At very high level,

18 generally yes.

19 JUDGE TYMKOVICH: If the author -- going

20 back to your description on the book publisher, if

21 the author of the book received a grant to publish

22 a book that referred to a candidate or engaged in

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1 express advocacy, would the author have to

2 disclose that donation and the amount of any

3 expenditure in advertising?

4 MR. GROVE: If the author raised or

5 solicited money specifically for putting together

6 that sort of communication, then I think that we

7 are in a very similar situation to what we have in

8 this case. So, yes.

9 JUDGE TYMKOVICH: And just to be clear,

10 there's really no exemption for a movie-making

11 company. MGM or Netflix wouldn't have -- would

12 not be eligible for the press exemption under the

13 secretary's interpretation?

14 MR. GROVE: If one of those went out and

15 made this same sort of film, then no, they

16 wouldn't be exempted. If they were merely the

17 conduit by which it was distributed, then they

18 would not have to disclose, you know, the

19 bandwidth that you required when you went and

20 clicked on it.

21 JUDGE TYMKOVICH: And in the expenditure

22 definition, there is a narrowing of an expenditure

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1 to refer to express advocacy. That narrowing of

2 the definition of an expenditure, that doesn't

3 relieve an entity from disclosing under the

4 electioneering communication, which is a broader

5 definition of what's covered. Is that correct?

6 MR. GROVE: My understanding is that you

7 have to check an additional box on the form, if

8 it's an electioneering communication. So it could

9 be both. If it's an expenditure, it probably is

10 an electioneering.

11 JUDGE TYMKOVICH: It's a subset, though,

12 of the electioneering communication --

13 MR. GROVE: Yes.

14 JUDGE TYMKOVICH: Would that be a fair

15 way to --

16 MR. GROVE: Yes, and it's just a matter

17 of checking an additional box. There's no

18 additional report required.

19 JUDGE TYMKOVICH: And just so I'm clear

20 on the -- your responses as to earmarking,

21 earmarking disclosure is sort of a command either

22 of the statute or the constitution as construed by

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1 the secretary's regulation. Is that correct?

2 MR. GROVE: Yes, that's accurate.

3 JUDGE TYMKOVICH: And if that entity

4 does not take an earmarked donation, then there's

5 no disclosure obligation.

6 MR. GROVE: There's no disclosure

7 obligation of the donors from, you know, the pool

8 of money in the general treasury that the entity

9 used to fund that donation or to fund that

10 communication. There is a disclosure obligation

11 for how they spent the money if they exceed the

12 $1,000.

13 JUDGE TYMKOVICH: And that -- really the

14 disclosure would be, to the extent the earmarking

15 is the loophole, the loophole is closed by the

16 independent expenditure definition?

17 MR. GROVE: I'm not sure I see

18 earmarking as a loophole. So I'm not sure I quite

19 understand where you're going.

20 JUDGE TYMKOVICH: Okay. I just want to

21 make sure that the earmarking is, you know, a

22 statutory requirement for the disclosure to kick

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1 in.

2 MR. GROVE: Our position is yes. It

3 says for the communication. That's how we

4 interpret it.

5 JUDGE TYMKOVICH: Okay.

6 JUDGE HARTZ: Do you have any questions?

7 JUDGE PHILLIPS: No. No, thank you.

8 JUDGE HARTZ: Okay. Thank you very

9 much. That was helpful to me. I hope it will

10 enable the arguments to be clearer to us what's

11 being addressed. Mr. Olson, if you'd proceed.

12 MR. OLSON: Thank you, Your Honor. May

13 it please the Court. Theodore Olson, on behalf of

14 appellant, Citizens United. If I had a transcript

15 of what I just heard, the number of arguments that

16 we would make in our brief would be expanded

17 enormously. This statute, these constitutional

18 provisions are enormously vague, enormously

19 elastic, ambiguous and very, very difficult to

20 understand.

21 Just take the word earmarks. Congress

22 has been arguing about what earmarks are for

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1 decades. It's not clear that there is a

2 regulation saying that contributors don't have to

3 be identified unless their contribution to

4 Citizens United is earmarked in some fashion. But

5 that is not in the independent expenditure portion

6 of the regulation. It's unclear whether an

7 earmark could be oral or whether it could be just

8 general. National Public Radio, for example,

9 every once in while mentions that, thank you to

10 someone for contributing money for the coverage of

11 Japan or the coverage of medicine or the coverage

12 of something. Organizations put on -- media

13 organizations, broadcasters put on candidate

14 debates. Would those be covered? Newspapers

15 support candidate debates on the run-ups to

16 election.

17 We're told today that the production

18 costs of this communication is exempt in some way,

19 but the advertising of the money to talk about the

20 communication and urge people to buy it is

21 covered. Books, the expert witness who testified

22 below wasn't sure about whether the book he is

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1 writing would be covered or not, and then counsel

2 clarified and said the book wouldn't be covered

3 and then we heard that the books might not be

4 covered because they are mass media. I don't see

5 that anywhere in the statute or definitions.

6 We also heard about whether or not it

7 might depend upon how the book was funded. What

8 about self-publication? What about books that are

9 published on Kindle? What is the regular course

10 of business? We heard in the trial court that the

11 expert witness' book would be exempt because it

12 was going to be published by Oxford University

13 Press and Oxford University Press, I think I have

14 the publisher right, is in the regular course of

15 business of publishing books.

16 Well, Citizens United is in the regular

17 course of business of making movies. There are so

18 many ambiguities and vagaries in this statute. It

19 is in the hands of the regulator. We don't even

20 know whether the statements made today would be

21 binding on the next secretary of state or the next

22 attorney general. There are citizen suits

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1 permitted here. So all of this vagueness leads to

2 discretion by the enforcer, litigation costs, the

3 costs of hiring attorneys to figure out what this

4 statute means and the taking of risks when you're

5 engaged in the very business, in the very activity

6 that the Supreme Court has repeatedly said is at

7 the center of the core of the First Amendment.

8 No right is more importantly protected.

9 The First Amendment has its most urgent

10 application when you're talking about who will

11 govern, who will be the candidates.

12 JUDGE TYMKOVICH: Mr. Olson, shouldn't

13 we provide some deference to the interpretation of

14 the attorney -- of the secretary of state?

15 MR. OLSON: Not when it comes to

16 regulating speech, Your Honor. What we're talking

17 about here -- and there isn't any question that

18 there are differential burdens based upon who you

19 are, the identity of the speaker, the content of

20 the communication --

21 JUDGE TYMKOVICH: Yeah, I want to get to

22 that in a second. But I just, you know, want to

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1 kind of set the ground rules and either the

2 secretary is provided an interpretation to

3 illuminate some of the ambiguities or vagueness of

4 the statute. You may disagree or agree with those

5 and maybe for purposes of your case, the

6 interpretation of the secretary of state may be

7 important.

8 MR. OLSON: We're just finding about

9 some of those interpretations now. It's not like

10 a notice and comment provision or a rulemaking

11 procedure or anything like that. If there are

12 finely reticulated regulations already in effect,

13 that might be something of a different story. It

14 would of course depend upon what they were.

15 JUDGE TYMKOVICH: One problem is we

16 haven't had any state court interpretation of what

17 the statute means in this area.

18 MR. OLSON: Well, we're going -- but the

19 problem with this is what the counsel said today

20 might be different than what a counsel said

21 tomorrow, and a citizen can challenge that and

22 bring a suit which then goes before an

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1 administrative law judge, which then goes to a

2 state court.

3 Then you find out whether you're

4 permitted to speak or not without these burdensome

5 disclosures and it does depend -- the language

6 throughout the state's brief refers to it's you

7 may be exempted if you are a traditional speaker,

8 if you are an institutional speaker, if you're

9 part of the establishment, if you're a repeat

10 speaker like a newspaper, if you're regular or if

11 you're balanced or if you're journalism, but

12 you're not exempt if your ideological, if your

13 speech is negative, if it's -- these are all words

14 out of the state's brief -- if there's persuasive

15 effect in it, if it's an emotional appeal, if it's

16 an attack ad, if it urges action.

17 All of that has to do with the content

18 of the speech and it has to do with the identity

19 of the speaker and the point of view of the

20 speaker, and it has to do with the medium of

21 communication.

22 JUDGE TYMKOVICH: Isn't the

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1 discrimination here -- the class, the difference

2 between -- I'm going to call it broadcast speakers

3 versus non-broadcast speakers because really

4 Citizens United looks more like a broadcaster than

5 they do like a newspaper.

6 But how is that distinction viewpoint

7 based at all --

8 MR. OLSON: Well, the problem is --

9 JUDGE TYMKOVICH: There's no content.

10 It's not, you know, Republican versus Democrat,

11 conservatives or liberal. It's neutral, isn't it?

