N.J. Bankers Ass'n v. Attorney Gen. N.J.

49 F.4th 849

NEW JERSEY BANKERS ASSOCIATION

v.ATTORNEY GENERAL NEW JERSEY

New Jersey Bankers Association, Appellant in No. 21-2352

Attorney General New Jersey, Appellant in No. 21-2433

Nos. 21-2352

21-2433

United States Court of Appeals, Third Circuit.

Argued July 14, 2022

Filed: September 28, 2022

John D. Haggerty, Lawrence S. Lustberg, Gibbons, One Gateway Center, Newark, NJ 07102, Rachel Rodman [ARGUED], Cadwalader Wickersham & Taft, 700 Sixth Street, N.W., Washington, DC 20001, Jonathan M. Watkins, Cadwalader Wickersham & Taft, 650 South Tryon Street, Charlotte, NC 28202, Counsel for Appellant

Endel Kolde, Institute for Free Speech, 1150 Connecticut Avenue, N.W., Suite 801, Washington, DC 20036, Jonathan S. Franklin, Independent Community Bankers of America, American Bankers Association, Norton Rose Fulbright, 799 9th Street, N.W., Suite 1000, Washington, DC 20001, Counsel for Amicus Appellant

Matthew J. Platkin, Acting Attorney General of New Jersey, Jeremy M. Feigenbaum, State Solicitor, Melissa Dutton Schaffer, Assistant Attorney General, Melissa Fich, Timothy Sheehan [ARGUED], Deputy Attorneys General, Office of Attorney General of New Jersey, Division of Law, 25 Market Street, Hughes Justice Complex, Trenton, NJ 08625, Counsel for Appellee

Paul M. Smith, Campaign Legal Center, 1101 14th Street, N.W., Suite 400, Washington, DC 2005, Counsel for Amicus Appellee

Before: GREENAWAY, JR., MATEY, and NYGAARD, Circuit Judges.

OPINION OF THE COURT

GREENAWAY, JR., Circuit Judge.

In this appeal, New Jersey Bankers Association ("NJBA") asks us to reverse the District Court's holding that the contribution ban in N.J. Stat. Ann. § 19:34-45 [hereinafter § 19:34-45 ] does not contravene the First Amendment. The Attorney General of New Jersey ("Attorney General") seeks reversal of the District Court's holding that § 19:34-45 encompasses independent expenditures in violation of the First Amendment. Because we hold that § 19:34-45 does not apply to trade associations of banks, we resolve the case on statutory grounds and decline to reach these First Amendment issues. We will reverse the judgment of the District Court and remand.

I. Background

NJBA is a non-profit member-funded trade association representing 88 banks headquartered in or with branches in New Jersey. It seeks to make independent expenditures and contributions to political parties and campaigns for state and local office in New Jersey. However, it has not made these payments based on the concern that the Attorney General would enforce § 19:34-45 against it.

Section 19:34-45 provides that, among other specified corporations, "[n]o corporation carrying on the business of a bank ... shall pay or contribute money or thing of value in order to aid or promote the nomination or election of any person, or in order to aid or promote the interests, success or defeat of any political party." In its complaint, NJBA alleged that this statute prohibits it from making independent expenditures and contributions to political parties and campaigns. Throughout this case, NJBA has made no contributions to any New Jersey political party or campaign. It began making independent expenditures only after the District Court invalidated § 19:34-45's prohibition on independent expenditures.

To secure the ability to make independent expenditures and contributions without fear of enforcement under § 19:34-45, NJBA sued the Attorney General of New Jersey in the United States District Court for the District of New Jersey on November 6, 2018. It purported to bring a facial challenge to § 19:34-45 on its own behalf and on behalf of third-party banks. In Count One, NJBA alleged that § 19:34-45 encompasses independent expenditures in violation of the First Amendment. In Count Two, NJBA alleged that § 19:34-45's complete prohibition on contributions by certain corporations is unconstitutional because the statute is not closely drawn to serve the important state interest in combatting quid quo pro corruption or its appearance. NJBA sought a declaratory judgment that the ban on independent expenditures and contributions is unconstitutional. It also sought an injunction prohibiting the Attorney General from enforcing the ban on independent expenditures and contributions.

On June 21, 2021, the District Court granted summary judgment in favor of NJBA on Count One, holding that § 19:34-45 prohibits independent expenditures in violation of the First Amendment. It rejected the Attorney General's argument that the statute bars only campaign contributions. Accordingly, it issued a declaratory judgment that the statute "does not ban any entity from making independent expenditures." J.A. 24-25.

