United States District Court, D. South Dakota, Northern Division
OPINION AND ORDER
CHARLES B. KORNMANN, United States District Judge
in these two cases filed complaints seeking a preliminary and
permanent injunction preventing the State of South Dakota
from enforcing Initiated Measure 24 ("IM 24"), which
was enacted by the South Dakota voters in the 2018 general
election. IM 24 bans out-of-state contributions to South
Dakota ballot question committees. Plaintiffs assert that IM
24 violates the First and Fourteenth Amendments and the
Commerce Clause of the United States Constitution. The trial
on the merits was advanced and consolidated with the hearing
on the motion for a preliminary injunction as authorized by
judge must view with great deference any legislative
enactment, especially when enacted by a majority of the
voters of South Dakota, which is the case here. I do so here.
South Dakota Constitution expressly reserves to the
electorate the rights to initiative and referendum. S.D.
Const, art. Ill. § 1. Initiated or referred laws are
placed on the ballot only after the sponsor complies with the
provisions of SDCL Chapter 2-1. Once a proposed measure
complies with all laws required for placement on the ballot,
the South Dakota Secretary of State oversees the collection
of pro and con statements as well as the Attorney
General's statement that will accompany the proposed
measure on the ballot, in compliance with SDCL Chapter.
12-13.. The Secretary of State also oversees compliance with
campaign finance laws, SDCL Chapter 12-27, applicable to,
inter alia, ballot question committees.
2016, South Dakota voters passed Constitutional Amendment S,
a crime victim's rights measure which was dubbed in the
media as "Marsy's Law," despite an extensive media
campaign by opponents who complained it was entirely funded
by an out-of-state interest. Marsy's Law was not the only
measure on the 2016 ballot that was supported by out-of-state
interests. According to then-Governor Dennis Daugaard in his
published pro statement in support of IM 24, six of the seven
initiated measures on the 2016 general election ballot were
urged by out-of-state interests who donated 97% of the $9.6
million spent on such initiatives,
That year, out-of-state interests used South Dakota's low
signature requirements and cheap media markets as a testing
ground for their ideas. They have turned our state
founders' intent completely on its head. Let's send
their political business model somewhere else. Support
initiated measure 24 to ban out-of-state financial
contributions to ballot committees. Let's protect a SOUTH
DAKOTAN's right to petition the people, but deny that
privilege to New York, Massachusetts and California business
interests. They don't have kids in our schools, they
don't attend our churches, and you won't see them at
the football game this weekend. That's because they
don't live here. Let's limit their involvement unless
they can demonstrate either residency or a legitimate
business interest in South Dakota.
QPamphlet.pdf (visited May 7, 2019).
which will be codified as part of South Dakota's campaign
finance laws at SDCL 12-27-18.2 effective July 1, 2019,
Any contribution to a statewide ballot question committee by
a person who is not a resident of the state at the time of
the contribution, a political committee that is organized
outside South Dakota, or an entity that is not filed as an
entity with the secretary of state for the four years
preceding such contribution is prohibited. If a statewide
ballot question committee accepts a contribution prohibited
by this section, the secretary of state shall impose a civil
penalty equal to two hundred percent of the prohibited
contribution after notice and opportunity to be heard
pursuant to chapter 1-26. Any civil penalty collected
pursuant to this section shall be deposited into the state
prohibition on receipt of out-of-state contributions applies
only to ballot question committees. No. restriction on
out-of-state contributions applies to candidates or candidate
committees, political action committees, or political
person who is not a resident of South Dakota cannot donate to
a statewide ballot question committee but no state law
prevents an individual from making an independent
communication expenditure, as defined by SDCL 12-27-1(11), to
support or oppose a ballot initiative. An entity, defined by
SDCL 12-27-1 (15), that is not "filed" with the
Secretary of State may not contribute to a ballot question
committee but nothing prevents a foreign corporation
organized under the laws of another state but registered with
the Secretary of State to do business in South Dakota from
contributing (as long as they have been so registered at
least 4 years). Further, an "entity" organized in
South Dakota can freely contribute to a ballot question
committee without regard to the source of the funds
term "statewide ballot question committee" is not
defined by IM 24 nor by South Dakota's campaign finance
laws, SDCL Title 12-27, where IM 24 is to be codified.
ballot question committees must register with the Secretary
of State, SDCL 12-27-3, and comply with state campaign
finance rules, individuals, whether they are residents or
non-residents, have no obligation to register their
independent spending in support of or in opposition to a
First Amendment Claims.
contend that IM 24 violates their First Amendment right to
engage in debate on public issues through contributions to
fund advocacy efforts. Plaintiffs South Dakota Newspaper
Association, et al. also contend that IM 24 prohibits their
associational rights protected by the First Amendment.
major purpose of the First Amendment "was to protect the
free discussion of governmental affairs." Mills v.