12 MR. OLSON: What the Citizens United

13 Supreme Court said: "We must decline to

14 draw and then redraw constitutional lines based on

15 the particular media or technology used to

16 disseminate political speech." So that's what the

17 Supreme Court said just a couple of years ago.

18 But why is this distinction -- why is

19 this distinction being made between broadcast and

20 print on the one hand and people that make movies

21 on the other hand? If you read the state's brief,

22 it's because there's a point of view in there.

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1 It's an attack ad. They call it a drop-in

2 communication.

3 We're talking about communication that's

4 at the very central core of the First Amendment at

5 the most important time for citizens to hear it

6 and if you are one type of speaker, if you are a

7 movie-maker, even if it's in your regular course

8 of business and you want to talk about Colorado

9 politics, you must fill out these forms or you

10 must file these disclosures and it's not --

11 JUDGE TYMKOVICH: But in the election

12 area, the Court has recognized speaker-based

13 distinctions. Foreign nationals can't contribute.

14 Lobbyists can't contribute in certain types of

15 elections. You know, there are speaker-based

16 distinctions that have been upheld at less than a

17 strict scrutiny standard of review. What do we do

18 about those cases?

19 MR. OLSON: I submit, Your Honor, that

20 many of those might be constitutionally subject as

21 well. To the extent that there are

22 differentiations between people in a certain line

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1 of business or a certain nationality, if we're

2 going to distinguish on the basis of -- the

3 Supreme Court has never upheld that. The Supreme

4 Court has said, we haven't gotten to that. It

5 specifically said that in Citizens United. The

6 argument was made something about foreign

7 contributors.

8 But, if there's distinctions made --

9 what the problem with this statute, this regime,

10 is that it distinguishes among media, how you

11 speak. It distinguishes based upon what you

12 speak. Electioneering communication, if you're

13 talking about politics, it's one thing. If you're

14 talking about the zoo, it's something else. If

15 it's an attack ad, it's separate. If it's a drop-

16 in communication, it imposes this burden --

17 JUDGE TYMKOVICH: Is your client's

18 subjected then to be within the press exemptions?

19 Is that the primary remedy that you're seeking at

20 the District Court and now before us?

21 MR. OLSON: Well, we asked for that and

22 that's of course what the Federal Election

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1 Commission did say, that Citizens United is in the

2 same business as other media communications.

3 JUDGE HARTZ: Well, you asked for that

4 before the secretary of state.

5 MR. OLSON: Pardon me, Your Honor?

6 JUDGE HARTZ: You've asked for that

7 before the secretary of state. It appears that

8 all your Court arguments are for a facial

9 challenge. And I'm curious about that because the

10 language in the statute that is problematic here

11 is very similar to that in the federal statute,

12 and it would seem that if we found that this

13 statute was unconstitutional on its face, that

14 would require a determination that the federal

15 statute is unconstitutional on its face. So I'm

16 asking if, in fact, you are seeking simply relief

17 for your client on an as-applied basis and if so,

18 have you preserved that adequately.

19 MR. OLSON: I believe that we have

20 preserved it. Had we not challenged or asked the

21 secretary of state for an exemption, we'd be

22 hearing the argument today that we didn't

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1 discharge or exhaust our administrative remedies.

2 But the statute as it is, however it's

3 interpreted, it might well be that Citizens United

4 would have a standing problem that the secretary

5 of state announced in an administrative decision,

6 as we had asked for, that it doesn't fly to you,

7 don't worry about it.

8 Then we'd be in here standing having to

9 defend ourselves on the basis of whether we have

10 standing to challenge the statute, whether it

11 applied to us. But it does apply to Citizens

12 United quite clearly. These burdens are going to

13 be imposed and the burdens are going to be imposed

14 because Citizens United talks openly about

15 politics. It mentions persons who might be on the

16 ballot and it deals with all of those things that

17 are so central to the First Amendment. Now, I'm

18 watching --

19 JUDGE HARTZ: Don't worry about the

20 time. We're going to -- we're not going to let you

21 waste time, but we're going to pursue these issues

22 until we have a good understanding.

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1 MR. OLSON: I appreciate that, Your

2 Honor, because I would want to reserve time for

3 rebuttal.

4 JUDGE HARTZ: But if we're reluctant to

5 say that this statute is unconstitutional on its

6 face because it has language virtually the same,

7 the important language is very close to what the

8 federal statue says, but thought that it would be

9 unconstitutional as applied to your client, can we

10 grant that relief given the way you've postured

11 your litigation in federal court?

12 MR. OLSON: The litigation challenged

13 not just -- was not just a facial challenge but it

14 was also as-applied challenge, if I recall what we

15 said in the complaint. But our point here is

16 specifically -- I think the central point here is

17 the facial challenge, is that this regulatory

18 regime does discriminate between speakers on its

19 face, based upon what the speakers have to say,

20 how they say it, when they say it and type of

21 media selected to do it.

22 It would be -- if the Court were

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1 considering, for example, separating out the

2 provisions that relate to Citizens United or

3 saying Citizens United was entitled to the

4 exemption that the broadcasters and the publishers

5 are entitled to, notwithstanding the plain

6 language of the statute that does not exempt them,

7 under some First Amendment consideration you have

8 to consider whether that severability issue that

9 voters would ever have approved the legislation

10 written in that fashion. We submit and we argue

11 below that there's no way that it would stand up

12 under that kind of analysis.

13 JUDGE TYMKOVICH: Could a disclosure

14 regime survive at all under your identity- based

15 theory?

16 MR. OLSON: I do not believe that it's

17 constitutional to distinguish between speakers

18 with respect to the imposition of a burden. The

19 Minnesota -- Minneapolis Star case, the Arkansas

20 Writers Project case, once you start

21 distinguishing between speakers in connection with

22 the imposition of a burden, that is facially --

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1 presumptively and facially unconstitutional.

2 JUDGE HARTZ: So you are saying that the

3 federal statute is facially unconstitutional

4 because of the press exemption in that statute.

5 MR. OLSON: I think that we're of course

6 not debating the constitutionality of the federal

7 statute.

8 JUDGE HARTZ: But it could give us

9 pause.

10 MR. OLSON: And if we heard the Federal

11 Election Commission give those -- the kinds of

12 answers that we heard today with respect to the

13 meaning of those words, we might be there too. I

14 think that we might have a problem with the

15 federal statute that if wound up imposing burdens

16 on different speakers with respect to disclosure,

17 the records that you have to keep, that whether or

18 not you have to disclose people that contribute

19 and you don't know what the meaning of those words

20 are. Many of the same things we are saying here

21 today we would be saying in maybe this court.

22 JUDGE HARTZ: But the Colorado -- let me

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1 ask one question, and then --

2 JUDGE PHILLIPS: Sure.

3 JUDGE HARTZ: But the Colorado Supreme

4 Court really hasn't spoken on this statute and the

5 interpretation of the constitutional amendment.

6 If it decided to interpret it the way the federal

7 statute has been construed by the Federal Election

8 Commission, then presumably it would not -- you

9 wouldn't have your facial challenge. And if it

10 can be construed that way, doesn't that eliminate

11 your facial challenge?

12 MR. OLSON: Well, I think the answer to

13 that question depends upon the standing of the

14 party bringing the litigation and if we had

15 standing to bring that case, I think that would be

16 a standing issue if the Colorado Supreme Court

17 said your client and what your client does is

18 completely exempt, then there would be a standing

19 issue.

20 But if it did discriminate against a

21 blogger, discriminate against a person that held

22 out a sign in a neighborhood, that would make it

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1 facially unconstitutional for the person bringing

2 that challenge because the discrimination between

3 -- by the imposition of different burdens and the

4 Supreme Court -- the Ladue case, for example,

5 about the woman who wanted to put a sign in her

6 window about politics, the Supreme Court

7 jurisprudence is full of decisions that say, you

8 may have burdens imposed upon speakers if they're

9 equal and they're neutral as to content and

10 neutral as to the speaker and if they don't impose

11 burdens that are such that it's more difficult to

12 speak. Those things might conceivably be upheld.

13 But this statutory regime is not even close to

14 that.

15 JUDGE HARTZ: Judge Phillips had a

16 question? No, go ahead.

17 JUDGE PHILLIPS: Is it your position

18 then that the only disclosure schemes that would

19 be constitutional are everyone discloses or no one

20 discloses?

21 MR. OLSON: I think that if there was a

22 compelling government reason for a disclosure in

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1 balance with respect to different types of

2 speakers, that conceivably would be upheld. But

3 what does the state offer here? The state offers

4 two things. One, it says in the brief here, but

5 it did not say in the district court, that it's

6 important to have this regime because to prevent

7 corruption or the appearance of corruption, it

8 says that we want to deter corruption.

