COFFEY, Circuit Judge.
Brownsburg Area Patrons Affecting Change ("BAPAC") and its founder and leader, John Patten,
I. BACKGROUND
BAPAC is a group of citizens located in Hendricks County, Indiana, organized to inform and educate local citizens on political, social, and economic issues; to act as a conduit for presenting citizens' views to local public officials; and to advise citizens on the positions of local public figures. BAPAC describes itself as non-partisan and voluntary, with no officials or board members. BAPAC accomplishes its mission in part by recording and disseminating information on a telephone hotline regarding candidates' positions on issues. The hotline message sometimes indicates whether a candidate's position is in accordance with the views of BAPAC. BAPAC also prepares and distributes flyers on various candidates and issues.
Prior to the primary election in May 1996, BAPAC aired a message on its hotline that discussed certain candidates' positions on various issues. On June 6, 1996, William Daily, the chairman of the Hendricks County Election Board ("Board"), sent a letter to BAPAC indicating that BAPAC might be considered a "political action committee" ("PAC") as defined by Indiana law.
In September 1996, BAPAC filed a complaint and a motion for a preliminary injunction in federal district court. BAPAC alleges that the definition of "political action committee" under Indiana election law is unconstitutionally overbroad because it impermissibly regulates "issue advocacy," that is, advocacy on politically or socially relevant issues that is not associated with express advocacy in support of certain candidates or electoral outcomes. BAPAC also seeks to challenge the law on the ground that the definition of a PAC includes groups whose "major purpose" is not to engage in express advocacy. BAPAC sought a preliminary injunction to prevent the enforcement of the alleged unconstitutional Indiana election law provisions. On October 11, 1996, the district court held a hearing on the motion for a preliminary injunction. The district court issued its written decision on October 23, 1996, denying the request for a preliminary injunction because it concluded that BAPAC did not possess a likelihood of success on the merits. The district court found that the Indiana statutory language did not regulate issue advocacy based on the Supreme Court's interpretation of similar language in the Federal Election Campaign Act of 1971. See Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976). Because BAPAC engaged only in issue advocacy, the district court concluded that it was not a PAC under Indiana law; accordingly, the preliminary injunction was not necessary. Since BAPAC was not a PAC, the district court stated that it did not possess standing to challenge the constitutionality of the statute on the alternate ground that its major purpose was not to engage in express advocacy.
II. ANALYSIS
At oral argument, we asked counsel for BAPAC whether this case was suitable for certification to the Supreme Court of Indiana as it appeared to turn so decisively on the Indiana court's interpretation of its own law. Although BAPAC stated that certification was unnecessary, we conclude that it is and certify this case.
A. District Court's Interpretation of State Law
BAPAC is in the peculiar position of challenging the constitutionality of the Indiana election statute in this court when it essentially prevailed in the district court on statutory interpretation grounds. The district court held that the definition of a PAC does not include organizations engaged only in issue advocacy, and consequently, that BAPAC is not a PAC as defined by Indiana law and so need not comply with the registration and reporting requirements imposed on PACs in Indiana. BAPAC, however, argues now that the district court's interpretation of the statute is incorrect, and thus, asserts that its request for a preliminary injunction should not have been denied. It argues that, in fact, it is a PAC as defined by Indiana statute and accordingly, that the Indiana statute is unconstitutional because it regulates issue advocacy, the only activity in which BAPAC is engaged.
In Buckley, the Supreme Court addressed various constitutional challenges to the Federal Election Campaign Act of 1971 ("FECA"). The Court recognized the important First Amendment interest in protecting political speech, including discussions surrounding elections and candidates. Buckley, 424 U.S. at 14, 96 S.Ct. at 632 ("The First Amendment affords the broadest protection to such political expression in order to `assure
The Indiana statute defines PACs, in part, as groups that spend more than $100 to "influence the election of a candidate ... or the outcome of a public question." Ind.Code § 3-5-2-37(a)(1). The district court construed the phrase "influence the election of a candidate ... or the outcome of a public question" to mean "expressly advocate the election or defeat of a clearly defined candidate." Because BAPAC engages only in issue advocacy rather than express advocacy, the district court concluded that BAPAC would not fall within this definition and thus would not be considered a PAC. Accordingly, the district court stated that BAPAC lacked standing to challenge the constitutionality of the statute based on the "major purpose" test.
The district court based its construction of the Indiana statutory language on the Supreme Court's interpretation of similar language in FECA. FECA required any individual or group (other than a political committee or candidate) who made contributions or expenditures aggregating over $100 in a calendar year to file a statement with the Federal Election Commission. Buckley, 424 U.S. at 74-75, 96 S.Ct. at 660-62. The definitions of "contributions" and "expenditures" were based on whether the money was used "for the purpose of ... influencing" the nomination or election of a candidate. The Court concluded that while such language could include "both issue discussion and advocacy of a political result," it would narrowly construe the statute to apply only to expenditures that were used to "expressly advocate the election or defeat of a clearly identified candidate." Id. at 80, 96 S.Ct. at 664.
The district court noted the similarities between the language in FECA and the language used in the Indiana election statute when it was passed in 1976.
Ind.Code § 3-4-1-6(a) (1981) (emphasis added). An "expenditure" was defined as:
Ind.Code § 3-4-1-10(a) (1981) (emphasis added). The district court noted that the similarities between the Indiana statute and FECA were "strong and obvious."
