Central Maine Power Company v. ME Comm'n on Gov't Ethics and Election Practices

• Court: Court of Appeals for the First Circuit
• Decided: July 11, 2025
• Docket: 24-1265
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 24-1265

CENTRAL MAINE POWER COMPANY; VERSANT POWER; ENMAX CORPORATION; MAINE PRESS ASSOCIATION; MAINE ASSOCIATION OF BROADCASTERS; JANE P. PRINGLE, individually and in her capacity as a registered voter and elector; KENNETH FLETCHER, individually and in his capacity as a registered voter and elector; BONNIE S. GOULD, individually and in her capacity as a registered voter and elector; BRENDA GARRAND, individually and in her capacity as a registered voter and elector; LAWRENCE WOLD, individually and in his capacity as a registered voter and elector,

Plaintiffs, Appellees,

v.

MAINE COMMISSION ON GOVERNMENTAL ETHICS AND ELECTION PRACTICES; WILLIAM J. SCHNEIDER, in his official capacity as Chairman of the Maine Commission on Governmental Ethics and Election Practices; DAVID R. HASTINGS, III, in his official capacity as a Member of the Maine Commission on Governmental Ethics and Election Practices; SARAH LECLAIRE, in her official capacity as a Member of the Maine Commission on Governmental Ethics and Election Practices; DENNIS MARBLE, in his official capacity as a Member of the Maine Commission on Governmental Ethics and Election Practices; BETH N. AHEARN, in her official capacity as a Member of the Maine Commission on Governmental Ethics and Election Practices; AARON M. FREY, in his official capacity as Attorney General for the State of Maine,

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE

[Hon. Nancy Torresen, U.S. District Judge] Before

Montecalvo, Howard, and Aframe, Circuit Judges.

Jonathan R. Bolton, Assistant Attorney General of Maine, with whom Aaron M. Frey, Attorney General, Thomas A. Knowlton, Deputy Attorney General, and Paul Suitter, Assistant Attorney General, were on brief, for appellants.

Joshua D. Dunlap, with whom Nolan L. Reichl, Katherine E. Cleary, and Pierce Atwood LLP were on brief, for appellee Central Maine Power Company.

Paul McDonald, with whom John A. Woodcock III and Bernstein Shur were on brief, for appellees Versant Power and ENMAX Corporation.

Timothy C. Woodcock, with whom P. Andrew Hamilton and Eaton Peabody were on brief, for appellees Jane P. Pringle, Kenneth Fletcher, Bonnie S. Gould, Brenda Garrand, and Lawrence Wold.

Sigmund D. Schutz, Alexandra A. Harriman, and Preti Flaherty on brief for appellees Maine Press Association and Maine Association of Broadcasters.

Amira Mattar, John Bonifaz, Ben Clements, and Courtney Hostetler on brief for Free Speech For People as amicus curiae supporting appellants.

Tara Molloy, David Kolker, Campaign Legal Center, Peter L. Murray, Sean R. Turley, and Murray Plumb & Murray on brief for Protect Maine Elections as amicus curiae supporting appellants.

Shannon Liss-Riordan, Jack Bartholet, and Lichten & Liss-Riordan, P.C. on brief for Corporate and Securities Law Experts as amici curiae supporting appellants.

Ben Robbins and Daniel B. Winslow on brief for New England Legal Foundation as amicus curiae supporting appellees.

David T. Raimer, E. Stewart Crosland, Ethan D. Beck, and Jones Day on brief for Maine State Chamber of Commerce as amicus curiae supporting appellees.

Charles Miller on brief for Institute for Free Speech as amicus curiae supporting appellees.

Katie Townsend, Mara Gassmann, Julia Dacy, Scott D. Dolan, and Petruccelli, Martin & Haddow, LLP on brief for The Reporters Committee for Freedom of the Press as amicus curiae supporting appellees Maine Press Association and Maine Association of Broadcasters.

July 11, 2025 MONTECALVO, Circuit Judge. In 2023, Maine voters passed

by ballot initiative "An Act to Prohibit Campaign Spending by

Foreign Governments" ("the Act") with the expressed purpose of

prohibiting foreign governments and "foreign government-influenced

entit[ies]" from contributing to or otherwise influencing

candidate elections and ballot initiatives.1 Me. Rev. Stat. Ann.

tit. 21-A, § 1064 (2024). To accomplish the Act's aim of

preventing what its supporters refer to as "foreign interference"

in elections, the Act also requires media platforms to conduct due

diligence to ensure that they do not distribute a public

communication that violates this prohibition. Those who violate

the Act may be subject to civil penalties, criminal penalties, or

both.

Several companies and individuals, including Central

Maine Power ("CMP"), Versant Power and Enmax Corporation

("Versant"), Maine Press Association and Maine Association of

Broadcasters ("Press and Broadcasters"), and several individuals

("Electors") filed suit against state officials and entities

responsible for enforcing the Act (collectively, "Maine"),

including the Maine Commission on Governmental Ethics and Election

Practices (the "Ethics & Election Commission"). The challengers

A second section of the initiative, aimed at promoting an 1

anticorruption amendment to the U.S. Constitution that would limit spending in state and federal elections, was not challenged in this case and is not at issue.

- 4 - contended that the Act was facially invalid under the First

Amendment and thus moved for a preliminary injunction enjoining

the Act in its entirety. The district court granted the

preliminary injunction, and Maine appealed. We affirm.

I. Factual Background

The Act aims to limit the influence of foreign

governments in Maine's elections, including both candidate

elections and referenda. Tit. 21-A, § 1064. The Act was

overwhelmingly popular with voters, 86% of whom approved it as a

ballot question after other attempts to enact similar legislation

failed. To explain why the Act has proven controversial despite

its support among Maine voters, we first sketch some of the

specific facts leading up to the ballot question before turning to

the language of the Act itself.

CMP and Versant, two of the plaintiffs here, are the two

primary utility companies operating in Maine. The present case

stems in large part from a contentious fight over the construction

of an energy transmission line that, if completed, would run

through the state of Maine, thereby connecting Canadian

electricity to Massachusetts. The project, known as the "CMP

Corridor," is a joint project between two companies: CMP and H.Q.

Energy Services (U.S.) Inc. ("HQUS"), which is a subsidiary of a

Canadian public utility called Hydro-Québec. Unfortunately for

supporters of the CMP Corridor, the project was unpopular with

- 5 - many Maine voters who, in multiple elections, aimed to stop its

development through ballot initiatives. Maine voters also

considered (but ultimately rejected) a ballot initiative that

proposed to seize CMP's and Versant's assets through eminent domain

and replace the companies with a quasi-governmental entity.

The companies that would have been negatively impacted

by these ballot initiatives -- including CMP, HQUS, and

Versant -- opposed their passage. They did so, in part, by

contributing substantial amounts of money to political action

committees and ballot question committees. Specifically, between

2013 and 2023, CMP and its affiliates contributed nearly

$73 million combined, and HQUS contributed around $22 million.

Versant contributed over $16 million in just the time between

August 2020 and the end of 2023.

These campaign contributions were substantially higher

than other corporate contributions in the state, and some Maine

voters and legislators took issue with these companies'

contributions based on, to varying degrees, the companies' foreign

ownership. For example, at first glance, CMP might seem an

unlikely target since it is incorporated in Maine and has operated

there for over 125 years. Despite its ties to the state, however,

CMP's parent company is wholly owned by a publicly traded company,

Avangrid Inc. ("Avangrid"). At the time of this suit's filing,

81.6% of Avangrid's shares were owned by a Spain-based corporation,

- 6 - Iberdrola, S.A.2 Further, Qatar's sovereign wealth fund owned

somewhere between 7 to 11% of CMP in light of its 8.7% ownership

interest in Iberdrola, S.A. and 3.7% ownership interest of

Avangrid. HQUS, for its part, is wholly owned by the province of

Québec in Canada.

Versant, like CMP, is incorporated in Maine and has

operated exclusively there for a century. But Versant's parent

company is wholly owned by a foreign entity -- the City of Calgary

in Alberta, Canada. Versant's operations, however, are subject to

domestic control pursuant to a stipulation approved by the Maine

Public Utilities Commission that prohibits Calgary from

participating in operations or management decisions.

The companies' ownership structures led their opponents

to characterize the companies' campaign spending as foreign

interference in domestic elections. Believing such foreign

involvement improper, opponents set out to ban it, including by

supporting legislation that would prohibit political spending by

companies "influenced" by foreign governments or companies.

Several attempts to enact legislation failed, in part due to

concerns by Maine's Governor that such restrictions might be

unconstitutional. Finally, the Act was submitted as a ballot

question in 2023 and approved by Maine voters.

2 Iberdrola now owns 100% of Avangrid.

- 7 - II. The Act's Language

The Act states that "[a] foreign government-influenced

entity may not make, directly or indirectly, a contribution,

expenditure, independent expenditure, electioneering

communication or any other donation or disbursement of funds to

influence the nomination or election of a candidate or the

initiation or approval of a referendum." Tit. 21-A, § 1064(2). A

"foreign government-influenced entity" is defined as:

(1) A foreign government; or

(2) A firm, partnership, corporation, association, organization or other entity with respect to which a foreign government or foreign government-owned entity:

(a) Holds, owns, controls or otherwise has direct or indirect beneficial ownership of 5% or more of the total equity, outstanding voting shares, membership units or other applicable ownership interests; or

(b) Directs, dictates, controls or directly or indirectly participates in the decision-making process with regard to the activities of the firm, partnership, corporation, association, organization or other entity to influence the nomination or election of a candidate or the initiation or approval of a referendum, such as decisions concerning the making of contributions, expenditures, independent expenditures, electioneering communications or disbursements.