9 But the Supreme Court has said that in

10 connection with independent expenditures, that is

11 not a compelling justification with respect to

12 corruption. The corruption motive is not a

13 justification for this kind of statute. Then

14 you'd have to look at the other argument being

15 made by the state which is very weak. It says we

16 want to inform the voters as to what's going on.

17 JUDGE PHILLIPS: But it's not just the

18 state that makes that argument. It's the voters

19 and the citizens of Colorado who made that

20 argument when they passed Amendment 27, and does

21 it matter at all that the people making that

22 distinction are the very people of Colorado by a

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1 2-1 vote that they think they need more

2 information about drop-ins or whatever else,

3 outsiders who come in with a political message

4 than they do from people within their own state or

5 companies, newspapers, TV stations, that they're

6 able to evaluate those over time.

7 They are able to figure out which ones

8 speaks a particular voice or message and discount

9 it or credit it as they please. But with entities

10 they have no idea about, that they really do need

11 to know who is promoting this speech. And is

12 there anyone better than the people themselves to

13 make that distinction?

14 MR. OLSON: Well, there's two answers to

15 that. At least two answers to that come to my

16 mind, Your Honor. It makes no difference

17 whatsoever that the voters approve something that

18 is unconstitutional under the First Amendment. So

19 if the state legislature did this or the voters do

20 it through initiative or referendum or anything

21 like that, it makes no difference. Now, the

22 voters might be saying, yes we would like to know

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1 more about this particular speaker or that

2 particular speaker. But if the First Amendment

3 tells the voters, the state, which is here today,

4 through the attorney general's office, that we

5 would like to know more about this particular

6 person because they live in Iowa or they may be

7 engaged in this kind of a business, that's

8 discrimination based upon the identity of the

9 speaker and the Supreme Court has said you can't

10 let the government decide who will participate in

11 government. But through electoral communications

12 --

13 JUDGE PHILLIPS: Well, I understand. I

14 understand that the voters can't pass a law that's

15 unconstitutional. But the voters made that

16 distinction and shouldn't that be weighed in the

17 whole balance of what's a sufficiently important

18 government interest? Don't they -- isn't their

19 voice important at all on that?

20 MR. OLSON: Their voice is very, very

21 important, whether they exercise that voice as

22 citizens at a ballot box or as citizens electing

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1 representatives who pass the same legislation. I

2 do not know of a single case that would support

3 the proposition that a regime which would be

4 unconstitutional if adopted by the legislature

5 became constitutional because the legislature or

6 the people put it on a ballot and voted for it.

7 JUDGE PHILLIPS: And just one last

8 question to follow up on this line. If the

9 legislature or if the people through a

10 constitutional amendment put the same disclosure

11 requirements on the press, on broadcasters and

12 newspapers, then you would say everything is good

13 constitutionally as far as Citizens United as

14 well?

15 MR. OLSON: I think that would take away

16 the argument, the principle argument that we have

17 today, that a statute that discriminates in terms

18 of the imposition of burdens between speakers

19 based upon that who they are, their identity, the

20 medium of communication or the manner of speech or

21 the content of their speech, that's

22 unconstitutional. If it's an even-handed

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1 application, and we acknowledge the Citizens

2 United case itself addressed disclosure regimes.

3 It didn't discuss them in the context of

4 discrimination. But it did uphold disclosure

5 regimes in the Citizens United case that the

6 Supreme Court heard.

7 But it would depend, Your Honor, on how

8 much of a burden that was in a particular

9 disclosure regime because it can be too much of a

10 burden. It might inhibit speech. It might be

11 vague, as the statute that we're dealing with here

12 today is, so the people don't know and can't make

13 decisions.

14 Here we are less than a month before

15 elections and we're in a court of appeals trying

16 to decide whether an individual speaker, Citizens

17 United, a nonprofit corporation, can make a 30-

18 minute documentary and distribute it to the people

19 in whatever form about Colorado politics. Here we

20 are four weeks from an election and we don't know

21 the answer to that. We don't know whether they

22 have to comply with all of these burdens when the

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1 Denver Post or the local television station, and

2 it may not be a local television station.

3 With respect to your question about

4 Colorado voters saying, well, we know who these

5 local stations are, if you look up the ownership

6 of the broadcasters in Colorado, many of them are

7 in New York. Many of them are in other places.

8 The New York Times has got a very, very

9 substantial contribution from a billionaire in

10 Mexico. I mean, these sort of things can't -- the

11 reason for these constitutional rules are that the

12 First Amendment, if it protects anything, it's

13 robust, uninhibited speech about who's going to be

14 on the ballot.

15 JUDGE PHILLIPS: But there's nothing

16 about this that stops anyone from speaking. And

17 the regulation, statute, the Constitution are all

18 content-neutral. And that, of course, was heavily

19 brought up during the district court proceedings

20 that Michael Moore was the example, would be just

21 a subject to this regulation as is Citizens

22 United.

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1 MR. OLSON: But it's not content-

2 neutral. If the brief of the State of Colorado

3 talks in terms of, it's okay, you're exempt if

4 you're a traditional speaker, if you're an

5 institutional speaker, if you're part of the

6 establishment, but not if you're ideological.

7 Now, it may be that Michael Moore and

8 Citizens United be in the same box here. But they

9 would be in a different box than the Denver Post

10 because it's presumed that the Denver Post isn't

11 ideological, or National Public Radio or MSNBC is

12 not ideological. So there is a distinction based

13 upon the content of the speech. Is it an attack

14 ad? Is it a negative ad? All of those things

15 have to do with what's being said and why it's

16 being said.

17 The footnote nine of the government's

18 brief, the state's brief here, says, with respect

19 to regular course of business, which, as I say,

20 Citizens United's regular course of business is

21 making movies about political issues. The

22 footnote nine of the government's brief, the

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1 state's brief says, well, you're not in the

2 regular course -- you can't have the regular

3 course of business exemption if you're attempting

4 to persuade people, if you're attempting to

5 influence a voter.

6 Well, that's speech. That is content of

7 speech. And then you have the government deciding

8 what is your motive for speaking. Do you want to

9 influence somebody? Of course, most speakers do,

10 whether they present it in a factual way or a

11 semi-balanced way. Speakers want to have their

12 ideas communicated to someone else.

13 And here we have a label put on Citizens

14 United calling ideological. And the dictionary

15 says ideological means that it's about ideas. And

16 if we have a First Amendment for any purpose, it's

17 to protect the distribution of ideas, whether we

18 like those ideas or not and whether they're in

19 your favorite newspaper or not or your favorite

20 publisher or your favorite broadcaster. The

21 little guy, the startup and the drop-in person,

22 has as much voice as the most powerful newspaper

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1 under the First Amendment.

2 JUDGE TYMKOVICH: If we don't agree that

3 there's strict scrutiny identity-based -- or

4 identity-based classification doesn't generate a

5 strict scrutiny standard of review, under a lesser

6 standard exacting scrutiny or whatever you want to

7 call it, doesn't the state have the flexibility to

8 pick and choose among some speakers based on some

9 of the factors that you've identified,

10 establishment versus non- establishment,

11 ideological versus not?

12 MR. OLSON: No, not under any standard.

13 In the first place, the Supreme Court is clear if

14 the distinction is being made based upon content,

15 that is presumptively unconstitutional and strict

16 scrutiny applies.

17 JUDGE TYMKOVICH: Okay, but if I

18 disagree with that premise, where do we go?

19 MR. OLSON: Yes. If you call -- if our

20 opponents' say it's not strict scrutiny for the

21 various reasons because it has to do with

22 disclosure, even though its uneven disclosure,

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1 they say exacting scrutiny. The standard for

2 exacting scrutiny is an important governmental

3 interest. But it also must be the same as strict

4 scrutiny, narrowly tailored to achievement of that

5 interest. It cannot be over-inclusive. It cannot

6 be under-inclusive. The Ladue case is a good case

7 to talk about that. So this --

8 JUDGE TYMKOVICH: And you say the

9 problem here is that it's under-inclusive.

10 MR. OLSON: Well, it's both. It's

11 under- inclusive because it exempts newspapers and

12 broadcasters. It's over-inclusive because it

13 includes people that have no connection with

14 corruption or no connection with the so-called

15 information need, which as this Court said in one

16 case, it's an interest. But it's not that big a

17 deal, especially when you're talking about

18 independent expenditures.

19 People who want to come out and speak

20 and are not connected with a candidate, who are

21 not contributing to a candidate or are not

22 connected with a candidate, there's no danger of

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1 corruption there. And the interest that the state

2 articulates is very vague. They just say people

3 should know more information about whose doing the

4 speaking.