In addition to the similarity of the language in both the federal and state statutes, the district court noted that the Indiana statute had been enacted just four weeks after the decision in Buckley. Moreover, the district court recognized the statutory interpretation principle that when a legislature
B. Preliminary Injunction
In order to prevail on its motion for a preliminary injunction, BAPAC must show: "(1) some likelihood of prevailing on the merits, and (2) an inadequate remedy at law and irreparable harm if preliminary relief is denied." TMT North America, Inc. v. Magic Touch GmbH, 124 F.3d 876, 881 (7th Cir. 1997). If it demonstrates these two elements, then the court considers the irreparable harm to the defendants if preliminary relief is granted as balanced against the irreparable harm to BAPAC if preliminary relief is denied, and the public interests involved. Id. (citing Grossbaum v. Indianapolis-Marion County Bldg. Auth., 100 F.3d 1287, 1291-92 (7th Cir.1996), cert. denied, ___ U.S. ___, 117 S.Ct. 1822, 137 L.Ed.2d 1030 (1997)). We review the district court's legal conclusions de novo, while our review of factual findings is for clear error. Id.
We agree with the district court that BAPAC has demonstrated irreparable harm and an inadequate remedy at law. BAPAC's position that it has ceased its activities due to fear of prosecution for not satisfying the reporting and disclosure requirements is sufficient to demonstrate irreparable injury.
Before we may proceed to the balancing of interests, however, we must decide if BAPAC has shown that there is a likelihood of success on the merits. According to BAPAC, success on the merits would be a conclusion that the Indiana election provision at issue is overbroad and is thus unconstitutional. Federal courts must interpret a state statute as that state's courts would construe it. See Konradi v. United States, 919 F.2d 1207, 1213 (7th Cir.1990) ("The decision of a federal court in a diversity case, or in any other case in which state law supplies the rule of decision, is an exercise in predicting how the highest court of the state would decide the case if it were presented to it."). Accordingly, in order to determine whether BAPAC would have a likelihood of success on the merits, we must attempt to divine how the Supreme Court of Indiana would interpret the definition of a "political action committee" as stated in the Indiana election statute.
These possibly competing principles of statutory interpretation lead us to conclude that the most prudent course of action is to certify this case to the Supreme Court of Indiana pursuant to this circuit's Rule 52.
It is true that the district court has not enjoined the statute, and thus the Indiana state courts still have the opportunity to pass judgment on the Indiana election provisions at some point in the future. We also acknowledge that the Supreme Court of Indiana has provided some direction as to how it would approach a statutory interpretation issue such as this one. However, the United States Supreme Court recently reminded us that "`[s]peculation by a federal court about the meaning of a state statute in the absence of prior state court adjudication is particularly gratuitous when ... the state courts stand willing to address questions of state law on certification from a federal court.'" Arizonans for Official English v. Arizona, ___ U.S. ___, ___, 117 S.Ct. 1055, 1074, 137 L.Ed.2d 170 (1997) (quoting Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 510, 105 S.Ct. 2794, 2805, 86 L.Ed.2d 394 (1985) (O'Connor, J., concurring)). Thus, in the interests of comity, certification is entirely appropriate in this case.
Moreover, an interpretation of the statute by Indiana's highest court will be outcome determinative. See Shirley v. Russell, 69 F.3d 839, 844 (7th Cir.1995) ("Certification is appropriate only when the question of state law will control the outcome of the case."). BAPAC acknowledges that the federal courts are unable to provide an authoritative reading of the Indiana election statute. See Appellants' Brief at 20 (citing Gooding v. Wilson, 405 U.S. 518, 520-21, 92 S.Ct. 1103, 1105-06, 31 L.Ed.2d 408 (1972), and Kucharek v. Hanaway, 902 F.2d 513, 517 (7th Cir.1990) ("an important difference between interpretation of a state statute by a federal court and by a state court is that only the latter interpretation is authoritative")). Regardless of how well we might anticipate the Supreme Court of Indiana's interpretation of this statutory provision, authorities in Indiana would not be bound by our determination at this point in the litigation. See Kucharek, 902 F.2d at 517 ("If the district judge had read Wisconsin's new ... statute so narrowly as to obviate all constitutional questions, it would still be possible for the state to prosecute people for violating the statute as broadly construed, because the enforcement of the statute would not have been enjoined."). Accordingly, we provide the state court with the opportunity to make a definitive ruling on this issue.
During oral argument, BAPAC argued against certification due to the delay it would create in obtaining a final adjudication on the injunction. We understand that a prompt resolution of the issues is critical in a case such as this where fear of prosecution may be chilling one party's freedom of expression. However, we must also always be careful not to overstep our boundaries in deciding an issue with results that almost exclusively impact Indiana citizens. Id. ("As a matter of comity, states ought to have th[e] opportunity [to interpret a state statute constitutionally]—even at the price of some delay in the winding up of litigation as the parties adjourn the federal suit to seek the guidance of the state court — unless the statute simply is not susceptible of a narrowing interpretation."). Such an important determination is better left to the state's highest court. See Stephan v. Rocky Mountain Chocolate Factory, Inc., 129 F.3d 414, 418 (7th Cir.1997) ("Although neither party here has requested certification, we are free to certify questions on our own motion.").
The clerk of this court shall transmit the briefs and appendices in this case as well as a copy of this opinion to the Supreme Court of Indiana. Further proceedings in this court are stayed while this matter is considered by the Supreme Court of Indiana.
QUESTION CERTIFIED.
FootNotes
Ind.Code § 3-5-2-37(a)(1) (1996).
The Supreme Court of Indiana permits certification to its court under Indiana Rule of Appellate Procedure 15(O) which states:
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