THE ONUS OF TRANSPARENCY: STATE OF WASHINGTON v. META PLATFORMS, INC. ILLUSTRATES THE FIGHT OVER REASONABLE CAMPAIGN FINANCE DISCLOSURE LAW AND FIRST AMENDMENT PROTECTED SPEECH VIOLATIONS

By: Lindsay Maher, Volume 107 Staff Member

Campaign finance disclosure laws are being questioned and limited in states across the country. In many states, legislatures have passed laws to prevent future requests for disclosure to non-profit organizations that donate to political candidates or parties.[1] In others, disclosure laws already in place are being challenged.[2] The legal arguments in these scenarios focus on protection of the First Amendment right to free speech, and in particular to political speech. Although these laws may require some work on the part of commercial advertisers like Meta Platforms, Inc. (Meta) or Google LLC (Google),[3] it is misleading to characterize requiring transparency as a limitation on free speech. Transparency is a tool for recognizing if the will of the people is motivating politicians, rather than the wallets of special interest groups. “Transparency is not an end in itself . . . . But knowing that campaign spending has to be reported can change the incentive structure for those with the worst motives.”[4]

This Post explores how State v. Meta[5] fits into the current conversation about campaign finance disclosure laws across the country. It will then look at Washington state’s lawsuit against Meta and the consequences for the company of the state prevailing in the suit. Finally, the Post will explore what the Meta case potentially indicates to other states looking to protect or add more transparency in political campaign spending law.

I. THE DETAILS

The fight in Washington’s King County Superior Court comes down to whether Washington’s law requiring disclosure from commercial advertisers is seen as a legitimate means to campaign finance transparency, or a law designed to chill political free speech.[6] Courts have been asked many times to consider this question. In Citizens United, one of the Supreme Court’s seminal cases on the issue of campaign finance law, the Court is particularly concerned about laws that limit political speech.[7] Practically speaking, Citizens United has opened up the opportunity for even more money to be given in political campaigns through Political Action Committees,[8] and other organizations classified as a 501(c)(4)—a politically affiliated non-profit organization.[9] It also establishes precedent for arguments that other types of campaign finance laws similarly violate the First Amendment. The laws at issue in Washington’s case against Meta are regarding state and local elections, but Meta attempts to make arguments of violation of the First Amendment similar to those made against the FEC in Citizens United.

A. Campaign Finance Laws Across the States

Campaign finance law in the United States is a complicated beast, particularly for state and local elections. While state and local elections are regulated by their individual state legislatures and regulatory agencies,[10] federal elections are largely regulated by the Federal Election Commission (FEC).[11] Because each state is free to establish its own methods of campaign finance regulation,[12] there is dramatic variation in approaches.[13] Washington, for example, has an independent commission that oversees the disclosure of campaign finance information and has enforcement authority.[14] They also have laws that require disclosure on a variety of platforms that sell political advertisements.[15] Washington state has some of the strongest campaign finance laws in the nation.[16] Indiana, by comparison, regulates campaign finance to a much lower degree. Its state campaign finance laws are administered by the state’s overall election commission,[17] rather than by a specially designated campaign finance commission. It requires disclosure for payments on political advertisements only for print media.[18]

In many states across the country, laws are being passed to limit the disclosure of campaign finance contributions based on First Amendment arguments.[19] While these bills deal with a different aspect of campaign finance—disclosure of donors to 501(c) organizations[20]—they are based in the same kind of rhetoric that Meta argues in its motion for summary judgment.[21] Supporters of these new laws argue that political speech is limited when organizations are required to disclose where exactly their donations come from.[22] The rhetoric is that disclosure is an over-policing of campaign contribution, and that this will discourage donations from everyday Americans trying to participate in politics.

What’s missing from this argument is the acknowledgement that these types of laws put no actual limit on what politicians, political parties, or even donors can say. They exist to preserve transparency in political campaign financing, not to police political speech.[23] The same can be said of campaign finance disclosure laws for commercial advertisers. The statute at issue in the Meta case concerns requiring platforms that run political advertisements (“commercial advertisers”) to disclose information about who pays for those advertisements.[24] While Washington’s law covers more types of platforms than other states, it is not unique for having this type of statute.[25] In fact, a many other states have similar reporting mechanisms to Washington’s.[26] Disclosure laws like these have been held as a legitimate government interest by courts as a promotion of transparency and accountability.[27]

B. State v. Meta Platforms, Inc.

In 2018, the Washington state Public Disclosure Commission (Commission) updated its regulations on disclosure.[28] Of the amended portions, the definition of a commercial advertiser was expanded to include online platforms like Meta, Google, and Twitter.[29] They are required to disclose information to the public regarding political advertisements relating to state campaigns—things like who purchases ads and the amount of money spent.[30] While the extension to online platforms is new, the disclosure requirements themselves are not. These disclosure laws have been in effect since 1972,[31] and other advertising platforms (television, radio, print news, etc.) have been following these guidelines since then.