Id. § 1064(1)(E). "Foreign government-owned entity," in turn, is

defined as "any entity in which a foreign government owns or

- 8 - controls more than 50% of its equity or voting shares." Id.

§ 1064(1)(F).

Subsection 2's prohibition on campaign spending is

supplemented by the Act's following three subsections.

Subsection 3 prohibits "knowingly solicit[ing], accept[ing] or

receiv[ing] a contribution or donation prohibited by

subsection 2." Id. § 1064(3). Subsection 4 prohibits "knowingly

or recklessly provid[ing] substantial assistance" in the making of

"a contribution or donation" or "an expenditure, independent

expenditure, electioneering communication or disbursement

prohibited by subsection 2," as well as in the "solicitation,

acceptance or receipt of a contribution or donation prohibited by

subsection 2." Id. § 1064(4). Subsection 5 prohibits

"structur[ing] or attempt[ing] to structure" a transaction "to

evade the[se] prohibitions and requirements." Id. § 1064(5).

A knowing violation of subsections 2 through 5 is a class

C crime under Maine law. Id. § 1064(9). Class C crimes are

punishable by up to five years' imprisonment. Me. Rev. Stat. Ann.

tit. 17-A, § 1604(1)(C) (2024).

The Act also requires that specified media platforms

conduct due diligence to ensure that they do not distribute any

prohibited communications (e.g., election-related communications

paid for by a foreign government-influenced entity):

- 9 - Each television or radio broadcasting station, provider of cable or satellite television, print news outlet and Internet platform shall establish due diligence policies, procedures and controls that are reasonably designed to ensure that it does not broadcast, distribute or otherwise make available to the public a public communication for which a foreign government-influenced entity has made an expenditure, independent expenditure, electioneering communication or disbursement in violation of this section. If an Internet platform discovers that it has distributed a public communication for which a foreign government-influenced entity has made an expenditure, independent expenditure, electioneering communication or disbursement in violation of this section, the Internet platform shall immediately remove the communication and notify the [Ethics & Election Commission].

Tit. 21-A, § 1064(7); see also id. § 1001(1).

The Act also requires that whenever a foreign

government-influenced entity "finance[s] a [permissible] public

communication . . . to influence the public or any . . . local

official or agency" concerning government policy or government

relations with a foreign country or political party, that

communication must contain the words: "Sponsored by [the name of

the entity]," followed by the label of a "foreign

government-influenced entity" or a "foreign government." Id.

§ 1064(6).

A violation of the Act may be penalized by a fine of not

more than $5,000 or "double the amount of the contribution,

- 10 - communication, donation or disbursement involved in the violation,

whichever is greater." Id. § 1064(8). The Ethics & Election

Commission has the discretion to assess the penalty and "shall

consider, among other things, whether the violation was

intentional and whether the person that committed the violation

attempted to conceal or misrepresent the identity of the relevant

foreign government-influenced entity." Id.

III. Procedural History

On December 12, 2023, after the ballot initiative

passed, CMP filed this lawsuit against Maine and moved for a

preliminary injunction. As relevant here, CMP alleged that the

Act violated the First Amendment and that any constitutional

provisions could not be severed. Versant soon filed a complaint

making these same arguments and arguing that federal law preempted

the Act, in addition to raising other claims. The Press and

Broadcasters then filed a complaint challenging

subsection 7 -- the due diligence requirement -- as

unconstitutionally vague and a violation of the First Amendment.

Finally, the Electors filed a complaint bringing a variety of

federal and state constitutional claims based on their rights as

voters to receive and consider political speech. The cases were

- 11 - soon consolidated and each complainant, like CMP, moved for a

preliminary injunction.

After reviewing the submissions of the parties and amici

curiae, the district court held a hearing on February 23, 2024 and

granted the motions for a preliminary injunction a few days later,

shortly before the Act was scheduled to go into effect. Cent. Me.

Power Co. v. Me. Comm'n on Governmental Ethics & Election Pracs.,

721 F. Supp. 3d 31, 37 (D. Me. 2024). Given the compressed time

frame, however, the district court issued the preliminary

injunction based on only CMP's and Versant's motions. Id.

In its order, the district court noted that First

Amendment facial challenges based on overbreadth "succeed if 'a

substantial number of the law's applications are unconstitutional,

judged in relation to the statute's plainly legitimate sweep.'"

Id. at 49 (cleaned up) (quoting Wash. State Grange v. Wash. State

Republican Party, 552 U.S. 442, 449 n.6 (2008)). The court laid

out the familiar four-part framework for deciding whether to grant

a preliminary injunction, noting that the first factor of

likelihood of success on the merits is the most important part of

the analysis in the First Amendment context. Id. at 42 (citing

Sindicato Puertorriqueño de Trabajadores v. Fortuño, 699 F.3d 1,

10 (1st Cir. 2012) (per curiam)).

The district court then turned to its analysis and began

with Versant's claim that the Act was preempted by federal law.

- 12 - Id. As to that argument, it held that, to the extent that the Act

covered foreign spending in elections for federal office, it was

likely preempted by the Federal Election Campaign Act's ("FECA")

preemption provision. Id. at 42-43; see 52 U.S.C. § 30143(a). In

contrast, the district court held that the Act was likely not

preempted as to state and local elections. Cent. Me. Power Co.,

721 F. Supp. 3d at 43-49.

The district court then turned to the merits of the

challengers' First Amendment arguments with respect to

(1) referenda and (2) state and local candidate elections. As a

threshold matter, the parties disagreed about the applicable level

of scrutiny. Maine argued that the more lenient standard of

"exacting scrutiny" applied, but the district court agreed with

the Act's challengers that the Act was properly subject to strict

scrutiny.3 Id. at 50 (citing Fortuño, 699 F.3d 1). The district

court thus held that, to prevail, Maine had to show that the Act

furthered a compelling interest and was narrowly tailored to

achieve that interest. Id. (citing Citizens United, 558 U.S. at

340).

3Maine uses the term "'closely drawn' scrutiny" (quoting Nixon v. Shrink Mo. Gov't PAC, 528 U.S. 377, 387 (2000)), but we use the term "exacting scrutiny" for the same concept. See Daggett v. Comm'n on Governmental Ethics & Election Pracs., 205 F.3d 445, 454 (1st Cir. 2000) (discussing the Supreme Court's reference to "exacting scrutiny"); see also Fortuño, 699 F.3d at 11 (describing Daggett as "applying exacting scrutiny to limits on direct contributions").

- 13 - With respect to the former, the district court found

that Maine had a compelling interest in limiting foreign government

influence in state candidate elections and assumed without

deciding that Maine also had a compelling interest in limiting

foreign government influence in state referenda. Id. at 50-51.

In contrast, the district court found that Maine lacked a

compelling interest in limiting the appearance of foreign

government influence in state elections. Id. at 51-52.

Accordingly, the district court next considered whether

the Act was narrowly tailored to achieve the state's compelling

interest in limiting foreign government influence in state

candidate elections and referenda. On that point, the district

court held that subsection 2's prohibition on spending in state

elections by foreign governments was likely narrowly tailored

because federal law provides no protections against foreign

government spending in state referenda (as opposed to state

candidate elections). Id. at 52; see tit. 21-A, § 1064(1)(E)(1).

However, the district court held that subsection 2's prohibition

on spending by entities with at least 5% foreign ownership was

likely not narrowly tailored. Cent. Me. Power Co., 721 F. Supp.

3d at 52-53; see tit. 21-A, § 1064(1)(E)(2)(a). The district court

reasoned that the 5% definition seemed arbitrary and had the impact

of prohibiting political speech from corporations with potentially

- 14 - 95% U.S. citizen ownership. Cent. Me. Power Co., 721 F. Supp. 3d

at 52-53.

Similarly, the district court deemed insufficiently

tailored subsection 2's application to entities in which a foreign

government or foreign government-owned entity "[d]irects,

dictates, controls or directly or indirectly participates in the

decision-making process" of the entity "to influence the

nomination or election of a candidate or the initiation or approval

of a referendum." Id. at 54-55 (alteration in original) (quoting

tit. 21-A, § 1064(1)(E)(2)(b)). In the district court's view,

this definition's focus on conduct initially seemed to fit the

requisite interest more closely. Id. at 54. However, Maine

defended the statutory text by referring to definitions in the

Ethics & Election Commission's since-revised rules, which appeared

to impermissibly broaden the Act's application beyond the

"participation" requirement. Id. The court noted that the rules

seemed to allow for the possibility that "influence" might

encompass domestic corporations receiving unsolicited

communications from foreign governments, which would then prohibit

those domestic corporations from campaign spending. Id. at 55.

The district court thus held that this definition was likely not

narrowly tailored because it would "stifle" domestic speech

regardless of actual foreign influence. Id.

- 15 - In the end, because the district court determined that

a substantial number of the Act's applications likely violated the

First Amendment, and the remaining factors favored a preliminary

injunction, it enjoined the Act in its entirety. Id. at 55-56.

In doing so, the district court expressly noted Maine severability

law but declined to sever given the expedited and preliminary

nature of the proceeding; instead, the court reserved the issue

for later consideration. Id. at 55.