State of Ala., 384 U.S. 214, 218, 86 S.Ct. 1434, 1437,
16 L.Ed.2d 484 (1966). This protection extends to the
discussion of all matters related to political processes.
Id. "The First Amendment affords the broadest
protection to such political expression in order 'to
assure (the) unfettered interchange of ideas for the bringing
about of political and social changes desired by the
people.'" Buckley v. Valeo, 424 U.S. 1, 14,
96 S.Ct. 612, 632, 46 L.Ed.2d 659 (1976) (quoting Roth v.
United States, 354 U.S. 476, 484, 77 S.Ct. 1304, 1308, 1
L.Ed.2d 1498 (1957)). "The First Amendment protects
political association as well as political expression"
because "effective advocacy of both public and private
points of view, particularly controversial ones, is
undeniably enhanced by group association." Buckley
v. Valeo, 424 U.S. at 15, 96 S.Ct. at 632-33.
Supreme Court has long recognized that "virtually every
means of communicating ideas in today's mass society
requires the expenditure of money." Id. at 19,
96 S.Ct. at 635. "All speakers, including individuals
and the media, use money amassed from the economic
marketplace to fund their speech, and the First Amendment
protects the resulting speech." Citizens United v.
Fed. Election Comm'n. 558 U.S. 310, 130 S.Ct. 876,
884, 175 L.Ed.2d 753 (2010). A restriction on the amount of
money a person or group can contribute to a campaign
"necessarily reduces the quantity of expression by
restricting the No. of issues discussed, the depth of their
exploration, and the size of the audience reached."
Buckley v. Valeo, 424 U.S. at 19, 96 S.Ct. at 634.
"Given the important role of contributions in financing
political campaigns, contribution restrictions could have a
severe impact on political dialogue if the limitations
prevented candidates and political committees from amassing
the resources necessary for effective advocacy."
Buckley v. Valeo, 424 U.S. at 21, 96 S.Ct. at 636.
Supreme Court has held that the First Amendment prohibits
"restrictions distinguishing among different speakers,
allowing speech by some but not others." Citizens United
v. Fed. Election Comm'n. 558 U.S. at 340, 130 S.Ct.at
898. "Speech restrictions based on the identity of the
speaker are all too often simply a means to control
content." Id., 130 S.Ct. at 899. "The
Government may not by these means deprive the public of the
right and privilege to determine for itself what speech and
speakers are worthy of consideration. The First Amendment
protects speech and speaker, and the ideas that flow from
each." Citizens United v. Fed. Election
Comm'n, 558 U.S. at 340-41, 130 S.Ct. at 899. IM 24
prohibits out-of-state persons from expressing their
viewpoint through certain campaign contributions and instead
favors in-state speech on ballot initiative issues.
"When a state restricts speech, it bears the burden of
proving the constitutionality of its actions."
Missourians for Fiscal Accountability v. Klahr, 892
F.3d 944, 949 (8th Cir. 2018) (quoting McCutcheon v.
FEC, ___U.S.___, ___, 134 S.Ct. 1434, 1452, 188 L.Ed.2d
468 (2014)) (cleaned up).
First Amendment includes, in addition to the right to engage
in political speech, also the right to association. "The
right to join together for the advancement of beliefs and
ideas is diluted if it does not include the right to pool
money through contributions, for funds are often essential if
advocacy is to be truly or optimally effective."
Buckley v. Valeo, 424 U.S. at 65-66, 96 S.Ct. at 657
Effective advocacy of both public and private points of view,
particularly controversial ones, is undeniably enhanced by
group association, as this Court has more than once
recognized by remarking upon the close nexus between the
freedoms of speech and assembly. It is beyond debate that
freedom to engage in association for the advancement of
beliefs and ideas is an inseparable aspect of the
'liberty' assured by the Due Process Clause of the
Fourteenth Amendment, which embraces freedom of speech. Of
course, it is immaterial whether the beliefs sought to be
advanced by association pertain to political, economic,
religious or cultural matters, and state action which may
have the effect of curtailing the freedom to associate is
subject to the closest scrutiny.
Nat'l Ass'n for Advancement of Colored People v.
State of Ala, ex rel. Patterson,
357 U.S. 449, 460-61,
78 S.Ct. 1163, 1171, 2 L.Ed.2d 1488 (1958) ...