With regard to Count Two, the District Court granted summary judgment in favor of the Attorney General, holding that § 19:34-45's ban on political contributions by certain corporations does not violate the First Amendment. It held the statute passes intermediate scrutiny. First, it concluded that the statute advances the state's legitimate interest in preventing quid pro quo corruption or its appearance. Second, it determined that the statute is closely drawn to its anti-corruption purpose. On this point, the District Court observed that 18 other states have laws banning contributions by some or all corporations—and, in its view, these laws have a scope that is similar to or broader than the New Jersey law. The District Court also noted that statutory alternatives, such as contribution limits and disclosure requirements, would not be as effective in combatting corruption. NJBA appealed the grant of summary judgment on Count Two. The Attorney General cross appealed the grant of summary judgment on Count One.

II. Jurisdiction and Standard of Review

The District Court had jurisdiction pursuant to 28 U.S.C. § 1331. We have jurisdiction pursuant to 28 U.S.C. § 1291.

Summary judgment is appropriate where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). We review the order granting summary judgment, including the factual and legal questions, de novo. Ezaki Glico Kabushiki Kaisha v. Lotte Int'l Am. Corp. , 986 F.3d 250, 255 (3d Cir. 2021) ; see also Perelman v. Perelman , 793 F.3d 368, 373 (3d Cir. 2015) (exercising de novo review over the District Court's legal conclusions relating to standing). We "view the underlying facts and all reasonable inferences therefrom in the light most favorable to the party opposing the motion." Eisai, Inc. v. Sanofi Aventis U.S., LLC , 821 F.3d 394, 402 (3d Cir. 2016) (internal citation and quotation marks omitted).

III. NJBA's Article III Standing and Remedy

NJBA has sought to bring a facial challenge to § 19:34-45 on behalf of itself and third-party banks. Although the parties did not raise standing as an issue in their opening briefs, standing is a "threshold jurisdictional requirement" and we "have an obligation to examine our own jurisdiction." Interfaith Cmty. Org. v. Honeywell Int'l, Inc. , 399 F.3d 248, 254 (3d Cir. 2005) (quoting Pub. Int. Rsch. Grp. of N.J., Inc. v. Magnesium Elektron, Inc. , 123 F.3d 111, 117 (3d Cir. 1997) ); see also In re Imerys Talc Am., Inc. , 38 F.4th 361, 370 (3d Cir. 2022) (identifying standing as "a threshold matter"). First, we consider whether NJBA has standing to sue on its own behalf. We conclude that it does.

A. Article III Standing Requirements

Article III requires a showing that the plaintiff has: "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant,¹ and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins , 578 U.S. 330, 338, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016), as revised (May 24, 2016) (citing Lujan v. Defs. of Wildlife , 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ; Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc. , 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) ).

With regard to the injury in fact element, "we do not require a plaintiff to expose himself to liability before bringing suit to challenge the basis for the threat." MedImmune, Inc. v. Genentech, Inc. , 549 U.S. 118, 128-29, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007). Instead, courts have held that a credible threat of prosecution under an allegedly unconstitutional statute constitutes an injury in fact. See Babbitt v. United Farm Workers Nat'l Union , 442 U.S. 289, 298, 99 S.Ct. 2301, 60 L.Ed.2d 895 (1979). The threat may not be merely "imaginary or wholly speculative." Susan B. Anthony List v. Driehaus , 573 U.S. 149, 160, 134 S.Ct. 2334, 189 L.Ed.2d 246 (2014) (quoting Babbitt , 442 U.S. at 302, 99 S.Ct. 2301 ).

The Supreme Court has articulated three factors for establishing "a credible threat of enforcement." Id. at 161, 134 S.Ct. 2334 (citing Babbitt , 442 U.S. at 298, 99 S.Ct. 2301 ). First, there must be "an intention to engage in a course of conduct arguably affected with a constitutional interest." Id. (quoting Babbitt , 442 U.S. at 298, 99 S.Ct. 2301 ). Second, the intended conduct must be "arguably ... proscribed by [the] statute" that the plaintiff seeks to challenge. Id. at 162, 134 S.Ct. 2334 (quoting Babbitt , 442 U.S. at 298, 99 S.Ct. 2301 ) (alteration in original). Arguably proscribed is not a stringent test. In Susan B. Anthony List , the Supreme Court deemed it sufficient that a statute appeared broad enough to cover the intended conduct. Id. at 162, 134 S.Ct. 2334. The Supreme Court also relied on the fact that the entity charged with identifying statutory violations had previously interpreted the statute as applying to the intended conduct. Id.

Third, the plaintiff must face a "substantial" "threat of future enforcement" under the statute.

Id. at 164, 134 S.Ct. 2334. For this inquiry, we consider the "history of past enforcement." Id.

B. NJBA Satisfies Article III...