Maine timely appealed, arguing that the district court

abused its discretion as to its holdings regarding preemption, the

applicable level of scrutiny, the state's compelling interest, and

whether the Act was narrowly tailored. Maine also argued that the

Act was not facially invalid, the injunction was overly broad, and

the district court abused its discretion in reserving its decision

on severability. Since March 21, 2024, the proceedings have been

stayed pending appeal.

IV. Discussion

A. Preliminary Injunction Analysis

This court reviews the grant of a preliminary injunction

for abuse of discretion. Fortuño, 699 F.3d at 10. "Under that

rubric, findings of fact are reviewed for clear error and issues

of law are reviewed de novo." Id. (quoting Wine & Spirits

Retailers, Inc. v. Rhode Island, 418 F.3d 36, 46 (1st Cir. 2005)).

"[A] facial challenge to a statute presents a question of

- 16 - law . . . ." Id. at 11 (citing New Eng. Reg'l Council of

Carpenters v. Kinton, 284 F.3d 9, 19 (1st Cir. 2002)).

Courts weigh four factors in considering whether to

issue a preliminary injunction: "(1) the plaintiff's likelihood of

success on the merits; (2) the potential for irreparable harm in

the absence of an injunction; (3) whether issuing the injunction

will burden the defendants less than denying an injunction would

burden the plaintiffs and (4) the effect, if any, on the public

interest." Id. at 10 (quoting Jean v. Mass. State Police, 492

F.3d 24, 26-27 (1st Cir. 2007)). But the first

factor -- likelihood of success on the merits -- is the "linchpin"

of the analysis in the First Amendment context. Id. If the

movants are likely to succeed, then "irreparable injury is

presumed." Id. at 11.

Facial challenges are "hard to win." Moody v. NetChoice,

LLC, 603 U.S. 707, 723 (2024). Although this "very high bar" is

lowered somewhat in the First Amendment context, the standard is

"still rigorous" and facial challenges are still "disfavored."

Id. at 723, 744. In the First Amendment context, "[t]he question

is whether 'a substantial number of the law's applications are

unconstitutional, judged in relation to the statute's plainly

legitimate sweep.'" Id. at 723 (cleaned up) (quoting Ams. for

Prosperity Found. v. Bonta, 594 U.S. 595, 615 (2021)). In other

words, a law "may be struck down in its entirety . . . only if the

- 17 - law's unconstitutional applications substantially outweigh its

constitutional ones." Id. at 723-24.

B. The Applicable Level of Scrutiny

In general, "[l]aws that burden political speech

ordinarily are subject to strict scrutiny, requiring the

government to prove that any restriction 'furthers a compelling

interest and is narrowly tailored to achieve that interest.'"

Fortuño, 699 F.3d at 11 (quoting Citizens United, 558 U.S. at 340).

Citing Fortuño, the district court reviewed the entirety of the

Act under strict scrutiny. Cent. Me. Power Co., 721 F. Supp. 3d

at 50. On appeal, Maine argues that the district court should

have applied the somewhat more lenient standard of "exacting

scrutiny," which requires that restrictions on speech be "closely

drawn to match a sufficiently important interest." Daggett v.

Comm'n on Governmental Ethics & Election Pracs., 205 F.3d 445, 454

(1st Cir. 2000) (internal quotations omitted) (quoting Nixon v.

Shrink Mo. Gov't PAC, 528 U.S. 377, 387-88 (2000)). Maine advances

two arguments to support this contention, which we take in turn.

1. Level of Scrutiny for Restrictions on Contributions

Maine first argues that exacting, rather than strict,

scrutiny should apply to the Act's restrictions on contributions.

For support, Maine points to this court's precedent applying

exacting scrutiny to contribution limits. See id. In response,

CMP and Versant acknowledge that exacting scrutiny applies to

- 18 - stand-alone limitations on contributions. See Buckley v. Valeo,

424 U.S. 1, 20-21 (1976). They nevertheless contend that exacting

scrutiny is inappropriate here because the Act bans a wide range

of spending, including contributions as well as expenditures,

restrictions of which are typically subject to strict scrutiny

(citing Fortuño, 699 F.3d at 12). CMP additionally argues that

the level of scrutiny is irrelevant because the Act would not

withstand even a lower level of scrutiny.

At the outset, we note that Maine is correct that

exacting scrutiny generally applies to limits on contributions. A

less demanding form of scrutiny is appropriate for regulations on

contributions because, as the Supreme Court explained,

"contributions lie closer to the edges than to the core of

political expression." FEC v. Beaumont, 539 U.S. 146, 161 (2003).

Therefore, "a contribution limit involving 'significant

interference' with associational rights" is not subject to strict

scrutiny but instead "passes muster if it satisfies the lesser

demand of being 'closely drawn to match a sufficiently important

interest.'" Id. at 162 (quoting Nixon, 528 U.S. at 387-88); see

also Fortuño, 699 F.3d at 12 (noting that "regulations designed

'to ensure against the reality or appearance of corruption,' such

as those capping direct contributions to political candidates" are

subject to exacting scrutiny (quoting Citizens United, 558 U.S. at

357)); Minn. Chamber of Com. v. Choi, 765 F. Supp. 3d 821, 847-49,

- 19 - 857 (D. Minn. 2025) (applying different levels of scrutiny to a

law containing separate restrictions on contributions and

expenditures).

CMP and Versant point out that the Act bans a wide

variety of political spending: "contribution[s], expenditure[s],

independent expenditure[s], electioneering communication[s and]

any other donation[s] or disbursement[s] of funds." Tit. 21-A,

§ 1064(2). But we agree with CMP that we need not resolve whether

strict scrutiny should apply to the Act in its entirety, because

the plaintiffs have demonstrated a likelihood of success on the

merits even if the contribution ban is evaluated under the somewhat

lower standard of exacting scrutiny. We therefore assume without

deciding that exacting scrutiny applies to the portion of the Act

restricting contributions.4 See Beaumont, 539 U.S. at 161-62.

4CMP argues that we would have to overturn Fortuño to apply anything other than strict scrutiny to any aspect of the Act. But Fortuño does not control here. The law in Fortuño created detailed requirements with which corporations and unions had to comply to make campaign contributions or political expenditures. 699 F.3d at 5. There, we applied strict scrutiny to the entire law because it "impose[d] substantial burdens on the very process through which a [speaker] determine[d] whether and how to exercise its free speech rights," "reach[ing] deep into the mechanics of an organization's own self-governance" and "regulat[ing] the if and how of a[n organization]'s political speech." Id. at 12 (emphasis added). In contrast, the Act contains a more straightforward restriction on contributions and does not regulate the process by which decisions about speech are made.

- 20 - 2. Level of Scrutiny for Restrictions on Political Spending by Foreign Citizens

Next, despite acknowledging that restrictions on

expenditures generally receive strict scrutiny, Maine argues that

the remainder of the Act -- including limits on

expenditures -- should be subjected to exacting scrutiny because

the Act restricts non-citizens' participation in our nation's

democracy. Maine argues that cases like Citizens United and

Fortuño did not concern what level of scrutiny applied to laws

targeting foreign government influence in American elections and

are therefore inapposite.

It is helpful to begin our discussion by sketching out

the overarching legal framework regarding restrictions on

corporate spending, including restrictions on foreign

corporations. On the one hand, Citizens United makes clear that

federal and state governments "may not suppress political speech

on the basis of the speaker's corporate identity." 558 U.S. at

365. In contrast, "foreign organizations operating abroad have no

First Amendment rights." Agency for Int'l Dev. v. All. for Open

Soc'y Int'l, Inc., 591 U.S. 430, 436 (2020). This case falls in

the middle of the spectrum and calls on us to consider at which

point a domestic corporation has sufficient foreign ownership or

control that the First Amendment analysis changes.

- 21 - To make its argument for a lower level of scrutiny, Maine

relies heavily on Foley v. Connelie, in which the Supreme Court

rejected an equal protection challenge to a state law that limited

police jobs to U.S. citizens. 435 U.S. 291, 292-93 (1978). The

Court subjected the law to rational basis review, noting that a

lower level of scrutiny applied to classifications involving

non-citizens where the law prohibited non-citizens "from

participation in [a state's] democratic political institutions" or

where the state law was "firmly within a State's constitutional

prerogatives"; for example, the right to vote, to run for elective

office, or to serve on a jury. Id. at 295-96 (quoting Sugarman v.

Dougall, 413 U.S. 634, 648 (1973)). Maine seizes on this language

to assert that Foley supports a lower level of scrutiny for

restrictions on foreign entities' political speech. Crucially,

however, Maine does not argue that the First Amendment's

protections do not apply at all to these U.S. corporations, even

those with some level of foreign ownership.

In response, Versant and CMP seek to distinguish Foley

by noting that it involved an equal protection claim, not the First

Amendment, id. at 294, and that restrictions on domestic

corporations' speech trigger strict scrutiny under Citizens

United, 558 U.S. at 355, 362. We are not persuaded that Foley

applies to this case and accordingly, as we explain below, we apply

- 22 - Citizens United to the restrictions on spending other than

contributions.

