BOSTON (CN) - Puerto Rico cannot enforce sections of a campaign finance law that burden the free-speech rights of labor unions, the 1st Circuit ruled.
Three labor unions, Sindicato Puertorriqueño de Trabajadores (SPT), Unión General de Trabajadores (UGT) and Service Employees International Union (SEIU), teamed up with the nonprofit Allianza SEIU to fight Puerto Rico's Political Campaign Financing Oversight Act, also known as Law 222, which was enacted in November 2011.
A federal judge in Puerto Rico initially denied the unions a preliminary injunction, but the federal appeals court found that they would likely prove that the law substantially burdens their First Amendment rights.
"Law 222 forbids juridical persons from spending any funds on political campaign, be they direct contributions, independent expenditures, or otherwise, without the process the statute prescribes," the three-judge panel found. "These provisions are backed by criminal sanctions, administrative penalties of up to $30,000 per day, and other mechanisms designed to ensure strict compliance. Indeed, a violation of section 6.010 can subject a juridical person's 'highest ranking official' to personal financial liability for any violations, even if that individual lacked knowledge of the violation in question."
Later in the decision, the judges call Section 6.010 "the most problematic aspect of the statute."
But the problems do not end there. "If these restrictions were not burdensome enough, Puerto Rico's election comptroller has issued regulations further defining the statute's terms," the unsigned opinion states. "These regulations require the 'membership meeting' to be 'an assembly to be held simultaneously in various jurisdictions or geographic areas provided they are held on the same day up to 12:00 midnight,' meaning that 'a majority plus one' of the entity's members must meet on the same day."
A day after passage of Law 222, Both UGT and SPT adopted a platform called Proposals for a Better Country, described as proposals to improve the lives of union "members and their families as well as the welfare of Puerto Rico through the topics of education, health and welfare, labor rights, sustainable development, democracy and citizen participation, and human rights."
The unions then sent the proposals to various political candidates and members of the Legislature for support. The UGT's Council of Delegates determined on March 30, 2012, that UGT would make expenditures on behalf of candidates who supported the proposals in Puerto Rico's Nov. 6, 2012 general election, if allowed by law. SPT's Consultative Board adopted a comparable resolution on June 15, 2012.
Union attorneys cautioned both groups, however, that political expenditures related to the upcoming general election could implicate liability under Law 222.
Accordingly, on July 3, 2012, the unions filed a federal complaint alleging that sections 6.007, 6.009 and 6.010 of Law 222 violate the First Amendment by restricting the unions' political speech.
They moved for a preliminary injunction on July 17, but "the District Court moved slowly on plaintiffs' motion," according to the 1st Circuit.
The appellate panel noted that the government never defended its campaign finance provisions on the merits.
"In the absence of any such defense, and in light of the other factors relevant to the preliminary injunction analysis, we issued an appellate injunction on October 11, 2012, enjoining enforcement of the challenged provisions of Law 222 pending the final disposition of this appeal," the ruling states.
The ruling, which explains the need for the injunction, is dated Oct. 19.
"Law 222 reaches deep into the mechanics of an organization's own self-governance and imposes numerous requirements on the organization's internal processes," the judges wrote. "In doing so, it seeks to dictate the terms and circumstances under which they are permitted to express political opinions. Stated differently, Law 222's challenged provisions are designed to regulate the if and how of a juridical person's political speech. It is difficult to conceive of a statute that strikes more deeply at a juridical person's core First Amendment rights."