Lawsuit challenges Hawaii’s new campaign spending activity law
An expected legal challenge to legislation restricting influences on Hawaii elections and ballot measures next year has arrived, less than a month after the bill became law.
An expected legal challenge to legislation restricting influences on Hawaii elections and ballot measures next year has arrived, less than a month after the bill became law.
The nonprofit Grassroot Institute of Hawaii filed a federal lawsuit Friday seeking to invalidate the new state law, which intends to bar campaign spending activity by companies, labor unions and other organizations that had such abilities protected in a 5-4 U.S. Supreme Court decision in 2010 under a case called Citizens United v. Federal Elections Commission.
Hawaii lawmakers passed Senate Bill 2471 in a novel attempt to block what federal legal precedent allows, by prohibiting actions to influence elections or ballot measures by entities that have to register to do business in Hawaii. Foreign corporations would also be held to the same rules under the measure.
Grassroot Institute is challenging the constitutionality of the legislation, which Gov. Josh Green signed into law as Act 11 on May 14 but does not become effective until July 1, 2027.
“Act 11 is one of the most sweeping attacks on political speech we’ve seen in years,” Owen Yeates, an attorney with the Washington, D.C.-based Institute for Free Speech representing Grassroot Institute, said in a statement. “Americans have a constitutional right to join together through nonprofits and other associations to advocate for the causes that matter to them and their communities.”
Keli‘i Akina, Grassroot Institute president and CEO, said Act 11 limits advocacy work of the organization and for Hawaii residents to join with others in certain groups to speak out on issues that impact their community.
“It doesn’t matter what the issue is or which side of it the organization is on,” Akina said in a statement. “This law prevents citizens from organizing and pooling resources, time and effort to speak on topics of public concern.”
The organization noted that Act 11 includes an exemption for news organizations, which it contends isn’t something the state can do under its power to define rules for operating a company or other organization in Hawaii.
“The First Amendment guarantees that lawmakers cannot pick and choose who gets to speak,” the lawsuit states. “Nor can lawmakers condition access to any legal benefit on forfeiting the fundamental right of free political speech.”
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State Sen. Jarrett Keohokalole, principal author of the bill that became Act 11 and chair of the Senate Committee on Commerce and Consumer Protection, said in a statement on Sunday that he welcomes the test for the new law.
“Act 11 does not touch the First Amendment,” said Keohokalole (D, Kaneohe- Kailua). “It operates on an entirely different legal foundation: the authority Hawaii has always had over the corporations it creates. Corporations are not people. Their powers flow from the state, not from the creator. What the state creates, the state can define. … We built this law to be litigated — and we are ready.”
The Grassroot Institute describes itself as being founded in 2001 to promote individual liberty, economic freedom and limited, accountable government. The organization expressed concern that its work advocating for ballot measures and policy positions of elected officials could run afoul of Act 11 prohibitions on directly or indirectly engaging in election activity or ballot-issue activity.
The lawsuit was filed against Anne Lopez as Hawaii Attorney General, and against Nadine Ando as director of the state Department of Commerce and Consumer Affairs.
Lopez strongly opposed the bill while it was being debated at the Legislature.
“While the Department (of the Attorney General) greatly sympathizes with the frustration with federal case law on this subject, this bill is likely impossible to defend without (Citizens United), being overturned,” Lopez said in written testimony. “While many Americans strongly disagree with the U.S. Supreme Court’s holding in Citizens United, under our federal system of government, it is our duty to state that this opinion remains the law of the land, irrespective of its merits (or lack thereof).”
Lopez noted that the high court rejected an argument that political speech of corporations or other associations of people should be treated differently under the First Amendment simply because such associations are not “natural persons,” and that the underlying rationale for corporations having speech rights through political campaign donations is that they are associations of individuals.
“To apparently work around what is plain in the case, this bill relies on an untested legal theory using an unprecedentedly dangerous mechanism — the full revocation of all corporate powers in the state — in defense of a theory that collapses in upon itself upon further examination,” Lopez said. “The operative theory behind this bill is that states have the ability to define corporate powers and can strip certain powers to speak based upon the content of that speech that are otherwise protected by the First Amendment and Citizens United.”
State Rep. Scot Matayoshi, who as chair of the House Committee on Consumer Protection and Commerce helped get SB 2471 passed, defended the new law as a tool that limits unchecked corporate spending — including millions of dollars from Super PACs — being used to flood mailboxes, social media, email and TVs with information influencing elections.
“Act 11 does not silence individual voices; it turns down the volume of corporate voices to allow voters to hear those individuals,” Matayoshi (D, Kaneohe- Maunawili) said in an email on Monday. “Individuals are still able to exercise all of their legal free speech rights, including the right to donate to candidates or causes of their choosing. Act 11 does restrict unlimited, anonymous spending by corporations from their corporate treasuries to influence political races and ballot measures. The right and the left do not agree on much, but they are both overwhelmingly against unlimited corporate political spending.”