This is an issue of first impression for this court, and

although other courts have faced similar inquiries, we are aware

of only one to have decided the issue. In Choi, a federal district

court held that a similar law, which would have barred corporations

with some foreign ownership from political spending in state and

local candidate elections and ballot questions, violated the First

Amendment. 765 F. Supp. 3d at 832-33. The district court held

that the standard levels of scrutiny under the First Amendment

still applied, reasoning that "no case holds that a corporation

ceases to be 'American' by virtue of any quantum of foreign

ownership." Id. at *12. Other courts facing similar arguments

have avoided deciding the applicable level of scrutiny. See Bluman

v. FEC, 800 F. Supp. 2d 281, 285-86 (D.D.C. 2011) (noting that

determining proper level of scrutiny for federal law barring

foreign nationals from making various types of contributions,

donations, and expenditures related to candidate elections

presented a complex question but concluding that the law withstood

even strict scrutiny, thereby avoiding question of applicable

level of scrutiny), aff'd, 565 U.S. 1104 (2012) (summarily

affirming); see also OPAWL - Bldg. AAPI Feminist Leadership v.

Yost, 118 F.4th 770, 772-73, 777 (6th Cir. 2024) (declining to

decide appropriate level of scrutiny for Ohio law barring foreign

- 23 - nationals from contributing to candidates in state elections or

spending money on ballot initiatives because law withstood all

possible levels of scrutiny); cf. id. at 786-87 (Davis, J.,

dissenting) (agreeing that court did not need to decide applicable

level of scrutiny but concluding that was so because law failed

both intermediate and strict scrutiny). We find that Foley is

inapplicable in this situation, as the Choi court did, and explain

our reasoning below.

First, as discussed, Foley involved a Fourteenth

Amendment equal protection challenge and not a First Amendment

challenge. 435 U.S. at 294; see also Choi, 765 F. Supp. 3d at

849. Second, Foley is factually distinct: it involved a challenge

to a state law that limited police jobs to U.S. citizens. 435

U.S. at 292-93. The Court applied rational basis review because

states could permissibly exclude non-citizens from participation

in certain democratic institutions. Id. at 295-96. The Court

upheld the challenged law after "examin[ing] [the] position in

question to determine whether it involve[d] discretionary

decisionmaking, or execution of policy, which substantially

affect[ed] members of the political community." Id. at 296.

Thus, Foley's test, formulated in response to a law

concerning state employment, does not help guide our decision about

the appropriate level of scrutiny here. All of the examples that

Foley gives as permissible to reserve to U.S. citizens are roles

- 24 - that individual citizens play in our democracy -- juror, voter,

political candidate, public servant -- because these "lie at the

heart of our political institutions" and impact "the right to

govern." Id. at 295-97. We do not find this discussion

sufficiently applicable to the context of political speech

restrictions on a wide range of speakers, including corporations,

to persuade us to lower the typical level of scrutiny for the

entire Act.

Because the Act applies to domestic actors as well as

foreign actors, the First Amendment's protections apply. The Act's

restrictions on contributions must withstand exacting scrutiny,

see Nixon, 528 U.S. at 387-88, and its remaining burdens on

political speech must withstand strict scrutiny, see Citizens

United, 558 U.S. at 340.

C. Maine's Proposed State Interests

Below, the district court determined that Maine has a

compelling interest in limiting foreign government influence in

candidate elections.5 Cent. Me. Power Co., 721 F. Supp. 3d at

5 The district court relied on Bluman in making this determination, and the parties now dispute whether that case is controlling here. Cent. Me. Power Co., 721 F. Supp. 3d at 50-51 (citing Bluman, 800 F. Supp. 2d at 282-83, 285, 288, 292 n.4). The Supreme Court summarily affirmed Bluman and, accordingly, there is some question as to whether its conclusion is binding or merely persuasive. See Anderson v. Celebrezze, 460 U.S. 780, 784 n.5 (1983) (holding that "the precedential effect of a summary affirmance extends no further than 'the precise issues presented and necessarily decided by those actions.'" (quoting Ill. State

- 25 - 50-51. Given the "initial stage of the case," the district court

assumed, without deciding, that Maine likely also has a compelling

interest in limiting foreign government influence in referenda

elections. Id. at 51. However, the district court rejected

Maine's argument that it has a compelling interest in limiting the

appearance of foreign government influence in both candidate and

referenda elections. Id. at 51-52. On appeal, Maine contends

that the district court erred in not recognizing all of its

proposed compelling interests, while CMP maintains that none of

these proposed interests are compelling. Versant also challenges

the district court's decision to assume, without deciding, a

compelling interest in limiting foreign government influence in

referenda elections.

As noted above, the district court applied strict

scrutiny to the entirety of the Act, but we think it unnecessary

to decide that strict scrutiny should apply to the Act's

contribution limits, which would fail even exacting scrutiny. We

therefore must consider whether Maine's proposed interests are

compelling, in the strict scrutiny analysis, or sufficiently

Bd. of Elections v. Socialist Workers Party, 440 U.S. 173, 182-83 (1979))); Auburn Police Union v. Carpenter, 8 F.3d 886, 894 (1st Cir. 1993) (cautioning that "summary dispositions 'should not be understood as breaking new ground but as applying principles established by prior decisions to the particular facts involved'" (quoting Mandel v. Bradley, 432 U.S. 173, 176 (1977))). However, we need not reach this dispute because we assume that all of Maine's proposed interests are compelling.

- 26 - important, in the exacting scrutiny analysis. But we may

streamline those analyses because no matter the level of scrutiny,

the plaintiffs have established a likelihood of success in

establishing that the law is not sufficiently related to any of

these proposed state interests. We therefore assume, without

deciding, that each of Maine's proposed interests is sufficiently

compelling.

D. Tailoring

Having assumed that Maine has the requisite interests in

preventing foreign influence or the appearance of foreign

influence in its elections, we turn to the question of whether, at

this stage of the litigation, Maine is likely to succeed in showing

the required fit between the Act's provisions and the state's

interests.

For the Act's restrictions on all spending other than

contributions, we ask whether Maine is likely to succeed in showing

that the Act "serves [the] compelling state interest[s] in a

narrowly tailored manner." We the People PAC v. Bellows, 40 F.4th

1, 19 (1st Cir. 2022). In other words, we first consider the fit

between the invoked interest and the Act's restrictions and how

the law advances the compelling interest. See id. at 19-20. The

restriction on speech must be "actually necessary" to achieve the

compelling interest. See United States v. Alvarez, 567 U.S. 709,

725 (2012) (plurality opinion) (quoting Brown v. Ent. Merchs.

- 27 - Ass'n, 564 U.S. 786, 799 (2011)). "There must be a direct causal

link between the restriction imposed and the injury to be

prevented." Id. Courts consider the "record evidence or

legislative findings" that demonstrate the necessity of curtailing

First Amendment rights to fix a problem. FEC v. Ted Cruz for

Senate, 596 U.S. 289, 307 (2022) (quoting Colo. Republican Fed.

Campaign Comm. v. FEC, 518 U.S. 604, 618 (1996)). Courts also

"consider whether the rule is either under- or overinclusive."

Does 1-6 v. Mills, 16 F.4th 20, 33 (1st Cir. 2021).

"[U]nderinclusiveness can raise 'doubts about whether the

government is in fact pursuing the interest it invokes, rather

than disfavoring a particular speaker or viewpoint.'"

Williams-Yulee v. Fla. Bar, 575 U.S. 433, 448 (2015) (quoting

Brown, 564 U.S. at 802).

Similarly, for the Act's restrictions on contributions,

we consider whether Maine is likely to succeed in showing that the

Act is "narrowly tailored to serve a sufficiently important

governmental interest." Gaspee Project v. Mederos, 13 F.4th 79,

85 (1st Cir. 2021) (citing Ams. for Prosperity, 594 U.S. at 608).

Although the Supreme Court has previously referred to the required

relationship as "closely drawn," see Beaumont, 539 U.S. at 162,

the Court has clarified that the required fit amounts to narrow

tailoring, see Ams. for Prosperity, 594 U.S. at 608; see also

McCutcheon v. FEC, 572 U.S. 185, 197 (2014) (plurality opinion)

- 28 - (describing exacting scrutiny as "a lesser but still 'rigorous

standard of review'" (quoting Buckley, 424 U.S. at 29)). Under

exacting scrutiny, the restrictions need not "be the least

restrictive means of achieving their ends," but they must be

"narrowly tailored to the government's asserted interest." Ams.

for Prosperity, 594 U.S. at 608. This tailoring is required

because, "[i]n the First Amendment context, fit matters." Id. at

609 (quoting McCutcheon, 572 U.S. at 218). Even outside of strict

scrutiny, "we still require a fit that is not necessarily perfect,

but reasonable; [and] that represents not necessarily the single

best disposition but one whose scope is in proportion to the

interest served." Id. (quoting McCutcheon, 572 U.S. at 218).

Therefore, although we apply exacting scrutiny to the Act's

restrictions on contributions and strict scrutiny to the remainder

of the Act's restrictions, our analysis of the fit looks largely

the same.

As a reminder, the Act's central prohibition on campaign

spending forbids a "foreign government-influenced entity" from

making "a contribution, expenditure, independent expenditure,

electioneering communication or any other donation or disbursement

of funds to influence" a candidate election or a referendum. Tit.

21-A, § 1064(2). The Act provides three definitions for "foreign

government-influenced entity": a foreign government; an entity

that is 5% or more owned, directly or indirectly, by a foreign

- 29 - government or a foreign government-owned entity (meaning it is

itself more than 50% owned by a foreign government); and an entity

in which a foreign government or foreign government-owned entity

"[d]irects, dictates, controls or directly or indirectly

participates in the decision-making process" regarding the

entity's political speech. See id. § 1064(1)(E), (F). We analyze

the Act with respect to each of these three definitions.

