MINNESOTA ASS'N OF COMMERCE, ETC. v. Foley

316 N.W.2d 524
CourtSupreme Court of Minnesota
DecidedMarch 5, 1982
Docket81-440
StatusPublished

This text of 316 N.W.2d 524 (MINNESOTA ASS'N OF COMMERCE, ETC. v. Foley) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MINNESOTA ASS'N OF COMMERCE, ETC. v. Foley, 316 N.W.2d 524 (Mich. 1982).

Opinion

316 N.W.2d 524 (1982)

MINNESOTA ASSOCIATION OF COMMERCE AND INDUSTRY, Plaintiff,
v.
Tom FOLEY, Ramsey County Attorney, Defendant, and
Warren Spannaus, Attorney General, State of Minnesota, Intervening Defendant.

No. 81-440.

Supreme Court of Minnesota.

March 5, 1982.

*526 Thomas W. Foley, County Atty., Stephen F. Befort, Prin. Asst. County Atty., and Michele L. Timmons, Asst. County Atty., St. Paul, for Foley.

Warren Spannaus, Atty. Gen., Kent G. Harbison, Asst. Atty. Gen., and D. Douglas Blanke, Sp. Asst. Atty. Gen., St. Paul, for Spannaus.

Popham, Haik, Schnobrich, Kaufman & Doty and Bruce Willis, Minneapolis, for plaintiff.

Peterson, Engberg & Peterson, Roger A. Peterson and Jay Y. Benanav, Minneapolis, amicus curiae.

Heard, considered and decided by the court en banc.

SCOTT, Justice.

This case involves the certification of the following three questions to this court by the Federal District Court of Minnesota:

(1) Does Minn.Stat. § 210A.34 (1980) permit the establishment and maintenance of any form of corporate "political action committee," or "PAC"?
(2) Does Minn.Stat. § 72A.12, subd. 5 (1980), permit an insurance company or association to establish and maintain any form of "political action committee," or "PAC"?
(3) Do the prohibitions of Minn.Stat. § 210A.34 (1980) apply to nonprofit corporations?

The Minnesota Association of Commerce and Industry (MACI) is the plaintiff in an action pending before the Federal District Court. MACI, a Minnesota nonprofit corporation representing the interests of 2,600 members, challenges the constitutionality of the two statutes cited above in that action and has preserved that constitutional challenge in the federal court. Our sole function in this case is to answer the specific certified questions.

The relevant portions of the two statutes to be construed are as follows:

It shall be unlawful for any corporation doing business in this state to make any contribution or to offer, consent or agree to make any contribution, directly or indirectly, of any money, property, free service of its officers or employees or thing of value to any political party, organization, committee or individual to promote or defeat the candidacy of any person for nomination, election, or appointment to any political office. For the purpose of this subdivision, "contribution" includes an expenditure to promote or defeat the election or nomination of any candidate to any political office which is made with the authorization or expressed or implied consent of, or in cooperation or in concert with, or at the request or suggestion of a candidate, his principal campaign committee or his agent.

Minn.Stat. § 210A.34, subd. 1 (1980).

No insurance company or association, including fraternal beneficiary associations, doing business in this state, shall, directly or indirectly, pay or use, or offer, consent or agree to pay or use, any money or *527 property for or in aid of any political party, committee or organization, or for or in aid of any corporation, joint stock or other association organized or maintained for political purposes, or for or in aid of any candidate for political office, or for nomination for such office, or for any political purpose whatsoever, or for reimbursement or indemnification of any person for money or property so used. Any officer, director, stockholder, attorney or agent of any corporation or association which violates any of the provisions of this section, who participates in, aids, abets, or advises or consents to any such violation, and any person who solicits or knowingly receives any money or property in violation of this section, shall be guilty of a gross misdemeanor, and any officer aiding or abetting in any contribution made in violation of this section shall be liable to the company or association for the amount so contributed.

Minn.Stat. § 72A.12, subd. 5 (1980).

The parties agree that there are three forms of political action committees or "PAC's." The first type, partisan PAC's, are "separate funds collected and maintained by corporations or corporate committees, which not only provide all administrative support for the funds but also direct the payments out of the funds to political candidates designated by the sponsoring corporation." The second type of PAC is referred to by the parties as a "conduit" or "nonpartisan" PAC. In the conduit PAC, individual contributors, e.g., corporation employees, may specify the particular candidates to whom they wish to make a donation. The sponsoring organization, however, still provides free administrative (clerical, staff, physical space, accounting, etc.) support for the PAC. The third type of PAC is the "independent" PAC, which is sponsored by an organization in name only, but receives no direct or indirect subsidy from the sponsoring organization and only supports candidates designated by its contributors.

Each of the parties takes a different position on the permissibility under the state statutes of the three types of PAC's. On the third certified question concerning the applicability of Minn.Stat. § 210A.34 (1980) to nonprofit corporations, there is also a divergence of opinion. We answer the first two certified questions in the affirmative, as qualified, and the third in the negative.

1. Political action committees, or PAC's, take their name from an early entity established by the executive board of the Congress of Industrial Organizations (CIO) in 1943. Cf. Pipefitters Local 562 v. United States, 407 U.S. 385, 403-08, 92 S.Ct. 2247, 2258-61, 33 L.Ed.2d 11 (1972) (historical discussion). However, it would not be unfair to say that the PAC phenomenon "exploded" when federal campaign financing reforms of the 1970's created an environment in which PAC's could flourish.[1]See Alexander, The Obey-Railsback Bill: Its Genesis and Early History, 22 Ariz.L.Rev. 653, 653 (1980).

Though begun by a labor organization in the 1940's, the 1970's were the decade of the corporate PAC:

In 1970, there were some three hundred identifiable PAC's, most of which were affiliated with organized labor. * * *
Currently there are almost 2,500 PAC's registered with the Federal Election Commission [FEC] and uncounted others have filed with public bodies responsible for regulating state and local elections. * * * Of the PAC's registered with the FEC, 1,153 are affiliated with corporations, 290 are affiliated with labor unions, *528 and approximately 1,000 fall into other categories * * *. Conservatively, one-half of the PAC's in the other categories may be considered business-related PAC's.

Epstein, The PAC Phenomenon: An Overview, 22 Ariz.L.Rev. 355, 356 (1980) (footnote omitted).

When enacted originally in 1912, Act of June 20, 1912, ch. 3, § 26, 1912 Minn.Laws Ex.Sess. 34,[2] no explicit reference was made to political action committees as they are presently constituted, because they are a recent phenomenon. Subsequent amendments and recodifications of the statute also make no explicit provision for corporate PAC's.

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Minnesota Ass'n of Commerce & Industry v. Foley
316 N.W.2d 524 (Supreme Court of Minnesota, 1982)

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