Quentin Riegel, NAM’s Vice President, Litigation, and Deputy General Counsel was at today’s oral arguments in NAM v. Taylor, the association’s lawsuit challenging the “affiliated organizations” provision of Honest Leadership and Open Government Act of 2007. His report follows:

Tom Kirby of Wiley Rein argued on behalf of the NAM today in the U.S. Court of Appeals for the D.C. Circuit in our challenge to Section 207 of the Honest Leadership and Open Government Act of 2007, which requires the NAM and other organizations with lobbyists to disclose the names of certain members who actively participate in its internal lobbying discussions and related activities.

The panel consisted of Judges Karen LeCraft Henderson, Doug Ginsburg and Merrick Garland. Each side was given 15 minutes. Kirby spent much of his time describing how the statute is unconstitutionally vague and imposes “a virtually impossible burden” on the NAM with the possibility of criminal sanctions for violations. Criminal statutes must be clear so that potential defendants know how to comply. He explained the difficulty of knowing how a government prosecutor will evaluate intent to violate the statute since there is no objective bright-line rule defining “active participation” in lobbying activities. It is impossible to know whether the intent of a member company is to engage in efforts in support of lobbying contacts when that company’s employees participate in NAM meetings, teleconferences or other activities. The vagueness of the statute is particularly problematic for an organization like the NAM that holds over 100 meetings a month and that has nearly 11,000 companies as members. The statute produces strong pressure to over-report, and the NAM cannot tell its members what kinds of activities will or will not qualify as active participation.

Judge Garland asked about the exception for listing the entire membership on an Internet site, but Kirby explained the confidential nature of the NAM’s membership, and the problems of complying with the alternative, which requires quarterly disclosure of different lists of members depending on the level of participation and whether dues or similar amounts are paid during the quarter. He said that the statute produces a “patchwork and virtually random” disclosures that do not satisfy any compelling governmental interest. There is no more central interest in the First Amendment that the statute infringes upon: the efforts of people to engage in petitioning the government for redress of grievances.

Judge Ginsburg asked whether there is any harm in over-reporting the names of members who participate in the NAM’s lobbying activities, and Kirby responded that that would deter members from participating at all. A narrow construction of the statute’s requirements would help companies adjust their level of participation and would help the NAM advise members and structure their activities to try to minimize the impact on their First Amendment rights. Judge Ginsburg also asked whether “active participation” is a redundancy, which led to a discussion at the heart of the vagueness issue. Only one other court accepted the term in another context, only because it was clarified in 3,000 adjudications over its meaning.

Two government attorneys, Nicholas Bagley and Thomas Caballero, argued on behalf of the U.S. Attorney’s office and the Clerk of the House and Secretary of the Senate. Bagley argued that the statute bears a substantial relationship to the government interests of good government, confidence in government officials, and identifying the real parties behind group lobbying efforts. He said the NAM has no evidence that companies have been retaliated against for being involved in NAM lobbying [although the record was closed before any reports were filed]. He downplayed the possibility of liability arising from an “honest mistake,” and pointed to the guidance provided by the House and Senate regarding “active participation.” Judge Garland replied that the guidance is not binding, and Judge Ginsburg noted that the guidance was not voted on and was released after the statute was on the books. Bagley stated that the U.S. Attorney can “freelance” by bringing suits even where the House and Senate have not referred cases of noncompliance to be prosecuted, but that he is “unlikely” to disagree with the House and Senate guidance.

Caballero downplayed the breadth of the statute, saying that it only requires reporting of companies that participate in the “planning, supervising and controlling” of lobbying activities. He noted that the House and Senate do not issue advisory opinions, nor do they have any preclearance mechanisms.

It is of course difficult to read the tea leaves on how the court will resolve this case. The judges did not ask any tough questions of the government lawyers, but seemed genuinely interested in the difficulties of compliance. There were several other key issues raised in the briefs but not discussed at length in the oral argument, relating to the standard of review, the government’s interest in lobbying disclosure, the burdens on First Amendment rights, and whether the law is effective and narrowly tailored to achieve legitimate objectives. We expect a decision in the next several months.

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