1. Prohibition on Spending by a Foreign Government

The first of the three definitions of "foreign

government-influenced entity" is simply "[a] foreign government,"

id. § 1064(1)(E)(1), as defined in the Act, id. § 1064(1)(D).6 The

district court held that subsection 2's ban on campaign spending

by foreign governments is likely narrowly tailored and thus

constitutional. Cent. Me. Power Co., 721 F. Supp. 3d at 52. No

party challenges this conclusion, but we note it because it is

relevant to comparing the Act's "plainly legitimate sweep" with

its unconstitutional applications. Moody, 603 U.S. at 723 (quoting

6The Act defines "foreign government" as including "any person or group of persons exercising sovereign de facto or de jure political jurisdiction over any country other than the United States or over any part of such country." Tit. 21-A, § 1064(1)(D). The term also includes "any subdivision of any such group and any group or agency to which such sovereign de facto or de jure authority or functions are directly or indirectly delegated" and "any faction or body of insurgents within a country assuming to exercise governmental authority, whether or not such faction or body of insurgents has been recognized by the United States." Id.

- 30 - Ams. for Prosperity, 594 U.S. at 615). We therefore move to the

next two definitions.

2. Prohibition on Spending by an Entity with 5% or More Foreign Ownership

The second definition is "[a] firm, partnership,

corporation, association, organization or other entity with

respect to which a foreign government or foreign government-owned

entity . . . [h]olds, owns, controls or otherwise has direct or

indirect beneficial ownership of 5% or more of the total equity,

outstanding voting shares, membership units or other applicable

ownership interests." Id. § 1064(1)(E)(2)(a). The district court

held that the Act's restrictions with respect to this 5% ownership

threshold are likely not narrowly tailored and therefore

unconstitutional, for several reasons. Cent. Me. Power Co., 721

F. Supp. 3d at 52. First, the district court determined that this

5% foreign ownership threshold is overinclusive because it would

prohibit a substantial amount of protected speech. Id. at 53.

For example, the Act prohibits campaign spending by CMP, a company

incorporated in Maine and run by United States citizens. Id.

Second, the district court noted that the 5% ownership threshold

seems to be arbitrarily chosen. Id. Finally, the court observed

that Maine had not yet offered any "evidence that a foreign

government or foreign government-influenced entity with less than

full ownership of a domestic entity ha[d] exerted influence over

- 31 - that entity's election spending in Maine." Id. The district court

thus concluded that this 5% threshold provision is likely not

narrowly tailored to a compelling interest in preventing foreign

influence in candidate or referenda elections. Id.

On appeal, Maine argues that the district court erred in

underestimating the potential influence that a shareholder who

owns 5% or more of a corporation may wield over that corporation's

decision-making. That includes the shareholder's ability to sell

off all of its stock at once if dissatisfied, which would be a

major event for a corporation. Maine argues that a shareholder

with well under 50% ownership -- and even under 10%

ownership -- can use that influence to accomplish significant

changes in a corporation. Because of this possibility, Maine

argues, the Act is not overinclusive. Maine also contests the

need for evidence showing actual influence, arguing that corporate

managers' fiduciary duties to their shareholders will prompt them

to anticipate and infer the interests of their largest

shareholders. Maine disputes that the 5% threshold was arbitrarily

chosen, pointing to federal laws that require special disclosures

for any person who owns 5% or more of the equity of a corporation.

See 15 U.S.C. § 78m(d). Finally, Maine points to restrictions in

other states and cities that use the 5% ownership threshold to

demonstrate that such a threshold is commonly used.

- 32 - We agree with the district court that this 5% foreign

ownership threshold for triggering the Act's prohibition on a wide

range of political speech is likely not narrowly tailored to the

stated compelling interests in preventing foreign influence or its

appearance. Regarding subsection 2's ban on contributions, we

similarly think that the 5% foreign ownership threshold is likely

not closely drawn to match its sufficiently important state

The law is overinclusive because -- as the district

court pointed out -- it silences U.S. corporations that have their

own First Amendment rights: CMP and Versant were founded in Maine,

have operated exclusively there for over a century, and are

entirely run by U.S. citizens. See Mills, 16 F.4th at 33. To

illustrate why the law is overinclusive, we will look at the

strongest evidence in Maine's favor: the evidence that HQUS, a

subsidiary of a foreign government's utility company, was the third

highest contributor to political action and ballot question

committees in Maine over the last decade. The company's owner,

Hydro-Québec, and the province of Québec do not have any First

Amendment rights. See Agency for Int'l Dev., 591 U.S. at 436.

Subsection 2's ban applies to HQUS because of the 5% definition.

But HQUS is 100% indirectly owned by a foreign government, as is

Versant. Maine's evidence therefore does not demonstrate why the

5% threshold -- as opposed to 100%, or 50%, or any other

- 33 - number -- is narrowly tailored to its interests in preventing

foreign influence in its elections. See Cruz, 596 U.S. at 307

(noting that courts consider the record evidence or legislative

findings demonstrating why restricting First Amendment rights is

needed). Maine has not shown that the Act's curtailment of First

Amendment rights in this way is necessary.

The prohibition is overly broad, silencing U.S.

corporations based on the mere possibility that foreign

shareholders might try to influence its decisions on political

speech, even where those foreign shareholders may be passive owners

that exercise no influence or control over the corporation's

political spending. See Choi, 765 F. Supp. 3d at 852 ("It is not

enough . . . to explain how foreign minority shareholders could

exercise influence over corporations."); see also Cruz, 596 U.S.

at 307 (deeming the absence of record evidence "significant").

CMP offers a helpful illustration. CMP is captured by the 5%

definition because Qatar's sovereign wealth fund indirectly owns

7 to 11% of CMP. But Maine has shown no evidence that Qatar itself

has tried to influence CMP's decisions regarding political speech.

True, CMP and its affiliates have spent a lot of money -- nearly

$73 million -- in Maine's elections over the past decade. But in

that time, CMP faced two ballot initiatives aimed at removing its

permit for the CMP Corridor -- after $450 million had already been

spent on construction -- in addition to a ballot question that

- 34 - sought to seize all of its assets through eminent domain. The

record suggests that CMP's spending was motivated by its desire to

protect the company's own interests, rather than the independent

interests of Qatar.

With this context, we cannot find that Maine's interest

in avoiding the appearance or possibility of Qatar's influence

justifies entirely silencing CMP's speech in the face of public

referenda that could have such detrimental outcomes to its future

as a company. See Citizens United, 558 U.S. at 339 (striking down

a restriction on political speech where the "purpose and effect

[was] to silence entities whose voices the Government deems to be

suspect").

In the face of these examples, the 5% threshold starts

to look either like an end-run around Citizens United, aimed at

silencing a large swath of corporations merely because they are

corporations, or an effort to shape the ongoing debate in Maine

about its two primary utility companies by silencing one

side -- the companies themselves. See First Nat'l Bank of Bos. v.

Bellotti, 435 U.S. 765, 785 (1978) (striking down a prohibition on

political speech where it appeared that the legislature aimed to

silence one side of the debate on particular ballot questions).

Neither is permissible under the First Amendment.

At oral argument, Maine defended the 5% definition by

pointing out that the record showed only two particular companies

- 35 - in Maine with between 5 and 50% foreign ownership. But we are not

persuaded that this demonstrates narrow tailoring. Instead, it

suggests that the Act was targeted at particular companies. See

Williams-Yulee, 575 U.S. at 448 (noting that underinclusiveness

may indicate that the government seeks to disfavor a particular

speaker); see also Citizens United, 558 U.S. at 340 (laws may

violate the First Amendment when they "identif[y] certain

preferred speakers").

Finally, we note that the amount of uncertainty as to

which corporations are covered by the law will potentially have a

chilling effect. The Act does not set any particular moment in

time for determining the level of foreign ownership, which -- for

publicly traded corporations -- can fluctuate throughout the

course of a day.7 As a consequence, U.S. corporations with First

Amendment protections will likely choose not to speak at all rather

than risk criminal penalties.8

7 Indeed, CMP's ownership changed while this appeal was pending. 8 Maine cited similar provisions from other states that restrict political speech based on foreign ownership of corporations, but these are not persuasive. The St. Petersburg law has been preempted by the Florida legislature. Fla. Stat. § 106.08(11) (2023). The Minnesota law, which applied to companies with only 1% foreign ownership, Minn. Stat. § 211B.15(d), was struck down as a violation of the First Amendment. Minn. Chamber of Com. v. Choi, 765 F. Supp. 3d 821, 858 (D. Minn. 2025). While Alaska has a similar 5% threshold, Alaska Stat. § 15.13.068(e)(5)(A) (2018), it does not appear to have faced a constitutional challenge. Neither has Seattle's ordinance, which

- 36 - We are sympathetic to Maine and amici on the difficulty

of ascertaining when foreign shareholders are wielding influence

over a domestic corporation's decisions on political speech. That,

however, does not alter our conclusion that the Act likely sweeps

far too broadly to be narrowly tailored.9 See Citizens United,

558 U.S. at 362 (noting in dicta that the provision at issue, which

was "not limited to corporations or associations that were created

in foreign countries or funded predominately by foreign

shareholders," would still be overbroad even if the government had

"a compelling interest in limiting foreign influence over our

political process").

