CA4: Abandons prior standard in wake of Winter

In a case involving free speech during the Presidential election, the Fourth Circuit rejected its own prior precedent regarding the standard for a preliminary injunction in light of Winter v. Natural Resources Defense Council, Inc.

In a case involving free speech during the Presidential election, the Fourth Circuit rejected its own prior precedent regarding the standard for a preliminary injunction in light of Winter v. Natural Resources Defense Council, Inc., 129 S.Ct. 365 (2008)(see our summary here). Previously, the Fourth Circuit had conducted a balancing of hardships test and only required a showing of a serious question on the merits. The Fourth Circuit found that Winter required demonstration of a likelihood of success on the merits and irreparable harm.  Utilizing this stricter test, the court of appeals  affirmed the denial of a preliminary injunction. Real Truth About Obama, Inc. v. Federal Election Commission, --- F.3d ----, 2009 WL 2408735 (C.A.4 (Va.))(August 05, 2009)(No. 08-1977). The panel included Circuit Judge Niemeyer (Bush I; writing), Senior Circuit Judge Beam of the Court of Appeals for the Eighth Circuit, sitting by designation (Reagan), and District Judge Anderson of the District of South Carolina (Reagan).

 

Real Truth About Obama, Inc. (“Real Truth”), a group organized as a tax-exempt issue-advocacy group under section 527 of the Internal Revenue Code, challenged Federal Election Commission (“FEC”) regulations it feared it would violate with proposed anti-Obama radio advertisements during the 2008 election. Real Truth argued that the FEC’s expected regulation of its advocacy for the defeat of then-candidate Obama was based upon unconstitutionally vague and overbroad provisions in violation of its rights to free speech. The District Court denied a preliminary injunction. Utilizing the standard for federal preliminary injunctions introduced by Winter, the District Court found that Real Truth was unlikely to succeed on the merits of its complaint as the challenged provisions were almost identical to those approved by the Supreme Court in similar First and Fifth Amendment free speech cases, thus failing to satisfy the first of the four required parts of the Winter standard. For example, as noted by the District Court, the Supreme Court’s recent decision in FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 (2007), upheld virtually identical regulatory language against the same type of constitutional challenge.

 

On appeal, the Fourth Circuit affirmed the denial of the preliminary injunction. Previously, under Blackwelder Furniture Co. of Statesville v. Seilig Manufacturing Co., 550 F.2d 189 (4th Cir.1977), the Fourth Circuit had allowed the issuance of preliminary injunctions in the event that the likelihood of irreparable harm to the plaintiff outweighed that to the defendant and the merits posed “serious, substantial, difficult and doubtful” questions. However, the court of appeals concluded that Winter has rendered this balancing of hardships test obsolete .The Fourth Circuit held that the plaintiff must make a “clear showing” of each of the following: “[1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.”

 

Justice Ginsburg’s dissent in Winter asserted that the majority opinion did not reject a sliding scale approach to a preliminary injunction in which the strength of likelihood of success on the merits outweighed a lower likelihood of harm.  129 S.Ct. at 392.  The Fourth Circuit clearly rejected Ginsburg’s interpretation of Winter and viewed the majority opinion as requiring the plaintiff to prevail on all four factors. This trend toward a restrictive interpretation of Winter has recently been followed in the Ninth Circuit as well, perhaps unsurprisingly in light of the fact that it was the court immediately reversed by Winter. See, e.g., Sierra Forest Legacy v. Rey, 2009 WL 2462216 (9th Cir.(Cal.)) ( August 13, 2009) (No. 07-16892); Stormans, Inc. v. Selecky, 571 F.3d 960 (9th Cir.(Wash.)) ( July 08, 2009) (No. 07-36039, 07-36040).

 

Commenting “we do not decide the merits nor intend to foreclose any outcome on the merits,” the Fourth Circuit reviewed the District Court’s application of the Winter test to Real Truth’s motion for a preliminary injunction.  The appellate court agreed that Real Truth failed to meet the first prong through its inability by a “clear showing” to demonstrate it was “likely to succeed on the merits.” The court also agreed with the District Court’s determination that the “public interest” of campaign finance reform, which has led to restrictions upon 527 and Political Action Committee (“PAC”) groups, outweighed Real Truth’s concerns that it would be accordingly regulated and therefore failed the fourth prong of the Winter test as well. Finally, as the Winter standard is a four-part test of which every part must be satisfied, the Fourth Circuit declined to indicate if the District Court’s treatment of the “irreparable harm” and “balance of equities” prongs was satisfactory. By holding that the District Court’s determination of failure of Real Truth on the other parts was correct, the Fourth Circuit was able to affirm that the Winter standard was not met in whole and therefore the denial of a preliminary injunction was not an abuse of discretion.