Days after the amendments[32] were passed in 2018, Washington filed suits against Meta (then Facebook Inc.)[33] and Google[34] for their violation of these regulations. Meta and Google agreed to pay the fines for violating the regulations and settled the suits.[35] They both also announced after those suits that they would “ban” all political advertisements for Washington’s local and state elections.[36] In reality, political advertisements for dozens of candidates throughout the state continued to run on both companies’ platforms.[37] Washington filed suit once again for blatantly violating the state’s laws. While Meta challenged the law, Google chose to settle with the state for a second time.[38]

Both parties in the latest Meta case filed motions for summary judgment. Meta’s motion for summary judgment argues under three avenues: (1) Washington’s commercial advertiser disclosure requirements violate the First Amendment, (2) the state’s claims are barred by Section 230 of Communications Decency Act, and (3) the Commission’s regulations are invalid “as a matter of administrative law.”[39] On September 2,^, 2022, the judge denied Meta’s motion for summary judgment under all three via an oral judgment.[40]

Washington, on the other hand, asked for summary judgment on the premise that Meta not only violated the law, it did so intentionally.[41] On October 6, 2022 the court moved in favor of the State’s motion for summary judgment, finding that Meta intentionally violated the statutes at issue and owes treble damages for each violation.[42]

II. THE IMPLICATIONS

Washington argues that its campaign finance laws are stringent but effective in providing transparency to the people of Washington state, but companies like Meta see them as an overbearing “regime.”[43] There is no real evidence that complying would be overly burdensome for the company. Although compliance may require Meta to compile all information that the state asks for in an easily accessible place (similar to the Ad Library it voluntarily made),[44] state disclosure laws like Washington’s are not asking companies to collect any more information than they do “during their regular course of business.”[45] As one of the largest advertising platforms in the world,[46] not to mention one that prides itself on tracking precisely the type of information the state wants to disclose, it certainly tracks this in the regular course of business.

In addition to already tracking the information that the state seeks, Meta also seems to understand exactly why transparency is so important.[47] The company’s attempt to find Washington’s law unconstitutional was not found to be credible by the court, and does not have support in the case law either. Even considering Washington’s requirements under exacting scrutiny—the appropriate test for disclosure laws challenged under the First Amendment[48]—Washington state has a perfectly legitimate government interest in the disclosure of purchase information related to political advertisements that is narrowly tailored to data Meta already captured before this law included them.

As the state points out in its response, Meta’s arguments in the alternative don’t even really seem to understand the laws it is arguing under. Section 230 of the Communications Decency Act would be applicable here if Washington’s law was related to Meta’s choice to publish, withdraw, or edit content.[49] What the law does, however, is require Meta to disclose information about the ads, not police what is in them.[50] Meta chose on its own to establish a policy that banned political advertisements for Washington state campaigns, it was not a provision of the statute.

Washington’s amendment to the definition of a commercial advertiser is a clear approach to campaign finance disclosure that reflects the influence of a largely digital world. As more state legislatures bring new laws and amendments to the floor, it is crucial that the rhetoric of First Amendment infringement doesn’t overshadow the legitimate government interests in transparency for campaign finance. Particularly with laws pertaining to disclosure—whether they are to limit or expand it—states and constituents have a compelling interest in knowing where politicians’ support (and funding) comes from. State v. Meta is an example of how a state can continue to hold large companies accountable and encourage compliance for the sake of a healthy Democracy.

 

[1] See Ballotpedia Staff, Disclosure Digest: Virginia and Kansas Enact Donor Privacy Bills, Ballotpedia (May 3, 2022), https://news.ballotpedia.org/2022/05/03/disclosure-digest-virginia-and-kansas-enact-donor-privacy-bills [https://perma.cc/K89G-DEXJ]; Nadia Ramlagan, AR Bill Tightens Rules on Nonprofits’ Donor Disclosure, Pub. News Serv. (May 7, 2021), https://www.publicnewsservice.org/2021-05-07/campaign-finance-reform-money-in-pol/ar-bill-tightens-rules-on-nonprofits-donor-disclosure/a74217-1 [https://perma.cc/4EAK-BEQL].

[2] Defendant’s Motion for Summary Judgment, State v. Meta Platforms, Inc., No. 20-2-07774-7 (Wash. Sup. Ct. July 15, 2022) [hereinafter Meta Summary Judgment].

[3] Wash. Admin. Code § 390-18-050 (2022).

[4] Ciara Torres-Spelliscy, Transparency for Democracy’s Sake, Brennan Ctr. for Just. N.Y.U. Sch. L. (Dec. 21, 2020), https://www.brennancenter.org/our-work/analysis-opinion/transparency-democracys-sake [https://perma.cc/J8YM-6ZN3].