5 That's very attenuated, very ambiguous.

6 And any burden that -- the state makes the

7 argument that it's not much of a burden. If you

8 put a five-pound weight on 2,000-pound

9 thoroughbred horse, that's called a handicap. And

10 there's no question that the obligation to keep

11 records, to make disclosures is a burden and it's

12 unequally distributed and that makes this statute

13 -- this statutory regime facially

14 unconstitutional.

15 JUDGE HARTZ: Let me ask a question

16 where you quoted from Citizens United regarding

17 the lack of an interest, of a government interest

18 with respect to corruption for independent

19 expenditures. How do you account for what it said

20 later in McCutcheon, after Citizens United, when

21 it says that, "The disclosures of contributions

22 may also deter actually corruption and avoid the

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1 appearance of corruption by exposing large

2 contributions and expenditures to the light of

3 publicity," quoting from Buckley which predated

4 Citizens United? Doesn't that suggest that they

5 didn't mean what they said in Citizens United, at

6 least not as far -- it didn't extend as far you

7 would extend it.

8 MR. OLSON: Well, I think that they

9 clearly meant what they said in Citizens United.

10 Of course I would say that. But what you're

11 talking about -- what they're talking about in the

12 context of the later case is it had to do with

13 aggregate contribution limits. And so, it wasn't

14 focusing on this issue. So anything it said there

15 would be dicta.

16 But what the Court has been consistent

17 about is that -- and it goes back to Buckley too -

18 - that expenditures are less of a concern,

19 especially uncoordinated expenditures.

20 Expenditures not coordinated with the candidate

21 don't present the risk of corruption that

22 contributions might. That goes all the way back

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1 to Buckley and the Court has been consistent about

2 that in various different iterations of these

3 cases that have come along.

4 And when we have an independent

5 expenditure, and expenditure totally unconnected

6 with any candidate by an individual that wants to

7 comment on Colorado politics or any other state's

8 politics independently and freely, there's no

9 connection and there's none shown by the state and

10 they didn't bring it up in the District Court.

11 They just brought it up in the brief here. So

12 they really forfeited that argument.

13 But even if that argument were to be

14 considered, you have to realize, or you have to

15 focus on the fact that they didn't think it was

16 important enough to raise in the District Court --

17 the United States v. Virginia -- the VMI case.

18 The Court pointed out you can't come up with post

19 hoc rationalizations for cases in this area. This

20 is a post hoc rationalization and it doesn't carry

21 any weight based upon what the Supreme Court has

22 said.

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1 JUDGE HARTZ: Let me return again to as-

2 applied challenge, which, as I've indicated, may

3 make more sense here. In Virginia, Citizens

4 United was willing to disclose its expenditures in

5 a long report. Do you have any serious problem

6 with the expenditure and disclaimer requirements?

7 MR. OLSON: Taken in the abstract,

8 expenditure and disclaimer requirements --

9 disclaimer requirements have fallen in different

10 category than expenditure requirements, it seems

11 to me, because you're requiring -- when you make

12 that step, you're requiring speech affirmatively,

13 and the Supreme Court has --

14 JUDGE HARTZ: Which is to say that this

15 is not coming from the candidate.

16 MR. OLSON: It's not. You're telling

17 the speaker, Citizens United or whoever, what you

18 must say when you make a speech. When you apply

19 something like that to 10-second commercials, you

20 can run into problems. A, you're requiring

21 someone to say that they don't voluntarily choose

22 to say, and the courts have been very suspicious

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1 of that sort of thing, and the burden when you

2 talk about short pieces of time may be

3 significant. It might be 20 to 30 percent of the

4 amount of time in the amount of speech.

5 So disclosure requirements or

6 requirements that say -- yeah, disclaimer

7 requirements I think have to be looked at in their

8 context.

9 JUDGE HARTZ: Does the federal law, now

10 that Citizens United has the press exemption, are

11 there any requirements of disclosure or any

12 disclaimer requirements under federal law that

13 still apply, even if you have the press exemption?

14 MR. OLSON: I don't know the answer to

15 that, Your Honor. I haven't gone back and looked

16 at those requirements. My client was very

17 concerned about this case, this regime and this

18 time because we are so close to an election and

19 this is a point where First Amendment principles

20 are urgent. It's time to be able to speak.

21 JUDGE HARTZ: I think we understand your

22 argument there. Thank you.

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1 MR. OLSON: And if I may have some --

2 JUDGE HARTZ: We'll give you some

3 rebuttal time. You can give them 30 minutes. But

4 let's try to stick with 30 minutes. I think we

5 can do that. Don't you think we can do that?

6 MR. GROVE: Hopefully.

7 JUDGE HARTZ: Okay.

8 MR. GROVE: May it please the Court.

9 One of the fascinating things about this case is

10 that it highlights what happens when a party

11 challenges an individual component of a campaign

12 finance law while it is designed to work together

13 as a whole. The Supreme Court has again and again

14 struck down restrictions on independent

15 expenditures and limits on contributions, direct

16 contributions. In every one of those cases,

17 though, the Court had said, we are doing this

18 because, look, effective disclosure remains as a

19 less burdensome, a more narrow option.

20 What the plaintiff has done here though

21 is separate out disclosure and present it as an

22 independent burden on political speech. Now,

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1 that's certainly possible. But this case is

2 nothing like Brown v. Socialist Workers' Party or

3 even Doe v. Reed, for that matter. But analyzing

4 disclosure in a vacuum is problematic. It ignores

5 the fact that the Supreme Court has relied heavily

6 on the existence of disclosure as a justification

7 for striking down spending and contribution limits

8 in case after case.

9 McCutcheon I think is the most recent

10 example of this. There the Court pointed out the

11 twin governmental interests in disclosure, and

12 this was raised below: providing information to

13 the electorate, on one hand, and deterring

14 corruption by shining a light on large

15 contributions and expenditures on the other. As

16 the plurality put it in that case, disclosure

17 often represents a less restrictive alternative to

18 flat bans on certain types or quantities of

19 speech.

20 For that reason, I think it's important

21 to acknowledge what this case is about and what

22 it's not about. The focus of the debate here

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1 shouldn't be on speech bans because the challenged

2 law neither imposes a ceiling on campaign-related

3 activity nor does it prevent anyone from speaking,

4 nor no matter how many times the plaintiff says

5 it, should this case be about discrimination based

6 on viewpoint, content or the identity of the

7 speaker.

8

9 JUDGE TYMKOVICH: Is it really content-

10 neutral if it treats more favorably the broadcast

11 speaker than the non-broadcast speaker, the

12 traditional speaker versus the nontraditional, the

13 establishment versus the antiestablishment? Why

14 isn't that a content distinction?

15 MR. GROVE: Because the same, I think --

16 I was thinking about this last night, and I think

17 maybe the best example of it is this. If you've

18 ever watch 9 News, they do these truth tests and

19 they will play a commercial and then they'll

20 analyze the claims in the political commercial.

21 The fact that they are playing the commercial as

22 part of the news broadcast means that they are

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1 disseminating the precise same content and the

2 exact same content that a commercial that runs in

3 between news segments disseminates. But they do

4 in the context of a -- it's different, the

5 context, because it's not the same sort of

6 advertising mode I suppose.

7 The point is that, again, it's not --

8 this case is not about the institutional press or

9 broadcast stations or anyone else versus the

10 little guys. It's about the type of

11 communications. It's about whether this is

12 advertising, and the Supreme Court has in Citizens

13 United made this very clear that they are

14 perfectly willing to look at the content to

15 determine whether something is advertising or not.

16 That's exactly what they did.

17 JUDGE TYMKOVICH: What if the same 9

18 News decides that it has an agenda in an election

19 and it's either going to, you know, try take out a

20 particular candidate or prop up a particular

21 candidate? You know, because of its stature as a

22 broadcaster, it plays by a different set of rules

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1 and it could expend millions of dollars in in-time

2 value by, you know, favorable or disfavorable

3 coverage.

4 But there's no disclosure. The public

5 doesn't learn anything about its potential bias

6 or, you know, the source of its advocacy. You

7 know, why -- you know, what -- does the state

8 really have, you know, a compelling interest or a

9 substantial interest in that kind of

10 discrimination?

11 MR. GROVE: So that certainly is not as

12 hypothetical as some of the questions within.

13 We've got Fox News on one hand, MSNBC on the

14 other. Rush Limbaugh on one side, Rachel Maddow

15 on the other. But that --

16 JUDGE TYMKOVICH: And they all get a

17 pass under the statute.

18 MR. GROVE: And that's largely the

19 point. When you have a communication like that,

20 that takes that form, then viewers -- and this is

21 the policy decision that Colorado's voters have

22 made -- viewers or readers or listeners of that

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1 content have the cues that they need in order to

2 evaluate the message. That's not the case when

3 you have what we've termed the drop-in political

4 advocacy that you have here.

