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Fourth Circuit Rules Maryland Online Political Ad Law Unconstitutional

By Max Mishkin

The United States Court of Appeals for the Fourth Circuit has affirmed a victory by a coalition of newspapers that publish in Maryland in their challenge to a state law that would have placed significant burdens on them as platforms hosting online political advertisements. In a 3-0 published decision, the court held that the obligations the law imposes on the news organizations' websites are contrary to the First Amendment. Washington Post v. McManus, No. 19-1132, 2019 U.S. App. LEXIS 36245 (4th Cir. Dec. 6, 2019).

Background

In the wake of the 2016 election, out of concern over efforts by foreign countries – particularly Russia – to influence U.S. voters through digital misinformation, Maryland passed the Online Electioneering Transparency and Accountability Act (the "Act"), which took effect in July 2018. Unlike traditional regulation of political advertising, the Act regulates the platforms hosting political ads in addition to the ad purchasers themselves. In particular, the Act requires newspapers and other organizations that host online campaign and issue ads to (1) publish information about political ads within 48 hours of the purchase of an ad, including proprietary details about ad pricing; (2) undertake complex and costly new recordkeeping obligations, with the State being able to demand records on 48 hours' notice; and (3) face the risk of injunctions and possible civil or criminal sanctions for hosting noncompliant ads, with no guaranteed notice or opportunity to object.

In August 2018, a coalition of news organizations filed a lawsuit in the United States District Court for the District of Maryland to block enforcement of the Act. The plaintiffs ranged from publishers of large newspapers like The Washington Post and The Baltimore Sun to publishers of smaller papers throughout every region of Maryland, as well as the Maryland-Delaware-DC Press Association, which represents most of the newspapers in Maryland. The coalition challenged the Act on several grounds, but principally under the First Amendment.

The District Court's Ruling

The key legal issue in dispute before the district court was how it should analyze Maryland's law. The publisher plaintiffs invoked a line of cases holding that statutes that compel speech, restrict political speech, or regulate speech because of its content generally must satisfy "strict scrutiny," such that they must advance a "compelling interest" and be "narrowly tailored to achieve that interest." Maryland and its amici instead characterized the statute as a routine campaign disclosure regulation that was subject to more relaxed review under a lower standard, called "exacting scrutiny." Under that standard, which emanates from cases dealing with the funding of political campaigns, such as Buckley v. Valeo and Citizens United v. FEC, the government must show that the law is "substantially related" to an "important" interest.

On January 4, 2019, the district court agreed with plaintiffs that strict scrutiny should apply, and found that the Act could not survive that test. Washington Post v. McManus, 355 F. Supp. 3d 272 (D. Md. 2019). For good measure, the court also found that, even if exacting scrutiny applied, the statute would fail that test as well. Although the court recognized that Maryland had legitimate concerns about foreign election interference, the court found that the burdens imposed by the law were not a good fit in achieving that goal.

Specifically, the district court observed that foreign bad actors have relied principally on unpaid social media, not paid ads, and have focused on stoking outrage through divisive social issues rather than directly promoting candidates or political parties. In addition, because the Act requires advertisers to self-identify to publishers, it would be ineffective at combatting foreign influence because any "self-respecting foreign operative" would easily circumvent the Act's identification requirements.

As the district court concluded, "While there is no denying that states have a strong interest in countering newly emerging threats to their elections, the approaches they choose to take must not encroach on First Amendment freedoms that are the hallmark of our nation. Maryland's statute appears to overstep these bounds."

The district court accordingly blocked Maryland from enforcing the Act against the publisher plaintiffs. Maryland appealed.

Fourth Circuit's Decision

The Fourth Circuit unanimously affirmed the district court in a ruling issued December 6, 2019. In a 30-page opinion authored by Judge J. Harvie Wilkinson III, and joined by Judges Diana Gribbon Motz and Henry F. Floyd, the appeals court held that "the lodestar for the First Amendment is the preservation of the marketplace of ideas" and that "each banner feature of the Act—the fact that it is content-based, targets political expression, and compels certain speech—poses a real risk of either chilling speech or manipulating the marketplace of ideas."

The court further explained that, because the Act imposes obligations on third-party publishers of political ads—and not only on the political speakers themselves—it differs from regulatory regimes that have been held to be constitutional in the past. That is because the Act creates a disincentive for platforms to publish political ads, as opposed to other kinds of advertising content, at great potential cost to political debate.

Unlike the district court, which concluded that the Act is subject to "strict scrutiny" rather than "exacting scrutiny," the Fourth Circuit opted "not to decide whether strict or exacting scrutiny should apply" because "the disparity between Maryland's chosen means and purported ends is so pronounced" that "the Act fails even the more forgiving standard of exacting scrutiny." The court emphasized, however, that "neither standard is deferential—both place high hurdles before the government," observing that "strict scrutiny, in practice, is virtually impossible to satisfy, while exacting scrutiny is merely difficult."

The court noted its "respect" for "how states choose to carry out their responsibilities" in overseeing campaigns and elections. But, the court concluded, "that respect has bounds—and here, Maryland has crossed them. Despite its admirable goals, the Act reveals a host of First Amendment infirmities: a legislative scheme with layer upon layer of expressive burdens, ultimately bereft of any coherent connection to an offsetting state interest of sufficient import."

The plaintiff news organizations were represented by Seth D. Berlin, Paul Safier, and Max Mishkin of Ballard Spahr LLP. Maryland was represented by Assistant Attorney General Andrea W. Trento.

 
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