[5] No. 20-2-07774-7 (Wash. Sup. Ct. 2022).

[6] Meta Summary Judgment, supra note 2, at 17.

[7] See Citizens United v. FEC, 558 U.S. 310, 316 (2010) (discussing the fact that as additional rules are introduced on political speech, that speech will be chilled).

[8] See Chisun Lee, Katherine Valde, Benjamin T. Brickner & Douglas Keith, Secret Spending in the States, Brennan Ctr. for Just. N.Y.U. Sch. L. 6 (2016), https://www.brennancenter.org/our-work/research-reports/secret-spending-states [https://perma.cc/2U7K-6X7P] (explaining that outside spending in political campaigns by state grew 38 times from 2006–2014, and that fully transparent spending decreased from 76 percent to 29 percent in the same time period).

[9] Id.

[10] Brian Cruikshank, Campaign Finance Laws: An Overview, Nat’l Conf. State Legislatures (July 17, 2015), https://www.ncsl.org/research/elections-and-campaigns/campaign-finance-an-overview.aspx [https://perma.cc/HK6N-6SYH].

[11] Mission and History, Fed. Election Comm’n, https://www.fec.gov/about/mission-and-history [https://perma.cc/HUD9-MQ94] (last visited Oct. 26, 2022).

[12] See generally U.S. Const. amend. X (establishing that all powers that are not explicitly delegated to Congress will be left to the states).

[13] Cruikshank, supra note 9.

[14] Wash. Rev. Code Ann. § 42.17A.105; The State Campaign Finance Index 2022: Washington, Coal. for Integrity (June 21, 2022), https://www.coalitionforintegrity.org/wp-content/uploads/2022/06/Washington-State-Report-FINAL-2022.pdf [https://perma.cc/T2FV-KCAQ].

[15] Wash. Rev. Code Ann. §§ 42.17A.005(10), 42.17A.345.

[16] Press Release, Facebook Parent Meta Seeks to Gut Washington State Campaign Finance Law, Wash. State: Off. Att’y Gen. (Aug. 16, 2022), https://www.atg.wa.gov/news/news-releases/facebook-parent-meta-seeks-gut-washington-state-campaign-finance-law [https://perma.cc/UG3M-HJVW].

[17]  Ind. Code § 3-6-4.1-14(a).

[18]  Ind. Code § 3-9-3-2.5(a)(3).

[19] See supra note 1.

[20] Ark. Code Ann. § 25-1-804 (2021); 2022 Kan. Sess. Laws 437.

[21] Meta Summary Judgment, supra note 2, at 13.

[22] Resolution in Support of Nonprofit Donor Privacy, Am. Legis. Exch. Council, https://www.alec.org/wp-content/uploads/2017/03/Resolution-in-Support-of-Nonprofit-Donor-Privacy-CLEAN-FINAL.pdf [https://perma.cc/5UJP-VTVC] (last visited Oct. 26, 2022).

[23] Gaspee Project v. Mederos, 13 F.4th 79, 86–87 (1st Cir. 2021) (“[R]easonable disclosure regimes ‘enable the electorate to make informed decisions and give proper weight to different speakers and messages.’”).

[24] Wash. Rev. Code Ann. § 42.17A.345.

[25] The State Campaign Finance Index 2022, Coal. for Integrity 29 (June 21, 2022), https://www.coalitionforintegrity.org/wp-content/uploads/2022/06/The-State-Campaign-Finance-Index-2022-Full-Report.pdf [https://perma.cc/NJ8A-EZK4].

[26] Id.

[27] Citizens United v. FEC,558 U.S. 310, 370 (2010); Smith v. Helzer, No. 3:22-CV-00077-SLG, 2022 WL 2757421 (D. Alaska July 14, 2022); Americans for Prosperity Found. v. Bonta, 141 S. Ct. 2373, 2383 (2021).

[28] Complaint for Civil Penalties and for Injunctive Relief for Violations of RCW 42.17A, State v. Meta Platforms, Inc., No. 20-2-07774-7, at 7 (Wash. Sup. Ct. Apr. 13, 2020) [hereinafter 2022 Complaint] (explaining the origins of this lawsuit).

[29] Wash. Rev. Code Ann. § 42.17A.005, Wash. Rev. Code Ann. § 42.17A.345.

[30] Wash. Rev. Code Ann. § 42.17A.345.

[31] Wash. Rev. Code Ann. § 42.17A.345 (effective 1972).

[32] Wash. Rev. Code Ann. § 42.17A.005 (LexisNexis 2022).

[33] See 2022 Complaint, supra note 27, at Exhibit A.

[34] Complaint for Civil Penalties and for Injunctive Relief for Violations of RCW 42.17A, State v. Google, Inc., No. 20-2-07774-7, at 7 (Wash. Sup. Ct. June 4, 2018).

