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Public Finance Update Elizabeth S. Blutstein, Julianna Ebert, Brian G. Lanser, Ann M. Murphy, Jeff Peelen, Jennifer V. Powers, Michael L. Roshar, Rebecca A. Speckhard, Bridgette DeToro, Allison M. Buchanan

U.S. District Court finds limits on activities to defeat or support a referendum question to be impermissible infringement of free speech guaranteed by the First Amendment to the Constitution.

In a recent case which examined the tension between the government's legitimate interest in preventing and exposing corruption in the election arena and an individual's First Amendment rights of free speech, the Federal District Court for the Eastern District of Wisconsin issued a decision calling into question the constitutionality of the registration and reporting requirements of Wis. Stat. §11.23 with regard to individuals supporting or opposing a local referendum. The court also held that the provisions of Wis. Stat. §11.30, requiring the identification of those who pay for any communication made for the purpose of influencing a particular vote at a referendum, were not constitutional as applied. Swaffer v. Cane, No. 08-CV-2008, 2009 WL 728450 (E.D. Wis. March 16, 2009).


The facts of the case were these. The Town of Whitewater historically has been a "dry" municipality. The town board scheduled a referendum for April 1, 2008 asking town electors whether the town should permit the sale of liquor within town boundaries. One of the plaintiffs opposed the referendum and wanted to make sure his voice was heard in the community. To that end, he planned to send postcards to all town residents, urging rejection of the referendum, and to create and place yard signs throughout the town delivering the same message. He estimated the total cost for activities at about $500.

His planned activity clearly triggered an obligation to register with the appropriate filing officer and to make certain disclosures pursuant to Wis. Stat. §11.23. That statute would require him to: 

  1. File a registration statement with the town clerk;

  2. Keep a dedicated bank account;
  3. Refuse any anonymous contribution over $10.00;
  4. Keep records of all contributions received, disbursements made and obligations incurred for at least three years after the referendum and
  5. File pre-election reports and a termination statement with the Government Accountability Board.

The plaintiff argued that these provisions are so unduly onerous on individuals wishing to spend over $25 to make their voice heard on a referendum issue as to constitute an impermissible infringement of the First Amendment's free speech guarantee.


The Court acknowledged that the public's interest in knowing where political money comes from and how it is spent may justify campaign disclosure statutes which have as their goal bringing to light political corruption but distinguished that interest in a campaign for elected office from a referendum question. The decision highlights prior Supreme Court recognition that compelled disclosure of campaign-related activities can seriously infringe on privacy of association and belief guaranteed by the First Amendment. Buckley v. Valeo, 424 U.S. 1, 64 (1976). The decision notes that referendum questions and candidate elections are fundamentally different in that a referendum question directly involves the electors in the determination of a specific issue affecting them which increases the need for the open exchange of ideas from diverse sources.

The Court held that imposing the requirements of Wis. Stat. §11.23 upon an individual wishing to spend as little as $25 to advocate a position on a referendum creates an unconstitutional hindrance on that individual's First Amendment right to engage in political conversations and exchange of ideas.

The plaintiff's postcards and signs did not identify who paid for their preparation in direct violation of Wis. Stat. § 11.30, which prohibits the distribution of anonymous campaign literature. Citing a United States Supreme Court case holding a similar Ohio Statute unconstitutional, McIntyre v. Ohio Election Comm'n, 514 U.S. 334 (1995), which emphasized the importance of anonymous publications in political discourse as a "shield from the tyranny of the majority," the Court concluded that Wis. Stat. §11.30 as applied to the plaintiffs was unconstitutional.

It is important to note that the Court limited its decision to a finding that Wis. Stat. §11.23 and Wis. Stat. §11.30 were unconstitutional as applied to these plaintiffs in this case and declined to reach the issue of whether the statutes were unconstitutional on their face.

It is also important to note that the defendants chose not to even try to argue for upholding the statutes at issue here as applied to the plaintiffs. Instead, they argued that in other circumstances voters may have a compelling interest in knowing the identity of persons with a personal or financial interest in the outcome of a referendum and who are attempting to influence that outcome. The defendants argued to limit possible injunctive relief only to circumstances involving expenditures of $1,000 or less. The Court declined to re-write the statutes in such a way and left repair of the provisions in the hands of the Wisconsin legislature.


To date no appeal has been filed, and no legislation has been introduced to address the Court's concerns. Unless appealed, the validity of the statutory limits on the activities of individuals supporting or opposing referendum is in question.