5 JUDGE HARTZ: How do they have those

6 cues when it's an op-ed from somebody who runs an

7 organization you've never heard of before or a

8 letter to the editor? How do you have those cues

9 in that context?

10 MR. GROVE: Well, you can certainly take

11 them -- you can take them for what they are. A

12 letter to the editor is clearly expressing a point

13 of view as in a newspaper. Everybody knows what

14 that is.

15 JUDGE HARTZ: Well, so is -- so are

16 electioneering communiques, so are independent

17 expenditures. That's a point. You've clearly

18 expressed a point of view. Why do you need to

19 know who's circulating the DVD but you don't need

20 to know more about the person who wrote the letter

21 to the editor or the op-ed piece?

22 MR. GROVE: I think the context matters.

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1 I mean an op-ed appears on the editorial page of a

2 newspaper. Everybody knows that's the editorial

3 page and it's not entirely clear. So the point is

4 that the reader of that knows that it is an

5 opinion, knows that it is being -- that that's how

6 you consider it and you give it the weight that's

7 it's due. It's not always --

8 JUDGE HARTZ: Okay, well let's be

9 concrete. Citizens United has put out 24, or was

10 it 28, movies. What more do people need to know

11 about Citizens United to assess where they are

12 coming from?

13

14 MR. GROVE: Well, I think it's --

15 JUDGE HARTZ: If it were -- if you had a

16 group called Ku Klux Klan, Inc., you wouldn't need

17 to know one more thing about them to know where

18 they are coming from, would you? Why isn't their

19 track record -- let me put in a broader content.

20 I'm trying to understand why the rationale for the

21 news exemption, which can make some sense because

22 people know who they are, they have a track

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1 record, why that doesn't apply to Citizens United?

2 MR. GROVE: So Citizens United has

3 released a couple of dozen films. They've never

4 released one regarding Colorado politics, and so

5 that is the sort of informational interest, and

6 that is where the informational interest comes in

7 to play for Colorado's voters.

8 JUDGE HARTZ: Oh, it's the geographic

9 thing then?

10 MR. GROVE: Not necessarily, but --

11 JUDGE HARTZ: Would you treat Citizens

12 United differently if it were just in Colorado?

13 MR. GROVE: If they had released --

14 JUDGE HARTZ: If they had released 24

15 DVDs in Colorado about different elections over

16 the last 20 years?

17 MR. GROVE: I'm not sure that the

18 secretary's interpretive latitude, for what

19 amendment 27 right now -- says right now would

20 allow a movie like this to be -- to fall within

21 the press exemption.

22 JUDGE HARTZ: Right, right. But in the

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1 First Amendment challenge, you'd better have a

2 good reason, and the reason I'd like to hear, what

3 it is about the purpose behind the press exemption

4 that doesn't justify under the First Amendment,

5 maybe not under your Colorado law, an exemption

6 for them here.

7 MR. GROVE: Let me answer that in a

8 couple of ways. First, we need a good reason. But

9 we don't need the fit to be perfect. As we've

10 said in the brief, exacting scrutiny is the test

11 here. And the reason for that is that these are

12 disclosure requirements and in every single case

13 where the Court has analyzed disclosure

14 requirements, it's applied exacting scrutiny. I

15 disagree with Mr. Olson's formulation of that

16 test. There's not a narrow tailoring requirement.

17 In the disclosure context, it's a substantial fit

18 between the regulation and the sufficiently

19 important governmental interest.

20 The sufficiently important governmental

21 interest and the fit are really the issue here.

22 There's no question that it's actually really the

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1 fit. And so the question is then can Colorado put

2 together regulations in which we make policy

3 decisions about what sorts of communications come

4 with these cues that readers can use to evaluate

5 the context and which don't. And that --

6 JUDGE TYMKOVICH: You could have a

7 start- up newspaper, a start-up periodical with no

8 cues and they would be perfectly eligible for the

9 exemption. They could be financed by millions of

10 dollars of outside money and the public would have

11 no information about them, yet they would fall

12 perfectly within this. That doesn't seem to be

13 very closely tailored to the interest that you're

14 asserting.

15 MR. GROVE: There is certainly difficult

16 questions at the margins of this case and a start-

17 up newspaper, I agree, if it was a general

18 interest newspaper that people subscribed to, that

19 sort of thing, and they provided content that

20 people would be able to use in order to evaluate

21 what was being said on the editorial page, then

22 sure, I don't think there is any issue. Now, if

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1 something that appears to be a newspaper appears

2 on my door, and it's got --

3 JUDGE TYMKOVICH: That's a different

4 issue. I'm saying, you know, something that

5 really looks like the print media. You don't have

6 -- I mean I'm looking at your cues argument rather

7 than whether it's a sham or not. You know, it

8 doesn't give you a cue. You could have -- say the

9 Denver Post was purchased by a different publisher

10 or a new editor came in with a completely

11 different philosophy. You know, previous cues

12 would be worthless in that context. Yet Citizens

13 United, they've got, you know, a 10- or 15- year

14 track record. They would not be eligible. You

15 know, why is your regulation or the statute

16 tailored to that interest when there's so many

17 kind of obvious and practical obstacles to its

18 implementation?

19 MR. GROVE: I think the answer is that

20 people know how to interpret what they are reading

21 generally when they get something like a

22 newspaper. That form of communication provides

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1 the cues at least as far as the Colorado's voters

2 have indicated.

3 Tymkovich: In some cases it does. But

4 in a lot of cases the cues aren't there.

5 MR. GROVE: And the fit may not be

6 perfect. I readily acknowledge that. But the fit

7 doesn't need to be perfect. It only needs to be

8 substantial.

9 JUDGE HARTZ: Well, it's far from

10 perfect. There's another way. I mean, as I said,

11 the distinction in general makes some sense to me.

12 If you have a drop-in independent expenditure, a

13 drop-in ad, then if it's a one-time thing, you

14 don't know who they're -- where they're coming

15 from and the statute requires that you at least

16 find where they're getting their money for this.

17 So you can make an evaluation knowing

18 that Exxon provided so much money or some labor

19 union provided the money or something like that.

20 When you have someone who's not a drop-in, who's

21 really in the business of electioneering in many

22 ways, there are two things. One, you know where

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1 they're coming from, and two, you're probably not

2 going to find out where they're getting their

3 money because the big donor did not earmark for

4 Rocky Mountain Heist. The big donor put up a

5 million dollars and said, "Go out and do good work

6 from my point of view." And you never find out

7 who those people are.

8 The person you find out who is

9 contributing is the ex-wife of the candidate says,

10 "Oh, they're attacking my ex. I'll give them a

11 couple hundred bucks." And she'll find out about

12 that. So you don't get information about who is

13 behind it. But you get a lot of information about

14 where they're coming from. And that sounds exactly

15 like the reason for the press exemption because we

16 don't know who's funding the newspaper, whether

17 it's a Mexican billionaire or Thomas Jefferson

18 secretly funding a newspaper in Philadelphia.

19 We don't know where they have to --

20 where their money comes from. But we know enough

21 about the newspaper. So you know where I'm coming

22 from and I'd like you to explain why that still is

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1 a good fit.

2 MR. GROVE: So there were a lot of

3 questions in there.

4 JUDGE HARTZ: Yes, there were a lot in

5 there. I wanted to give you the full benefit of

6 what you need to convince me of.

7 MR. GROVE: First of all, the record in

8 this case is completely devoid of any suggestion

9 that large donors might not earmark and small

10 donors might. Second, it's not just the donor's

11 identity that matters. As the Supreme Court said

12 in Citizens United, one of the -- the other piece

13 of this is the disclosure of the expenditures

14 themselves. And the Supreme Court said at a

15 minimum, and they said that this was sufficient to

16 satisfy exacting scrutiny, at least when there is

17 a disclaimer and a disclosure of the expenditures,

18 a viewer or a reader will be able to make sure, to

19 reassure him or herself that the expenditure

20 wasn't being made by a candidate committee but was

21 instead an independent expenditure.

22 JUDGE HARTZ: And you're talking about

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1 the sort of reporting that went on in Virginia, in

2 that, where Citizens United or whoever, would

3 explain where they placed money in support of the

4 DVD. You're talking about that sort of

5 disclosure, right?

6 MR. GROVE: That's right. I'm not

7 talking about the earmarks.

8 JUDGE HARTZ: You're not talking about

9 donor information.

10 MR. GROVE: I'm not talking about the

11 earmark donations. That's a bonus. If that

12 information comes in, the donor information, if

13 somebody has earmarked that and it's a

14 particularly large contribution that was rather

15 than one to the general treasury, then great.

16 That's information that a prospective voter can

17 rely on as well. But that's not the only -- the

18 point is that the existence or non-existence of

19 earmarked donations is not the only piece that the

20 Court has to look to, to decide whether the

21 informational interest is actually satisfied.