3. Prohibition on Spending by an Entity with Direct or Indirect Foreign Participation in the Decision-making Process

The third and final definition of "foreign

government-influenced entity" is:

A firm, partnership, corporation, association, organization or other entity with respect to which a foreign government or foreign government-owned entity . . . [d]irects, dictates, controls or directly or indirectly participates in the decision-making process with regard to the activities of the firm, partnership,

has a lower threshold. See Seattle, Wash., Mun. Code §§ 2.04.010, .370, .400 (2025). 9 We also agree with the district court that the federal securities law that Maine cites does not provide a persuasive analogy here, as that law requires a particular disclosure at the 5% ownership threshold but does not indicate that 5% is necessarily a proxy for control. See Cent. Me. Power Co., 721 F. Supp. 3d at 53; 15 U.S.C. § 78m(d)(1)-(3).

- 37 - corporation, association, organization or other entity to influence the nomination or election of a candidate or the initiation or approval of a referendum, such as decisions concerning the making of contributions, expenditures, independent expenditures, electioneering communications or disbursements.

Tit. 21-A, § 1064(1)(E)(2)(b). We will refer to this as the

"actual participation" definition as a shorthand.

The district court held that the Act's restrictions on

the entities encompassed by this definition were not narrowly

tailored and were likely unconstitutional. Cent. Me. Power Co.,

721 F. Supp. 3d at 54-55. The district court noted that this

definition seemed, "[a]t first blush," to be a closer fit to

Maine's interest than the previous 5% definition. Id. at 54. But

Maine defended this provision by pointing to the Ethics & Election

Commission's then-proposed rules, and the district court observed

that those proposed rules seemed to broaden the Act by eliminating

the statutory requirement that the foreign government or foreign

government-owned entity actually "participate[]" in the

decision-making process. Id. at 54-55. Therefore, in response to

Maine's reliance on these proposed rules to defend the statute,

the district court found that this category was "overly broad" and

"likely to stifle the speech of domestic corporations regardless"

of actual foreign influence. Id. at 55. However, the district

court noted that its conclusion might change if the Ethics &

- 38 - Election Commission adopted new rules indicating that actual

participation was required. Id. at 55 n.21.

Maine argues on appeal that the definition in

§ 1064(1)(E)(2)(b) mirrors a federal regulation implementing FECA.

See 11 C.F.R. § 110.20(i). Maine also focuses, as it did below,

on the Ethics & Election Commission's rules and argues that the

proposed rules discussed in the district court's decision have

since been rewritten to clarify and narrow the definition of

"participate." Finally, Maine asserts that there are no less

restrictive means to achieve its compelling interest, as it would

not be able to enforce a law that targets only foreign governments

and must be able to regulate "the U.S.-based recipients of such

influence."

We start with Maine's argument based on the text of the

statute: that the Act's "actual participation" definition was

"lifted almost verbatim" from a federal regulation. That federal

regulation states:

A foreign national shall not direct, dictate, control, or directly or indirectly participate in the decision-making process of any person, such as a corporation, labor organization, political committee, or political organization with regard to such person's Federal or non-Federal election-related activities, such as decisions concerning the making of contributions, donations, expenditures, or disbursements in connection with elections for any Federal, State, or local office or decisions concerning the administration of a political committee.

- 39 - 11 C.F.R. § 110.20(i). Certainly, the verbs used in the Maine

statute are almost the same. See tit. 21-A, § 1064(1)(E)(2)(b)

("[d]irects, dictates, controls or directly or indirectly

participates"). But the subjects of the two provisions -- "a

foreign national" as opposed to "a foreign government or foreign

government-owned entity" -- are not. The federal regulation

defines "foreign national" as including:

(1) a government of a foreign country and a foreign political party; (2) a person outside of the United States, unless it is established that . . . such person is not an individual and is organized under or created by the laws of the United States or of any State or other place subject to the jurisdiction of the United States and has its principal place of business within the United States; and (3) a partnership, association, corporation, organization, or other combination of persons organized under the laws of or having its principal place of business in a foreign country.

22 U.S.C. § 611(b) (defining "foreign principal"); see 11 C.F.R.

§ 110.20(a)(3)(i) (defining "[f]oreign national" as equivalent to

22 U.S.C. § 611(b)'s definition of "foreign principal").

There is some overlap between the Act's definition of a

"foreign government or foreign government-owned entity" and the

federal regulation's definition of "foreign national." For

example, both use substantially the same definition of "foreign

government." Compare tit. 21-A, § 1064(1)(D), with 22 U.S.C.

§ 611(e). But the federal provision also encompasses corporations

- 40 - organized or with their principal places of business abroad, many

of which have no First Amendment rights. See Agency for Int'l

Dev., 591 U.S. at 436. The Maine statute, on the other hand,

encompasses entities at least 50% owned by a foreign

government -- even if those entities are U.S. corporations, which

the federal definition expressly excludes. See 22 U.S.C.

§ 611(b)(2). The Act thus applies to a broader swath of U.S.

corporations than the federal provision and is therefore less

tailored. In light of the different scope of the two provisions,

we find unpersuasive Maine's argument that is premised on the

provisions' alleged similarity.

In looking at the "actual participation" definition as

a whole, we agree with the district court that it appears more

tailored than the 5% threshold to Maine's interest in limiting

foreign influence or its appearance in state and local elections,

because it focuses on conduct. But Maine has made no effort to

defend the statute on its own terms, other than its alleged

similarity to a federal regulation, which we dismissed above as

unpersuasive. We thus remain concerned that the "actual

participation" definition applies to too broad a swath of speakers

with First Amendment rights to be narrowly tailored. For the same

reasons, we think that the "actual participation" definition as

- 41 - applied to the Act's ban on contributions is not narrowly tailored

to match a sufficiently important state interest.10

E. Additional Provisions and Potential Overbreadth of the Injunction

Maine argues that, even if two of the three definitions

of "foreign government-influenced entity" have unconstitutional

applications, the district court erred in finding the Act facially

invalid because the Act's overbreadth is not "substantial . . .

relative to its plainly legitimate sweep." In support of this

argument, Maine notes that the court held that the Act was likely

constitutional as applied to foreign governments. Maine argues

that, if the 5% threshold is too low, the Act is still

constitutional as applied to entities with a higher percentage of

foreign ownership. In addition, Maine specifically endorses the

constitutionality of the disclaimer provision. See tit. 21-A,

As discussed, most of the applications of the Act's

central provision, subsection 2, are likely unconstitutional due

to the overly broad definitions of "foreign government-influenced

10 Maine argues that the Ethics & Election Commission's new rules clarify that the statutory term "directly or indirectly participate" is sufficiently narrow and that these new rules render the "actual participation" definition constitutional. These rules were not before the district court, see Cent. Me. Power Co., 721 F. Supp. 3d at 55 n.21, and we thus conclude that the district court acted within its discretion in issuing its injunction based on an earlier iteration of them.

- 42 - entity." Regarding the 5% definition, to the extent that Maine

implies that the court should have chosen a different threshold of

foreign ownership to which the Act should apply, we disagree. We

will set aside the issue that we are a federal court reviewing a

state law that the state's own court has not yet interpreted, which

in itself would be reason to tread cautiously. Cf. United States

v. Stevens, 559 U.S. 460, 474 (2010) ("Because [the challenged

law] is a federal statute, there is no need to defer to a state

court's authority to interpret its own law."). Courts "will not

rewrite a law to conform it to constitutional requirements." Id.

at 481 (cleaned up) (quoting Reno v. Am. C.L. Union, 521 U.S. 844,

884-85 (1997)). "[D]oing so would constitute a 'serious invasion

of the legislative domain' and sharply diminish [the

legislature's] 'incentive to draft a narrowly tailored law in the

first place.'" Id. (citation omitted) (first quoting United States

v. Nat'l Treasury Emps. Union, 513 U.S. 454, 479 n.26 (1995); and

then quoting Osborne v. Ohio, 495 U.S. 103, 121 (1990)).

Moving past subsection 2, most of the substantive

provisions of the Act are entwined with that provision.

Subsections 3, 4, and 5 prohibit soliciting, accepting, or

assisting in transactions that are prohibited under subsection 2,

or structuring transactions to evade subsection 2's prohibitions.

See tit. 21-A, § 1064(2)-(5). Subsection 9 provides criminal

penalties for violating subsections 2 through 5. Id. § 1064(9).

- 43 - Subsection 8 provides civil penalties for violating any of the

Act's subsections. Id. § 1064(8). Given how the Act is structured

around subsection 2's constitutionally problematic ban (as the

definitions currently stand), the overwhelming majority of

applications of these other subsections are necessarily

unconstitutional as well.

The remaining substantive provisions are subsection 6,

which requires a specific disclaimer on any permissible public

communications pertaining to a range of political speech by foreign

government-influenced entities, and subsection 7, which requires

media platforms to conduct due diligence to ensure that they have

not published any public communications that violate this Act.

Id. § 1064(6), (7). But even if we assume that both subsections 6

and 7 are constitutional, a substantial number of the statute's

applications are still likely unconstitutional as compared to the

statute's plainly legitimate sweep. See Moody, 603 U.S. at 723.

F. Reserving the Question of Severability

After concluding that two of the three central

provisions of the Act are likely to fail under strict scrutiny,

the district court held that the Act was likely facially invalid

because a substantial number of the Act's applications were

unconstitutional as compared to its plainly legitimate sweep.

