The U.S. Court of Appeals recently agreed with the U.S. District Court for the Western District of Michigan on a preliminary-injunction challenge to Michigan's campaign finance limits on individual contributions to candidates for state office in McNeilly v. Land, No. 10-2244 (July 3, 2012).

The Michigan Campaign Finance Act contains limits on how much an individual may contribute to a candidate for state elective office:  $500 for a candidate for state representative; $1,000 for a candidate for state senator; and $3,400 for a candidate for state elective office other than state legislator.  MCL § 169.252(1).  This limit does not apply to political parties or other independent committees.

Plaintiff Greg McNeilly challenged the constitutionality of the individual contribution limits, filing an action against the then Michigan Secretary of State, Terri Lynn Land, in federal court.  McNeilly argued that the individual contribution limits in the Michigan Campaign Finance Act violated his rights under the First Amendment to the U.S. Constitution.  After filing the lawsuit, he asked the Court to enter a preliminary injunction, preventing the Secretary of State from enforcing the campaign finance limits on individuals until the Court rendered a final decision on his claim.

The Honorable Janet T. Neff, U.S. District Judge, denied McNeilly's request for a preliminary injunction.   In an oral ruling from the bench, the Court found that the circumstances favored enforcement of the law during the pendency of the case:  there was no showing of irreparable harm to McNeilly; there would be significant harm to the Secretary if the preliminary injunction were granted; the public also would be significantly harmed if the injunction issued; and the likelihood-of-success factor did not favor either side.

McNeilly appealed the Court's decision to the Sixth Circuit.  In analyzing the preliminary-injunction factors, the panel focused on the likelihood of success of Plaintiff's claim.  It highlighted the distinction set forth in Buckley v. Valeo, 424 U.S. 1 (1976) between laws that impose "contribution limits" (reviewed under intermediate scrutiny) and laws that set "expenditure limits" (subject to strict scrutiny).  Accepting McNeilly's characterization of MCL § 169.252(1) as setting contribution limits, the panel went on to analyze the constitutional challenge under the factor-analysis framework set forth in Randall v. Sorrell, 548 U.S. 230 (2006): 

1. whether the "contribution limits will significantly restrict the amount of funding available for challengers to run competitive campaigns";
2. whether there is a statutory requirement "that the political parties abide by exactly the same low contribution limits that apply to other contributors";
3. whether expenses incurred volunteering are included in contribution limit amounts;
4. whether the contribution limits were adjusted for inflation; and
5. whether the state has a special justification for lower and restrictive limits (such as corruption). 

The panel agreed that most of the factors favored the Secretary's position:  Michigan's contribution limits do not significantly restrict the funding for challengers to run competitive campaigns; the individual contribution limits do not apply to political parties; the Michigan Act excludes from the contribution limit certain volunteer services; and the contribution limits may further the State's legitimate interest in preventing the appearance of quid pro quo corruption.  Although the fourth Randall factor does favor McNeilly—the Michigan Act's contribution limits were not indexed to inflation—that factor, by itself, did not demonstrate a likelihood of success on the merits for Plaintiff.

The Sixth Circuit also agreed with the Court's evaluation of the other three preliminary injunction factors:  the lack of irreparable harm to the McNeilly; the substantial harm that would accrue to the Secretary upon the issuance of a preliminary injunction; and that the public interest was best served by denying the preliminary injunction.  Accordingly, the Sixth Circuit affirmed the Court's denial of the preliminary injunction, leaving intact Michigan's individual campaign contribution limits pending resolution of the lawsuit.