22 JUDGE HARTZ: We can't say this is not

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1 constitutionally permissible but this is? I mean,

2 just because the expenditure reporting might be

3 proper doesn't mean that the donor reporting is

4 constitutionally satisfactory.

5 MR. GROVE: I would have -- I think I

6 would be more concerned about the donor

7 requirement, if there were some sort of

8 requirement that Citizens United open up its books

9 to the world in the event that it engaged in a

10 electioneering communication or independent

11 expenditure. But the earmarking requirement is

12 actually what saves the constitutionality here.

13 It's only donations that are directed towards

14 putting this communication out and those are

15 exactly the sorts of communications --

16 JUDGE HARTZ: Why do you want to know

17 that information? Why do you want to know -- when

18 you have an organization that's been around awhile

19 and produced a lot of stuff, why do you want to

20 know the people who earmark for this particular --

21 I can see if it's a single shot deal, if it's a

22 drop-in, one-time deal. I can see that. That's

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1 the only information you have because you don't

2 have a track record.

3 But when you have a track record, why?

4 What's the purpose of disclosing the people who

5 earmark and not those who might be the major

6 supporters? There's no reason to think it's one

7 way or the other at this point.

8 MR. GROVE: Citizens United had a

9 substantial track record in 2010 as well, and here

10 is what the Supreme Court said, and this is at

11 page about 915 of the opinion: "Even if the ads

12 only pertain to a commercial transaction, the

13 public has an interest in knowing who is speaking

14 about a candidate for an election." And then

15 later on the same page, "Shareholders can

16 determine whether their corporation's political

17 speech advances the corporation's interest in

18 making profits and citizens can see whether

19 elected officials are in the pocket of so-called

20 moneyed interests." Those are the -- that's the

21 fit that's been expressed by the Supreme Court

22 already.

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1 JUDGE TYMKOVICH: What do we do about

2 the MCFL, you know, ideological nonprofit

3 exemption? Why wouldn't Citizens United be

4 entitled to some constitutional protection under

5 that doctrine?

6 MR. GROVE: MCFL required disclosure.

7 MCFL, and this is part of, I think, the confusion

8 in this case, there are two components of MCFL.

9 One is could the corporation speak, and the Court

10 said, yes, for small ideological corporations,

11 we'll make an exception. The second was do they

12 have to disclose. And the answer on that, just as

13 it was in Citizens United, it's actually the same

14 case, just in a different context, was a

15 resounding yes.

16 JUDGE TYMKOVICH: Do you think -- is

17 there informational value in the -- not only in

18 the donation but also in the type and the amount

19 of the expenditure?

20 MR. GROVE: Yes, and Colorado has

21 actually made that distinction. Electioneering

22 communications or independent expenditures that

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1 fall below the $1,000 dollar threshold for the

2 expenditure or electioneering communication itself

3 don't have to be disclosed. To address Judge

4 Hartz's point, the widow of the candidate or

5 whoever it was that donates $200 dollars won't

6 have to be disclosed anyway because the threshold

7 is $250. Now, I understand --

8 JUDGE HARTZ: I said it was $250.

9 MR. GROVE: Sure. I understand that we

10 could go to $251 and ask the same question. But

11 the very small donations, the ones that, for

12 example, raised questions about the

13 constitutionality of our issue committee statute

14 in Samson aren't really at issue here. Our

15 thresholds are much higher, not only for the

16 expenditure, but also for the donation that might

17 be earmarked and would have to be disclosed.

18 JUDGE TYMKOVICH: If the public has a

19 good understanding of where a broadcaster or a

20 newspaper is coming from, wouldn't the public

21 still have an interest in the amount of

22 expenditures that are directed towards

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1 electioneering communications? In other words,

2 might not the public be interested that, say, 9

3 News was, you know, directing several million

4 dollars' worth of its resources pro or con a

5 particular candidate. Even if you know where

6 they're coming from, you might be a little

7 surprised that they're like 90 percent for one

8 candidate and 10 percent for another. Wouldn't

9 that be valuable information for the public?

10 MR. GROVE: It certainly could be. But

11 here's the problem with it. One, that imposes a

12 different sort of burden than what is imposed on

13 Citizens United in this case. We know --

14 JUDGE TYMKOVICH: How so?

15 MR. GROVE: We know down to the dollar

16 what Citizens United plans to spend on both

17 producing its film and disseminating it. Imposing

18 the types of burdens on a general interest news

19 organization that would require it to parse out

20 reporter time or production time or things like

21 that would be much more substantial than for an

22 organization that says, "This is exactly how much

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1 we are going to spend and this is how we're going

2 to spend it, and if you want to donate money for

3 it, great." That's not the way -- it's a

4 different business model really. And so, along

5 with that not only is --

6 JUDGE TYMKOVICH: Well, you might need

7 another accountant to track. But why is it so

8 hard to count the minutes? Aren't there

9 organizations that say, okay, they have this many

10 minutes in favor of this candidate, this many

11 minutes against, you know, figure out what air

12 time costs? I mean, that doesn't sound all that

13 complicated.

14 MR. GROVE: It is doable. The question

15 is whether the burden is commensurate with the

16 informational interest that comes along with it.

17 JUDGE TYMKOVICH: Really, in our

18 context, does that burden justify carving them out

19 from other types of communicators.

20 MR. GROVE: Well, and the answer is, in

21 the context of something like 9 News -- and in the

22 context -- and not just of 9 News itself but of

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1 their nightly newscast, which really is, again,

2 the focus of what we should be talking about here,

3 the informational interest isn't that great. We

4 know, in a general sense, who's paying for 9 News

5 because we watch the commercials, unless we skip

6 through them. But we don't know that for Citizens

7 United.

8 JUDGE TYMKOVICH: We wouldn't know about

9 it, start-up newspapers, start-up periodical

10 either, or NPR, right? They don't advertise.

11 MR. GROVE: In a general sense, I mean,

12 NPR certainly does. We hear that the Ford

13 Foundation supports this type of coverage or that

14 type of coverage and if the Ford Foundation

15 donated $2 million for NPR to create some kind of

16 investigative report or attack ad or something

17 like that, then that's the sort of information

18 that would need to be disclosed.

19 If you look back at Reader's Digest, and

20 this gets into the FEC regulations, but the

21 Reader's Digest case from 1981 in the Southern

22 District of New York where Reader's Digest is --

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1 you know, normally the communication that they use

2 is this magazine essentially. But they did an

3 investigation of Ted Kennedy and Chappaquiddick

4 and the Court in that case, and this is still good

5 law as far as I can tell, said that, well, you

6 know, what they're doing is really very different

7 than their normal press function. And so, they

8 raised money or they spent money specifically on

9 what amounted to a hit piece. And when that

10 happens, whether it's a hit piece or a puff piece,

11 the viewpoint doesn't matter. When that happens,

12 that's the sort of information, that's the sort of

13 communication that voters might want more

14 information about.

15 JUDGE HARTZ: So that raises the

16 question when the Denver Post, you said -- if the

17 Denver Post produced a DVD, that would have to be

18 disclosed. They would have to report under the

19 statute, you thought. Is that correct?

20 MR. GROVE: If the Denver Post did what

21 Citizens United is proposing to do here?

22 JUDGE HARTZ: Yes.

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1 JUDGE HARTZ: And what is the

2 informational interest there? Doesn't everybody

3 know from -- doesn't the reasoning you gave for

4 exempting the Denver Post apply just as much

5 there?

6 MR. GROVE: Well, for one, if they're

7 raising money specifically to do it, then there is

8 certainly an informational interest there. That's

9 just not something that the Denver Post in its

10 normal media role would do. And so, if they step

11 outside that role, and this is Phillips

12 Publishing, Reader's Digest, this is what these

13 cases say. If they step outside that role and

14 engage in the type of communication that should

15 raise a red flag for folks who might say, well,

16 how did this come about, this isn't normally what

17 I'd see in a paper, I just got a DVD in the mail

18 from the Denver Post. That's the sort of

19 information that would lack the contextual cues

20 that normally accompany the readership of the

21 paper.

22 JUDGE HARTZ: What contextual clues are

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1 you learning?

2 MR. GROVE: Sure, so the Denver --

3 JUDGE HARTZ: Tell me what you're

4 learning. I mean, it's the Denver Post, the same

5 people who have written all these editorials

6 you've read for years. What are you learning?

7 MR. GROVE: Well --

8 JUDGE HARTZ: Learning that 10 percent

9 of the cost of the production of the DVD was

10 raised from other people?