Cent. Me. Power Co., 721 F. Supp. 3d at 55. The district court

declined to sever the Act, given the rushed nature of the

- 44 - proceedings, until the parties had a chance to brief the issue of

whether particular portions were severable under Maine law. Id.

Maine argues on appeal that the district court abused

its discretion by not analyzing severability. Maine further argues

that the definitions of "foreign government-influenced entity" are

easily severable from the rest of the Act and that the district

court should not have enjoined subsection 6's disclaimer

requirement without analyzing its constitutionality.

However, while Maine raises colorable arguments

concerning the Act's severability under state law, it points to no

federal or state authority that required the district court to

consider that question at the preliminary injunction stage. We

leave the issue of severance for the district court to decide in

the first instance.

G. Preemption

Issues of federal preemption are questions of statutory

interpretation that we review de novo. See DiFiore v. Am.

Airlines, Inc., 646 F.3d 81, 85 (1st Cir. 2011).

The district court concluded that FECA explicitly

preempted the Act to the extent that it might be read to apply to

federal elections. Cent. Me. Power Co., 721 F. Supp. 3d at 43.

Maine agrees that the Act does not apply to foreign spending in

elections for federal office, but it argues here, as it did below,

that this result should be reached through statutory

- 45 - interpretation rather than preemption. However, Maine only

disputes the district court's preemption holding to the extent

that it informed the district court's ultimate conclusion, in

considering the motions for a preliminary injunction, that the

plaintiffs were likely to succeed on the merits of their First

Amendment claim.

In response, Versant urges us to affirm the district

court's holding that federal law expressly preempts the Act from

applying to federal elections, noting that this holding may well

have contributed to the district court's conclusion that a

substantial number of the statute's applications were likely

unconstitutional and therefore the law was likely facially

invalid. Versant also worries that a future Ethics & Election

Commission will reverse course and apply the Act to federal

elections, unconstrained by any limiting statutory language.

We do not read the district court's decision that a

substantial number of the statute's applications are likely

unconstitutional -- and that plaintiffs were likely to succeed on

the merits -- as hinging on its determination that the statute was

preempted as to federal candidate elections. The district court

determined that subsection 2's ban on campaign spending was likely

unconstitutional as it applied to the two broadest of the three

statutory definitions because only the "foreign government"

definition was likely narrowly tailored. Cent. Me. Power Co., 721

- 46 - F. Supp. 3d at 52, 55; see tit. 21-A, § 1064(1)(E). As explained,

we have determined no error as to these conclusions and,

accordingly, it is not necessary to discuss the merits of the

preemption determination in affirming the injunction.

V. Conclusion

For the foregoing reasons, we affirm the judgment of the

district court.

-Concurring Opinion Follows-

- 47 - AFRAME, Circuit Judge, concurring. I write separately

for two reasons: first, to state my view that Maine's asserted

government interests for its law are inadequate; and second, to

identify a possible vagueness problem caused by the law's

definition of foreign government.

A. Maine's Interests

I agree with the Court that the plaintiffs will likely

prevail on their First Amendment challenges to Maine's law because

the law sweeps too broadly into areas of protected speech by

American companies. I would, however, reach that conclusion by

following a somewhat different path.

I would not assume that Maine's interest in limiting

"foreign government influence" or "the appearance of such

influence" on political speech by American companies is a

compelling or even important government interest. Rather, as I

see it, First Amendment principles dictate that the government's

only compelling or important interest in this realm is to prevent

actual participation by foreign persons and entities in the

American political process, i.e., in "activities 'intimately

related to the process of democratic self-government,'" Bluman v.

FEC, 800 F. Supp. 2d 281, 287 (D.D.C. 2011) (quoting Bernal v.

Fainter, 467 U.S. 216, 220 (1984)), aff'd, 565 U.S. 1104 (2012),

or the appearance of such participation. Anything less

impermissibly interferes with the rights of Americans to engage in

- 48 - political speech. Therefore, I would conclude that Maine's law

likely is significantly overbroad because none of the restrictions

at issue are commensurate with this far more limited government

interest.

The Supreme Court has repeatedly stated that the

"'[d]iscussion of public issues and debate on the qualifications

of candidates [is] integral to the operation' of our system of

government." Ariz. Free Enter. Club's Freedom Club PAC v. Bennett,

564 U.S. 721, 734 (2011) (quoting Buckley v. Valeo, 424 U.S. 1, 14

(1976) (per curiam)); see, e.g., Eu v. S.F. Cnty. Democratic Cent.

Comm., 489 U.S. 214, 223 (1989); Garrison v. Louisiana, 379 U.S.

64, 74–75 (1964). As such, "the First Amendment 'has its fullest

and most urgent application' to speech uttered during a campaign

for political office." Eu, 489 U.S. at 223 (quoting Monitor

Patriot Co. v. Roy, 401 U.S. 265, 272 (1971)). This principle

applies equally to candidate-based and issue-based elections.

McIntyre v. Ohio Elections Comm'n, 514 U.S. 334, 347 (1995).

The Supreme Court also has emphasized that "political

speech does not lose First Amendment protection 'simply because

its source is a corporation.'" Citizens United v. FEC, 558 U.S.

310, 342 (2010) (quoting First Nat'l Bank of Boston v. Bellotti,

435 U.S. 765, 784 (1978)). That is because "[c]orporations . . . ,

like individuals, contribute to the 'discussion, debate, and the

dissemination of information and ideas' that the First Amendment

- 49 - seeks to foster." Pac. Gas & Elec. Co. v. Pub. Util. Comm'n of

Cal., 475 U.S. 1, 8 (1986) (plurality opinion) (quoting Bellotti,

435 U.S. at 783); see Citizens United, 558 U.S. at 342-43. Thus,

the political speech of American corporations should be treated no

differently than the speech of American "natural persons."

Citizens United, 558 U.S. at 343 (quoting Bellotti, 435 U.S. at

776).

The Maine law bans, among other things, American

corporate political speech that is influenced or appears to be

influenced by a "foreign government" or a "foreign

government-owned entity." See Me. Rev. Stat. Ann. tit. 21-A,

§ 1064(1)(D)-(F), (2) (2024). In other words, the law seeks to

limit what American companies may say in Maine political campaigns

because foreign sources may supply some of the information that

helps to shape an American company's speech choices. That, in my

view, presents a serious constitutional problem.

For over a half a century, the Supreme Court has

recognized that "the Constitution protects the right to receive

information and ideas . . . regardless of their social worth."

Stanley v. Georgia, 394 U.S. 557, 564 (1969). The First Amendment

also recognizes that an important "manifestation of the principle

of free speech," "enjoyed [alike] by business corporations

generally and by ordinary people," Hurley v. Irish-Am. Gay, Lesbian

& Bisexual Grp. of Bos., 515 U.S. 557, 573-74 (1995), is the

- 50 - "choice[] of what to say and what to leave unsaid," id. at 573

(quoting Pac. Gas & Elec. Co., 475 U.S. at 11).

Maine seems to be concerned that foreign governments

will influence the outcome of Maine elections by inducing American

companies to spread foreign-sponsored messages to the electorate

through an American speaker. But the Maine law does not seek to

silence only foreign speech; it also seeks to suppress the speech

of American companies that might have been swayed by it. Such

targeting of an American speaker's right to engage in core

political speech is anathema to the First Amendment: "Those who

seek to censor or burden free expression often assert that

disfavored speech has adverse effects[, b]ut the 'fear that people

w[ill] make bad decisions'" based on arguments and information

provided by others generally "cannot justify content-based burdens

on speech." Sorrell v. IMS Health Inc., 564 U.S. 552, 577 (2011)

(quoting Thompson v. W. States Med. Ctr., 535 U.S. 357, 374

(2002)).

Every speaker's choice of what to say is influenced by

many factors, including information and opinions gleaned from

external sources. Generally, we trust counterspeech, not

government regulation of the speaker, to dissuade people from

adopting bad or false ideas that a speaker may offer. See United

States v. Alvarez, 567 U.S. 709, 726-28 (2012) (plurality opinion).

Allowing Maine to silence an American speaker because it does not

- 51 - like a source of information which may have influenced that speaker

does not square with the basic First Amendment principles

recognizing the rights to receive information and to speak one's

ideas. See Sorrell, 564 U.S. at 577. I would reject out of hand

the interest Maine appears to assert in silencing an American

speaker on political matters.

To be clear, that does not mean that Maine is powerless

to prevent foreign government speech in its elections. There was

much debate in this appeal about whether the Supreme Court's

summary affirmance in Bluman binds this Court. I find that debate

irrelevant because, even if it does not bind our disposition of

this case, Bluman articulates a proper understanding of the

contours of the government's permissible interest in restricting

foreign participation in American elections.

Bluman recognized that the government "has a compelling

interest for purposes of First Amendment analysis in limiting the

participation of foreign citizens in activities of American

democratic self-government, and in thereby preventing foreign

influence over the U.S. political process." Bluman, 800 F. Supp.

2d at 288. Maine seizes on the phrase "foreign influence over the

U.S. political process" as supporting the broad governmental

interest that it proposes. But in so doing, Maine isolates that

phrase from the rest of the quoted sentence and the case more

generally.