[35] Jim Brunner, Facebook, Google to Pay Washington $450,000 to Settle Lawsuits Over Political-Ad Transparency, Seattle Times, https://www.seattletimes.com/seattle-news/politics/facebook-google-to-pay-washington-450000-to-settle-lawsuits-over-political-ad-transparency [https://perma.cc/9R6B-NPNV] (last modified Dec. 28, 2018).

[36] New Rules for Ads That Relate to Politics in Washington State, Facebook Business, Meta Platforms, Inc. (Dec. 27, 2018), https://www.facebook.com/business/news/new-rules-for-ads-that-relate-to-politics-in-washington-state [https://perma.cc/SH7F-SX9A].

[37] Eli Sanders, Since Facebook Banned Political Ads in Washington State, It’s Sold a Bunch of Them, Stranger (Feb. 12, 2019), https://www.thestranger.com/politics/2019/02/12/38844520/since-facebook-banned-political-ads-in-washington-state-its-sold-a-bunch-of-them [https://perma.cc/R92K-AAVY]; David Gutman, Facebook and Google Agreed to Stop Selling Political Ads in Washington State, but They Are Still Doing It, Seattle Times, https://www.seattletimes.com/seattle-news/politics/despite-promising-to-stop-facebook-and-google-are-still-selling-political-ads-in-washington-state [https://perma.cc/XE6D-TYXF] (last modified Oct. 30, 2019).

[38] David Gutman, Google to Pay Washington State $400,000 to Settle Campaign Finance Lawsuit, Seattle Times (June 17, 2021), https://www.seattletimes.com/seattle-news/google-to-pay-washington-state-400000-to-settle-campaign-finance-lawsuit [https://perma.cc/3M9Y-ZW2C].

[39] Meta Summary Judgment, supra note 2, at 13.

[40] Eli Sanders (@elijsanders), Twitter (Sept. 2, 2022, 1:42 PM), https://twitter.com/elijsanders/status/1565772062672957440 [https://perma.cc/4T6N-22RK] (summarizing the judge’s remarks when denying Meta’s motion for summary judgment); Jim Brunner, Facebook Parent Company Repeatedly Violated WA Campaign Finance Law, Court Finds, Seattle Times (Sept. 2, 2022), https://www.seattletimes.com/seattle-news/politics/facebook-parent-company-repeatedly-violated-wa-campaign-finance-law-court-finds [https://perma.cc/FVQ3-WBQ8].

[41] Plaintiff State of Washington’s Motion for Summary Judgment, State v. Meta Platforms, Inc., No. 20-2-07774-7, at 1 (Wash. Sup. Ct. July 15, 2022).

[42] David Gutman, Judge: Facebook Intentionally Violated WA Campaign Finance Law 822 Times, Seattle Times (Oct. 6, 2022), https://www.seattletimes.com/seattle-news/politics/judge-facebook-intentionally-violated-wa-campaign-finance-law-822-times [https://perma.cc/KT8Y-A7KM]; Order Granting Plaintiff State of Washington’s Motion for Summary Judgment, State v. Meta Platforms, Inc., No. 20-2-07774-7, at 7 (Wash. Sup. Ct. Oct. 6, 2022).

[43] Meta Summary Judgment, supra note 2, at 1.

[44] Ad Library, Meta Platforms, Inc., https://www.facebook.com/ads/library/?active_status=all&ad_type=political_and_issue_ads&country=US&media_type=all [https://perma.cc/EDU7-HZWJ] (last visited Oct. 26, 2022); see also Plaintiff State of Washington’s Response to Defendant’s Motion for Summary Judgment, State v. Meta Platforms, Inc., No. 20-2-07774-7, at 1 (Wash. Sup. Ct. Aug. 16, 2022) [hereinafter Response to Meta Motion].

[45] Response to Meta Motion, supra note 42, at 16.

[46] Michael Grothaus, Amazon Is Now the Third Largest Digital Ad Platform in the U.S., Fast Co. (Sept. 19, 2018), https://www.fastcompany.com/90238986/amazon-is-now-the-third-largest-digital-ad-platform-in-the-u-s [https://perma.cc/4U77-KNVU].

[47] Rachel Lurman, Google Says It Will Ban Political Ads After Election, Seattle Times (Oct. 27, 2020), https://www.seattletimes.com/nation-world/google-says-it-will-ban-political-ads-after-election [https://perma.cc/XK9J-FJ4A] (pointing out that both Google and Facebook planned on banning ads related to the 2020 federal election to limit the potential spread of misinformation).

[48] Gaspee Project v. Mederos, 13 F.4th 79, 85 (1st Cir. 2021); Citizens United v. FEC, 558 U.S. 310, 368 (2010).

[49] Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1102 (9th Cir. 2009).

[50] See generally Response to Meta Motion, supra note 42.