11 MR. GROVE: Well, I think it's hard to

12 say what we learned without actually having the

13 information in hand. But I can think of some

14 examples. So, let's say the Denver Post got --

15 put out a solicitation and it was going to be a

16 hit piece on a certain candidate and, choose your

17 billionaire, Michael Bloomberg, Charles or David

18 Koch, somebody like that funded the entire thing

19 on one side or the other.

20 That's certainly the type of information

21 that we see all the time in campaign disclosures.

22 With the recall elections last year, there was --

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1 it was highly publicized that the NRA on one side

2 and Michael Bloomberg on the other were making

3 independent expenditures for or against the

4 recalls. And so, I can't commit to a particular

5 piece of information being in any -- being in any

6 sort of form that I can definitely describe here

7 because it's --

8 JUDGE HARTZ: But normally, before we

9 allow some restriction on speech, we need some

10 evidentiary support for why this would help. And

11 when you have a repeat player, as I mentioned

12 before, not only do you learn about them but also

13 it's harder to see disclosures of earmarked

14 contributions are less valuable because there's no

15 indication of where the major source of the money

16 is. If the Koch brothers are funding Citizens

17 United largely, then what do you learn if there's

18 somebody that says, I want this to go to hit

19 pieces in Colorado? Are you -- you're missing --

20 you're missing the most important information

21 which is who's generally funding Citizens United,

22 are you not? And why is that valuable to voters?

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1 It's almost a distortion to voters.

2 MR. GROVE: I think both would be

3 valuable. I think the question is, from a

4 constitutional perspective, what information can

5 actually be required. And the Supreme Court has

6 made it clear that going and digging into the

7 general finances of a corporation, be it profit or

8 nonprofit, is not going to be acceptable. That

9 dates all the way back to NAACP v. Alabama. And

10 sure, it would be great if we knew exactly who was

11 funding every single penny of not just Citizens

12 United, but any organization. The Disclose Act

13 that has failed a couple of times in Congress

14 tried to get that sort of information out.

15 JUDGE PHILLIPS: Can I ask you a

16 question just to make sure I understand what your

17 position is on what if Citizens United threw up

18 its hands and said, this is so burdensome it's not

19 worth it, we're not going to disclose who our

20 donors are and we have an agreement with them or

21 something.

22 Instead what we're going to do for the

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1 next 30 days is buy six pages of the Denver Post

2 and we're going to put a transcript of everything

3 in that video with lots of pictures which

4 corresponds to the same thing and in fact is going

5 to reach a lot more people. Would it -- is it your

6 position that Citizens United would have to

7 disclose its donors in that instance?

8 MR. GROVE: Sure, that's an

9 advertisement. If they buy the space, that's

10 pretty easy.

11 JUDGE PHILLIPS: Okay.

12 JUDGE TYMKOVICH: I want to come back to

13 your comments at the introductory portion on the

14 digital platform. If the Denver Post showed this

15 movie on its digital site, you know, basically as

16 a news item, you know, it's become newsworthy now

17 and they want people to see what the argument was

18 about.

19 So they just run it on its news site.

20 You click there and you can watch the movie. It's

21 not being funded by anybody. It's just part of

22 their news judgment. And then similarly, the 9

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1 News prints the transcript on its website so you

2 can read it and they post it there as a news item.

3 None of that would raise any problems under the

4 exemption regime, would it?

5 MR. GROVE: Well, I think that we

6 wouldn't even get there because if 9 News is just

7 printing the transcript, unless they bought it for

8 more than $1,000, or if the Denver Post just got a

9 hold of this thing that costs 10 bucks and they

10 post it on their website -- I'm assuming there

11 wouldn't be any copyright issues -- then it's

12 likely that they would never even reach the

13 expenditure or electioneering communications

14 spending threshold. And so, I don't think that

15 that would be an issue in that. That's why we're

16 focused on --

17 JUDGE TYMKOVICH: Why wouldn't you look

18 at the value of the -- wouldn't you look at the

19 value of the broadcast rather than the cost of the

20 digital dissemination?

21 MR. GROVE: Well, that's not what the

22 electioneering --

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1 JUDGE TYMKOVICH: It seems to me that

2 the expenditure would be kind of the impact. You

3 know, let's say the editor, you know, was pro --

4 you know, the editor had a friend who was on the

5 Citizens United board and wanted to disseminate

6 this, you know, free of charge. So there's no

7 money exchanging. It's purely an ideological or,

8 you know, political position. You know, the in-

9 kind value of that broadcast could be enormous.

10 MR. GROVE: That's certainly true. But

11 what our statute says is that you look at how much

12 it costs to produce it, and -- or costs to

13 disseminate it. That's certainly true in

14 electioneering communications. I mean, if there's

15 -- we could go into these hypotheticals about

16 folks, you know, coordinating behind the scenes

17 and things like that, and sure those would be

18 interesting. But I don't think that that's what we

19 have here.

20 JUDGE TYMKOVICH: I don't think so

21 either.

22 JUDGE HARTZ: Let me -- if Citizens

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1 United were treated as a book publisher, what

2 would its obligations be here? We decided that

3 there's no reason to treat its production and

4 circulation of DVDs differently from a book

5 publisher doing the same with books. What would

6 its obligations be here?

7 MR. GROVE: If it satisfied a regular

8 business exception, then there wouldn't be a

9 disclosure requirement that goes along with that.

10 JUDGE HARTZ: Even for placing ads on TV

11 to publicize the book?

12 MR. GROVE: It depends on -- it depends

13 the content of the ad. It depends on if it's an

14 electioneering communication or not. But I think

15 that you start to move towards what is going to

16 need to be disclosed. If the ad said, "Read this

17 book and learn why John Hickenlooper is unfit to

18 be Colorado's governor," or, "Learn why you should

19 vote against Colorado's governor," just to make

20 sure we have one of the magic words in there -

21 -

22 JUDGE TYMKOVICH: Or just learn the

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1 truth about a candidate.

2 MR. GROVE: That's more of an

3 electioneering communication --

4 JUDGE TYMKOVICH: Non-expressed

5 advocacy, yes.

6 MR. GROVE: Right. That's

7 electioneering communication, not express advocacy

8 under Colorado's definition. But I guess to

9 answer your question, there are -- the lines can

10 be difficult to draw. I think that that one, the

11 advertisement, would cross it. I see that I'm out

12 of time.

13 JUDGE HARTZ: You're not out of time,

14 sorry.

15 MR. GROVE: I tried.

16 JUDGE TYMKOVICH: I know the feeling.

17 JUDGE HARTZ: You're doing well. If it

18 were considered a book publisher and it advertised

19 and you say it crossed the line, would the only

20 donors that had to be disclosed be those who

21 earmarked for the advertising as opposed for the

22 whole project?

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1 MR. GROVE: Assuming that there was --

2 there were any donors for the book project, then

3 yes. The only thing that would have to be

4 disclosed is the communication -- is donations

5 that are specific to the communication itself.

6 JUDGE HARTZ: To the ad.

7 MR. GROVE: To what needs to be

8 disclosed to the electioneering communication.

9 JUDGE HARTZ: And the reason you -- the

10 only reason you gave earlier for not treating it

11 the same as the book publisher is you don't think

12 the language of the statute or the Constitution

13 would permit that distinction to be made by the

14 secretary. Is that correct?

15 MR. GROVE: I think that's right, yes.

16 JUDGE HARTZ: Okay.

17 MR. GROVE: If the Court has no further

18 questions, thank you for your time.

19 JUDGE HARTZ: How about giving Mr. Olson

20 three minutes and we'll see if we can -- you think

21 you can get it all in three minutes? We'll see.

22 MR. OLSON: I don't know how effective I

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1 will be in three minutes.

2 JUDGE HARTZ: How long do you need to be

3 effective?

4 MR. OLSON: I don't think it will be

5 much longer than that. I just have a few points I

6 would like to make.

7 JUDGE HARTZ: Okay.

8 MR. OLSON: But I know I'm taking the

9 Court's time. So I'll cut it as close as I can.

10 The definition of an electioneering communication

11 doesn't depend upon where the money came from or

12 anything like that. You get an exemption if

13 you're in the media and there may be certain

14 circumstances -- but I have no idea what they are

15 -- based upon the discussion today.

16 But the definition of an electioneering

17 communication is a communication that identifies a

18 candidate during an election period. You asked a

19 question about whether we challenge this statute

20 regime as applied. It's right in the complaint on

21 page 18 of the complaint which is at A-25 of the

22 appendix. It's also in our brief.

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1 There is a content distinction here.

2 Even if you left out all the other things about

3 motive and attack ads and traditional and so forth

4 because the Turner 1 case, which is -- talks about

5 this, there's a differentiation between different

6 types of media. But the characteristics of the

7 particular media aren't the reason or the

8 rationale for the differentiation. So it's a

9 distinction based upon the type of media.

