The group challenging the state’s new anti-corporate law is asking the courts to suspend the law until the case is resolved.
In early June, Grassroot Institute of Hawai‘i sued state Attorney General Anne Lopez and Nadine Ando, director of the Department of Commerce and Consumer Affairs, as the first legal challenge against Act 11, a measure, signed by Gov. Josh Green in May, intended to limit the ability of corporations to spend money on political campaigns.
That lawsuit sought to have Act 11 declared “unconstitutionally void and unenforceable,” arguing that the law violates the First Amendment of the U.S. Constitution.
On Friday, Grassroot Institute filed a motion for a preliminary injunction, calling on the court to prohibit Lopez and Ando from enforcing any component of Act 11, including any sanctions or fines, for the duration of the case.
The law as written attempts to circumvent the ruling of Citizens United v. Federal Election Commission, a 2010 U.S. Supreme Court verdict that found unconstitutional the passage of laws prohibiting political spending by corporations. Champions of Act 11 have argued that it does not contradict the Citizens United verdict, but instead limits the “artificial-person powers” afforded to corporations by the state to exclude political spending.
The motion argues that Grassroot Institute, as a nonprofit with a history of advocating for or against various ballot issues throughout the years, would be negatively impacted by the enactment of Act 11.
“Act 11 is already harming Grassroot’s fundraising, as well as the plans Grassroot can make based on that fundraising,” according to the motion. “Two donors have already said that they will decrease or refrain from donations because of the Act’s restrictions.”
The motion also enumerates a number of legal arguments against Act 11, in particular that its underlying legal theory — that the state can completely control what rights a corporation has — is flawed and unsupported by Supreme Court precedent.
If followed to its logical conclusion, the motion argues, the law would ban news media like the New York Times from the state but for exceptions for “any bona fide news story … distributed through the facilities of … any print, online or digital newspaper.” This exception, the motion argues, is also a misinterpretation of the Press Clause of the First Amendment, which cannot be invoked only for specific, traditional news media.
“The state can point to nothing that would make a giant corporation that owns a newspaper any less corrupting than a small business that does not,” the motion reads. “Nor can the government argue that the media enjoys some special First Amendment protection that would justify extra protection.”
In addition to the request for a preliminary injunction against the measure, the motion also requests that the court waive any bond requirement in the case or at least reduce it to a negligible amount. It concludes by further requesting a hearing at an unspecified later date where both sides will be able to present oral arguments for 30 minutes each.
The state has so far not responded to the lawsuit.
Act 11 is set to take effect July 1, 2027.
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