- 52 - Bluman involved a direct restriction on a foreign

citizen making a political contribution or independent spending in

a political campaign. See id. at 282-83. Bluman held that these

acts -- the actual giving to a candidate or independent spending

by a foreign citizen -- may be constitutionally proscribed to

protect our democratic processes from foreign influence. Id. at

288-89. In other words, Bluman held that the government may close

off "activities 'intimately related to the process of democratic

self-government'" from foreign participation. Id. at 287 (quoting

Bernal, 467 U.S. at 220). Thus, Bluman holds only that the

government may forbid foreign persons or entities from actually

participating in the American political process. Id.; see Agency

for Int'l Dev. v. All. for Open Soc'y Int'l, Inc., 591 U.S. 430,

436 (2020) (recognizing that First Amendment rights do not extend

to foreign organizations operating abroad).

But Maine incorrectly reads Bluman to go further. It

reads Bluman as authorizing the government to prevent an American

company from itself speaking because it consults or has some other

contact with a foreign government before it decides what to say.

That is a misreading of Bluman. Bluman does not support the

regulation of this sort of secondhand foreign influence on the

American political process.

In line with Bluman, Citizens United seems to have

adopted, in the corporate context, the same interest in preventing

- 53 - actual foreign participation in the American political process, or

the appearance thereof. See Citizens United, 558 U.S. at 362.

One of the government's arguments in Citizens United against

extending First Amendment rights to corporations was that it would

allow "foreign individuals or associations [to] influenc[e] our

Nation's political process." See id.

The Supreme Court stated that, even if there were such

a compelling interest, it would only extend to "corporations or

associations that were created in foreign countries or funded

predominately by foreign shareholders." Id. at 362. The Court's

explanation suggests that any government interest in restricting

corporate political speech would be limited to situations where

the foreign corporations were themselves speaking or where the

American company was predominantly funded by foreign shareholders

such that these shareholders in effect controlled or appeared to

control the company's speech. See id. Maine's asserted interest,

however, is far broader insofar as it suggests that a foreign

government's influence over an American company, even when small,

provides grounds for silencing an American company. Citizens

United does not contemplate such an interest. See id.

In sum, this case presents an important question about

when the government may prohibit speech in a political campaign by

an American corporation. Maine asserts that it has the power to

do so whenever it appears that a foreign government might have

- 54 - influenced an American company's speech choice. But absent foreign

government control, it is the American company that ultimately

decides what to say. That decision by an American speaker is

protected by the First Amendment. While I agree with the Court

that Maine's law would infringe on the First Amendment even if

Maine's asserted interests were compelling or important, I would

say now that they are not.

B. Vagueness

I also want to raise a concern about potential vagueness

in Maine's law because, even after today's ruling, the case remains

in its early stages. My vagueness concern relates to the law's

definition of "foreign government." See tit. 21-A, § 1064(1)(D).

The "foreign government" definition plays a central role

in the Maine law's application. The law prohibits, and even

criminalizes, otherwise constitutionally protected political

speech by American companies that are "foreign

government-influenced entities." See tit. 21-A, § 1064(2). Each

method by which an American company becomes a "foreign

government-influenced entity" leads back to the law's definition

of "foreign government." See id. § 1064(1)(D)-(F). Thus, under

Maine's scheme, an American company must determine whether it has

a relevant relationship with a "foreign government."

The statute defines "foreign government" as follows:

- 55 - "Foreign government" includes any person or group of persons exercising sovereign de facto or de jure political jurisdiction over any country other than the United States or over any part of such country and includes any subdivision of any such group and any group or agency to which such sovereign de facto or de jure authority or functions are directly or indirectly delegated. "Foreign government" includes any faction or body of insurgents within a country assuming to exercise governmental authority, whether or not such faction or body of insurgents has been recognized by the United States.

Id. § 1064(1)(D).

Maine borrowed this definition from the Foreign Agents

Registration Act's definition of "government of a foreign

country." See 22 U.S.C. § 611(e). The Foreign Agents Registration

Act, inter alia, prohibits a person from acting as an "agent of a

foreign principal" -- which includes acting as an agent of the

"government of a foreign country," id. § 611(b)(1),

(c)(1) -- unless the person first files a registration with the

Attorney General. Id. § 612(a).

There are a handful of cases holding that the Foreign

Agents Registration Act's registration requirement comports with

the Constitution. See, e.g., United States v. Peace Info. Ctr.,

97 F. Supp. 255, 262 (D.D.C. 1951) ("The statute under

consideration neither limits nor interferes with freedom of

speech. It does not regulate expression of ideas. Nor does it

preclude the making of any utterances. It merely requires persons

- 56 - carrying on certain activities to identify themselves by filing a

registration statement."); Att'y Gen. v. Irish N. Aid Comm., 346

F. Supp. 1384, 1389-90 (S.D.N.Y. 1972) (holding that the

registration requirement is constitutional); Att'y Gen. v. Irish

N. Aid Comm., 530 F. Supp. 241, 253 (S.D.N.Y. 1981) (same).

Because the registration requirement does not implicate

constitutional rights and contains a specific-intent mens rea for

the criminal penalties arising from a failure to register, see 22

U.S.C. § 618(a), vagueness concerns about identifying a

"government of a foreign country," id. § 611(b)(1), (e), may not

be substantial in the registration context. See Screws v. United

States, 325 U.S. 91, 102 (1945) (stating that a statute is not

likely to be vague when a conviction requires a specific intent to

violate the statute); Vill. of Hoffman Ests. v. Flipside, Hoffman

Ests., Inc., 455 U.S. 489, 494-95 (1982) (stating that when a law

"implicates no constitutionally protected conduct," a statute is

impermissibly vague only if it is "vague in all of its

applications").

But the context into which Maine has imported the

"government of a foreign country" definition is quite different.

Here, as discussed, the Maine law has obvious and substantial

constitutional implications under the First Amendment. According

to the law, whether an American company is silenced from engaging

in political speech depends on whether that company maintains a

- 57 - covered relationship with a "foreign government." Tit. 21-A,

§ 1064(1)(E), (2).

Because of the Maine law's First Amendment implications,

it is essential that the definition of "foreign government" be

sufficiently clear to provide American companies with adequate

notice of when they must desist from otherwise protected speech.

That is especially so where a company's wrong assessment of its

speech rights exposes it to criminal penalties under a mens rea

standard that is less protective than specific intent -- the Maine

law imposes a mens rea of "knowing," which typically indicates a

general intent crime. Tit. 21-A, § 1064(9); Bryan v. United

States, 524 U.S. 184, 193 (1998) ("[U]nless the text of the statute

dictates a different result, the term 'knowingly' merely requires

proof of knowledge of the facts that constitute the offense."

(footnote omitted)).

The Supreme Court raised similar concerns in Reno v.

ACLU, 521 U.S. 844 (1997). Reno recognized that vagueness

"raise[s] special First Amendment concerns because of its obvious

chilling effect on free speech." Reno, 521 U.S. at 871-72. These

concerns are heightened when criminal penalties are involved

because "criminal sanctions may well cause speakers to remain

silent rather than communicate even arguably unlawful words." Id.

at 872. "[S]tandards of permissible statutory vagueness are [thus]

strict in the area of free expression." Keyishian v. Bd. of

- 58 - Regents of Univ. of N.Y., 385 U.S. 589, 604 (1967) (quoting NAACP

v. Button, 371 U.S. 415, 432 (1963)). "First Amendment freedoms

need breathing space to survive, [and therefore] government may

regulate in the area only with narrow specificity." Id. (quoting

NAACP, 371 U.S. at 433).

I am concerned that Maine's law fails to regulate with

the required "narrow specificity." Keyishian, 385 U.S. at 604

(quoting NAACP, 371 U.S. at 433). The definition of "foreign

government," the fulcrum on which the law pivots, is exceedingly

broad. It covers "de facto . . . political jurisdiction" exercised

by a "group" or "any subdivision of any such group" over "any part

of [any] country" other than the United States. Tit. 21-A,

§ 1064(1)(D). It also reaches "any faction or body of insurgents

within a country assuming to exercise governmental authority,

whether or not such faction or body of insurgents has been

recognized by the United States." Id.

We live in a complex world. Are the Houthis a "foreign

government" in Yemen under Maine's foreign government definition?

How about MS-13 in El Salvador? Boko Haram in Nigeria? Or even

kibbutzim in Israel? The hard calls are everywhere and endless.

That Maine requires each company to monitor what groups

or people may be purchasing its shares is difficult enough. But

the law also requires each company to make granular judgments about

the power that each "group," "subdivision of . . . such group," or

- 59 - "body of insurgents" has within any part of any country at any

time. Id. It would be a tall task for our State Department to

make these determinations. It seems to me it would be almost

impossible for a business or media group confidently to make such

judgments in constantly changing political environments.

As I see it, there is a likelihood that the "foreign

government" definition, the linchpin provision of Maine's law, is

sufficiently vague that people "of common intelligence must

necessarily guess at its meaning and differ as to its application."

Baggett v. Bullitt, 377 U.S. 360, 367 (1964) (emphasis added). If

I am right, a company otherwise wishing to participate in a Maine

election would likely abstain from political speech

entirely -- especially given the criminal penalties that may

attach from an inaccurate evaluation of the political situation in

a faraway place at any given time. See tit. 21-A, § 1064(9). It

is precisely to avoid such chilling of speech that the Supreme

Court has closely policed statutory vagueness in areas implicating

free expression. See NAACP, 371 U.S. at 432-33. As this case

returns to the district court, I urge consideration of this

potential vagueness problem.

- 60 -