10 JUDGE TYMKOVICH: But Turner didn't

11 apply strict scrutiny though, did it?

12 MR. OLSON: Pardon me?

13 JUDGE TYMKOVICH: I don't think Turner

14 applied strict scrutiny.

15 MR. OLSON: Well, I can't recall because

16 I don't have that in front of me. But there is

17 plenty of cases that say if you are distinguishing

18 between a medium of communication and unless you

19 have a very high justification for it, it's

20 presumptively unconstitutional.

21 We have that here. We have distinctions

22 based upon whether it's a movie or whether it's a

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1 newspaper. And I'm even learning today that if

2 it's on -- if it's a blog, it might be exempt but

3 some blogs might not be exempt. A Denver Post

4 blog might be able to do something. Somebody

5 else's blog might not be. So we learned a lot

6 about blogs today and I don't know you can discern

7 any of that from the statutes.

8 You are talking about a very, very vague

9 statute that has a great deal of elasticity. It

10 puts discretion in the hands of the enforcer. It

11 makes the person who wishes to speak about the

12 most important things that we talk about in this

13 country -- elections, politicians and whether

14 people should throw the rascals out or not --

15 those are the most important things that we talk

16 about.

17 This is the most important time that we

18 talk about them and we've got a statutory regime

19 here that imposes burdens on some people who wish

20 to talk.

21 There was some discussion about whether

22 or not Citizens United has a track record. Of

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1 course it has a long track record. It's been

2 making movies for a number of years, 24, 25 movies

3 already. But it shouldn't -- we shouldn't really

4 rely on that too much because the new guy that

5 just walks in and wants to speak shouldn't be

6 handicapped because he's the new guy. If this

7 statute favors the traditional --

8 JUDGE HARTZ: Well, let me ask you about

9 that because it seems to me there is a difference

10 the new guy and someone with a track record. And

11 that is if someone has a track record, you know

12 where they're coming from. There's information in

13 that and if it's a new guy, you don't have a track

14 record.

15 But the people who contribute to making

16 that independent expenditure may have a track

17 record and therefore it would be useful

18 information.

19 MR. OLSON: But it depends upon the

20 track record, doesn't it, Your Honor? I mean, how

21 long is the track record? What kind of a track

22 record is it? And is the speech itself going to

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1 be judged or regulated by the length of the track

2 record, short, long --

3 JUDGE HARTZ: Isn't that what happened

4 under Federal Election Commission, when you had

5 three or four DVDs, movies put out by Citizens

6 United? You didn't get the exemption. By the

7 time you had 14, I think it was, you got the

8 exemption. Isn't that a reasonable thing for a

9 regulator to do?

10 MR. OLSON: From a constitutional --

11 what the Federal Election Commission was deciding

12 whether this was identical, not because of the

13 length of the track record, but because of what

14 Citizens United was doing was reporting opinions

15 or ideas about political subjects, which is the

16 same that the Denver Post, the New York Times, NPR

17 do. They may do it in different ways.

18 But if we're going to have a government

19 putting its thumb on the scale, however lightly

20 it's putting it on the scale, and then deciding

21 because of the length of the track record, the

22 nature of the donors -- we heard something today

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1 from the government about it depends about where

2 the money comes from or how much money comes in.

3 This is regulating speech, and it

4 shouldn't be based upon those kind of things. And

5 we've heard so much today about attack ads and

6 negative ads and things like that. And there

7 might be good reasons why citizens want more

8 information about this speaker and some citizens

9 may want more information about that speaker. But

10 if we have an evenhanded regulatory regime that

11 imposes burdens equally, that might pass

12 constitutional muster.

13 But if the government has decided in a

14 statute and a constitutional provision, in

15 regulations or statements that they make up as

16 they go along or after the fact, then that's an

17 impermissible regime, and it can't be workable

18 because it makes it burdensome and risky to take a

19 chance to speak.

20 And that's what this is all about here,

21 that it is not going to be damaging to the

22 citizens of Colorado to apply measures such as

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1 this equally across the board, no matter who the

2 speaker is, because if you have a newspaper, you

3 might be a brand new newspaper. We heard that a

4 brand new newspaper would be okay, or you might

5 have one that's like the New York Times that's

6 been around for a hundred years. But the

7 newspapers are created equally.

8 JUDGE HARTZ: Just so you'll focus --

9 one more minute is what you're going to get. The

10 time shown there is where you've gone over your

11 three minutes.

12 MR. OLSON: Yes, and I'll just wrap up

13 now then.

14 JUDGE HARTZ: One minute.

15 MR. OLSON: Your Honor, I think that

16 looking at this statute as a whole, it's

17 discriminatory based upon who you are, what you

18 say, how you say it, when you say it and the

19 medium that you use to say it. And that is

20 unconstitutional on its face.

21 It's unacceptable under the First

22 Amendment, our most important value and the most

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1 important subject that we can talk about. This

2 statute does not meet any of the tests that the

3 Supreme Court has articulated.

4 JUDGE HARTZ: Thank you.

5 MR. OLSON: Thank you, Your Honor.

6 JUDGE HARTZ: It's always tough when you

7 have an important decision to make in a short

8 time. And we've been blessed with having very

9 good advocates on both sides and that will help

10 us, however we decide this case.

11 So thank you very much, counsel, and

12 amicus briefs were helpful also. Court is in

13 recess, and we'll try to get something to you

14 soon.

15 (WHEREUPON, the hearing was adjourned.)

16

17

18

19

20

21

22

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1 CERTIFICATE OF TRANSCRIBER

2

3 I, BENJAMIN GRAHAM, do hereby certify that this

4 transcript was prepared from audio to the best of

5 my ability.

6 I am neither counsel for, nor party to this action

7 nor am I interested in the outcome of this action.

8

9

10

11

12

13

14 _____________________

15 Benjamin Graham

16

17

18

19

20

21

22

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whatever 21:12 55:258:19 62:6

whatsoever 55:17

WHEREUPON109:15

whether 16:21 23:826:4 27:1339:6,7,22 40:6,2043:3 48:9,10 50:851:17 56:2158:16,2161:10,17,1872:11,15 79:781:16 83:2085:16,18 89:1591:10 102:19103:22 104:13,21106:12

White 1:16

whoever 27:1767:17 83:2 87:5

whole 6:12 27:1456:17 69:13100:22 108:16

whoops 12:10

who's 30:8 59:1374:19 80:20 81:16

90:4 94:21

whose 64:3

widow 87:4

willing 67:4 72:14

window 53:6

wish 19:19 104:19

wished 17:7

wishes 104:11

witness 39:21 40:11

woman 53:5

work 69:12 81:5

workable 107:17

Workers 70:2

works 21:8

world 84:9

worry 48:7,19

worth 88:4 95:19

worthless 79:12

wound 51:15

wrap 108:12

write 29:22

Writers 50:20

writes 22:13

writing 30:8 32:340:1

writings 26:3,15

written 10:13,1734:1,2 50:10 93:5

wrote 22:14 74:20

Yyet 78:11 79:12

York 23:20 59:7,890:22 106:16

Appellate Case: 14-1387 Document: 01019354934 Date Filed: 12/11/2014 Page: 153

Page 154: Citizens United's Opposition to Secretary's Petition for Rehearing en Banc

Capital Reporting CompanyCitizen United vs. Gessler 10-07-2014

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(866) 448 - DEPOwww.CapitalReportingCompany.com © 2014

108:5

you'll 29:18 108:8

yourself 4:22

you've 10:8 17:1947:6 49:10 62:971:17 74:7,17 93:6108:10

Zzoo 46:14

Appellate Case: 14-1387 Document: 01019354934 Date Filed: 12/11/2014 Page: 154

Page 155: Citizens United's Opposition to Secretary's Petition for Rehearing en Banc

CERTIFICATE OF SERVICE

I hereby certify that a copy of this CITIZENS UNITED’S OPPOSITION TO SECRETARY’S PETITION FOR REHEARING AND FOR REHEARING EN BANC, along with the accompanying exhibit, was served on the following persons via CM/ECF on December 11, 2014:

Daniel D. Domenico Matthew D. Grove LeeAnn Morrill Kathryn Starnella Colorado Attorney General’s Office Ralph L. Carr Colorado Judicial Center 1300 Broadway, 6th Floor Denver, Colorado 80203 [email protected] [email protected] [email protected] [email protected] Attorneys for Defendant-Appellees

Martha M. Tierney Edward T. Ramey Heizer Paul, LLP 2401 15th Street, Suite 300 Denver, Colorado 80202 [email protected] [email protected] Attorneys for Intervenor-Defendant-Appellees

Us/ Theodore B. Olson THEODORE B. OLSON

Appellate Case: 14-1387 Document: 01019354934 Date Filed: 12/11/2014 Page: 155